A Digital Transformation Case Study

Digital Transformation WP HeaderThis blogpost is based on my talk at the Pivotal Digital Transformation Forum 2016 in Istanbul.

In today’s world, even for big industrial companies, the
Digital Transformation is an absolute must; not only because industrial companies want a Digital Transformation, but also because the competition makes them do so.

The results & experiences presented here are gathered while supporting a german industrial company in building an industry 4.0 platform based on Cloud Foundry.

As stated above, international competitors are already in a Digital Transformation. Because of that it will be ‘disrupt or be disrupted’ for any company that tries to avoid a Digital Transformation. But there is already a question that needs to be answered before we can start.

What is Digital Transformation?

The Digital Transformation is about ‘How to learn to be disruptive’. For that it is necessary to learn ‘How to build your Disruptive Stack’. As you can see on the image, there are dozens of paradigms, but all of them can be unified in their 1 goal: ‘Time to Value’.

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What does ‘Time to Value’ mean?

Let’s have a look at the Dimensions of Digital Transformation, these are:

  • Culture
  • Methodology
  • Technology

Culture is influenced by paradigms that map to values. These values influence behavior. Behavior comprises culture. One could say that culture is the sum of people’s behavior.

Choose your paradigms

As a first step, you should determine which paradigms you want to apply to your organization. Unlike you might think, the paradigms are not that different. On the contrary, the paradigms overlap in many points.

After you have chosen the paradigms of your choice, you should ask yourself if your company is already living the values of the paradigms? Normally, this is not the case, because the company was not built with these values in mind.

We could distinguish between cultural and methodological values but keep in mind that Digital Transformation is not primarily about technology. It is about changing your company’s culture.

By experience we could tell you, that it will be hard and challenging to get these values in place of the heart of your organization. Afterwards, this change in the culture of your organization will have impact on methodology and technology.

Digital Transformation is not primarily about technology. It is about changing your company’s culture.

Having a closer look at a small subset of paradigms, that came up in the past decade, we are able to distinguish their values into cultural and methodology related values.

Pivotal Digital Transformation Forum - Istanbul - 2016-11-03 - Version 6.001Let’s have another look at our example paradigms ‘agile’ and ‘lean’.
One main value of both of them is the focus on the customer (value). One main goal of both paradigms is to satisfy the customer, deliver value and reduce waste.

Pivotal Digital Transformation Forum II.001Another value that is shared by both paradigms is ‘Sustainability’. This describes the ability to deliver at a certain pace – and even more important – to keep that pace basically forever.

This is a major value of these paradigms, because we would like to accept that it is not a good approach to burden the team with a strict timeline, just to reach one particular release, regardless of whether the team is burned out or manages to meet the requirements.

It is better for the organization to keep a certain pace for a very long time to have a chance to get better and improve in what they are doing.

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High people awareness

Sustainability is a good example where the ‘High people awareness’ of today’s modern ways building operations is focus.
On the one hand, there’s the focus on the customer’s value with a strong empathy for the customer. On the other hand, there is a culture of self-responsibility.

That also means to trust a motivated team to get the job done. But there’s one sentence that summarizes the values of the ‘High people awareness’ and that is: ‘It’s about the people’.

Think of the people as an essential part of your organization, they are the very heart of your company and that is contrary to the thinking that has been dominant in managing organizations in the past decade.

People are the heart of your company.

Pivotal Digital Transformation Forum IV.001In addition to the people orientated way of thinking, another part of the Digital Transformation is about Feedback, Learning & Adoption.

Feedback, Learning & Adoption

Open information and feedback processes, as well as strive for continuous improvement, are important values which you could also find in the paradigms like ‘agile’ and ‘lean’.

The parts ‘feedback’, ‘learning’ and ‘adoption’ are connected to each other. If you leave one of them out, the whole process does not work anymore.

Before you are able to adopt something, you first have to learn. Before you are able to learn something, you will need feedback and you will only get feedback if you build a product release and show it to the customer. That is where continuous delivery comes in place.

Evaluating is necessary to recognize if a new feature does not bring any value to the customer at all or even worse if it takes value instead of bringing new value.

You should take validated learning as an essential part of the value chain.

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Efficiency and Productivity

One major step to increase efficiency and productivity is to reduce waste. But what are the things we are referring to as waste?

In fact, the definition in this case is quite simple: Waste is everything that you think you have to do, but which you could leave out and still create the same amount of value. With that definition in mind it is pretty obvious how to reduce waste.

Every behavior, part of your organization that is not adding value to a product directly and is not absolutely necessary => cut it off.
But before you are able to detect waste, you first have to identify you value stream. In our case, we started to visualize our workflows to be able to optimize them with continuous improvement.

We are also using a pull based system to avoid system overload by limiting the work in progress and we realized that the cloud helps us to automate parts of our work that has been time consuming in the past years.

When approached with the right mindset and methodology Cloud Foundry can boost your productivity by living lean and agile values.

Transformation Choices

To perform the digital transformation, you have different choices to make.
For example, with regards to Culture and especially People, do you want to educate people or do you want to hire new? In case of Methodology and Processes & Habits, do you want to change process or do you want to bootstrap a new organization?

The most extreme choice you could think of would be the decision between Cannibalization and Transformation. Cannibalization in this case means the idea to create a new start-up, which is built with modern paradigms in mind. These paradigms should boost your new startup, which should compete with your ‘old’ company.
But this case is very rare, because most of the time, there is a young company that takes this place and disrupts your business.

Management Support

In case you have chosen your paradigms, learnt about their values and are now ready to use all your energy to get the Digital Transformation going; just one more small advice on that: Though it is possible to establish the Digital Transformation in a bottom-up manner, C-Level management support makes this task a lot easier.

Don’t get me wrong, that does not mean to have management attention right from the beginning of the movement, but with greater awareness at the base, it should be possible to raise C-Level management attention. This kind of management attention is more or less unavoidable because of the scope that the changes will require.

In an ideal world we would have a bottom-up and top-down movement at the same time to get the Digital Transformation done.

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Anti-Patterns ‘Waterscrumfall’

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Starting with a ‘Classic Value Chain’ relying on sequential following. In this value chain, the management will put the ideas into the process/ to the product manager.

The product manager will turn this idea into a spec, which will be realized in a waterfall like developing process and afterwards put to operations. This approach works only in theory, but if you use this classic value chain in practice, it reveals some major downsides.

At least during the developing phase learning takes place, because of the sequential process, these ideas will be wasted, because the project will not be adopted.

Pivotal Digital Transformation Forum VIII.001The first idea that comes into your mind in this case might be to add iterations to the development phase to avoid waste of the ideas. This adjustment will help your organization but most parts of the value chain are still sequential. That is what we call the ‘Waterscrumfall’.

But why is this attempt that bad? Not just because it is neither agile nor lean. It is because learning takes place along the whole value chain, and all of these ideas should have the chance to have influence on the product.

To ensure that the iteration should not only include the development phase, it should include all phases of the value chain.

Pivotal Digital Transformation Forum VIII.001The problem in this case is not the use of Scrum. The problem is the fact that parts of your organization stick to old paradigms. To avoid such anti-patterns, it is absolutely essential and necessary that the whole company gets transformed and adapts these values.

Embrace learning along your entire value chain by working with iterations and allow feedback to change to your original plan!

So if you are planning the Digital Transformation in your company, feel free to contact me & my team via our website www.anynines.com.

I hope you found some interesting facts here.

Also have a look at our video version of this blogpost.

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