Knowledge Summary: The Next Decade in Digital Transformation

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A knowledge summary is a semi-long to a long post that synthesizes positions, concepts, and lessons learned around a topic.  They consist of a mix of primary research with ideas and frameworks I built based on conversations and working sessions.

This knowledge summary will focus on concepts you have to know to embrace digital transformation in the next decade.

Understanding Digital

I wrote about digital transformation first in 2013.  Then an update later in the year, and finally a call to end the talk in 2015.  And I wish, you don’t know how much, we could do that.

But we can’t.

The problem is that digital has become the new crutch word much like e-anything or i-anything became the crutch letter in the late 1990s.  And we have seen decent value arise from that use: iPhone and eCommerce are the two most recognized iconic words (and concepts).

The purpose of Digital is to replace all that has to do with computer-driven or computer-assisted.  We have had computers since the 1980s in the organization, we cannot say “computer-driven transformation” as that ship has already sailed;  we talk about digital as if it was a magical, mythical approach to changing things.

But it’s not.

At the core, this machine-driven revolution is different from the one 30+ years ago in what is focused on – data.  That’s it, as simple as it can get.  This transformation is about data.

It would be more appropriate to say it was about information (a combination of data, content, and knowledge that enables companies to solve problems better in context), but — as I said before… i-anything was already taken.

Seriously, it’s not about data only, it could never be.

Data is the representation of an event.  What happened to whom or which, when, how, and where – it’s the pieces of information you need to recreate something: a customer signed up for a newsletter (what), they received the newsletter (what, when), they opened three of the five links (what, when, which), they did a search for further information (what, how, when), they bought a product (what, how, when, where), we shipped it (what, when, where, how), they received it (what, when).

That’s all data – every piece of that.

Data does not mean much without the other two parts of information: content and knowledge.

Content is the static information we (or someone else, if we believe in communities) created that describes an entity (product, solution, use cases, manuals, etc.).  For example, the customer got a newsletter with content – information about products, services, discounts, coupons, etc. and acted on that.  The data about the newsletter being distributed and the action remains, but without the content, we would not know why the client acted and we couldn’t track specific actions they took.

And that brings the final piece: knowledge.  Knowledge, if you follow my writings, is wisdom – the applied, contextual, intent-driven use of content.

And that is where the reality of what data can do comes together — if you combine data about events with content related to that event and intent and context in the form of knowledge – what do you have? the right information, at the right time, in the right place personalized for each person, optimized for each situation, and outcome-focused.

In other ways, you have the reason your organization is trying to adopt a business transformation strategy.

Becoming Digital

Now you know what digital is and why it’s the source for business transformation this time around: even though data has been around from the beginning, it’s the leveraging of data mixed with the right content and knowledge, yielding information, that makes it the basis for this new evolution.

How do you use it?

There are two slides that I use to show my clients and people I talk to where / how / why information is to use it.  First, where does information come from?  Big Data — rather Big Noise.

Check it out…

The concept of Big Data is a misnomer: how can something be “data” or be anything if we don’t even know what it is.  If one trillion IoT devices generate measurements, which ones are truly data and which ones are noise? If there are 20 millions tweets in one week mentioning your company name, product name, or someone in the company directly by name, how do you know which ones to reply to directly and which ones to safely ignore? What about corrupt or misspelled or damaged “data”? it’s not data until you structure it, until then is noise – simple.

Although the first reaction is always to store everything and “later we will figure it out” the volumes are becoming too large for that, and the need to use the data (and the speed at which data usability and usefulness decay) increases dramatically every day.  Storing for future use is no longer possible these days.  The next step is to filter the noise and create a signal.  If a plane that uses Rolls Royce engines generates over a terabyte of data per flight, and there are thousands of flights daily worldwide – which piece of “data” should be stored? used? discarded?  Filters make that decision.

Once the filters take their turn and the noise is selected as valuable, then we structure the information.  This is the decision as to what it is: data, content, or knowledge?  This is the moment the noise becomes structured and ready to be acted on.  The concept of digital transformation being about acting on unstructured data is another misnomer – how can something be acted on if we don’t know what it is? where it came from? what is used for?  once we filter the noise (create a signal) then we figure out what it is that we have, structure it, and store it in the proper place (or not, but that’s another post) and act on it.

These actions, the analytics or workflows applied to them, generate an insight – a something we did not know.  These insights are what we use to make decisions, to act, or simply to inform – via dashboards and reports.  These signals are also the components of information that will be used to power algorithms and AI components – and that will become the new filters for Big Noise.  The cycle of optimization based on what we know and what we learned is then complete and we have both insights we didn’t before, and data (and content and knowledge) stored.

Very different from simply capturing everything to figure out later what to do, no?

Being Digital

This section is the second framework I use with clients and in conversations when talking about what it takes to become a digital enterprise.  I must confess, this is not a new model – I first introduced it in 2013 – but have been working and optimizing it since.  Thanks to all of you that helped me along the way.

Once you get past the majestic use of colors and boxes, you end up with six components you can focus on: four yellow boxes, and two blue boxes.  I know, mind-blowing.

The yellow boxes represent infrastructure, the purview of IT and Architects in your organization.  As your organization becomes more entrenched in the cloud (which by now is commoditized, so I am assuming you are either already there or on your way there) they will notice more and more a need to structure their approach.  The yellow boxes separate the different pieces they need to focus on:

  1.     cloud infrastructure, the core components used to run and interconnect everything
  2.     legacy access, because I am still proud of the code I wrote in the 1980s in COBOL and to be fair – a large number of you still use it and need it to run your organizations
  3.     interface connectivity, because in the age or mobile and IoT there is no longer a requirement but actually a necessity to be device-independent — this is not mobile-first, this is mobile-also
  4.     and to accommodate the hype of the day – AI (or advanced analytics, if you read my writings on the topic) with three specific outcomes: optimization, personalization, and automation.

I wrote about this framework before, the link is above and there is an update to it here as well, which is why I am just summarizing it here.  If you need more details read those posts, or contact me.

Once you configure your distributed computing architecture (AKA cloud) to operate in a model similar or comparable to the above, you will end up with two blue boxes – which is where the magic behind business transformation happens.

The information blue box is what we were discussing above in the previous section: how to find the right data, content, and knowledge to create the necessary information for every transaction.  The information will come from anywhere: devices, legacy data or applications, or AI and analytics engines.  The role of the information layer is to make sure that all information is considered, and the best selected, when crafting the response to an interaction.

The experience layer is the one where most organizations would love to have control – but they can’t.  The concept of building experiences for customers is archaic and, frankly, dumb.  This is not about understanding customers journeys or planning for them – or anything like that.  This is about understanding that stakeholders (notice it says customers as well employees, partners, and public) will interact with the system on their own terms, according to their expectations, via any channel, at any time, in any way they see fit.  Today they may have more time, tomorrow less – and they would appreciate a quick summary today, and more information tomorrow.  To accommodate these shifting expectations, each experience will be built ad-hoc by the stakeholder – provided they have access to all systems, information, and rules that apply.

This is the essence of being digital: building an infrastructure that allows any stakeholder to interact with any part of your organization, at any time, anyway they want, for anything they need.  if you can do that, you are “living la vida digital”

Ricky Martin – Livin' La Vida Loca

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To get there, that’s what you need to do over the next decade; this is not a simple system purchase and deployment.  It requires extensive changes in all layers of the organization: people, process, and technology.  It also requires new thinking in governance and metrics.  and that — that takes a decade or so to complete.

Your move.

disclaimer: first things first, thanks to Jon Reed for the idea of using crossed-out text.  Since Sameer Patel does not like my parenthetical digressions, I am testing some minor ones using crossed-out text to see if it works.  if it does, all credit belongs to Jon who uses them to great effect (far greater than I could ever do) at Diginomica. I would reluctantly, but understandably, relinquish the use if he asks.  second, I also have to give credit to the kind folks at OpenText who helped me with the first chart a bit during a consulting session in December.  the other people, many, who contributed over time are also very kind and i am profoundly thankful – but they were more motivation and inspiration, OpenText tweaked the slide for me and let me use it.  third, no vendors are mentioned – but y’all know that i work mostly with them, so there’s a chance that some of this stuff shows up in something they do / use and i will gladly take all the credit for that.  ideas are mine, originally and follow-through, so feel free to yell at me for anything i got wrong.  if it works, not me – if it didn’t, me.  comment box is below.  thanks for reading.

Read the original post here.