Digital transformation for large enterprises is a humongous undertaking that can typically span across several years. CIOs at the helm of digital transformation are under immense pressure to rapidly deliver results.
However, despite the allocation of millions of dollars to digital transformation, many organizations are struggling with aligning technology spend with business outcomes. Some organizations are starting to look into a new concept “lean digital transformation” that can help CIO’s accelerate digital transformation.
Lean is a concept that evolved from the manufacturing industry and essentially involves “maximizing customer value while eliminating waste.” Lean helped manufacturers improve quality and speed of product development. In the early 2000s, the concept of “lean startups” was introduced by Eric Reis and Steve Blank on the premise that startups typically have a lot of “waste” in their process for business building and they advocated development of the “Minimal Viable Product (MVP)” to foster rapid validation of the business concept. Lean Startup’s adopt a “Build-Measure-Learn” feedback loop process for iterative customer discovery & product development.
Lean digital proposes a similar iterative and validated learning model to drive digital transformation at speed. Lean digital transformation is the process by which companies can apply lean principles to the design, development, and delivery of customer value for their customers. Lean digital process should involve the following key steps:
- Leverage design-thinking process to develop a deep understanding of what value entails for your customers and the sources where such value is created within your organization. Define metrics that will help measure value creation and develop a plan/system to track these metrics.
- Align your organization to the “Digital transformation vision” and re-train/hire resources to enable them to the new operating model and culture.
- Approach the transformation as a series of iterations with each iteration focusing only on activities that will deliver the desired business outcomes while simultaneously focusing on continuous improvement. This will ensure there is sufficient digital transformation momentum.
- Implement Technology Business Management(TBM) model to gain visibility into IT costs and corresponding value derived from business applications, application services and infrastructure services.
I spoke with Jay Jamison, senior vice president of strategy and product management at Quickbase and former vice president- strategy, cloud and software-defined networking at Hewlett-Packard Enterprise. Jay has a unique perspective on digital transformation given his experience working with leading CIOs on multi-year digital transformation strategies and low-code development platforms at Quickbase.
Jay considers lean digital instrumental to achieving the desired results from digital transformation. Jay believes that CIO’s ability to set a clear vision around the imperative of moving faster, focus on the need to better serve customers and consistently demonstrating “Quick Hits” will be vital to transformation success.
Based on our collective experience with business transformation across large enterprises, we outline below a few strategies CIO’s must explore to drive lean digital transformation:
1. Design thinking
Design thinking is a problem-solving process that combines creative and analytical thinking. Design thinking is often leveraged to drive business transformation and is rapidly becoming the process for business innovation. The design thinking process as defined by Stanford’s d.school involves the following 5 Steps:
- Empathize: Develop a deep understanding of your users, their emotions and their needs.
- Define: Create a meaningful and actionable problem statement based on user’s needs.
- Ideate: Idea generation to identify all possible solutions to the problems defined.
- Prototype: Iterative generation of artifacts intended to get closer to the desired solution.
- Test: Refine prototypes through user feedback and gain more empathy for your users.
Running through a design-thinking process can help digital leaders develop a deep understanding of what their customers are looking for and what they value most. This will help serve as the basis for the lean digital transformation strategy.
Although discussions around digital transformation often revolve around emerging technologies and utilizing technology to serve customers, the reality is that any successful digital transformation is going to be a function of people, processes and technology. Digital transformation requires people to quickly unlearn, relearn and master new skills.
Organizations should consider replacing traditional waterfall development processes with agile development. Agile methodologies are the backbone for lean digital transformation. To move faster, all new application development must follow a more iterative set of capabilities. Traditionally, enterprises have adapted their processes to avoid risk and maintain stability by establishing rigorous change management.
Digital leaders driving agile transformation often find it challenging to inject the change management necessary into established culture, existing systems and into existing application developers. Cultural change in any enterprise is no walk in the park. Jay believes that it is very important that digital leaders set the tone, provide the examples for agile success and help encourage the intellectual curiosity and resourcefulness of developers who may be comfortable working in a waterfall world to move through to the agile methodology.
3. Lean infrastructure and operations
Lean infrastructure and operations enabled through cloud computing and devops automation will significantly help improve speed of transformation. In a traditional waterfall methodology, an application may be updated 3-4 times in a given year. In a cloud environment that’s leveraging agile development methodology the application may even go through 2-3 release iterations in a given day. This helps you get closer to customers, solicit early feedback and be more responsive to their needs.
Many organizations are leveraging cloud-native application development platforms such as cloud foundry, a platform as a service (PAAS) along with application frameworks such as “Springboot” to achieve speed of innovation and rapid deployment. The value proposition of platform’s such as cloud foundry and springboot is that you abstract away and simplify the steps that are needed to get a web application stood up and running.
As an example, Jay states that a web application in a traditional (non-cloud) IT environment that needs a database will need to go through a formal requisition process that can take weeks. However, when a developer builds an application using platforms such as cloud foundry, the database is provisioned automatically once the developer is done with the code and decides that it’s of the desired quality. Platform’s such as cloud foundry also include a host of widgets that enable easy integration with devops pipelines resulting in rapid deployment of new functionality.
A recent trend involves leveraging low-code application development platforms such as Quickbase, Apptian, Outsystems, etc., to enable rapid application and innovation delivery. Traditional software delivery teams have often struggled with meeting business requirements on time and within-budget. Talented and highly-skilled developers are a very scarce commodity. In our experience working with large enterprises, IT teams typically have massive backlogs of business request and technical debt and are often unable to deliver the results requested by business users in the timeframe that will yield the business results required.
Low-code application development platforms typically provide visual development tools, and include widgets, connectors, out-of-the box templates & cloud deployment to foster rapid development. Low-code application development empowers the business users closest to the work that they perform and the customers. Low-code development platforms enable tighter business and IT collaboration. Since business users have first-hand knowledge of what’s needed, low-code platforms give them the tools to dive in and quickly develop solutions to business problems.
This self-service capability enables business users to roll-out solutions without depending on IT. In addition, organizations can expect faster production release cycles as there will be fewer bugs due to reduced amount of “human developed code”.
Low-code is also instrumental in the design-thinking process that organizations leverage to drive innovation. The rapid prototyping phase of design-thinking can benefit significantly from use of low-code tools that will allow users to adapt and customize applications in real-time. As business users uncover new customer requirements, they can iterate rapidly to deliver new functionality. Rapid prototyping using low-code allows business users to roll out functionality in hours’ vs months enabling organizations to innovate faster.
5. Technology Business Management (TBM)
Another key strategy for Lean digital transformation involves leveraging the Technology Business Management (TBM) methodology for gaining visibility into the IT costs and their relation to business value. TBM significantly enhances the partnership between business and IT by providing facts around business value of IT spend.
TBM provides a framework for IT leaders to track “Run-The-Business” spend vs “Spend on Innovation/Growth” and enables a clear understanding of any “wasteful” spending that should be immediately eliminated. TBM typically provides full transparency into cost of hardware, software and labor costs/utilization enabling organizations to track variances across each iteration of their Lean digital transformation and take immediate corrective action.
The transparency provided by TBM eliminates weeks of manual analysis that is typically required of IT finance teams to determine business value and identify waste. This helps the C-Suite quickly identify digital initiatives that are delivering desired results and change course where required. Enterprises that are in the process of cloud adoption can also gain significantly from leveraging TBM. CIOs can report with confidence on cloud-costs and their direct impact on business value enabling justification of cloud spend and potentially win additional budgets for further transformation.
Lean digital transformation methodology can help organizations jump start their transformation initiatives with minimal upfront capital and ensure that they are aligning their initiatives with business outcomes. Lean revolutionized manufacturing and CIO’s must adapt to “lean digital” to revolutionize IT’s ability to rapidly deliver business value.