CEOs and CIOs should focus on these four opportunities
It seems like only yesterday when the economy, and most organizations and enterprises, were in growth mode in an expanding economy (actually it was back in early March). Now, of course, economic shifts resulting from the pandemic will require many organizations to make restructuring decisions in the coming months. Here is a guide to the key areas where the CEO and CIO should focus:
- Retire the older and more expensive platforms. Most every organization has its share of costly, older systems that fall far short of what’s required in today’s digital age, but are just too mission-critical to quit. Now is the time to force the issue.
- Revisit your technology architecture. Your technology footprint is likely based on an evolving architecture from the past decade or more. Now is the time to enhance resilience, flexibility and scalability in a modernized technology architecture.
- Embrace intelligent process automation. As you look for ways to reduce costs and boost productivity, process automation can allow you to redeploy staff to jobs that demand more critical thinking.
- Adapt to changing customer needs. How can your company quickly and effectively assess the shift in needs that has occurred, or will be happening? Your organization will improve revenue and earnings only by being responsive to these needs.
Each of these items fits within the framework spelled out in Now’s the Time to Check your Digital Posture, by my colleague Jonathan Murray. The tl;dr of ‘Digital Posture’:
- Organizations with mature digital capabilities are more agile and resilient to external shocks.
- Digital Posture has four facets: Breadth and maturity of digital products & services portfolio, end-to-end data enabled digital processes, completeness of digital tooling, and the sophistication of digital culture.
- There are straightforward metrics for assessing the maturity of your organization’s digital posture.
- CEOs, boards and leadership teams should be focused on improving digital posture maturity for their organizations.
Retire the older and more expensive platforms
Most likely, you run platforms that were implemented a decade ago, or longer, and are expensive and cumbersome to maintain. The non-technical term for these platforms is ‘boat anchors,’ as they pull significantly on the IT budget. Plans have been developed to retire these systems, but just haven’t been prioritized. It’s just too hard, too expensive and it’s hard to see enough new value. But expenses now need to be reduced. Here are three options for dealing with these older systems:
- Pull the plug. What would happen if you just shut the platform down? Which customers or staff would be impacted, and in which way? How much would be saved in technology expense?
- Consolidate. Many organizations are running similar or same platforms in several departments or divisions, sometimes as the result of mergers or acquisitions, sometimes due to divisional independence. Are there options to consolidate? How hard is that to do – and how much would it save?
- Replace or upgrade. Has your platform vendor kept up to date with the market, and has your organization kept current with vendor versions? If the answer to either of these is negative, a replacement platform should be considered.
Revisit your technology architecture
CEOs have typically not been involved in technology architecture, but now is the time to participate in this conversation. Digital platforms are the underpinning of how a modern organization operates, as well as how customer products and services are delivered, billed and supported.
- Native cloud. In many organizations, porting platforms to the cloud has largely been accomplished, and many IT organizations are claiming to be largely or fully ‘on the cloud.’ But significant incremental efficiency can also be created by re-architecting individual applications or suites of applications to use native cloud solutions that are available in Microsoft’s Azure, Amazon’s AWS or Google Cloud. Bonus: Going all-cloud makes it easier to tele-work.
- SaaS solutions. Another level of potential efficiency is switching to software-as-a-service (SaaS) solutions when appropriate. Remember the days when email servers were a big part of IT’s costs (and problems)? Many have switched to Office365 or the Google Suite which are SaaS solutions. dPrism operates 100% on SaaS – see my trends in the digital workplace
- Transition path planning and implementation. Changing architecture or transitioning to a more modern architecture is typically accomplished secondary to a prioritization of platform investments. At the time of restructuring, prioritization of architecture investments may create better expense reduction opportunities when fully understood.
Embrace intelligent process automation
Intelligent and Robotic Process automation (RPA) has evolved into mature and reliable platforms in the last few years, Automation Anywhere, UiPath, Blue Prism and Workfusion are examples (see an example of the customer feedback of these platforms at G2.
- Identify opportunities for automation. Customer on-boarding, payment processing, payroll processing, repeatable HR actions and customer service requests are just some quick examples of likely candidates. Where are there significant enough staff costs in your organization with sufficient repeatable steps that can create expense efficiencies?
- Analyze and re-engineer processes. Identify those processes that have the most standard, repeatable steps or tasks. Most processes are not designed for automation, and likely have to be re-engineered for effective automation. See our blog on process automation lessons learned.
- Create a master plan for automation. Don’t make this a huge project that doesn’t have payback/ROI until several years out. But do create a multi-year master plan for incremental implementation.
- Incremental implementation. RPA is most effectively implemented one process at-a-time. Create a backlog from the master plan, prioritize and implement.
An interesting trend we are seeing is the incorporation of Machine Learning (ML) or even Artificial Intelligence (AI) into process automation. Though often not mature yet for true effectiveness, automated identification of repeatable steps and suggestions for automation are becoming more important.
Adapt to changing customer needs
From trade associations to big pharma, from financial services to B2B information and media companies, we have seen a rapid shift in our clients’ customer needs and requirements. All organization’s products and services are based on the needs of their customers and the activities or transactions in their markets. They have all changed. Because physical contact, travel and logistics have all changed, digital solutions are an increasing part of the future.
- Identify needs. Conduct customer research to verify existing needs and identify new needs and pain points.
- Find the gaps. Map the research findings to your organization’s current products and services, then identify gaps and opportunities.
- Prioritize the user. Focus on the areas with the biggest revenue potential, of course, but also commit to creating the most delightful experience possible for your customer.
- Plan your attack. Develop go-to-market plans, budgets, timelines and milestones.
It has been an abrupt switch from growth to restructuring. Both modes, these days, are driven by digital capabilities. CEOs and executive teams need to understand how to leverage the full spectrum of their digital capabilities to achieve their objectives.
The principals at Digital Prism Advisors have many decades combined experience in senior operational roles in digitally mature organizations. Feel free to contact one of us directly to set up a conversation about how we might help your organization assess and implement the strategies required to build resilience and improve your organization’s ability to adapt and respond to the challenges ahead.