If we search Google for “digital transformation” we find endless meanings and interpretations. It is curious that, at this point where the term is already so overused, there is no clear definition.
At Paradigma we realized the importance of the concept of digital transformation 10 years ago. We were born as a digital company and now, a decade later, after having helped multiple companies on their way to becoming digital, we dare to give our own “version” about what Digital Transformation is for us.
Technology, Business and Culture
Business, Technology and Culture are the three concepts (the three pillars) where we support any project that wants to start the journey towards digital transformation. For this, in the first place, we must understand the Business and understand the importance of exploiting it on a digital level.
Second, we have Technology, which helps us move our business to the Internet. Finally, we must have Culture, the modus operandi of how to make software using the best technology to improve the business.
Here comes my first reflection. There are large companies that already have their business on the Internet and the technology they need they buy it. Why do not we consider them transformed? The main reason is because their way of making software has not changed.
Watch out! If we think that the fault is the development of software then everything will point towards the IT area. And what really fails is the way to deliver value to customers. Everyone participates in the delivery of value, so everyone fails!
What is delivering value?
In this case I like to highlight the example of Jeff Patton on the concept of “value”. Imagine that we have to deliver 20€ to our customer. In the traditional model we would have a ticket cut into twenty parts and our job would be to recompose that ticket on a specific date.
The drawback is that it is likely that when the date arrives we do not have the full ticket and, therefore, the value delivered is zero. In the Agile model what we would do would be to collect 1 € coins and deliver them as soon as possible to the user, so that, even though we do not have € 20 on the date, we have delivered value along the way and the user has been able to use it. .
Therefore, if you are not able to deliver fast value you will not be transformed. Or change your processes based on plans that are never met or you can not compete on the Internet, even in the offline environment.
Flow efficiency VS Resource efficiency
An important debate that every company must address is the efficiency of flow faced with the efficiency of resources. In the traditional model the objective has always been to keep people busy all the time; while the Internet model the priority is to give the best possible service, without obsessing over time (in terms of occupancy).
We can see the best example we can find in the hands of Jerónimo Palacios. Palacios puts us in situation: imagine that you wake up one night with a lump in the neck. The scare is important and you decide to go quickly to the doctor.
After waiting three days for you to attend, the doctor sends you to the specialist (a step that you already intuited); After two months, the specialist asks you for tests and, after another two months, he gives you a diagnosis: “You do not have anything, you can go home quietly”. And what about those four months of anguish? The model of public health seeks the efficiency of resources where everyone is busy.
Now we contrast the example with a private hospital. In that hospital they have many specialists with “time” waiting to take care of patients. If you arrive in the morning with your lump in your neck, during the day several doctors will treat you, they will do the tests in the day and they will give you your diagnosis. The drawback in this model is that it is more expensive but… what experience does the user take?
Here is the key, the optimization of the flow helps us to improve the experience and satisfaction of the users, but it has a higher cost. That cost more does not mean that it is not profitable, on the contrary, if I get to the market first I can make the investment profitable.
Pokémon Go is a very graphic example. The game came to light in the summer of 2016 and already at Christmas of the same year, just 6 months later, it had lost millions of followers and had “gone out of style”.
A digital company could, from the first moment, take advantage of the “wave” to obtain benefits. For this you will have “unoccupied” people waiting to take advantage of these opportunities.
A traditional company would first have to identify the opportunity, then generate a business case to study the viability to later join a committee that approved the “project”. Then, make a bid with suppliers, choose the best bidder and start. This provider would have to assemble the equipment, take requirements and start building. By the time they are finished, nobody will play the Pokémon!
Perfect, we already know why we have to change our organization and our culture. How do we do it? For me the best answer is to incorporate Agile in all areas of the organization.
Agile incorporates flow efficiency, incorporates self-organization of equipment and incorporates competitiveness in the market. Within Agile, the most widespread framework is Scrum although you could bet on others like Kanban.
Because of this, Agile & Scrum have a lot to say about Digital Transformation, by not incorporating Scrum Master, Product Owner or Agile Coach figures into your teams, you will hardly get a lasting Transformation.
Some general advice we can give to address this organizational and cultural change (remember that each company has different contexts):
- Having a sponsor: The person who supports this initiative must be the highest possible within the prevailing hierarchy, it is essential.
- Mark the rhythm: Transforming is like losing weight, no matter how good the nutritionist is, you have to decide at what pace you want to do it.
- Transformation Strategy: Normally there are two paths, bottom-up or top-down. In the first we usually get value before, while in the second we will obtain the necessary support from the management (or the famous sponsor). The best thing is to do it in parallel and always bet on the people most open to the changes.
- Transformation Backlog: Instead of “planning the transformation”, try to have a backlog with all the initiatives you want to carry out, prioritize and order with your sponsor and do not try to go faster than you can.
- Deliver value: Learn to deliver fast value and maintain it over time.
- Urgency Feeling: Transformations occur if there is a sense of “haste” on the part of the organization.
- Choose people well: When there is a big change there is always someone who is in favor, who is neutral and who is against. Detect and bet on the first to be the “leaders” of the change.
- Extension by virus: Changes will occur by contagion, if people observe the team next to change, it is likely that they will also be encouraged to change.
- Avoid mistakes: Learn from your failures, implement inspection and adaptation moments that allow you to analyze your failures to avoid them.
- Beware of critical projects: Addressing major changes in critical areas can lead to crashes. Choose very well which battles to fight and always building a strong change that does not fall apart.
We know that Digital Transformation has become a fashionable concept. For agilistas it goes much further, it is a wonderful opportunity that opens a wide range of opportunities to change the world.
All the companies that believe it, that bet hard on it will surely reach places they did not expect.