Innovation Institute

Digital maturity: a business measure for adaptive capacity

Continual disruption is now a common feature of today’s rapidly changing and complex world. It creates a flux of opportunities and threats for businesses and economies. In a crisis mode situation, the need to transform and adapt an enterprise becomes an important preoccupation for the business leader.

The application of digital technologies has already been positioned to be a prominent business transformation instrument to support solution paths and propel forward business continuity and, potentially, growth. However, such applications of digital technologies have had varying degrees of success.

The accelerated rise in adopting digital platforms such as Zoom, Slack and AWS to create new or modify existing experiences during the Covid-19 pandemic is a case in point, and the impact of these platforms has been witnessed in almost every business model and in every business sector this year. Such an intensification in digital solutions to reimagine how business is transacted presupposes a level of digital maturity in organisations, which in many cases continues to be underdeveloped and unstructured. An organisation’s level of digital maturity provides an effective indicator of its adaptive capacity to respond to a crisis.

The top strategic technology trends in 2021 will focus on three clusters: people centricity, location independence and resilient delivery; with innovation being the cross-cutting theme that powers these three cluster-trends.

As 2021 emerges with an increased hope of pivoting to a new world normal, the relationship between digital and business leadership is likely to continue to be highly active, to forge new business and operating models that anticipate future customer/user needs and expectations, and support desired business outcomes.

So, what steps should an organisation be considering to drive up levels of digital maturity, creating the necessary digital anti-bodies against external threats and strengthening business resilience overall?

Well, according to global research firm Gartner, the top strategic technology trends in 2021 will focus on three clusters: people centricity, location independence and resilient delivery; with innovation being the cross-cutting theme that powers these three cluster-trends. Let me put these clusters into context in the business world.

Top strategic technology trends for 2021

The people centricity trend is manifested when any form of data-based interactive engagement happens. Examples include interacting with a government portal, purchasing and monitoring a delivery, deducing medical data from sensors and analytics. Hyper-personalised digital experiences (e.g. AI identification of user emotions) will significantly influence online behaviours and transactions. Therefore, this calls for a ‘trusted environment’ to be established, where privacy and security of personal information is a primary requirement.

The location independence trend, comprising of a blend of virtual and physical experiences reflecting the way in which a workforce operates, is now becoming more widely accepted. This behavioural shift is set to likely outgrow the Covid-19 crisis as many industries are reporting improved levels of productivity as an early outcome.

Location independence leverages distributed cloud technology options, enabling a location of choice to be used. A business can, thus, benefit from exploiting the different styles of modern communication networks that are designed to operate within a distributed cloud environment. For example, the use of 5G mobile edge cloud and Internet of Things (IoT) edge cloud, where sensors and data collecting devices are numerous and highly distributed, can be utilised in logistics management and large-scale manufacturing industry applications, without the need for operators to be physically on-site. Cybersecurity for ‘trusted’ remote-access control to digital assets meshed with distributed cloud platforms can offer an ‘anywhere operations’ feature providing a new business capability advantage.

An organisation’s architecture and its workflow infrastructure will continue to be subject to evolution and, as such, will need to become more programmable to flex requirements and adapt to continuous change.

The resilient delivery trend is where the use of hyper-automation tools and platforms (e.g. robotic process automation, business process management, artificial intelligence and machine learning) integrated with actionable data analytics for executing business operations generate solution paths with a high degree of consistency and scalability.

This requires orchestration of the degree and scope of automating the business processes across the different functions and through the organisation’s ecosystem, whilst still ensuring security, corporate policies, explainability of AI actions and preserving privacy requirements (i.e. applying the business logic and governance rules) are all met. For example, the use of chatbots in such services as customer support, facility management and procurement offer responsiveness as well as, consistency and scalability in business delivery.

These aforementioned three trends paint a picture of an evolving landscape, which indicates that an organisation’s architecture and its workflow infrastructure will continue to be subject to evolution and, as such, will need to become more programmable to flex requirements and adapt to continuous change, as shown in this illustration of the adaptive and reprogrammable enterprise:

A visualisation of the adaptive and programmable enterprise at the image above.

Organisations will need to focus on digital skills development and acquisition to increase levels of digital dexterity. They will need to design more sophisticated application programming interfaces (APIs) to improve data sharing/management whilst minimising or eliminating handoffs and look to adopt standards in corporate policies to maximise reuse and foster agility.

Such actions form the foundational elements to establish new key performance indicators that allow for continuous business transformation and automation reconfiguration. Furthermore, elements such as speed of service and deployment, reduction in handling customer time and improvements in quality, compliance and privacy assurance should also be considered as part of the overall organisation’s business performance KPIs.

In addition, the application of ‘use cases’ in digital transformation can provide a powerful visual representation that address the needs of both employees and consumers alike. For example, an organisation’s R&D team can apply digital tools to help them track project portfolios. They can use an assumption-based development approach to describe critical behaviours and drivers to accelerate the test-and-learn process supporting both speed-to-market, and the innovation outcomes deriving from the most promising projects in their innovation pipeline.

We at the IKE Institute would encourage organisations to consider the following three tips as part of their digital innovation transformational journey:

  1. Carry out scenario planning to enable the business to foresee how it can adapt to changing trends and lessen the impact uncontrollable events;
  2. Plan for new business value by using analytics to monitor the potential impact from a crisis on your ecosystem and provide a good level of visibility on where things could break;
  3. Expand the use of data to improve the level of digital dexterity. It is crucial for all employees to learn how to speak data as part of an innovation-driven culture.

Organisations that fail to innovate will probably be left behind. Increasing an organisation’s adaptive capacity by digitally innovating creates an opportunity for an organisation to enable programmability, and this is the only valid way in which a business can be protected to drive growth with confidence.

 

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