What Is ‘Digital’?

Despite working in the digital space for years, now I was quite stumped a few weeks ago when i was asked to define it. Sometimes you can get away by circumlocution or to use the technically correct term, waffling. But given all the hype around digital transformation, I felt that it was a good time to try and get a working definition going. For one it helps to cut the hype. And two, clarifies what is NOT digital at a time when the label is being slapped around with abandon.

So I read descriptions of digital in the media, and on our competitors sites. I listened to analysts and and read books and white papers. I asked our clients what they were doing. And I spoke to the experts in Cognizant, and spent time just thinking about this. And I’m happy to say I’m willing to stick my neck out and try and define digital in less than 25 words.

Of course the problem with definitions is the tradeoff between pithiness, abstraction and comprehensiveness. You can be very pithy but be too abstract e.g. ‘Digital is the future of business’. Or you can take a whole page to define digital, but that’s a description and not a definition. So here’s my definition and you’re welcome to challenge it or differ with it, or adapt it as you wish.

Digital means: exploiting emerging technologies to create user / customer centric interfaces and data driven business models, leading to more agile, responsive and competitive business models.

Let’s break this up.

Emerging technologies are certainly a driving force of digital. It’s the reason why we’re having this conversation. But to be clear, there are many discrete elements that make up the emerging technology theme. Arguably the big bang for ‘digital’ is the launch of the iPhone – because it put powerful computers into people’s pockets. It democratised access and provided a platform for almost all the other innovations. Samsung’s (and others’) lower cost and Android driven imitation of the iPhone ensured a mass market for smart phones. Alongside the smart phone though, you have to consider the continuously evolving web 2.0 (are we still allowed to say that?) and the emergence and maturing of HTML5, Javascript and more frameworks to deliver slick web front ends than you can shake a smartphone at. HTML5 and the ever improving web have had a see-saw battle with native mobile platforms, frameworks and entire generations of technology have come and gone in the past 5 years. Remember MCAP and MEAP platforms, and the allure of cross platform development for mobile apps? All of this have also greatly helped social platforms – which includes Facebook, Twitter, Whatsapp and hundreds of messaging and collaboration platforms.

Behind the scenes: But this is not just about front end technologies. Moore’s Law continues to drive the cost of computing down, leading to significant capabilities to process data – be it the in-memory database capability of a SAP Hana or the emergence of Big Data, and our ability to analyse and make meaning of ever larger data sets in continuously decreasing cycle times. Newer and more efficient Graph (Neo4J) and clustered database models (Hadoop) are supplanting the once ubiquitous RDBMS providers. And the en masse shift to cloud infrastructure and smarter automation has created a whole universe of services – starting with the PAAS and now a generic ‘as a service’ nomenclature.

The Internet of Everything: And to top it all, the next wave of internet connected sensors and devices is just beginning. Another whole wave of connected and smart objects has the potential to change everything, again, in the way we buy and consume goods and services. The Internet of Things does not have a single killer app, yet, but it’s growth and spread nonetheless are accelerating.

Its not what you did, its how you did it: the shift in the underlying methodology has played its role. The maturing and widespread adoption of agile frameworks and the toolkits to deliver them is a key construct of digital. The rapid evolution of technologies both necessitates and enables a much more adaptive and cyclical approach to technology delivery.

Design thinking: Almost absurdly, all this fantastic technology is still not what truly drives the digital change we see in businesses us. That honour belongs to the emergence of design thinking and service design methodologies. Some of this is commonsensical and you would think should have been the norm rather than an innovation. But the mind-shift is fundamental. Industry leading businesses are now recognising the need to be customer journey driven. I use the word interface in a broad sense here and not just restricted to screens. The question to ask is how do your customers, partners and even employees interface with your business? Historically, this was driven by inside-out thinking. In other words, businesses decided how they wanted to run their processes and designed systems and interfaces to match those desired processes. So if a bank’s preference was for the customer to be in the branch while opening an account, that’s how the processes and systems were defined. In digital, those interfaces are conceptualised outside-in. This means the starting point is the user. What does she or he want to do? How does the prospective customer want to open the account? What are her constraints? What would make her choice easer and her experience better? Once you start thinking outside in – you reach a very different point in the way systems and processes are defined. And when you combine this user centric interface thinking with the technology opportunities that are emerging you begin to understand why transformation is the buzzword du jour.

Data Driven Decisions: Implicitly or explicitly, every decision we make (what to wear to work, for example) is made on the basis of data that we process (what meetings do I have, what is the dress code, what is the weather?). Complex decisions require more sophisticated data. Historically this data has not been available to us for many large and small decisions. How much to spend on the marketing campaign? Where to open the next store? Who to hire as a program leader for a new business area? How to implement a hot-desking policy? As a consequence, most businesses have relied on ‘experts’ for these decisions, whether they are from within the business or consultants brought in for the purpose. Experts use their wisdom which is often an implicit accumulation of data from deep experience in that area. What we are witnessing, thanks to the combination of lean thinking and instrumentation, is a seismic shift to more explicit data driven decision making. For example, if everybody used a smart phone to access the office for a month or two, it might provide data that suggests that wednesdays are the busiest day of the week while friday is the lightest. The latter may be visually obvious but the former may not. Or the data may show that on mondays, the average time spent in office by people is actually just 4 hours – because they are in meetings or on projects outside. Suddenly there is explicit data to influence your hot-decking policy depending on what your objectives were. This is a tiny example but very representative of how digital is reshaping our decision making. Now imagine this at scale and for the hundreds of decisions made every day and you get a sense of what I mean.

Responsive business models:  we are used to stability and to treating change as a temporary disruption between periods of stability. Not dissimilar to moving house. Increasingly though, we find ourselves in a state of continuous change. The disruption is not a passing inclemency, but it is the new normal. Think of moving from a house to a caravan, for example. What the combination of technologies, design thinking and data surfeit allow us, is to build a responsive or adaptive business model that is able to keep pace with a fast changing environment. Think evolving operating model instead of target operating model. Think of the cost of change as a part of the cost of doing business, not as a capital expenditure. Obviously, industry context is vital – Retail banks and media businesses are much further down the path of transformation than, say, infrastructure providers. But while the impact may vary, the change is universal. Digital is not therefore about B2C vs B2B, it’s not about marketing or about your social media. I believe this is fundamentally about your business model being impacted by better data, delivered at the point of decision making.

Agile Strategy: Seen in this way, it would therefore be logical to look at your strategy as an agile and evolving artefact. Many companies still look at 3 year or 5 year plans which are sequential. Instead, we should be looking at rolling 12 quarter roadmaps which reflect our strategy, but which can be modified on a quarterly basis, keeping a vision or end goal in mind. But more about that some other time.

The point of all this is to be competitive. And digital business models which use technology, design thinking and data optimally are far more competitive in the world we live in. I heard John Chambers, the CEO of Cisco, say ‘Change will never be this slow again’. And 52% of companies from the Fortune 500 list of 2000 no longer exist. Collectively that sums up the challenges and dangers of being change resistant. So whether you agree with my definition of digital or not, a response to the change around us is not optional. Enjoy the ride!

Suggested reading:
Code Halos: Malcolm Frank, Ben Pring & Paul Roehrig
Being Digital: Nicholas Negroponte
Dataclysm: Christian Rudder
Mobile Mindshift: Ted Schadler, Josh Bernoff, Julie Ask
This Is Service Design Thinking: Marc Stickdorn  & Jakob Schneider
The Lean Start Up: Eric Ries


Digital: Time To Put The Horse Before The Cart?

As somebody who has come into the technology world with an education in economics and business, I have always been the one to argue vociferously, that it’s business first and tech after. You must first sort out the business objective, change, process impact and then select or customise the tool to the business needs.

Of late, in the digital environment, I am learning to question and often invert this logic.

Cart horse

But let’s remind ourselves of what ‘good’ means, in traditional technology projects. The correct flow has always been:

Business need –> Process change –> Define the ‘to be’ stage –> deploy appropriate technology –> impact on user behaviour –> outcome achieved.

As a consultant, I’ve made a living out of fixing this flow. Or specifically, fixing projects that have confused this flow. Many IT projects have historically gone bad because the technology came first, and nobody had thought about the business outcomes, or the desired process change.

But I find myself regularly giving advice in the digital projects which includes putting in the technology early in the game. Why is this?

To start with, traditional technologies were not intuitive. Many long suffering users would argue that they are often the absolute opposite of intuitive. It is definitely true that these technologies and tools are process centric. They are based around a view of a business processes that is deemed the ‘right way’. As such they are based on conformity, and used to drive process adherence.

Digital technologies, on the other hand, are fundamentally based on diversity. This is not diversity as in customising the font and the colour-scheme. Think of a smartphone, which, from the moment you start using it, starts to morph into something that is uniquely yours – in the applications you carry, the way you arrange them, the way you use it, and what you use it for. This is not about selecting from a limited number of pre-defined settings. It is creating enough degrees of freedom and choices so as to enable, mathematically speaking, options which are many orders of magnitude higher in number. A virtually infinite number, since you can’t humanly work through all of them. Or think about any two people’s Facebook or Twitter feeds.

Even the way 2 people use map applications can vary. My wife prefers Apple Maps (yes, and I still love her!). I can’t get away from Google Maps. The way we access the apps differs, how we check directions differs. Even the way we search varies. Both of us use exactly the same model of the iPhone.

Digital technologies are as we all know based on user centric approaches. They are built based around user journeys, not business processes. This philosophy shift, is the second key difference, and is the reason why these tools and technologies far more intuitive. The tech is not being used to corral a diverse user base into standardized work processes, it is in fact liberating them to do things their way, while allowing an underlying process to support a massive variety of users.

The combination of these 2 means that the technology can embrace the diversity of people and behavioural spreads without having to apply blinkers.

So far so good, but that still doesn’t explain why we should put technology and tools first, does it?

Now consider that in enterprises, technology is something that is done to people. Users are essentially recipients of the technology that is planned, designed and implemented by a specific set of people. Digital technology is more of an interplay than a one way street. And while traditional technologies are deterministic, digital is exploratory and discovery driven.

A critical pillar of this is the move to agile methodologies. I met a start up recently which has been self funded, has 6 people, has an excellent product, and has had 28 releases of its app within the past 3 years. The best businesses today tend to talk about a ‘tight development cycle between user feedback and new features’ – this tends to be in the range of a fortnight to a month, between releases. This also implicitly means that your users are now willing participants in the product roadmap and there is very little second guessing of what the users want.

When you pack all of this together, you can now see why in the digital space it makes sense to get technology into the users hands early. To summarise, the technology is intuitive, and digital solutions are typically discovery driven and supportive of huge diversity, and the delivery and continuous improvement is driven through tight agile cycles. So giving something that simple that works, to the user community, engages them, draws them into the development and improvement process and creates outcomes that you possibly couldn’t imagine even with the best product team. Its why Evernote or WhatsApp, which are fundamentally simple, even primitive propositions – note taking and text messaging, respectively – are able to take market share away from Microsoft or even Google, in the case of Evernote, and Vodafone or (earlier) Facebook, in the case of WhatsApp.

I argued earlier that Digital is all about big vision and small action. I’m now going a step further that the small action may well be to get a simple tool or platform to your users in the shortest possible time, rather than spend weeks and months drawing process maps and building complex systems. Now, obviously there are risks here. Simple and quick does not mean poor quality and badly thought out or executed. This isn’t a short cut, it’s a methodology which requires skill. The skill to strip a complex idea to it’s MVP version, and then to elegantly execute it. User experience quality is non-negotiable. And it has to solve a problem, not half a problem. And the best measure of this, is that it has to make the users’ lives a little easier, in however small a way. The challenge is that only the user can assess whether this has actually happened.

I was pleasantly surprised when I flew into the US this time to notice there were self service kiosks at immigration, at Atlanta. Sadly, the output of that processes was only to verify the fingerprints and then stand in another queue to meet a person. In a competitive environment (which I appreciate this isn’t), this would be the equivalent of solving half a problem.

So the way a digital “cart-before-the-horse” process might work is:

Product vision —> User journey understood —> MVP delivered —> engage with feedback —> co-create product roadmap with users —> co-own the outcomes —> deliver the (modified) vision.

So we’re back to the idea of customer journeys, and understanding how to simplify or transform them. If you were creating a new consumer product, such as the next Dropbox or Spotify, you have a certain level of freedom, I would even say simplicity as you have a clean sheet of paper with respect to your back end, processes, service and fulfilment. The challenge for enterprises is that simplifying one customer journey may require cutting across multiple business processes. This is why this is much harder for large businesses. From the earlier world where we built software to replicate our desired view of the process, we are now building tools that are perpendicular to process thinking. This can be messy, politically, operationally and commercially, for large organisations. Offering a transformation of how automobile accident claims are settled by an insurance company may require multiple departments, processes and existing technologies, to be impacted. So it would be a mistake to think of this as a trivial exercise of throwing a bit of technology out.

Also, digital processes typically apply to the systems of engagement – broadly speaking, to those components or aspects of your systems which need to interface with humans – be they customers, partners or employees.

And here’s the catch. Once users start to engage with your MVP technology product or solution, they start to drive the evolution of that platform. You now have the proverbial tiger by the tail. You can’t go halfway down the process and then abandon the needs and feedback that your users prioritise, even if it goes against what your Senior Vice President of Product Development (or other HIPPO) wants you to do.

So while it sounds simple, this is actually quite a profound change for enterprises, and especially for the entire ecosystem of IT teams and traditional IT vendors but one that you need to embrace unless you want to become a victim, rather than a proponent of Digital Transformation.