17 Aug What Digital Transformation Forgets
For many years, what a business knew – its data – and how it worked – its processes – determined its success. Those that understood what customers wanted, and could then design and supply innovative products found their recipes for generous profitability. However, the era of digital-powered business, challenges that model. Start-ups disrupting entire industries can emerge overnight while transitioning to pay-per-use billing can threaten venerable cash cows. It is no surprise then that innovative organisations now look to digital technology to help them find new sources of value.
For those on the journey to evolve their business applications, the benefits of new digital technologies can be significant. As organisations are finding, a competitive advantage no longer comes from just having data and processes. Successful businesses now use data to optimise their processes and implement processes to exploit their data.
The Result of Digital Evolution
As whole industries digitally transform themselves, their focus has been on improving the customer experience, implementing collaborative workplaces, and modernising ageing data centres. Staff now see their workplace desktops looking similar to their smartphones, while technology leaders talk about services rather than servers. This era of digital evolution was inevitable when the technology mega-vendors had so much influence over organisations’ technology roadmaps. Their software licensing agreements increasingly encourage cloud adoption while their innovation takes app-first, desktop-second routes to end users.
Looking at how organisations digitally transform themselves shows some common tactics. Choosing a future collaboration platform is often their first digital choice – in particular, whether they adopt Google or Microsoft’s services. Some would argue this is more of a philosophical than a technical decision. Is the right supplier going to be an established on-premises vendor that evolved itself into a cloud services company or a consumer cloud firm breaking into the business services market? Either way, there is a definite appetite for cloud-hosted email and collaboration services, and a clear set of options. Similarly, organisations are presented with a clear need and set of choices when they modernise their data centres. This time, it is Amazon as the consumer company trying to break into the business space, while Microsoft has once again transformed itself into a cloud services company.
The Digital Leftovers
Once an organisation’s next generation of collaboration and data centre needs are spoken for, some then look to modernise their applications. While no application vendor has a monopoly, there is no shortage of familiar names. Microsoft, SAP, and Oracle have taken their credible on-premises business platforms to the cloud, while born-in-the-cloud Workday and Salesforce provide healthy sources of competition. As a result, moving generic yet essential business capabilities – such as finance, sales, or HR – to the cloud is now a typical process for many businesses. To make these migrations easier, many projects now have the sturdy support of a related business department. Whether it be upgraded features or new capabilities, the temptation of transformation can be difficult for them to resist.
Having transformed their core business services and modernised their data centres, organisations could be forgiven for wanting a rest. In reality, that is what most do. However, despite the lure of a pause, it is no time for modernisation programmes to stop. Stopping now can mean an organisation’s oldest yet most valuable and personalised business processes remain reliant on ageing applications whose vendors or developers often vanished long ago. These systems become an organisation’s digital leftovers – ageing business applications without a modern home in the cloud.
Transformation programmes can also halt before deploying modern tools and processes to exploit an organisation’s mountain of data. Nowadays, they should consider the reporting and analytics systems plumbed into their core applications to be just the start of their analytics journey, rather than the beginning and the end. High performing organisations need to find and then learn from the valuable insights sat within their Excel file archives and bespoke operational databases. Their ambition should be to start answering their long unanswered questions.
Smart Business Operations
While businesses may appear identical to their competitors from the outside, experience shows that whether intentionally or unintentionally few work in precisely the same way on the inside. Access to unique resources or partnerships, catering for niche markets, or just experience and evolution often mean a business does something in a way no other company does. These distinct processes can be what gives them their competitive advantage, although more commonly, it is the only way of working they know. These ways of working cause business application departments to help make staff more efficient with application customisation and automation. If an application came from a vendor, then using its custom fields, rules, and workflows were often the answer. If applications lacked flexibility, then tailor-made systems were developed. Whichever option they took, businesses usually ended up with a highly valuable one-of-a-kind application.
One-of-a-kind applications cause problems for transformation and modernisation programmes. Newer software versions can lack upgrade paths for custom code, while some vendors have vanished altogether. Only the luckiest seem to use customised systems with turnkey modernisation choices. The vast majority of businesses are left then looking for native cloud applications offering a tempting balance of innovative features to support future needs and ready-to-configure capabilities to recreate current ways of working. Despite grand ambitions, migrating a custom application to the cloud rarely becomes the right time to make significant changes to how the business works.
For organisations which have already transformed their technology platforms using Microsoft’s cloud services, then its Dynamics 365 application service is the natural new home for their one-of-a-kind and core business function applications. Provided in a Software-as-a-Service (SaaS) format, Dynamics 365 is a portfolio of ready-to-configure and ready-to-customise application services. It contains modules for marketing, sales, operations, finance, and talent management – some of which, such as Dynamics CRM and Dynamics AX, are market leaders albeit with new names. More importantly for organisational innovators, it also provides the platform for one-of-a-kind applications. With a set of tools for managing data-models, custom user interfaces, and business process flows Dynamics 365 can host the business processes which cause a business, intentionally or unintentionally, to be unique.
Creating a modern home for business processes is a step forward for any organisation’s digital transformation. However, while having technology powered processes allows the business to operate, using data about how those processes perform lets it become smarter. The tight integration between Dynamics 365 and Power BI, Microsoft’s cloud reporting and analytics service, provides those insights. They not only say how a business is performing but also show how efficiently it operates. By analysing the metrics about how business processes perform, leadership teams can measure delays and find their causes, monitor inefficiencies over time, and answer the ultimate question – “how do I make the business more effective?”.
An Insightful Workplace
Microsoft’s Power BI platform is the interface between raw data and business insights, regardless of where organisations store that data. Its flexibility becomes essential when leadership teams and data analysts realise some of their most valuable data sits outside of their core CRM and ERP applications. Instead of having mobile dashboards, what-if modelling, and historical data warehouses, they can be left looking for answers in an array of proprietary manufacturing or e-commerce databases, and folders of Excel files.
Now more than ever, operational managers want to look beneath their business metrics and understand why as well as how much, leading to one of today’s most common business questions “why is it so much?”. Whether that question is about time, effort, resources, or cash, it demonstrates the modern manager’s need to reduce wastage. Wastage has been a topic of business debate since the late 1980s when manufacturing began using lean principles. The quest to do just enough, rather than take too long or reduce quality, is now known to influence profitability in many industries, not just manufacturing where lean thinking originated.
Finding those new insights about why often means looking at new sources of data, yet these new insights can come from some of the oldest data in a business. Factory production lines can have been operating for decades and retail systems for years, long enough to compare historical trends with current data. Likewise, many middle-managers still depend on the world’s favourite analytics tool – Excel. Despite its lack of formal data models, repeated use over time means organisations can have archives of semi-structured operational metrics sat ready for exploitation.
Power BI and Microsoft’s other cloud data services are the data transformation tools modern businesses need to answer their unanswered questions about efficiency, wastage, and profitability. By loading and transforming data from Excel files, legacy operational systems, or modern cloud services, Microsoft business data solutions can then present operational and financial insights. Senior leaders can use mobile dashboards to see current performance wherever they are while functional managers can delve into the detail to see how they are delivering that performance. These solutions also help everyone answer the recurring ultimate question – “how do I make the business more effective?”.
Intelligent Business and Data Applications
The era of Microsoft providing SaaS cloud application and data services means organisations can change how they think about using technology. No longer are extensive lead times, CapEx heavy, and resource intensive projects needed to try a new idea. Business, as well as technology, teams can instead modernise how their organisation already works and rapidly implement its new thoughts. Similarly, they can evolve their current business insights but also answer questions no one could previously answer. Now more than ever, today’s highest performing businesses depend on intelligent business and data applications to use data to optimise their processes and implement processes to exploit their data.