Leader Management

Digitization – Embracing Complexity

Technology has always been about change. It is used to solve business management and organizational issues in creative and innovative ways. Thereby, it can be viewed as a tool, a system, or a value to business that needs to be properly managed. Digitization is no different. Digitization may be thought of as an organization that is embracing the technologies of virtualization, cognition and connectivity to deliver its business. This also means that the organization has accepted the underlying complexity that comes with digitization.

In this article, we will explore few of the areas of growth in complexity that needs to be considered and managed. This article is meant to provoke thoughtful dialogue on the acceptance of complexity and its role in managing digital enterprise.

The dawn of the personal computing and the information age saw organizations deal with technological challenges using the “triple constraint” model or sometimes called the “3P” model. This model is prevalent, particularly in project management and six sigma methodology to achieve quality (or identified goals).

Figure 1: Triple Constraint Model

To achieve solutions to handle the business or operational challenge, one needs to define the right people (skill sets) to be involved with the right process and procedures defined and the product spec-ed out. The key for any manager is to ensure this triangle is equilateral. While not an ideal model to use in practice, for the purposes of illustrating changes due to digitization this model suffices.

Digitization has enabled interactions between people and things, things and things, and things to agents, and agents to agents. Note that people may have a bot (or agent) represent them as well. Thereby, the people constraint can be considered as a partner in the model as the set,

Partner = {People, Things, Agents}

Considering that the interactions occur over a framework set forth by common understanding among the partners, it is apparent that there needs to be some sort of data and governance fabric to meet the objectives. This aspect may be explored in future articles.

Advances in technology have also blurred the lines of the physical and virtual spaces. Further the expectation of the customer (internal and external) has changed with their expectations and higher demands on experience. The impact can be observed in real day experiences with the businesses moving to the use of platforms (beyond the products and services). A good example is Amazon Marketplace (or simply Amazon because of consumer familiarity). A platform addresses the organization’s need to minimize effort to connect people, knowledge and opportunities. This is a fundamental change to the traditional product thinking. Platform provides leverage to the organization in delivering the experience demanded by its customers. In short, it is more about the organization’s business model and thereby is beyond just a product. To deliver the platform, considerations needs to be given to the required infrastructure, information, computing, storage and experience needs based on its network, data and governance fabric. The rise of platforms has made software integrations and experiences more visible while abstracting hardware and complexity.

Figure 2: Triple Constraints Model – Impact of Digitization

Digitization not only blurs the physical and virtual spaces but the lines of business and technology as well. This impacts the organizational processes in place. The new processes requires better understanding of the value streams, in how well the organization fosters information exchange, in connecting the supply and the demand, in its ability to handle the core transactions within and external, in enabling an innovation and problem solving mindset, in high collaboration. By digitization, doing business is not the same as putting in a SOP or just being agile! It demands the need for business agility in a rapidly changing everyday experience landscape.

As shown with the use of the triple constraint model (see Figure-2), Complexity has increased many folds with digitization that needs to be actively managed in all dimensions. Do we manage or plain embrace the complexity of digitization? And at what cost?

Fred Brooks in his seminal book, The Mythical Man Month has mentioned the need for a framework to understand the information content in the software structures similar to Shannon’s theory used in communication streams. Until we can converge on a framework that can quantify the digital structures, NSB (No Silver Bullet) will rule the digital technologies usage, development and acquisitions. But then, doesn’t it always?

About the Author: Rajesh Murthy is the director at GAPASK Inc., Canada. He can be reached at rmurthy@gapask.com

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