Get Ready to Invest – The Future is Knocking at the Corporate Door

Dan Morris
Contributor: Dan Morris
Posted: 02/22/2017

OPEX week 2

Before I share my thoughts on the future of BPM over the next few years, I would like to let everyone know about the PEX OPEX conference that was just held in Orlando, Florida.  First of all, it was probably one of the best PEX conferences that I have attended.  It was also crowded – lots of people, great networking, and great sessions.  It was interesting to see the emphasis shift this year among the tool vendors who displayed their products.  This shift was to robotics and made an interesting mix between BPA, BPMS, and other technology.  I spent a lot of time with vendors catching up on changes and learning some new things about robotics and AI.  The future is about to change in ways most of us haven’t really been thinking about.

The sessions I attended were interesting.  Of course, there are always more sessions to choose from than anyone has time to attend – the choices can be tough when you want to hear presentations on a couple of topics that are scheduled for the same time.

If you didn’t have a chance to attend the conference, I recommend that you consider the reviewing the taped sessions and think about their messages – they may well change your thinking on several topics.

OPEX week

What is coming!

We are lucky enough to live in a world of wonderful major change as previously unthinkable technologies and products have become the norm.  As many slightly older readers will have heard before, we are on our way to “star trek” technology. 

But that also means the world we know is about to join the dinosaurs.  It may take a few years, but it won’t be that long until emerging technology changes everything.  Our challenge is to figure out how we can leverage this technology and the new business concepts and capabilities it brings.  The opportunity is to make everything in the way we execute and the way we interact with customers better – not just less expensive.  Once we have started down this path, which we must, the ride will get faster and faster and take us to new markets, with new products, and new expectations as what we now consider cutting edge becomes archaic.   It is clear that we haven’t seen anything yet!              

In this emerging new techno-society, “business as usual” will soon be an out-of-date concept.  Business will never be normal or usual again.  What we thought was rapid change in the past is now considered slow.  And the need for the ability to change fast is accelerating.  However, this is causing serious fear as the ability to change is met with quickly imposed manager and government obstacles.  It seems that some humans can only be comfortable with just so much change in any given time period.  When that is exceeded, people start looking for reasons to slow things down.  But that will not last long as the old guard is replaced by new people who are committed to broad business and IT transformation and dealing with customers as they want to be dealt with.  Clearly, with this rapidly emerging technology driven new society will come new business models and new approaches to grab market share. 

We are entering a new age, the age of “I want it and I want it now” coupled with “I want it my way” – with “it” changing constantly.  We can no longer wait for years for big projects and the delivery of new ways to interact with customers.   We can no longer wait for months for IT and business capability changes and we cannot deliver solutions that don’t work well.  Why?   -- because the customer will not tolerate it.  While customers were once in awe of technology, they have surpassed companies and are now both tech savvy and impatient.  The ones that now trail are the companies, not the customers – and that needs to change.

That is why it will be so important to be able to deliver change in days or weeks, instead of months and years.   Just look at what is happening all around us.  Society is now an interfaced global group of networked individuals who share pictures of everything they do and all of their experiences.  I have contacts through LinkedIn and associations in over 40 countries who exchange information.  My kids are never far from their phones and through them and social media, from their friends and the world.

This new techno-society is impatient, demanding, tech savvy, and not about to be as accommodating to business as my generation has been.  Studies say people are becoming less and less patient.  They have an expectation of getting what they want now – with little fuss and no problems.  And, as new technology emerges, expectations change and become more demanding.   To compete, the way companies support interaction with their customers, partners, and regulatory bodies must also change.  The past, fairly predictable business operating capability and the constant but slow pace of change is coming to an end.  We are now entering an age where speed and flexibility will rule all – including cost management.

In creating this flexibility and as you adjust to a techno-savvy customer journey, I believe the emphasis will shift from cost reduction in company improvement and transformation efforts to focus on competitive capability and a quest for market share. This will separate the bold companies from the ones who lag behind and eventually cease to exist.  But, this also represents a rethinking of the way business and IT interact and a wiliness to set aside the past cost reduction focus and replace it with a drive to capture and retain customers.  This does not mean that cost reduction is not important.  It simply means that building extreme competitive capabilities is more important.

But this is no real epiphany.  What is an epiphany for many is the fact that a new dramatically different future business model is needed and it will not focus on the things that managers are used to focusing on.  It will focus on rapid business and IT change.  It will focus on flexibility first and everything else second (with the exception of the ever-present legislative compliance reporting).  In this coming age building this flexible operating model and keeping up with technology and other market changes will be table stakes to play in the game.  That is the investment noted in the title of this column.  That is what becoming an OPEX company is really all about. 

This evolution does raise a lot of serious questions about the ability of companies’ business capabilities and approaches to IT.   For example, will the large ERP type integrated applications packages be flexible enough to remain adequate?  Will they need to be wrapped by flexible BPMS or robotics applications that interact with customers and then as needed with the ERP modules?  Will this usher in a new age of custom modular applications that are called by a web based or social media based orchestration application that respond to the customer or internal company worker?  Will past approaches to data storage and manipulation now be obsolete?  And how will technology changes drive business operation changes?  The list goes on – clearly a challenge for IT as the answers drive digital transformation and business operation transformation.

OPEx week Suneel

OPEX 

This evolution is creating an approach vacuum that companies are struggling to adjust to.  Many promising approaches, disciplines, tools, techniques, and concepts have been tried.  Many have delivered acceptable results but have lost their relevancy as they have not been able to keep up with the evolutionary needs of companies.  Some innovative transformation professionals are looking at these and casting off the past single focus bias’s to blend the use of these approaches, disciplines, tools, techniques, and concepts.  This creates a new way of thinking that allows managers the flexibility to use the appropriate tool, discipline, etc., as needed in a project – aligning them to the task at hand.  Thus, Business and Process architecture are blended with IT legacy and BPMS practices, and methodology approaches such as agile and waterfall are blended with change management.  This blending is the real strength behind the OPEX concept – the right tool/approach/discipline at the right time, in the right place to get the job done quickly, accurately, and at low cost. 

I believe that the foundation of this OPEX operation will be the creation of a model based BPM business transformation environment.   This will be supported by a constantly evolving Digital Transformation program that will take place within a flexible IT infrastructure.  Advanced analytics with simulation, and predictive/trend analysis will play a significant role in this environment and direct or focus change.  I also believe that IT will recognize that the core of this Digital Transformation is BPMS, not a new application, or ERP, or paperless operation.  The reason is the flexibility that BPMS low code (soon no code) application generation and cognitive computing will evolve to provide. 

Once this new IT capability is in place, the accompanying new business operation will be in a position to remain competitive and relevant in the company’s market.  At this point, the company will be able to evolve quickly and management can once again worry about cutting cost and incremental operating improvement.  The key facts here are that the companies that make this investment in the future will have the flexibility to move quickly and remain relevant in their market places – having taken market share from those companies that refuse this investment.

The truth is that very few businesses are currently prepared to support the demands of customers predicted for the future in the emerging techno-society.  Companies have huge investments in today’s automation technology, application systems, and business operations. These business operations and systems have often been in use for decades and due to ongoing changes have become extremely complex and often marginally effective.  Because of this complexity, these business operations and computer systems have become anchors holding back the transformation of business activity and the creation of a flexible, rapid change capability – resulting in error, high cost, slow reaction time, and increased risk.

Given the fact that doing the same thing over and over will never provide different results, it is clear that continuing the past habit of cobbling in new technology or business techniques will simply continue to add complexity.  The fact is that there is a tipping point in this past approach where complexity literally shuts down the ability to change.  While some think the answer will be advanced robotics and others believe that the cloud will become the answer, I personally believe that the answer is to redesign and rebuild the business along with IT capabilities (Business and Digital Transformation).  This transformation, if done right, will include advanced BPMS technologies augmented with both Robotics and AI.  Of course, it will have unlimited cloud access and leverage big data for analytics and mobility computing with generated social apps to pull in customer experience in the “customer journey” in any company interaction.  In my opinion, this is the only place true operating flexibility can be found.  This is the real opportunity that we have in front of us.  This is a chance to evolve into an operation that is designed for the future – not the past.  But, it will take vision, commitment, time, and investment.

A new business operating focus

Today there is a serious disconnect between business methods, company customer outreach capability, internal application support, and customer technology based buying changes.  In most companies, there is little alignment between these components of the operation. The result is that many are scrambling to cobble together yet more “temporary” fixes for each of these business operating components – in virtual isolation from one another.  But really, to me, adding more complexity that moves the company further toward inefficiency and ineffective operations just doesn’t seem to be a reasonable long term strategy.   While we need to take this approach today to try to keep up, the outcomes, which are really temporary steps, are seldom considered as a throw away temporary changes and ongoing change keeps adding to complexity.

Some innovative companies have, however, taken a long-term approach and have focused on modernizing (transforming) their digital capability and business approach.  These companies are positioning themselves to cast off the anchors of the past that have been holding back true business operation evolution and Digital Transformation.  These companies are building the foundation they will need in the future – aligned business operation and IT support, coupled with an IT tool infrastructure that will allow them to change quickly.  

The fact is that the future holds a lot of change that we are only beginning to recognize.  BPMS, Low Code, No Code, Robotic “bots”, Cognitive Computing, and so much more are reality – they are not just coming, they are here.  They will change everything we knew and used to define business operations and customer interaction. 

Exciting stuff!  But it means that there will no longer be a long-term core model for a business operation and that a company cannot expect to have a single operating model that covers all parts of the business.  It may be that each line of business and possibly each product will have a different operating model.  Certainly, the customer base for each will be unique.  But so will be the approach to production, distribution, and much more.   Of course, this individuality will need to be built from common components to facilitate maintenance, evolution, and rapid, low risk change.  This is where modern BPM and supporting BPMS/simulation/analytics come into play. This is the beginning of an age where each customer may ultimately be able to select how he or she will interact with any company.  Current capabilities are themselves transforming to create an age where any given business model will be capable of constant, rapid evolution.  It will be an age of extreme flexibility in tailoring customer interaction – based on their individual customer profiles.  So those who get stressed over change will need to find a way to deal with instability, fast moves, fix as you go, and rapid prototyping.   This transformation will be a wild ride for all, and those who need to analyze things forever will be left in the proverbial dust.

We currently need to deal with at least annual changes as smart phone, virtual reality, and other customer based technology is launched in time for the holidays each year.  Along with these changes come wonderful new capabilities that only the young ever figure out how to use.  But demands for more flexibility and easier access continues to grow in adoption and popularity.  Feeding new capabilities to this ever growing mass of people who are permanently plugged into social media, games, virtual reality, with “I want it now” and “I want it my way” buying patterns will require the creativity to look at new ways to provide low cost, low risk, and rapid response capabilities.  To fuel this evolution, tech companies constantly play leap frog with one another and release constantly awe inspiring capabilities that become old stuff after a few weeks – outpacing our ability to absorb and appreciate.   

But this wonder has cost society and companies.  Society really has no clue how to deal with this and how to control it as hackers steal and cause mayhem and villains break into servers and render nothing private or off limits, issuing in the age of Cyber Warfare.  And companies are generally even worse off – they are common targets that many look at as a challenge to their hacking skills.  In addition to new social technology, constant cyber-attacks, and constantly increasing complexity, many companies are really struggling with the implications of cloud technology, big data driven analytics, customer journey mapping, a mix of licensed and custom built applications, distributed data, low code technology, AI, and more.  Given the rate and scope of these changes, it is no wonder that company business and IT managers struggle to hold the operation together.

However, these are really the small problems – as devastating as they can be.  The real problem is the pending doom of many companies as executive committees remain focused on cost reduction and the next quarter’s profit.  While this valid concern will never go away, it can no longer take the place of center stage, front row.  It’s time for the torch to be passed to survival based transformation – preparing the company to operate and thrive against companies that have embraced the emerging technology, created the ability to change quickly, and rebuilt their IT infrastructure and business/IT integration capabilities.

Is this radical? Maybe.  But ask yourself if these observations are true and the implications realistic. 

Technology is the real driver – it is enabling new and wonderful capabilities

While this technology revolution may not have hit all corners of the business world yet, it will.  No one will be immune to this need to support a dynamic business model.  The only real question is when you want to move.  But fair warning - those that delay will lose market share and customer recognition.  That is what will make this change into an extinction level event for some companies.

But moving early is not really enough by itself.  Today we have some real business and IT problems that need to be overcome.  In many companies there is a hesitancy to invest in simplifying both business and IT and in creating the foundation that is needed to move into the future.  There is also often a lack of urgency in considering how what is going on in the market will change the business, how current advanced tools and approaches really work, and what they can do. 

The truth is that this level of transition is both hard and risky – making it scary and for many, something to be avoided.  It is also going to be very difficult to create a vision of the future when it is almost 180 degrees away from everything managers have dealt with.  But business survival is all about adaptability and a willingness to innovate and change.  While many managers will accept this challenge and make the change successfully, many will not.  However, those that do transition successfully will become leaders in this new era of tech savvy customers and workers.

OPEX, Business, Digital, and Cultural Transformation

OPEX is a concept (see my November 2016 PEX column – “What is OPEX?”) that is comprised of Business, Digital, and Cultural Transformation.  This transformation is focused on building a flexible business and support environment that is designed for the speed of change that is coming.  To define, design, and build this operation, it will be necessary to rethink the business and the technology capability box that a new solution can be designed within.  It will also be necessary to finally complete the destruction of organization and discipline silos in companies.  There is simply no place for them in the future.  This will obviously require a lot of thought and a lot of compensation, evaluation, training, and other adjustment.

Although this transformation will not be easy, for the company to run at a sustained optimal level, this difficult shift will need to be made. 

So what comes first?

I would say that the foundation should be a new vision of the future and the way the company will fit into it.  This will guide the definition of the new IT infrastructure and a new company operating direction – and provide the basis for the company’s Digital Transformation Strategy.  This vision will need to be based on an understanding of what is possible with emerging technology, what customer demands are coming, and the way the market is anticipated to evolve – all of which drives Business Transformation.  If the industry is anticipated to be volatile and change quickly, which most will, the company will need to begin designing and creating a very flexible business and IT capability as soon as possible.  This will require a commitment to the long-term viability of the company and the funding needed to build this “uber” flexible operating model over a reasonable time frame.

But, even here, flexibility is needed.  Technology anticipation may be wrong.  Market demands may change and there is always a potential for delays due to acceptance and operational disruption.  So, strategies and transformation plans must be able to shift direction as reality takes the place of anticipation.

At this time the most important first step is to perform the studies and analysis needed to justify this move – even if everyone knows that they are needed, the senior officers will need justification.  While this is going on, as a parallel effort, I suggest that IT and business together begin to look into how they can provide the foundation needed to transform into a flexible operation, which is neither easy nor fast to change.

I would like to thank my readers for their continued support.  As always I welcome comments, differences of opinion, or questions.  Please contact me a daniel.morris@wendan-consulting.com.

Dan Morris at OPEX

And, check out my new book, “The Business Transformation Field Guide” which is available through Amazon Books.  It provides Business Transformation teams with over 840 best practice “hints” on how to perform the many tasks in transformation projects and increase the probability of project success.

Dan Morris
Contributor: Dan Morris
Posted: 02/22/2017

EVENTS OF INTEREST

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