Quickly adapting to shifting customer, competitive and regulatory needs is now a strategic necessity for digital business. Managing different organisational capabilities to collaboratively achieve this is complex and requires more science than sales. Achieving basic success is commendable; doing it in a transparent, integrated, data driven, and measurable way is remarkable and requires a holistic strategy and vision for digital capability excellence.
This blog explores several business topics that can help digital offerings go from okay to great. Key busines challenges to overcome include digitally integrating capabilities around business goals, quantitative tracing of value back to customers/ business need, and establishing end to end metrics that roll up all functions and map effort to value. A deeper challenge to address is broken process integration that creates gaps between capabilities, people, and tools, and stops data flowing between capabilities, and up to management. Technology topics such as CICD, devops, cloud are important however not the focus of this blog: if the topics in this blog are well managed, the technology capabilities can be more potently used.
Great digital offerings are backed by different teams who work to a common vision using a methodical, measurable, customer centric approach. They collaboratively create and manage defined value along 'value streams' that are aligned to strategic priorities, eg a business goal, customer need, or competitive or regulatory pressure. Value streams help focus and prioritise the highest value initiatives across teams. They comprise of processes, meaning they can be digitised, optimised, measured, and quantitatively managed. Establishing and improving value streams, including the capabilities that contribute to them is the key to digital success.
Effectively, digital capability improvement is a small scale but powerful transformation. It requires new ways of working that are more than a reactive fad: it requires intentional design of multi-disciplinary capabilities and processes. This includes both the digitisation of these processes as well as supporting them with integrated tooling that drives value streams. The goal is to create well defined, repeatable processes that are both transparent and measurable and therefore easier to manage and improve. Digital operations deserve to have measures like ROI per feature, real time progress of a two-year roadmap, code quality of each product module, etc. Buying off the shelf tools and simply turning them on doesn't magically achieve this: tools need to support processes and tasks, integrate with other tools, and close up gaps across teams.
Value Stream Management platforms helps to accelerate the improvement of digital capabilities. They define value streams as a fully digitised, end-to-end processes that begin with business strategy and customers, and extend to supported, monitored, and improving products. B y design value streams are data driven, capturing KPIs, governance steps, user analytics, and more. They provide traceability from business goals to customer experience, roadmaps, version, features, and more. They simplify prioritisation, and very importantly, allow the circular lifecycle of products to fully digitally measured and managed.
Once mature, digital capabilities become a transformation engine to power other transformations. Most organisations need to do this however I’ve seen it enough times to know what works and what doesn’t. My vision is to build a fast track highway to digital maturity with turnkey solutions to common challenges, allowing focus on higher maturity goals such as portfolio measurement. Based on user friendly, off the shelf, fully integrated processes and tools, most of the expensive gaps would be plugged. The Prodigise method and its services is based off this. The Prodiggi toolset and value management platform is the implementation
People are key to great offerings and generally fall within five core capabilities or disciplines. These capabilities are required to create, manage, and innovate digital offerings. This includes product strategy and competitor monitoring; marketing, growth and change management; customer value creation (UX); software design and build; and finally, customer engagement and support. These capabilities work together in a circular, iterative way and should be underpinned by one integrated, data driven value stream. The product manager is central to the integration and orchestration of these disciplines.
The PMO also play a central support role in enabling processes to work together, and critically, measuring the value stream. The PMO's goal should be to operate a measurable portfolio. To achieve this all capabilities should have defined, repeatable digital processes designed to be measurable - ideally in real time. The PMO should govern processes and tools and pay specific attention to the configuration of digital toolsets to support the value stream: this enables a measurable portfolio. Further below is an example of a digitised value stream. An additional challenge for the PMO is shifting from project to product thinking, implementing a framework such as Scaled Agile, and fixing resource costs whilst allowing scope and schedule to flex around strategic, customer or other external needs.
Debates occur over what is a digital product vs digital service. I subscribe to the notion of digital offerings, comprised of products and services that resolve customer journeys (see below). Products are made of features, whilst services are delivered via processes. This distinction is helpful because it allows roadmaps to specifically address either. It helps a product team focus on features, and service owners or process engineers to focus on processes (shared IT services may build common digital services leveraged by multiple products). The important point here is customer journeys can be designed around offerings composed of product features and digital services that together improve the experience. Another benefit of using digital offerings they can be made market and/or segment specific by composing existing products and services in creative ways. Eg free tier vs premium with added services and features.
Digital offerings are not limited to SAAS or packaged software: they allow traditional products to be complemented by a new digital service, eg premium support via an app. A digital offering could include a tangible, traditional product (a tractor) with cloud based reports giving access to tractor sensor data via a subscription. The former improves the customer experience, whilst the later extends the business model. In my view, most traditional business's products can be completed with business model extension (value adding digital services) or new business models and products altogether.
Shortly I’ll introduce an example of a digitised pipeline of value. Before I do, I’ll revisit some challenges in building great digital offerings.
- Building the five capabilities and finding the right people to operate them.
- Adopting an end to end methodology that spans all capabilities.
- Organizing resources to deliver on common vision and goals: this requires clear end to end processes (a value stream), and good micro processes within each capability
- Providing well integrated tools to these capabilities to enable collaboration around value pipelines including information and insight sharing. Tooling digitises processes, speeding up operations by closing gaps between teams, and automating repetitive or time-consuming tasks. A tooling plan is needed that supports well-defined processes and helps orchestrate them.
- Making digital operations measurable and transparent: how can you manage what you cannot measure? Organisations with PMO should task them with this as it will help digital capabilities become transparent and data driven, and create a bedrock for ongoing improvement.
- Adopt the notion of digital offerings. Don’t argue about product vs service, they both work together and both product features and business services (processes) can be digitised.
Finally, a common value stream or pipeline is needed. For this to work it needs some form of end to end method and integrated toolset. Without, processes are weak, siloed, and cause gaps between teams and tools. These challenges constrain management through lack of transparency of the status of the digital operation.
The diagram below shows a conceptual pipeline of value creation. It puts the customer first but doesn't ignore competitive or regulatory pressure. These external factors can be balanced into a value creation pipeline with defined processes and information. Essentially this is data model that enables a data driven value stream (More data types can be added – this is an example). The value stream should reflect all relevant processes, tools as well as contributors and consumers.
To help organisations, small and large, fast track to a well-managed digital operation, I created the Prodigise method and toolset. The method establishes core processes for the five disciplines described in this blog. Our services help baseline, plan, build, operate and improve digital capabilities. In development, our Prodiggi platform aims to simplify the operation of these five capabilities, providing specialist tools and integration with 3rd party tools, and providing an underlying, measured value stream. Our first product due early 2021 is a digitized customer journey management tool integrated with third party ticketing systems.