Raising the Bar - for clouds, renewables and digital - Part 3

My blogs, now 12+ years old, my 6 books and much of my consulting in those years have cataloged and celebrated cloud computing, renewable energy and digital transformations. I have been a big booster of each, but think we are at a point with each where we need to ask for much more.

In Part 1 I covered cloud computing and in Part 2, renewables in the energy sector. Now let’s look at the phenomenon of Digital Transformations.

People talk as if “digital” is a recent phenomenon. Steve Jobs known for his string of amazing Macs and iPods and iPhones actually contributed more to the world with his digitization of art at Pixar, codecs which delivered hi-def music in the iTunes store and other digital form/factors. The progress we are seeing with machines and Facial Recognition and Voice Transcription are a result of decades of digitizing images and accents. Marty Groover, an Operational Technology Manager at Caterpillar which has been reimagining the factory with IoT and robotics told an SAP event recently “we have been going digital since the 1980s”. He called his project a Business Transformation project, not a Digital Transformation.

Another of my peeves is we have too many consultants with what I call low  “digital credibility”. They use Borders, Blockbuster or Kodak as examples. Executive eyes rolls as they hear yet another vendor try the FUD “If you don’t work with us, you will get Amazoned or Netflixed”.

Far better to talk about “digital phoenixes” which have gone through traumatic times and bounced back. On the New Florence blog, I have examples of technology and Lego, Marvel, BP salvage operations after the Gulf spill, how railroads have been reborn. In my books,I have examples of how Aircell has been reborn as GoGo  the wi-fly service, how Delta Airlines has reinvented itself with technology, how GM’s OnStar has repeatedly been recast, how Corning seems to have major impact on mainstream technology every decade or so and others. Many of these examples started their digital transition a couple of decades ago.

Malcolm Frank at Cognizant implores audiences to do “Digital that Matters”. If you are doing a digital project and you are not making your products smarter, rethinking your business models and customer channels, rethinking your plants and supply chain, you are likely doing small “d”.

Technology has long focused on efficiencies and cost savings. Today, it allows for a top-line, revenue focus, yet way too many projects define their scope too narrowly. In that sense we are repeating a sin from the mid 1990s. Dr. Michael Hammer was a rock star in the early 90s with his reengineering books and articles. His rallying cry was “Don’t automate, obliterate”. In just a few years, that zeal had evaporated. ERP vendors and systems integrators convinced companies packaged software defined “best practices”. Just implementing the software would be “reengineering in a box”. It was not, and many companies ended up in worse shape because of the massive ERP overruns. Others just updated their corporate HQ functionality and forgot about their R&D labs, their shop floors, their logistics. We risk similar with today’s narrowly defined digital projects

For years now, pundits have said technology budgets are being taken over by the CMO. That is their narrow definition of digital – implement a social sentiment analysis technology or roll out a mobile consumer focused app.  Much better payback has come from the product side of the house. It is not unusual to find in auto makers more software engineers who report to product engineering/R&D than do to the CIO. It is not uncommon to see in companies seriously making their products smarter that the spend with contract manufacturers like Flex and Foxconn and product design firms like IDEO and Frog exceeds the spend with IT outsourcers and strategy firms.

And even if you do small “d”, a common mistake it to just look at packaged software vendors and one of their services partners. My colleague, Brian Sommer and I have been researching what we call “custom-crafted” processes. With SMAC (social, mobile, analytic, cloud) software and increasingly sensory, automation, blockchain technology you can custom design processes which are much better aligned with your changing industries. The big learning we have realized is if you go down this path you cannot just do that just once. For best results, you have to continually upgrade it like a packaged software vendor would to keep up with newer waves of technology and changes in your industry.

At best, your digital project will dramatically reshape your top line and your organization’s competitiveness. At worst, you will repeat the mistake of the 90s and end up with newer technology but not much better processes or efficiencies. Raise the bar for your digital project. Think Big D.