As I meet with executives from enterprises attempting to be digitally enhanced, most agree on one thing: In order to achieve material value from new digital services, offerings and technologies, they need to balance two factors: the pace of the initiative and “the realization horizon.” The realization horizon is what you can hope to achieve with a digital effort before changes occur to the program’s resources, commitment, funding, management support or benefit expectations.
I’ll delve into the pace-based approach to digitization in this blog, and will follow up with an additional post to explore what it takes to plan, scope and work toward the realization horizon.
Setting a Realistic Pace
A pace-based approach demands a formal, realistic appraisal of the evolving situation and then executing a game plan based on an achievable pace. Such an appraisal consists of a thorough readiness assessment of current capabilities, likely market/customer/user adoption and also an estimate of how capabilities and adoption may increase within a relatively short time period. These factors prescribe the scope, pace and enablement requirements, as well as capability and market development.
“In the past, we jumped right in and aggressively pursued digital technologies and opportunities,” a pharma support company CIO recently told me. “We’ve learned to do much more front-end readiness assessment and then use the findings to scope and pace our efforts. Our success has increased dramatically.”
Success Is in the Details
While many enterprises claim to conduct readiness assessments, they’re often far too superficial, estimating only five to 15 high-level items. More successful organizations engage in far more detailed assessments.
“I expect my folks to articulate five to 10 categories of situation-relevant readiness and then examine 10 to 20 factors for each category of readiness for each digital initiative,” the CEO of an industrial manufacturer revealed to me. “If they can’t, we don’t know what we don’t know, can’t intelligently choose scope, can’t ensure we know what it will take, can’t prescribe pace, and deserve the frustration that will ensue pursuing what might have been a most worthwhile initiative. We are painfully learning the proper paces for all sorts of digital efforts,” he bemoaned.
This company also includes the following factors in evaluating its way forward on digital initiatives:
- The benefits of many digital initiatives – including data analytics, robotic process automation and Internet of Things – are dependent on elective use by the broad community of ultimate users or beneficiaries.
- Many digital initiatives require IT, the business, channel partners and customers to do things they’ve never done before.
- Many digital technologies, skills and management processes are nascent, immature, evolving or highly volatile.
Once these realities are accounted for, it becomes clear that the initiative must be prudently paced and iteratively executed. It also changes the usual targets of discussion and enthusiasm surrounding digital from the why and what, to the how, who, when and where – not to mention the money that will be needed. Often, these factors lead to the increasingly popular minimum viable product (MVP) approach.
Key Components of a Pace-Based Approach
Enterprises pursuing a pace-based approach often take the following steps:
- They embed pace-based approaches into their planning and operating models. For example, in the Agile methodology, scrum teams working on digital initiatives are required to include readiness, scope and pace in their recommendations.
- They follow a formal process to assess and plan based on very thorough categories, dimensions and factors of readiness – often over 100 factors, such as the following:
- Categories of readiness: These include markets, users, ongoing support, financial lifecycle, likely benefits, legal landscape, cultural issues, in-house skills/capabilities, obtainable skills, enabling management processes, legacy systems and data, security aspects, compliance issues, provider experience, risk tolerance, etc.
- Dimensions of readiness: Classes of users, geography, timeframes, possible scope, enabling partners, etc.
- Factors of readiness: For skills/capabilities, these might include business analysis, business knowledge/understanding, enterprise roll-out, technical, software, support, user-enablement, cultural change, promotional efforts, etc.
- They turn these assessments into a pace-based game plan to determine scope, hot spots or areas of vulnerability to focus market and skill/capability development.
- If they’re unable to specifically identify relevant readiness categories or provide an assessment or calibration of the categories factors, they launch a proof of enablement (POE) probe or confer with others who’ve experienced that type of effort to determine what the effort will require.
- They use readiness assessments to set expectations and communications efforts.
- They go beyond asking “what will we learn,” “what will we be able to do differently” or “what will this do for our customers” to asking, “how exactly will this digital initiative lead to business steps that make material contribution.” What will those steps involve and take? Should we change scope or slow pace to figure this out?
- Over time, they develop factor calibration metrics for each type of situation, how they’ve matured, how the factors have changed and how they’ve performed.
Following ‘Rogow’s Rule’
In my discussions with C-level executives, many who express frustration or remorse say, “Well, we sort of do those things.” If they’re serious about enhancing digital success, they should consider formal programs for more pace-based approaches.
Years ago, as head of research at Gartner, I tried to introduce “Rogow’s Rule.” While the pundits of that time predicted a radically disrupted tomorrow based on Moore’s Law and Metcalf’s Law, Rogow’s Rule suggested that “we ain’t going to advance technology use any faster than we can reliably deliver it, or any faster than users can figure out how to apply and adopt it.”
Total cost of ownership (TCO), as well Gartner Magic Quadrants and Hype Cycles, all became well known, while Rogow’s Rule was delegated to the dustbin of forgotten ideas. Has its time come?