This is Part 2 of a multi-part series on an innovative new way of looking at digital transformation and how information technology becomes ingrained into business processes and business outcomes.
The digital DNA components
As the breadth of new technologies being developed and disruptive trends increase exponentially, it can be challenging for companies to understand these changes and how to adapt to them. At the heart of an effective digital enterprise are several key components that allow the company to leverage cutting-edge technologies and processes to drive business outcomes. Understanding this framework and how to successfully refine it to the needs of the company is key to achieving success in the digital era.
Systems of record
A company’s systems of record include core business transaction systems, including ERP systems (finance, HR, payroll, CRM, materials management, inventory, supply chain, and distribution) and record-keeping systems (financial services, healthcare, and all insurance verticals). These systems of record maintain and provide access to the key information businesses need for compliance, accounting, supply chains, and strategic planning.
The rise of information governance and MDM – As technology systems develop and IT processes adapt to be more business-focused, information governance and master data management (MDM) are becoming increasingly important. Paper records are rapidly becoming a thing of the distant past, and companies are looking for new ways to maintain and improve the accuracy and accessibility of their information. Data holds all of the digital DNA components together, yet most organizations don’t invest enough in master data management and data governance to allow the ecosystem of digital systems to interact seamlessly. This means taking new, holistic approaches that seek to address issues relating to compliance, organization, access, and retrieval. Implementing a comprehensive information-governance program supplemented by MDM can help ensure that the company’s systems of record are effective, accurate, and accessible.
How fast these systems can change – Because the data maintained on systems of record can be extremely sensitive and valuable, transitions to new technologies require care. Changes are often complex and time intensive. Business leaders should be cautious when implementing new systems of record to ensure that they will deliver the level of accuracy necessary. The release cycles for most companies will usually not exceed three a year.
Systems of engagement
Whether they be customers, employees, or partners, human beings are the driving force of every company. Systems of engagement are the interface between technology and humanity, connecting your team with business leaders, colleagues, and customers worldwide. Systems of engagement include mobile applications, SaaS tools, wearables and a wide range of other new technologies that have allowed businesses to engage more effectively.
The Cloud and mobility – Web and mobile applications facilitate interactions by allowing companies to quickly and easily reach out to customers and communicate internally. Recent statistics show that more than 10 apps are downloaded each year for every human being on the planet. Apps like Uber have already disrupted countless industries, while new technologies and innovations are likely to disrupt many more.
Similarly, SaaS applications have revolutionized sharing and collaborating internally and with partners worldwide. This makes it easier for companies to expand into new markets and source better talent, while still maintaining close, constant contact across offices.
How fast these systems can change – Systems of engagement can change much more rapidly than systems of record. Companies can easily add functionality because most of the systems rely on web or micro services, allowing companies to deliver new capabilities in as little as two or three weeks.
Systems of intelligence
At the cutting edge of digital technology are systems of intelligence. These systems include the automation, cognitive computing, smart sensors, and cloud solutions that allow companies to drive efficiencies, predictability, and accuracy across the enterprise. They represent some of the most exciting and potentially disruptive changes in the digital enterprise, but they are also the least developed.
Automation and cognitive computing – Automation is a human-productivity multiplier. It takes many of the time-consuming, repetitive, and error-prone tasks traditionally done by human workers, and allows them to be done faster and more accurately by machines. This includes simple customer service interactions, the basic assembly of manufactured goods, and the automatic repair of IT systems and services. This list will only continue to grow in coming years, as a greater number of tasks are able to be done by computers more accurately and with greater efficiency.
IoT – Systems of intelligence often extend into the realm of IoT (Internet of Things), collecting, analyzing, and acting on information and interactions that devices have in the real world. This can have significant implications for business, as companies can develop new business models and improve existing ones through more effective manufacturing, monitoring, and customer interactions.
How fast these systems can change – Although automation and cognitive computing are relatively nascent technologies, they can provide value to companies today. However, it is important for the organization to be mindful of how implementing automation technology will impact the company, its customers, and its employees. It is often necessary to gradually shift employees away from smaller tasks such as IT tickets, with automation tools acting as a supplement to the human worker, rather than a replacement. As these systems become more robust, it is likely that they will continue to allow companies to make greater improvements to their efficiency, customer service, and profitability, as well as provide an alternative for outsourcing.
Systems of insight
Systems of Insight are the tools companies need to better understand customers, optimize their operating model, and gain a competitive advantage. IoT smart sensors and applications collect data, while effective business intelligence and analytics allow companies to make better, more informed decisions.
Business intelligence and analytics – Having the right information at the right time is one of the most important elements of effective business. However, it is important to remember that it’s not enough simply to collect data. The key to powerful business intelligence is collecting the right data and extracting the most value from it. New technologies have made it easier to collect massive amounts of data, but data analysis has been relatively slow to catch up. With new innovations and better insight strategy, companies can more easily locate the most valuable insights and more effectively use them to drive business goals.
Data lakes – Data lakes provide organization-wide data management built to allow users to manipulate and analyze data across many formats and applications. This brings the power of Big Data into more areas of the company, potentially helping to improve efficiency and productivity across the enterprise. However, just because data lakes allow for easier access to data doesn’t mean that everyone within the company will have the motive or know-how to use them. This is an area in which it’s critical to ensure the required talent and training is in place before implementation.
IoT – Network connected devices also can play a significant role in a company’s insight infrastructure. By collecting real world data in areas like manufacturing lines, vehicles, and storefronts, companies can increase efficiency, reduce problems, and better meet customers’ needs.
Systems of protection
As a company undergoes a digital transformation, it becomes increasingly important that its digital assets be well-protected. Hiring key talent and investing in robust systems of protection is critical to avoiding breaches, downtime, or other damaging problems. Companies are being built on digital systems and cannot afford to have their very foundation exposed.
Proactive and defensive information security – Information security is one of the most critical elements of a risk-management strategy. Most companies are content to simply implement defensive information security systems. These might include firewalls, anti-virus software, and staff on hand to respond to breaches. However, for the digital enterprise, this is simply not enough. Companies should be proactive in their efforts to improve the security of their IT systems. This means hiring third parties to conduct full penetration testing, engaging with industry groups to identify and respond to threats, and building more robust systems of security.
Risk management – A company’s information security efforts should only be part of a broader risk-management strategy. This includes implementing systems of data backup, having offsite workplaces, and other solutions to mitigate the overall risk to their IT systems.
To learn more about what Wavestone US can do for your company, visit https://www.wavestone.us/capabilities/.
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