Digital Enterprise Transformation and the "Intelligent" Future

Stephen DeAngelis

July 26, 2016

The 21st century business landscape will be characterized by the rise of the intelligent enterprise (i.e., organizations that use cognitive computing systems to increase efficiency and effectiveness). The first step towards the intelligent enterprise is establishing a digital enterprise transformation strategy. Vijay Kannan, a Director at PwC India, notes, “Digital technologies are impacting industries and businesses alike. Leadership’s desire to capitalize on digital technology is so strong that it’s disrupting the enterprise operating model, as evidenced by shifting spending patterns, new digital roles, and undefined working relationships.”[1] He goes on to note, “A large share of global companies (41%) said that digital means investments being made to integrate technology into every part of their business.” Although Kannan makes it sound like digital enterprise transformation is all about technology, Joe McKendrick (@joemckendrick) reminds us that it involves much more than that. “There are now a wealth of tools, technologies and platforms,” he writes, “that can help even the most staid, hidebound organizations begin to make the journey to digital enterprise. However, becoming digital isn’t just about technology, it’s also about changing mindsets and breaking up calcified processes.”[2]

Industrial age organizations were created around siloed functions — like operations, sales, administration, etc. Each function collects data on key performance indicators and uses that data in corporate meetings to demonstrate how well it is doing. Data is often not shared and functional executives often compete in internecine warfare to prove their functional areas are the most important for the company’s success (and, as a result, deserve the biggest bite of the budget). Chris Bingham, founding CTO of Crimson Hexagon, notes, “Many of the walls that separate information were put there by people, and people will need to agree — enthusiastically — to bring them down. Everyone wants to protect ‘their’ assets. They want to own ‘their’ data. And they often fail to see how that mentality hampers overall business success.”[3] Data hoarding and functional rivalries make corporate alignment very difficult to achieve. In global companies, even those in which business executives want to share information and achieve overall corporate goals, competing challenges can arise between processes. Without some kind of orchestration between processes, achieving corporate alignment (i.e., making the enterprise the best it can be) remains an elusive goal. A digital enterprise, orchestrated by a cognitive computing system, has a much better chance of achieving corporate alignment and becoming an intelligent enterprise. But as McKendrick notes, digital enterprise transformation is about more than technology. “Digital transformation is challenging enterprises in numerous ways,” writes Ann All, “from determining who should lead digital initiatives to modifying infrastructure to better support the cloud computing, mobile, social media and Big Data analytics technologies that are central to digital business efforts.”[4]

She goes on to point out that integrating data from legacy systems is another challenge. Dan Huberty, Vice President of Vision, Strategy and Enterprise Architecture for Unisys Corporation, told All, “The legacy has always been information in towers, but there is no sense of tower anymore. Today there has to be a service integration and management layer so that companies can pull information together to do digital business.” Analysts from the Boston Consulting Group and CAST agree with that assessment. “Complexity can be crippling in IT,” they write. “Functional, data, and technical complexity can be a big barrier to digital transformation — especially for companies that have expanded internationally or by M&A, or evolved over generations of hardware and software advances.”[5] Cognitive computing systems can help with data integration because they can deal with both structured and unstructured data. More importantly, cognitive computing systems can understand how decisions in one area can affect operations or goals in another area and can provide actionable insights based on overall corporate goals. This kind of orchestration (and democratization of data) is not possible in an industrial age organization. Bingham adds, “Stakeholders across the enterprise are clamoring for data democracy. Leaders in human resources, marketing, sales, customer service, supply chain and nearly every other department of the enterprise are painfully aware that information is key to their success, and they’re pushing IT to tear down the siloes that make data difficult to access and analyze. IT teams can’t ignore the cry for data democratization — the broad availability of all the metrics needed to make decisions and measure performance. But the response will not be easy.” He concludes, “Data democratization helps organizations use data more effectively, but it’s only achievable when IT leaders push for the right technology — and the right attitudes — to pull down data silos. Identifying the challenges present in an enterprise and overcoming them are critical steps in the long-term success of data and analytics in the enterprise.”

Because digital enterprise transformation involves more than adopting new technologies, McKendrick discusses four qualities Piers Fawkes, founder of PSFK, asserts advanced digital enterprises share. The first characteristic is that digital enterprises keep it continuous and connected. “In the digital enterprise,” McKendrick writes, “innovation — and thus quality improvement — should be rapid and ongoing. Keep things moving and updated on a continuous basis — especially software and applications. This starts at the employee level — the playbook urges that team members be able to ‘seamlessly collaborate across all platforms and devices’ at all times.” The second characteristic is that digital enterprises are data-driven, or at least data-aware, to the point where they can make sense of some of it. “Everyone has boatloads of data these days, but the successful digital enterprises are learning what morsels are of value, and how to extract and deliver insights from these bits. The first step is to know what big data flows are traversing the enterprise, where this data is coming from, and how trusted it is.” The third characteristic is that digital enterprises have moved their workplaces into the 21st century. “By now,” McKendrick writes, “it’s well understood that work itself — at least the information-intensive kind — can occur anywhere, and doesn’t have to be in a 9-to-5 office. However, many organizations have not gotten the message. A digital enterprise, on the other hand, understands that its work can be accomplished from anywhere in the globe, day and night. For an organization seeking to ramp up its digital acumen, it’s just as important to digitize employee channels as it is customer channels.” The final characteristic is that digital enterprises make security continuous and ubiquitous as well. According to McKendrick, Fawkes recommends “the use of ‘modern discovery solutions to uncover unused or unmanaged systems,’ and to ‘close the gap between vulnerability awareness and remediation actions through improved security operations integration.'”

A cognitive computing system excels in the 24/7 environment of the modern business. It can make routine decisions, provide actionable insights, understand how policies in one area can adversely affect operations in another area, and provide a myriad of other opportunities for an enterprise to become smarter.

Footnotes
[1] Vijay Kannan, “Will your digital strategy drive top-line growth or real disruption?Express Computer, 6 June 2016.
[2] Joe McKendrick, “Four Qualities All Digital Enterprises Have In Common,” Forbes, 25 June 2016.
[3] Chris Bingham, “Democratizing Data Takes More Than Just Tech Upgrades,” Information Management, 5 July 2016.
[4] Ann All, “Integration a Big Digital Transformation Challenge,” Enterprise Apps Today, 9 March 2016.
[5] Michael Grebe, Lev Lesokhin, Guillaume Mazieres, Filippo L. Scognamiglio Pasini, Benjamin Rehberg, and Marc Schuuring, “Will Your Software Help or Hinder Digital Transformation?bcg.perspectives, 2 May 2016.