Digital technologies saved many businesses during the pandemic. The rapid adoption of digital capabilities allowed businesses to survive what was a generational crisis. And three years’ on, the impact from the pandemic continues, as some organizations find themselves struggling with some of the quick decisions that were made. The rapid adoption of working from home exposed gaps in work methods that continue to be unresolved. Websites that were established to continue to conduct business were not integrated with back-office support systems. Moving forms from a paper-based to a cloud-based model made work harder to do, not easier. And many companies, feeling as though they went through a “digital transformation”, have not realized the hoped-for results from the use of digital technologies.
Digitization, digital transformation, and digital evolution
We’ve heard the terms “digitization” and “digital transformation” so much that the terms have nearly become cliché and are frequently conflated. But there is a distinct difference between “digitalization” and “digital transformation”.
Digitization simply refers to adoption of technology that allows an organization to replace manual forms or work methods with the use of digital technology, but nothing about the business model changed. Replacing a paper-based form with a cloud-based electronic form for accepting an order is an example of digitization.
Digital transformation refers to the adoption of digital technologies that results in new ways of doing business, or the creation of new business models. For example, the adoption of digital technologies has allowed some restaurants to become “ghost kitchens” that serve completely different menus to delivery or pick-up customers. These “ghost kitchens” are a separate business model within the existing restaurant’s kitchen. Auto dealers now leverage digital technologies to provide virtual showrooms that customers can visit online to shop for new vehicles.
So, what is “digital evolution”?
According to Grieg Johnson, digital evolution is the “continual adoption and refinement of new and emerging technologies to improve business efficiency, reduce costs, overtake competitors, and achieve better outcomes”. Digital evolution leverages what is already in place in an incremental approach to improving an organization’s value proposition.
Whether a company has digitized or digitally transformed, digital evolution is the next phase.
A platform for digital evolution?
If evolution starts with leveraging current capabilities, then organizations that have ITSM tools, AI capabilities, and an ESM mindset are well positioned for digital evolution.
ITSM tools provide a means for capturing information from consumers of technology-based solutions as well as facilitate and manage the flow of work in response to that consumer interaction.
Many organizations are beginning to embrace an ESM, or enterprise service management, approach to how work is done across the company. Effective ESM takes a holistic approach, based on organizational value streams, for delivering valuable products and services to customers.
Lastly, many organizations are deploying AI-enabled tools and technologies, such as chatbots, robotic process automation, and virtual assistants. AI tools use methodologies such as natural language processing, machine learning, and more to augment the work being done by people, relieve people from tedious or monotonous work, and identifying opportunities for improvement.
How can combining these capabilities enable digital evolution? Using AI-enabled capabilities to evaluate ITSM workflows could detect execution gaps in work. Statistical analysis by AI-enabled technologies of ITSM workflows can determine that intervention or inputs from a workgroup or department before continuing to completion. Eliminating the need for such manual intervention results in improved efficiency of work.
The use of these capabilities can enable personalization in individual interactions with organizations. Using AI-enabled technologies can help organizations understand user preferences or buying patterns, which in turn can enable personalized interactions with ITSM tools or enterprise value streams, such as suggested solutions or product offerings. Using predictive capabilities of AI-enabled technologies may result in proactive suggestions for further enhancing individual experiences and interactions with organizations.
Despite that the combination of ITSM tools, ESM, and AI-enabled capabilities can provide a solid platform for digital evolution, some organizations may face the following challenges.
- No defined value streams or owners – Gartner defines a value stream as “the sequence of activities necessary to deliver a product, service, or experience to a customer, internal or external”. Given that organizations are, at their essence, groups of departments that work together to deliver products and services, value streams cross departmental boundaries within organizations. Because of this, no one understands the end-to-end nature of the activities within a value stream, much less has accountability for the value stream.
- “ESM” isn’t ESM – An issue with what many solution providers call “ESM” is that those aren’t really “enterprise” solutions. Rather, they are only “point solutions” or “add-on” modules for managing the work associated with a particular department or team. Those modules often provide little to no integration of workflows between departments within the organization.
- AI resistance – The introduction of AI-enabled capabilities willchange the way that work will gets done will change. Some people may resist ceding some of the monotonous and tedious work currently done by humans to machines and may resist digital evolution.
Keys to success
Digital evolution enables organizations to leverage existing and new digital technologies to improve their respective value propositions. What are some keys to success with digital evolution?
- Define a business strategy that embraces digital technologies – Having a well-defined strategy is critical for the effective adoption and use of digital technologies. Frankly, technology likely exists that will support or enable to achieve business outcomes. By first defining what the organization wants to achieve, and how technology will help the organization achieve those results, helps organizations define success, how it will be measured, and minimize risk associated with digital evolution.
- Resist the temptation to start with the technology – Taking this approach would be repeating the same mistakes that resulted from the rush to deploy digital technologies during the pandemic. There are many digital technology solutions at many price points available on the market. By defining the digital business strategy, organizations can be confident in selecting the right technologies needed to achieve the results needed by the business.
- Collaborative effort – While it is important to involve IT departments in the development of digital business strategies, digital evolution cannot be an IT-led initiative.
Start your digital evolution!
Here are three things you can do to start the digital evolution within your organization.
- Define your digital strategy – How can the use of digital technologies further increase the value proposition of products and services provided by your organization?
- Fill in those gaps remaining from the pandemic – Look at the current uses of digital technologies within the organization, especially those that were adopted in response to the pandemic. What gaps are present between those technologies and back-end systems? How can existing digital capabilities like ITSM tools, organizational value streams, and AI-enabled technologies help address those gaps?
- Start with small steps – Digital evolution is not about taking big leaps in adopting digital technologies. Identify and define a small value stream; gain commitment from across the organization and explore the use digital technologies in delivering the products and services