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Chapter 2 - From Silo to System: An Integrated Approach to Transformation

For many organizations, digital business holds the key to future growth; however, the challenges associated with the full integration of digital business can be overwhelming and costly. The digital age is simultaneously increasing the magnitude of opportunities for the companies that know how to react and increasing the difficulty of getting it right. While technology can relieve people of the mundane tasks of the past, the remaining tasks are becoming increasingly complex – whether it be synthesizing vast and disparate pieces of information or dealing with customers in a world where customer centricity is expected 24/7/365.

The hard truth is that even in the best of circumstances, success is not a guarantee. According to the most optimistic estimates coming from McKinsey, 70% of all transformation efforts fail. The sheer volume adds impact and urgency to the why question—why do so many transformations fail? To gain further insight into this topic, Mavim surveyed our customer base to understand what hurdles they experienced in previous change initiatives and what led them to choose for Mavim. A theme quickly emerged. Previous transformation efforts had resulted in a variety of symptoms (difficulty achieving end-user adoption, lack of management involvement, lack of alignment between strategy and execution, short lived successes) that all stemmed from the same problem—approaching transformation in a limited, fragmentary way. Here are the four primary roadblocks Mavim customers identified that prevent an integrated approach to transformation.

Roadblock #1: Organizational Silos

Silos develop from an inside-out approach to value production. In essence, silos developed as an organizational design choice based upon what was most convenient for the organization. Yet, there is a clear problem here. Organizations don’t exist for themselves – they exist for their customers. In many cases, silos were created as a means to help companies coordinate activities in order to create efficiency within the business unit. It is more convenient for the organization that department x works together because they have overlapping roles and functions, but silos often stand in the way of an organization being able to harness the necessary knowledge and expertise across internal boundaries in a way that customers value. In essence, silos serve a purpose – but that purpose is not customer-centric. What is worse, the efficiency gained by working in silos is often counteracted by the lag time that is created when the baton is passed in between business units.

Roadblock # 2: The Fragmented Disciplinary Approach

Traditional business & IT management disciplines such as Business Process Management, Enterprise Architecture, Product Portfolio Management, Application Portfolio Management, Governance, Risk, and Compliance are flourishing, as evidenced by each discipline’s own set of standards, procedures, best practices and tools. Entire markets have been created around subsets of these disciplines (think: iBPMS, eGRC) Yet, while the markets prosper, organizations suffer. The proliferation of these diverse disciplines encourages organizations to approach transformation in a piecemeal, fractional way.

The disciplinary approach often exacerbates the inertia created by organizational silos. Similar roles, skills and functions encourages personnel to work within their respective departments with their own standards and tools, effectively closing themselves off from the business they are supposed to support. Approaching these disciplines in one platform is not about limiting specialists in any one arena, but about integrating their critical knowledge into the business in order to drive value.

Roadblock #3: Misalignment between strategy and execution

Within every company exists a wealth of ideas and initiatives that could drive business impact. Yet, it is not enough to be in possession of a portfolio of innovative ideas and projects—digital business requires delivering results in spite of the rapidly changing internal and external environment. The challenge here lies not in creativity, but in alignment between strategy and execution while the ground is constantly shifting.

A decade ago, it was possible look at corporate strategy, and do an impact and cost/benefit analysis in order to determine which projects make it into the portfolio. This approach was based upon the assumption that the world would look the same when the project was completed. That luxury no longer exists. Connection between strategy and execution is a must – but the dynamic nature of the outside world adds an extra hurdle that can only be solved by a system that is equally dynamic and responsive to continuous change.

Roadblock #4: A Platform-Less Digital Toolkit

Technology is no longer an optional aspect of major transformations. In fact, technology is the only thing that can possibly respond with equal speed to the rapid change of the external world. However, not all technology is created equal. There is a right and wrong choice when it comes to transformation-enabling technology. Digital tools enhance the customer experience by creating the capacity to automate mundane, repetitive tasks as well as provide customers the option for self-service. However, an organization will only experience broad-based gains when digital solutions are applied in a systematic way. In other words, it is equally inefficient to devote time to automating a one-off task as it is to doing the task by hand. The reason platforms are critical is that the right platform can provide holistic insight into the potential impact and scale of opportunities that each step towards full digitalization can provide.

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