The key to creating a new digital revolution is doing it the systematic way. Similar to urban planning, it has to have anchoring landmarks, focus on removing structural hurdles, or entirely break away from old systems and build new ones. More insights from the Harvard Business Review:
Most companies want their businesses to keep pace with digital startups, but end up bogged down by the need to fix the daily challenges that their decades-old IT systems create. How do yoy redesign and rebuild major infrastructure while keeping the day-to-day work going? This kind of challenge is often referred to as “repairing the airplane while you’re flying it.” But a more instructive analogy might be the redesign of a major city’s infrastructure.
Specifically, there are three urban planning strategies, commonly followed by major metropolises, that leaders can use for inspiration in the race to keep up with digital competition. They include building glistening landmarks that anchor their digital strategy (as Dubai has done), removing roadblocks and bottlenecks to improve their underlying speed and agility (Boston), or changing course altogether to construct an entirely new city (Shanghai).
Dubai: Erecting Modern Landmarks
Targeted investments in striking new sights, like Dubai’s Emirates Office Tower or London’s giant Ferris wheel, serve as useful starting points for broader revitalization plans. The Emirates Office Tower was one of the first skyscrapers that marked Dubai’s transition to being a modern focal point for the United Arab Emirates. Today Dubai also boasts the world’s tallest building, artificial islands, the first hotel with a rain forest, and the largest indoor theme park on earth.
In the same way, investments in landmark digital projects that significantly enhance customer experience can help launch wider digital transformations. By developing visible, high-impact apps or improving data analytic capabilities separately from core IT systems, companies can roll out new offerings where they will most strongly change perception and put pressure on digital rivals — even if their back-end systems still need years to catch up. A pragmatic, output-focused approach can provide a catalyst to the back-end reinvention that needs to follow, and kickstart a company’s digital transformation by making the benefits real and impossible to miss.
For example, by designing a new cloud-based customer service platform, within nine months a power company could go head-to-head with an internet service provider that had started to sell electricity alongside Wi-Fi services and cheaply financed cars. Now the utility will be able to provide not just power but also phone, internet, smart meter, smart home, and security services. To customers, the company feels as nimble and innovative as its digital competition, even though its back-end systems remain problematic.
Boston: Removing Roadblocks
At the other end of the spectrum, companies can first focus on removing the structural hurdles that prevent them from moving with speed and agility over the long run. Boston, with its Big Dig project, for example, invested heavily in creating room for more vehicles and future growth by tearing down an aging elevated highway and replacing it with a tunnel highway network to circumvent the maze of congested roads in its downtown area. Even with the project’s delays and costs, city planners confronted the fact that the old infrastructure just wouldn’t fit the area’s transportation demands.
Companies can help themselves become more agile and remove their own bottlenecks by taking a similar approach. For example, retailers will struggle to put the right products on their shelves until they have accurate data about the dimensions of the packaging itself. Companies with sales forces that collect important customer data inconsistently in notes fields, because their data collection systems haven’t been kept up to date, will wrestle with problems downstream because workarounds must be developed to compensate for the poor quality of the initial input data.
The business case for these improvements is often hard to make because the benefit in speed and agility is indirect. It requires an extraordinary level of vision to see how a very different company will emerge at the end of the process and to persevere — as, I’m sure, the architects of Boston’s Big Dig can testify.
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