How can you ride the digitsation tidal wave in a post covid world?

Covid-19 has accelerated the digitisation of business activities. Ranging from the simple remote working through to virtual collaboration, what was a scientific vision of the future is part of daily life. There is no doubt that march of digitisation will accelerate in the post Covid-19 world and we all need to get ready. I have distilled some ideas to help leaders and individuals think about the opportunity ahead and how they might get ready.

1. Start by understanding the 3 laws of of digitisation so you can understand the inevitability of the future change:
   
   https://rashikparmar.wordpress.com/2018/06/22/be-digital-or-be-digitalised/
   https://rashikparmar.wordpress.com/2017/03/31/are-there-some-fundamental-laws-for-digitisation/
   
2. The heart of digitisation is to create magical client experiences that remove uncertainty. This should be sufficient to encourage someone to want to invest their monies on the the new experiences.
   https://rashikparmar.wordpress.com/2017/11/02/is-the-removal-of-uncertainty-at-the-heart-of-the-digital-economy/
   
3. Digitisation places unexpected challenges to the underlying business models that enable the profitability of organisations and systems. Five generic business models patterns have been identified and can be summarised as:
   1. Manufacturers will augment their products with sensors, connectivity and intelligence to create new client experiences that enable new value
   2. Services organisations will codify their manual activities in to software and deliver them as APIs in the cloud and drive increased productivity
   3. Multi-organisational processes will be optimised through trusted data sources from  platforms such as blockchain and eliminate inefficiency.
   4. Data market places will emerge and will provide an opportunity for you to turn the data you use to run your business into a tradable asset.
   5. Digital representation of physical assets (digital twin) will allow new interaction patterns and new value (e.g. Uber, Air B&B)
      
      These five pattern are detailed in the HBR article I co-authored: https://hbr.org/2014/01/the-new-patterns-of-innovation
      
4. Underpinning these new business model patterns is the opportunity for create new business value around three categories:
   • Increasing the productivity of employees
   • Accelerating processes to improve performance
   • Using the new data and AI to boost predictability 
     
     These are elaborated in the following blog: https://www.ibm.com/blogs/cloud-computing/2016/03/01/3-business-outcomes-you-can-expect-from-adopting-hybrid-cloud/
5. Leaders need to consider the role they want to play in the growing digital economy as a provider, consumer, complementor of digital platforms – I will be writing more blogs about this in the future. The chapter I wrote in “Case Studies in Service Innovation” titled “Information Technology Enabled Business Platforms” provides some early thinking, but this has moved on and future articles/Blogs will provide more detail.
   
6. Success will depend on the digital technologies that support and sustain your business. The recent survey of 100 CTOs across EMEA (Europe, Middle East and Africa) provides a valuable framework to review your technology capabilities.
   https://www.linkedin.com/pulse/architecture-decision-points-30-rashik-parmar/
   
7. You need the right skills and culture in place to be able to seize the opportunity. A data savvy culture is one of the biggest changes that is often overlooked and based on the analysis of 30 digitisation projects 5 core competencies were identified. Experience so far suggest that missing any of this core competencies results to failed projects. So review your digitisation projects to ensure you have a healthy mix of these skills
   
   https://rashikparmar.wordpress.com/2016/09/15/what-is-a-data-savvy-culture/
   
8. Whilst all that sounds exciting and daunting at the same time, how do you stay motivated and focused? In addition to having a clear purpose and vision you also need a business case. This is a very high level case of the opportunity for digitisation and provides a basis for you to identify the specific opportunity for you
   
   https://rashikparmar.wordpress.com/2017/08/05/is-there-a-business-case-for-the-next-generation-of-digitisation/

This change like all before will create winners and loosers. I hope this blog provides some clues to help you be a winner. Please do share your perspectives and help improve these ideas.

Is digital business the natural evolution for all businesses?

Having discussed the 3 laws of digitalisation with many organisations over the last year, I often get asked if becoming a digital business is the natural evolution for every business? Given the amount of time that people spend with some form of digital technology: smartphones, tablets, computers, TVs, games consoles, digital additions to appliances or machines. The list is almost endless. At the same time, the list of things that cannot be digitised is also endless: food, clothing, houses, offices, roads, cars, trains, planes, boats, furniture, appliances… This is a much larger list that the digital list and it leads you to consider why is digitalisation so high on everyone’s list of things to talk about?

Digitalisation is addressing real problems that individuals and business care about. The care and value them enough to spend their hard-earned money on buying these technologies or services. At the core of every digitalisation project, there is typically an “ah-ha” moment where someone identified the use case or the user experience that would simplify someone’s life. The essence of these come from design thinking sessions where a multi-disciplinary produce large numbers of post-its and stick them on walls. They then have heated debates on the future state that is needed. It is a little ironical that these digitalisation projects start with something totally non-digital like writing or drawings on post-its.

As you explore these problems further, it becomes apparent that they relate to physical things. Examples include finding objects (a taxi or a hotel), using an object, connecting people, understanding the state of an object or improving the performance of an object. You might be thinking – wait a minute, what about videos, eBooks, digital games or virtual reality? If you think about thee further, they are all about physical objects or very closely connected to objects.

There will continue to be business that will create digital technologies, develop new uses. support the implementation or keep the systems working. Companies such as IBM, Apple, Microsoft, and Google might be the first that comes to mind. They will continue to be a small fraction of the total economy. The US Bureau of Economic Analysis estimated the   GDP for Digital Business represented 6.9% of the US economy in 2017. A business will use digitalisation to help increase their overall productivity or performance. This leads us to think about the potential for future digitisation and the opportunity ahead. The Digix from BBVA Research and the McKinsey Institute Paper – “Twenty-five years of digitization: Ten insights into how to play it right” provide valuable insights here.

So we need to start with what is the purpose of this business and then how digitalisation could increase the chances of success. Success will depend on the business and the digitisation progress so far. Digitisation is personal to the organisation and requires thoughtful leadership.

What are the elements of work in the digital economy?

The nature of work continues to evolve and a clear distinction between blue collar or white collar work is well understood. The phrase new collar work has been established to refer to the new set of jobs have emerged in the digital economy and require skills that cut across traditional education curricula. Jobs such as cybersecurity analysts, cloud automation specialist or virtual reality specialists. Whilst the technical skills and soft skills that these roles require are well understood, there are a few underlying skills that have consistently emerged that I wanted to test with others.

Outcome led

Roles in the digital are created to achieve an outcome that has well-defined metrics. The digital data that is created as the activities progress will provide transparency on progression towards the outcome. When combined with agile techniques such as managing a backlog with a kanban board also provides clarity on the outcomes.

Unpredictable

The activities that an individual performs is often very unpredictable and they respond rapidly to the priorities as they become clear. Whilst this overall list of activities is maintained and individual experiences unpredictability. This can be seen as an advantage in keeping the work interesting. For others, this rapid changing set of activities can unacceptable levels of stress. The seemingly endless list of activities can also mean

Constant change

The opportunity to increase the productivity and effectiveness of all activities using digitisation techniques is top of mind for everyone. Individuals know that they need to also make time to improve what they are doing and are always looking for new ideas. The regular reviews not only consider the work completed, but they also look for areas for improvement and this is added to the work list just like the other activities.

These three elements seem to be constant in the range of digital economy work I have been observing. Anyone seeing the same or have additional perspectives?

Be Digital or Be Digitalised

In a conversation with a colleague the phrase “be digital or be digitalised” emerged and it started me thinking. The discussion of the 3 laws of digitisation can be summarised in this simple phrase. We all need to look for the activities that can be digitalised and/or automated. This leads to the question, how? This is where we need to become a little savvier than just being the annoying person pointing out that all these activities will be digitalised. A little more subtlety here. Whilst many things can be digitalised does not mean the should or will. There is a cost associated with the effort for digitalisation and unless there is an adequate return, it might be best to leave this in a non-digital form.

As a simple example, it light switch can be replaced by a digital switch. However, most homes have kept this as a manual switch. You might switch the light on a few times a day and the switch is in a convenient location so the cost and disruption would be difficult to justify. However, in an office where lights are left switched on, an automated switch with motion sensor could reduce the energy usage. There is a clear rationale and many offices have made this change. There will also be a group of people who say that they forget to switch the light off at home in the morning and they have returned on the evening to find the light has been on all day. For them, you could argue a digital switch, with motion sensors and the ability to check the status of the lights in the house may be justifiable. Also, you might prefer a range of lighting options – the colour, the brightness, which parts of the room are lit etc. Whilst you could imagine a bank of switches to control this range of settings, it would be much simpler to create a digital control and so digitalisation would be appropriate.

The march of digitalisation is moving at an ever-accelerating pace and we need to stay ahead of this if we are to continue to gainfully employed. Activities in our work and personal life will be changed through digitalisation. We have a choice of deciding to wait for this to happen and then respond or we can be the ones driving the digitalisation. There is no right or wrong here, it is a choice we all have to make. My concern is that lack of awareness of the potential for digitalisation results in a sudden shift and creates unexpected disruption. This is where we need the most help. Being aware of the current possibilities, and challenging yourself to spot the opportunities for digitalisation is a vital skill for survival in the digital economy. Where do you start? Simply start by asking your colleagues, on a regular basis could we accelerate or simplify what we are doing through digitalisation?

 

 

Are you catering for the spectrum of digital skills?

I just read the UK Consumer Digital Index 2018 report with great interest today. Some of the statistics where sobering are best and alarming at worst. An estimated 4.3m people with no digital skills and 11.3m with basic digital skills. Which probably means that 11.3m people have little chance of reading this blog post and 4.3m would only be able to read this blog if someone printed it for them or read it to them. On the positive side, the report does show progress since last year.

Many questions came to mind as I read the report, starting with do we take this reality into consideration when designing digital services. Do we focus effort on growing the basic digital skills in everyone? Or do we focus on providing choice to these significant number of people who are cited in the report as having no interest in developing digital skills.

As the disruptive force of automation and digital disruption continues to replace aspects of work and in some cases totally report jobs, what is the implication for those with no digital skills? Will there be sufficient non-digital jobs to keep them gainfully employed?

Whilst all the data needed to answer these questions is not readily available in a form to be able to provide evidence based arguments, is it best to just focus on growing the digital skills in everyone. Is there anywhere in the world where everyone has basic digital skills? If not who will be the first?

Lots to consider here, I would be very interested to hear everyone’s views and any links to data would be very valuable.

How can creating a hassle map help you build your Digital Economy Platform Strategy?

Over the last six months, there has been a surge in interest in establishing digital platforms – primarily multi-sided and create an ecosystem to amplify/accelerate value capture. In most of these discussions, people can articulate the challenge they face from competition that will mean they need to cannibalise their existing business to survive the onslaught from start-ups. In a previous blog, I talk about creating certainty as one way of finding the purpose of the platform. There are a number of other techniques that are valuable here. You can use the 5 patterns from the HBR paper I co-authored to help identify the strategies.

Another very useful technique is hassle mapping. I first came across in Adrian Slywotzky’s Book – Demand. This forces you to think from the perspective of the final beneficiary of the platform. Creating persona using a technique such as IBM’s Design Thinking can help here. The hassle map will help in identifying the experiences or service that will be of sufficient value to be paid for.

There is a lot of information on hassle mapping on the web:

https://www.inc.com/tech-blog/adrian-slywotzky-interview-what-is-a-hassle-map.html

http://changethis.com/manifesto/show/86.01.Demand

I am keen to learn from others in this area. How are you developing your strategies in this area?

Excellent example of data to outcome

Remember the 3 equations that summarise the logic for how data can create an outcome. I just came across an analysis done by Venkatesh Rao where he explores the 1854 London cholera outbreak. What is most interesting about this is how the raw data when put into the context in the final map shows how Dr Snow’s hypothesis is validated by plotting the data onto the map. The map in this case is providing the context and provides the insight that the Broad Street pump is most likely contaminated. His action to remove the pump validates the actions and cholera cases subside.

Excellent analysis and provides a valuable illustration of how data can create remarkable outcomes.

Is the removal of uncertainty at the heart of the digital economy?

Creating magical client experiences that become viral and scale exponentially summarises the approach of digital economy leaders. But what is a magical client experience? As I considered this question I started looking at examples of “magical experiences”.

The first example that came to mind was seeing the expected arrival of the next bus on a digital display at the bus stop. When I first saw this in London I remember discussing this with everyone I met that day. This is now readily available and anyone can build an app to provide this information using the TFL as an Open Data API. However, at the time this was a magical exerience.

The second example is using Flight Stats to check on the status of flight arrivals. I was travelling to the airport to meet visiting relatives and we were stuck in a traffic jam. Previously the only means of checking the flight status was to phone the airport, some provided an information service. The first time I was able to open the FlightStats website and see the arrival information, I knew that the flight was delayed and I did not need to worry about getting to the airport in time.

Considering Uber – what was magical about their experience? If you remember having to phone for a taxi and the controller saying the taxi will arrive in 10 mins. After 15 mins you would get frustrated and phone the taxi company again to ask when the taxi was due to arrive. The polite operator would re-assure you that the taxi was on the way and will be with you soon. You were relieved that you had requested the taxi with plenty of time as you had little confidence in predicting how long it would take for he taxi to arrive. With the Uber experience, you are able to see the location of the taxi, get details of the taxi and the driver. This removes the uncertainty that existed before and creates the magical experience.

As we consider ways to create value in the digital economy, the uncertainty that exists in a process or for an individual provides an ideal starting point. Questions such as, when will this device need servicing? What is the condition of the critical elements of the machine? Will the house be warm when I return? When did I last meet this person? These kinds of questions can help identify the outcomes that can be achieved and also estimate the value to be captured. It also helps identify the data required and the supporting systems/technology.

So is the removal of uncertainty at the heart of the digital economy? What is your view?

Is the economic value data derived from connections?

Life sometimes seems impossible to rationalize as discrete objects or events. But, if you start to consider the connectivity around you, a tapestry of links emerges based on, what appears to be, a finite set of rules. In this way hands are connected to arms and friendships are made through the casual sharing of ideas and kinship. Considering data like this can therefore help uncover previously hidden patterns. That is, if some established scientific approaches are appreciated alongside. For example, the four laws of thermodynamics point the way to some very useful techniques for understanding the inherent value in data (or more precisely information). 

At surface inspection such laws might seem detached from the idea of information, helping instead to describe physical properties like temperature, energy and entropy. But history tells us how they proved essential in the early development of Information Theory. This then provided a valuable way-point on the road towards more contemporary ideas on how information chooses to connect and structure in the wild. One such idea is that of scale-free networks – networks that maintain their essential characteristics regardless of how large they are. These can be found in the the distribution of popularity of websites across the World Wide Web, or the way that consensus spreads through a social network. Similar patterns emerge from the analysis of economics data, or most other fields of human endeavor.

Uncovering patterns like these is critical to the progression of digitalisation and extracting value from digital data at scale. One can think of uses such as predicting market crashes and developing laws for prediction surely gives us an indication of the advances needed to uncover the underlying laws of human behaviour and the complex systems that intertwine our lives. Interdisciplinary collaboration is needed to advance our understanding of complex data sources, however. As explained by the authors of Superforecasting: The Art and Science of Prediction increased accuracy comes from combining insights from multiple sources and fine tuning the probabilities. 

To find your space in the digital economy a combination of skills and techniques, we have depended on for many years, needs to be applied in creative ways to find those hidden patterns, develop the laws and thereby  help reduce inefficiencies and create value from the data.

Written in collaboration with https://www.linkedin.com/in/philtetlow/

What is digital infrastructure?

Many governments and cities are discussing the importance of investment in digital infrastructure to maintain competitiveness. Sounds a very sensible and effective strategy, but this rises a number of questions.

What is infrastructure?

This might be obvious to many people, however, if you ask a group of people, you would get a range of answers. This wikipedia article elaborates the ideas of infrastructure and introduces telecommunications as a contemporary infrastructure.

What is a digital infrastructure?

Often government leaders assume that digital infrastructure refers to the internet or high speed broadband. The analogy is that of roads that allow the movement of goods between locations.  The digital infrastructure needs to allow the rapid movement of digital data between locations. So it is natural to think that super fast broadband is the answer. This analogy is a good starting point, but misses some differences between road networks and data networks.

Why does data need to move between locations?

Data needs to move to the place where a person can view or make use of that data. For example viewing a webpage or launching a connected app on a smartphone. This is at the edge of the network, however, there are much more complex interactions that are not seem by the consumers of data. Drawing connections between pools of data, analysing data requires the data to move to algorithms or algorithms need to move to the data. A search engine such as Google is constantly accessing websites to capture changes or identify new websites. Data is being backed to be re-accessed in the event of failures.

The cities data infrastructure needs to cater for a wide range of interaction patterns as well as data storage and  analysis. Using the road analogy, the design needs to consider car parking, placement of warehouses for trucks, and pedestrian zones. In the same way the city data infrastructure needs to consider data centres, open data platforms, mobile phone network access etc.

What is the value of the data and what infrastructure can the city afford?

Firstly, we need to remember that it is the use of the data that helps  create value. The three equations I described in a previous blog post help in identifying the role of digital infrastructure.

1. Capturing data and making this available for analysis. Open data is particularly important in creating ecosystems of innovators.
2. Access from analysis. Allowing all types of appropriate access to algorithms that will turn the raw data into information that in its own right can allow a range of decisions and uses.
3. Creation of models or context system that identify new insights. Identifying anomalies, deviations or correlations that will inspire new actions. Ultimately the actions are the means of creating value from the data.

So the digital infrastructure for a city needs to cater for these uses and be priced at an affordable level for the organisations or individuals.

Cities should start by understanding what data is needed to satisfy the citizens, the business and institutions. Then the range of data facilities that will be satisfy these requirements. Then determine which of these elements are best provided via a city wide digital infrastructure.