VeriSM™: Unwrapped and Applied E-Book

Claire Agutter

• Herausgeber: Van Haren Publishing
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 696

Veröffentlichungsjahr: 2018

Beschreibung

VeriSM: Unwrapped and Applied, the second volume within the VeriSM series, extends the information in the first volume VeriSM: A Service Management Approach for the Digital Age. It shows how VeriSM applies to the digitally transforming organization. This includes information around what digital transformation is, approaches to digital transformation and its implications for the entire organization, especially the people. The book explains how to use the VeriSM model, describing the steps to develop, maintain and use the Management Mesh to deliver a new or changed product or service. Within this content, a case study is used to illustrate how to apply the model for each stage and to show the expected outcomes. Implications for the entire organization are stressed throughout the entire volume, reinforcing the concepts of enterprise strategy tying together the organizational capabilities to produce consumer-focused products and services. The second part of the book also includes a wealth of case studies, stories and interviews from organizations and individuals who have a digital transformation journey to share. VeriSM early adopters from around the world provide more information about how they are applying the guidance.

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VeriSM™: Unwrapped and Applied

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Colophon

Title:

VeriSM™: Unwrapped and applied

A publication of:

IFDC (International Foundation of Digital Competences)

Authors team:

Claire AgutterSuzanne Van HoveJohann Botha

Publisher:

Van Haren Publishing, Zaltbommel, www.vanharen.net

Design and Layout:

Coco Bookmedia, Amersfoort – NL

NUR code:

981 / 123

ISBN Hard copy:

978 94 018 0335 9

ISBN eBook (pdf):

978 94 018 0334 2

Edition:

First edition, first impression, October 2018

Copyright:

© Van Haren Publishing, 2018

All rights reserved. No part of this publication may be reproduced in any form by print, photo print, microfilm or any other means without written permission by the publisher.

Although this publication has been composed with much care, neither author, nor editor, nor publisher can accept any liability for damage caused by possible errors and/or incompleteness in this publication.

Trademark notices:

Adaptive Service Model™ is a trademark of Taking Service Forward

BiSL® is a registered trademark of ASL BiSL Foundation.

COBIT® is a registered trademark of ISACA.

ISO/IEC 20000® is a registered trademark of ISO.

ITIL® is a registered trademark of AXELOS Limited.

IT4IT® is a registered trademark of The Open Group.

SIAM® is a registered trademark of EXIN.

VeriSM™ is a registered trademark of IFDC.

Preface

The world we live in today is changing more quickly than most of us still realize. New and very disruptive technologies, such as Artificial Intelligence and advanced robotics, are developing at an accelerated pace. These and other (also already existing) digital technologies have the potential to transform not only the business world and the global economy, but society as a whole and the very way in which we live our daily lives.

We know this well in Estonia, where we have been building up a digital government and society for the last 20 years. Sometimes our country is even called e-Estonia to mark the high level to which digital tech penetrates and eases the life of Estonians (and these days also our global e-Residents!).

Technology-driven solutions are already everywhere we look, right from the way our city is being redesigned and the car we drive, to the way we make individual purchases and communicate with those close to us. The best of governments are embracing technology to digitize services to citizens, companies are embracing technology to digitize services to customers. Technology is used to cut down on costs, create new value offerings, literally improve lives.

So what are the implications of this new world? Well, from a management perspective it’s quite simple. The ability of both public and private sector to adapt to this new reality and embrace the possibilities of new technologies in a timely way is no longer a nice-to-have. It is essential if they are to stay relevant and so ultimately, it is a question of pure relevance or even survival.

There are enough examples around of organizations which have not adapted to the digital age and have paid the ultimate price. However, what makes this reality even more complex is that it’s not just technology which is changing. The digital age has resulted in new demands on organizations and professionals which stretch much further than understanding the implications of and how to apply the new technologies. To thrive in this new world requires changed behaviors, different organization structures, new ways of collaborating, and fresh attitudes towards those we are serving: the end consumers. In short, we need to develop the right mindset.

This is why a new approach to service management is essential. An approach which recognizes the challenges and opportunities of the digital age we are living in; which acknowledges that the IT department can no longer operate outside of the business as a separate entity; and which focuses on the behaviors and attitudes to make a successful digital transformation.

VeriSM™ is an attempt to embrace all these elements, which is why I hope you find this practical guide a useful source of aid to start or continue your organization’s digital journey – be it in government, business or beyond.

Siim Sikkut

Government CIO, Republic of Estonia

Authors’ Preface

What would you do if someone told you that you could change your organization for the better by adopting just one simple new behavior? Or one amazing new technology? You’d do it, wouldn’t you?

But what if that person came back the next day with another quick tip, and then another and another; and some of the tips started to contradict each other?

This is the situation for most of us in today’s business environment. We are overwhelmed by new ways of working, technological changes and an onslaught of information. So how do we respond? How do we deliver value through products and services in the digital age?

Suzanne, Johann and I were all contributors to the first VeriSM publication in 2018. Sponsored by the IFDC and working in collaboration with a large global author group, we proposed a service management approach for the digital age. The feedback we received was positive, but we got one question over and over again: “how can I ‘do’ VeriSM in my organization?”

In this book, we’ve worked hard to bring you the equipment to answer that question. You’ll find much more detail about applying the VeriSM model, inspirational case studies, stories, interviews and examples from VeriSM early adopters around the world. We know there isn’t a perfect answer that will work for every organization, so what we’ve done here is give you the tools to help you find the answer that’s right for you. The stories we share aren’t meant to be copied without question or without the application of critical thinking, but we hope that they give you some examples of how you could do things differently.

Enjoy the book; we wish you success on your digital journey.

Claire Agutter

Suzanne Van Hove

Johann Botha

Contents

CONTRIBUTORS

1 USING THIS BOOK

1.1 Overview of the VeriSM approach

1.2 Part A: Chapters 1 – 18

1.3 Part B: Chapters 19 – 29

1.4 The 2018 Digital Transformation Survey

PART A

2 DIGITAL TRANSFORMATION IN CONTEXT

2.1 VeriSM and digital transformation

2.2 Defining the digital age

3 THE DIGITAL AGE AND THE DIGITAL ORGANIZATION

3.1 What is a digital organization?

3.2 Digital transformation and the digital organization

3.2.1 Systems and digital transformation

3.2.2 Systems of record and systems of engagement

3.3 People and the digital age

3.3.1 Generation Y and Z as consumers

3.3.2 Generation Y and Z as staff

3.4 Digital products and services

3.5 Digital optimization and transformation approaches

3.6 From conventional to digital services

3.7 Requirements for successful digital programs

3.8 Digital transformation options

3.8.1 An organization-led implementation option

3.8.2 Consultant/vendor-led implementation option

3.8.3 Mixed implementation option

3.9 The impact of digital transformation on ways of working

3.9.1 Consumer centricity

3.10 The impact of digital transformation on structure

4 THE DIGITAL LEADER

4.1 Who are the leaders in the digital organization?

4.2 The digital mindset

4.3 What skills do digital leaders need?

4.3.1 Leadership competences

4.4 Leading cultural transformation

4.5 Leadership in the initiation phase

4.6 Ongoing leadership

4.7 Communicate the ‘why’

4.8 Digital sustainability: guidance for digital leaders

4.8.1 Planning and measurement: short term

4.8.2 Planning and measurement: medium term

4.8.3 Planning and measurement – long term

5 ADAPTING TO CONSTANT CHANGE

5.1 Kill the hierarchy

5.1.1 Moving to a flatter structure

5.1.2 Why embrace a flatter structure?

5.1.3 Getting started

5.2 Decentralize decision making

5.2.1 Best placed

5.2.2 Getting started

5.3 Provide autonomy

5.3.1 What is autonomy?

5.3.2 Guardrails

5.3.3 Getting started

5.4 Employee ownership

5.4.1 Benefits

5.4.2 Achieving a sense of ownership

5.4.3 Getting started

5.5 What do leaders need to do?

5.5.1 Become adaptive leaders

5.5.2 Adaptive leadership teams

5.5.3 Get out of the way

5.5.4 Move away from ‘empowering’

5.5.5 Getting started

5.6 Establish mutual trust

5.6.1 Sense of purpose

5.6.2 Walk the talk

5.6.3 Teams

5.6.4 Enablement

5.6.5 Transparency

5.6.6 Everyone is equal

5.6.7 Getting started

5.7 Build a network of reliance on others

5.7.1 Getting started

6 COLLABORATION

6.1 What is collaboration?

6.1.1 Collaboration is not a tool

6.1.2 Collaboration is not using social tools in the workplace

6.1.3 Collaboration is not email

6.2 Collaboration behaviors

6.2.1 Organizational behavior characteristics

6.3 Why is collaboration important?

6.4 The dynamics of collaboration in an organization

6.4.1 The dynamics of team collaboration

6.4.2 The dynamics of enterprise collaboration

6.5 Benefits of nurturing a collaborative culture

6.6 Collaborating in practice

6.7 Measuring success

7 KNOWLEDGE MANAGEMENT

7.1 Knowledge management defined

7.2 Knowledge management in the digital age

7.3 Knowledge management behaviors

7.4 The purpose of knowledge management in a digital organization

7.5 Knowledge management roles and competences

8 OUTCOMES

8.1 What is an outcome?

8.2 What is different for products and services?

8.3 How to identify outcomes

8.3.1 Value Stream Mapping (VSM)

8.4 Measuring outcomes

9 TRANSFORMATION TECHNIQUES

9.1 Identifying transformational opportunities

9.1.1 Cynefin

9.2 The VUCA view of the world

9.3 The Innovator’s Dilemma

9.4 The Lean Start-up

9.5 Business Innovation Circles (BICs)

9.5.1 Setting up BICs – the three Cs

9.5.2 Techniques used in BICs

9.6 Other tools and techniques

9.6.1 Collecting information and data

9.6.2 Tools to solve problems and understand current environments

9.6.3 Tools to frame a hypothesis

9.6.4 Platform business model maps

10 GOVERNANCE AND STRATEGY

10.1 Setting the scene

10.2 The importance of leadership in governance

10.2.1 VeriSM Pillars

10.3 The organizational portfolio

10.4 Relationship of the organizational portfolio to other VeriSM artifacts and activities

10.5 Governance and strategy overview

10.5.1 Evaluate, Direct, Monitor (EDM)

10.5.2 Evaluate

10.5.3 Direct

10.5.4 Monitor

10.6 Governance questions

10.6.1 Question one – Who are we?

10.6.2 Question two – What influences what we can do?

10.6.3 Question three – What do we do?

10.6.4 Question four – Who do we do it for?

11 VERISM DESCRIBED

11.1 The high-level view

11.2 VeriSM unwrapped: the full view

11.3 VeriSM applied: FireCloud Health case study

12 THE MANAGEMENT MESH

12.1 What is it?

12.2 How is the Management Mesh used?

12.3 Creating the current view of the Management Mesh – What is available?

12.3.1 Resources

12.3.2 Environment

12.3.3 Management practices

12.3.4 Emerging technologies

12.4 VeriSM unwrapped: the Organizational Mesh

12.5 VeriSM applied: FCH Organizational Mesh

13 DEFINE: APPROVAL

13.1 Option space

13.2 Opportunity portfolios

13.3 Run-Grow-Transform (RGT)

13.4 VeriSM unwrapped: tools to approve decisions

13.5 VeriSM applied: FCH Wearable initiative approval

14 DEFINE: DEFINE THE REQUIREMENTS

14.1 Remember the consumer

14.2 Introduction to requirements

14.2.1 Requirements gathering techniques

14.3 Gathering the requirements

14.3.1 Traditional requirement gathering

14.3.2 Iterative requirement gathering

14.4 Requirement analysis and agreement

14.5 Choosing management practices and technologies

14.5.1 Choosing an appropriate management practice

14.5.2 Choosing appropriate technology

14.6 Conclusion: managing requirements

14.7 VeriSM unwrapped: requirements

14.8 VeriSM applied: FCH requirements

15 DEFINE: ANALYZING GAPS

15.1 Perform a gap analysis

15.2 Steps to perform a gap analysis

15.3 Techniques for analyzing and managing gaps

15.3.1 McKinsey 7S framework

15.3.2 Burke-Litwin model

15.3.3 Nadler-Tushman model

15.4 Conclusion: gap analysis

15.5 VeriSM unwrapped: interpreting gaps

15.6 VeriSM applied: FCH gaps

16 DEFINE: SOURCE THE GAPS

16.1 Sourcing options

16.1.1 Strategic sourcing

16.2 VeriSM unwrapped: sourcing protocols

16.3 VeriSM applied: FCH sourcing

17 VERISM PRODUCE, PROVIDE AND RESPOND STAGES

17.1 Produce

17.1.1 Merging management practices

17.1.2 VeriSM unwrapped

17.1.3 VeriSM applied: FCH Produce

17.2 Provide

17.2.1 VeriSM unwrapped

17.2.2 VeriSM applied: FCH new Management Mesh

17.3 Respond

18 MAKING A CASE FOR VERISM

PART B

19 CASE STUDIES: EARLY ADOPTERS OF VERISM

19.1 6point6 Cloud Gateway

19.2 CITIC Tech: using VeriSM to support digital transformation

19.3 Kabu.com Securities Co. Ltd.

20 CASE STUDIES: DIGITAL TRANSFORMATION – WUXI APPTEC AND ANONCORP

20.1 WuXi AppTec

20.1.1 Procurement’s challenges

20.1.2 Looking ahead

20.2 ANONCORP

20.2.1 Past approach

20.2.2 New approach

20.2.3 Recent example

21 CASE STUDY: DIGITAL TRANSFORMATION IN THE PUBLIC SECTOR – AYLESBURY VALE DISTRICT COUNCIL

21.1 Introduction

21.2 History and context

21.3 Transformation

21.4 Organization and people transformation

21.5 Future plans

22 CASE STUDY: DIGITAL ORGANIZATION – SKY BETTING AND GAMING

23 REAL WORLD PERSPECTIVE: INTERVIEW WITH JACK BISCHOF FROM TECHNOLOGY BUSINESS MANAGEMENT

24 REAL WORLD PERSPECTIVE: INTERVIEW WITH KAREN FERRIS, OCM EXPERT

25 REAL WORLD PERSPECTIVE: DIGITAL TRANSFORMATION AND THE JOBS MARKET

25.1 Employment market overview

25.2 Digital strategy

25.3 Salary expectations CDO/CTO/CIO

25.4 Leadership and skillset required in digital transformation

25.5 What do staff need?

25.6 The role of the CDO and team

25.7 Digital transformation and the impact on the jobs market

25.8 Summary

26 REAL WORLD PERSPECTIVES: IVANTI, SERVICENOW AND MARVAL

26.1 Ivanti

26.2 ServiceNow

26.3 Marval

27 REAL WORLD EXAMPLE: DIGITAL OPTIMIZATION- HIPPO DIGITAL/KIDZ KLUB LEEDS

27.1 The problem to be solved

27.2 Design sprint preparation

27.3 Design sprint community approach

27.4 Ongoing work with Kidz Klub

28 REAL WORLD EXAMPLE: DIGITAL DESIGN – HIPPO DIGITAL

28.1 Hippo Digital: build the right thing

28.2 What is digital design?

28.3 What is Design Thinking?

28.4 About the user and meeting their needs

28.5 What is a user journey?

28.6 Delivering Design Thinking

28.7 Design techniques

28.8 About the team

28.9 Tools

28.10 Applying Design Thinking across the organization

29 REAL WORLD EXAMPLE: SOLLERTIS CONVERGENCE - AUTOMATING THE MANAGEMENT MESH

29.1 What is Sollertis Convergence?

29.2 Outcomes and organizational portfolio

29.3 The Management Mesh for the current state

29.4 The Management Mesh for ideas and transformation

29.5 Connecting to project portfolio, projects and develop

APPENDIX A: READINESS FOR VERISM

APPENDIX B: FIRECLOUD HEALTH CASE STUDY

APPENDIX C: HOW MANAGEMENT PRACTICES EVOLVE

29.6 Lean applied outside of manufacturing

29.7 Enterprise service management at Kinetic IT

APPENDIX D: MANAGEMENT PRACTICES INFORMATION

APPENDIX E: AGILE REQUIREMENTS

APPENDIX E2: MASTER REQUIREMENTS DOCUMENT

APPENDIX F: STEPS FOR STRATEGIC SOURCING

GLOSSARY

BIBLIOGRAPHY

INDEX

Table of Figures

Figure 1 The VeriSM model

Figure 2 Location of survey respondents of the 2018 Survey

Figure 3 Respondent industries of the 2018 Survey

Figure 4 Respondent size of organization of the 2018 Survey

Figure 5 Benefits being pursued through digital transformation in the 2018 Survey

Figure 6 Number of digital initiatives in the 2018 Survey

Figure 7 Technology activities carried out by respondent’s organization in the 2018 Survey

Figure 8 Products and services supported by technology in the 2018 Survey

Figure 9 Percentage change in products and services that rely on technology in the 2018 Survey

Figure 10 Changing interaction with technology in the 2018 Survey

Figure 11 Skills for the digital age (source: Deloitte University Press)

Figure 12 VeriSM Digital Optimization and Transformational approaches, their focus and benefit (source: original idea from Digital Transformation: a Roadmap for billion dollar organizations, 2011 MIT Centre for Digital Business and Capgemini Consulting)

Figure 13 Mapping VeriSM approaches to Business Innovation CirclesTM optimization and transformation approaches

Figure 14 Consequences of missing capabilities

Figure 15 Organization-led implementation

Figure 16 Projects are waves

Figure 17 Do senior managers need new skills? (Source: 2018 Survey)

Figure 18 How well does your organization adapt to major changes? (source: 2018 Survey)

Figure 19 How well does collaboration work in your organization? (Source: 2018 Survey)

Figure 20 Organizational behavior characteristics (source: Hornbill)

Figure 21 Outcomes form part of the interaction between service provider and consumer (source: Adaptive Service Model)

Figure 22 Strategy and principles lead to value

Figure 23 A SIPOC diagram

Figure 24 A typical VSM with key metrics calculated (based on Toyota material and information-flow mapping, ©Toyota)

Figure 25 The Cynefin Framework (source: Cognitive Edge)

Figure 26 Digitization responses mapped to Cynefin domains (source: Dave Snowden)

Figure 27 Cynefin and Standard+Case (source: Rob England)

Figure 28 Knowledge and predictability are key VUCA drivers

Figure 29 Christensen’s Innovation Types compared with VeriSM digitization approaches

Figure 30 Example of a good and bad response to the Innovator’s Dilemma (based on work from Clayton Christensen)

Figure 31 The Lean Start-up BML cycle (source: The Lean Start-up by Eric Ries ©2011)

Figure 32 Business Innovation CirclesTM – an innovation management technique (©getITright, Business Innovation CirclesTM is a Trademark of getITright)

Figure 33 Ishikawa diagram

Figure 34 Using A3 as a visual tool to solve problems

Figure 35 An A3 sheet when used as part of DMAIC

Figure 36 Osterwalder and Pigneur – Business Model Canvas (source: strategizer.com)

Figure 37 Value Proposition Canvas (source: strategyzer.com)

Figure 38 A Customer Journey Map of Mug and Muffin

Figure 39 Mug and Muffin stakeholder map

Figure 40 Platform business model map – Android (source: David L. Rogers, The Digital Transformation Book)

Figure 41 An example of disintermediation

Figure 42 An example of intermediation

Figure 43 VeriSM Pillars

Figure 44 The organizational portfolio

Figure 45 Some strategic questions to answer when using the EDM model (source: GetITRight)

Figure 46 An example of the cascading levels of principles guiding behavior

Figure 47 Porter’s 5 Forces

Figure 48 ISO 31000 risk management approach (source: ISO)

Figure 49 Example of a Lean Management cascade used in Hoshin Kanri

Figure 50 Products, services, customers, and markets drive strategy

Figure 51 VeriSM – high-level view

Figure 52 VeriSM – the full view

Figure 53 The Management Mesh

Figure 54 Progressing the Management Mesh through the VeriSM stages

Figure 55 Applying the Management Mesh

Figure 56 VeriSM unwrapped: Organizational Mesh

Figure 57 FireCloud Health Organizational Management Mesh – Current

Figure 58 Approval

Figure 59 The Option space too (source: T.A. Luehrman, 1998)

Figure 60 The Option Space Tool applied to a tomato garden (source: T.A. Luehrman, 1998)

Figure 61 The opportunity portfolio (source: McGrath, R. G. & MacMillan, I. (2000))

Figure 62 Define the requirements

Figure 63 “Project Cartoon”

Figure 64 Front and back view of a user story card

Figure 65 Rejected requirements

Figure 66 VeriSM and Improvements

Figure 67 VeriSM unwrapped: Requirements Mesh

Figure 68 FCH requirements – needs for the Wearable Wellness program

Figure 69 Analyze the gaps

Figure 70 A simple gap analysis

Figure 71 McKinsey 7s framework

Figure 72 A stylized view of the Burke-Litwin model

Figure 73 Nadler-Tushman model

Figure 74 VeriSM unwrapped: interpreting the gaps

Figure 75 FCH gaps

Figure 76 Source the gaps

Figure 77 Produce, Provide & Respond

Figure 78 Change control versus Agile Scrum change control

Figure 79 Unwrapped – “new” Organizational Mesh

Figure 80 FCH Organizational Mesh – includes FCH Wearable

Figure 81 Draft VeriSM model at 6point6 Cloud Gateway (source: 6Point6)

Figure 82 Interim service management model at 6point6 Cloud Gateway (source: 6Point6)

Figure 83 Generic Management Mesh

Figure 84 CITIC Cloud Empowerment Transformation model (source: CITIC)

Figure 85 CITIC – Business flow of warehouse logistics (source: CITIC)

Figure 86Kabu.com staff

Figure 87Kabu.com VeriSM and DevOps

Figure 88Kabu.com Management Mesh

Figure 89Kabu.com – Agile organization

Figure 90Kabu.com – DevOps Organization

Figure 91 WuXi AppTec before and after E-commerce model (source: WuXi AppTec)

Figure 92 LabNetwork features and micro-services (source: WuXi AppTec)

Figure 93 Change Plan on a page

Figure 94 Strategic Change canvas

Figure 95 Change scorecard (source: OCM)

Figure 96 Digital strategy in enterprises (source: Centric Digital LLC and Emarketer 2017)

Figure 97 Employment effect of drivers of change (source: World Economic Forum)

Figure 98 Journey map with Post-it® Notes

Figure 99 Hippo Digital Teams

Figure 100 Sollertis Convergence – Value Framework (source: Sollertis)

Figure 101 Sollertis Convergence – Management Mesh Capabilities (source: Sollertis)

Figure 102 Sollertis Convergence – Mesh Strands and Capabilities (source: Sollertis)

Figure 103 Sollertis Convergence – Mesh and data points view (source: Sollertis)

Figure 104 Sollertis Convergence – capabilities needed to achieve outcome (source: Sollertis)

Figure 105 Sollertis Convergence – Value Plan stage (source: Sollertis)

Figure 107 Sollertis Convergence – Gap analysis Mesh dashboard (source: Sollertis)

Figure 106 Sollertis Convergence – Requirements Management Mesh dashboard (source: Sollertis)

Figure 108 Sollertis Convergence – linked projects per Mesh strand (source: Sollertis)

Figure 109 FCH structure (source: FCH)

Figure 110 Kinetic IT – Service Wheel (source: Kinetic IT)

Figure 111 Kinetic IT – request system (source: Kinetic IT)

Figure 112 Using DMAIC in Kaizen events

Figure 113 Pareto analysis

Figure 114 PDCA

Figure 115 Agile requirement gathering

Contributors

Name

Company

Claire Agutter

Scopism Limited

Suzanne van Hove

SED-IT

Johann Botha

getITright

Abbey Wiltse

SMV Inc & Ahead Technology Inc

Aleksandr Zhuk

Independent

Alexander Guilherme Couceiro

LOGICALIS

Alison Cartlidge

Sopra Steria UK

Alistair Doran

Architecting Solutions Ltd

Allen Dixon

Independent Consultant

Andrea Kis

Deloitte

Andrew Humphrey

Auto Trader UK

Anna Leyland

Sopra Steria

Aprill Allen

Knowledge Bird

Aureo Antunes

Citsmart Corporation

Catherine Chalmers

CTC Management Services (UK) Ltd.

Chris Pope

ServiceNow

Chris Taylor-Cutter

CTC Management Services (UK) Ltd.

Clare McAleese

VocaLink (a Mastercard Company)

Daniel Breston

Virtual Clarity

David Bentley

Cranford Group

David Johnston

Two Rivers Meet

Doug Tedder

Tedder Consulting

Dragos Malihin

CWSI

Eppo Lupes

Octopus Learning

George Nawara

Nawara & Assoc ITSM/Governance Consultancy

Gerry Sweeney

Hornbill

Helen Morris

Helix SMS

Ian Aitchison

Ivanti

James Gander

Gander Service Management Ltd

James Harvey

DevOpsGroup

Jan Bouman

Sogeti Netherlands

Jon Hall

BMC

Karen Ferris

Macanta Consulting

Krzysztof Politowicz

BEI Krzysztof Politowicz i Partnerzy

Kylie Fowler

ITAM Intelligence

Leo van Selm

Vaseom b.v.

Liz Gallacher

Helix SMS

Luis Anderson

Independent

Luke Koichiro Toda

Strategic Staff Services Corporation

Maarten Bordewijk

Bordewijk Training & Advies

Marcos Weiss, PhD

Independent Consultant

Mark Flynn

Felix Maldo Ltd

Mark Smalley

Smalley.IT

Marlon Molina

Computerworld

Martijn Adams

4me, Inc.

Mathias Traugott

Punctdavista AG

Michelle Major-Goldsmith

Kinetic IT

Nikola Gaydarov

NiganiConsulting

Patrick Bolger

Hornbill

Penny Emmett

Cranford Group

Peter Brooks

Independent

Randy Steinberg

Concurrency

Reni Friis

Valcon Consulting

Richard de Kock

Microsoft

Richard Sharp

NashTech Limited

Rob Akershoek

Fruition Partners, DXC technology company

Robert den Broeder

Trigono BV

Rory Canavan

SAM Charter

Sachin Bhatnagar

South32

Sandra Whittleston

University of Northampton

Satya Misra

HCL Technologies

Simon Dorst

Kinetic IT

Simon Kent

Sollertis

Simone Jo Moore

SJM

Stephen Thair

DevOpsGuys and Microsoft

Steve Matthews

DorLind Solutions

Vincent Douhairie

Amettis

Neil M Forshaw

Fujitsu

Rita Pilon

EXIN

Case studies/Extra bits Authors

Liz Whitefield

Hippo Digital

Rob England

Two Hills Ltd

Jannis de Visser

QNH Consulting

Caspar Miller

Westergaard A/S

Rachel Watson

Sky Betting and Gaming

Steve Chambers

Cloudsoft Corporation

Steve Leach

6point6 Cloud Gateway

Maryvonne Hassall

Aylesbury Vale DC

Don Page

Marval

Jack D. Bischof

Technology Business Management Council

Dave Snowden

Cognitive Edge

Suzanne Galletly

IFDC

Rachel McElroy

Social Revolution Marketing

Rogier Kuijpers

ASML

David Krieg

Kinetic IT

Song Xiang

CITIC Technology Co., Ltd.

Deng Hong

Beijing Trendsetting Consulting Co., Ltd.

Xing Jie

WuXi AppTec

1 Using this Book

VeriSMTM: Unwrapped and Applied develops and builds on the content in the first VeriSM book, VeriSMTM: A Service Management Approach for the Digital Age. To use this publication effectively, concepts from the initial book should be understood. While repeating the concepts is not the intent of this volume, Section 1.1 provides a brief summary for those who are new to the approach.

1.1 OVERVIEW OF THE VERISM APPROACH

VeriSM provides a value-driven, evolving, responsive and integrated approach for service management in the digital age. Key concepts for VeriSM begin with the idea that the entire organization is a service provider, not a single department such as the IT department. Expanding service management beyond one department (typically IT) to include the rest of the organization is important for the digital organization. Doing this means that all of an organization’s resources and capabilities are engaged in delivering value to the consumer through products or services.

This supports the next VeriSM key concept: whatever is delivered by the service provider, products or services, does not really matter. What matters is that the needs of the consumer (a much broader and more inclusive term than customer) drive what the service provider delivers. Consumer is used as a term throughout the book, except where ‘customer’ is the normally accepted term (for example, when talking about customer service). VeriSM also requires products and services to be aligned with enterprise governance and supporting Service Management Principles.

VeriSM focuses on the people and culture aspects of service management including leadership and organizational culture as well as the need for continued professional development. These concepts are interwoven throughout the next chapters. An organization’s leaders set the tone for success, so their role is essential and covered in detail.

The VeriSM model is a service management operating model for an organization, which includes:

■ Governance;

■ Service Management Principles;

■ The Management Mesh, which allows for flexibility and an integrated application of multiple management practices;

■ Four stages (Define, Produce, Provide, Respond) supporting the products or services delivered to the consumer;

■ The consumer, who drives what the service provider does and provides feedback on what is delivered.

There is a two-way relationship between the organization’s strategy and the service management operating model. In one direction, design of the operating model is derived from the strategy. In the other direction, the organization’s strategy may be influenced by operating model improvements and changes, or by signals from consumer feedback that resonate with the leadership, causing changes to the overall operating model (shown in Figure 1).

Figure 1 The VeriSM model

Full descriptions of these are found in VeriSMTM: A Service Management Approach for the Digital Age. Briefly, each area is defined as follows:

■Governance – the underpinning system of directing and controlling the activities of an organization;

■Consumer – provides the requirements for products and services, receives products and services, gives feedback, and participates in verify/review/improve activities;

■Service Management Principles – based on the organizational governing principles, the ‘guardrails’ for the products and services delivered, addressing areas such as quality and risk;

■Management Mesh – how an organization combines its resources, environment and emerging technologies with different management practices to create and deliver products and services;

■Define – design of a solution (product or service) using agreed requirements;

■Produce – the creation of the solution (build, test, deploy) ensuring the outcome meets the needs of the consumer;

■Provide – the new/changed solution is available for use;

■Respond – support the consumer during performance issues, unexpected occurrences, questions or any other requests; read the consumer’s signals and act accordingly.

Within the VeriSM model, governance and Service Management Principles are relatively stable elements, only changing when the organization’s needs or consumer requirements change. The Management Mesh is flexible and is adjusted as required for products and services, for example to integrate a new management practice or a new technology. The four stages reflect the defined organizational management practices.

1.2 PART A: CHAPTERS 1 – 18

This book is divided into two sections. Part A discusses the impact of digital transformation on organizations and people. It provides practical guidance on how to respond, including techniques, approaches and applying the VeriSM model.

1.3 PART B: CHAPTERS 19 – 29

Part B builds on Part A with practical examples, case studies, interviews and industry perspectives. It includes a wide range of material from around the world that will be a source of inspiration and advice for your own digital journey.

1.4 THE 2018 DIGITAL TRANSFORMATION SURVEY

Whilst preparing the content in this book, IFDC conducted a survey in 2018 of more than 1,200 people to ask for their views on digital transformation and how it is affecting their workplace. Throughout the book survey extracts are used to develop concepts where they are relevant.

The 2018 Digital Transformation Survey

There were responses from many countries; the top 8 are shown in Figure 2.

Figure 2 Location of survey respondents of the 2018 Survey

Industry types and organization sizes are shown in Figures 3 and 4.

Figure 3 Respondent industries of the 2018 Survey

Figure 4 Respondent size of organization of the 2018 Survey

The survey shows that the trajectory of digital transformation has increased significantly over the last few years with 91% of respondents claiming they have heard the term digital transformation before; 81% of the respondents claimed their organizations have included digital transformation as part of their strategy and 61% of respondents indicated that their organizations frequently evaluate emerging technologies for their impact on products and services. It comes as no surprise that organizations are taking digital transformation more seriously when 85% of the respondents claimed that their competitors/peer organizations are embracing technology to improve their products and services. Digital transformation is no longer ‘nice to have’, but something organizations need to pursue to remain competitive. Further to these results, respondents claimed multiple benefits their organizations were trying to achieve through these digital transformation efforts. These are illustrated in Figure 5.

Figure 5 Benefits being pursued through digital transformation in the 2018 Survey

47% of respondents have indicated that over the last five years, the volume of the organization’s products and services that depend on technology has increased significantly. Figure 6 illustrates that majority of organizations running digital initiatives fall between 10 or more initiatives or three to five initiatives:

Figure 6 Number of digital initiatives in the 2018 Survey

This understandably has resulted in 73% of respondents claiming that the time spent interacting with technology within their role has increased. 90% of respondents felt that senior managers need new skills to take advantage of digital technology, with respondents indicating their organizations carry out activities relating to the emergent technologies described in Figure 7.

Figure 7 Technology activities carried out by respondent’s organization in the 2018 Survey

Only 49% of respondents indicated that their organizations frequently evaluated new and or changed management practices, standards and frameworks amidst their digital transformation efforts. This is interesting, because emergent technologies require new management practices, standards and baselines to be effective in delivering, managing or supporting services. Organizations that are not evaluating new management practices, standards and frameworks to complement their digital transformation initiatives are likely to have difficulty in achieving the benefits they intended. These include increased efficiency, the ability to create or improve products rapidly and effectively and improving services while lowering costs.

PART A

This section of the book discusses the impact of digital transformation on organizations and people. It provides practical guidance on how to respond, including techniques, approaches and applying the VeriSM model.

2 Digital transformation in context

Introduction

Why should organizational leaders care about VeriSM? What does it mean for them, for digital transformation, and for digital optimization? This chapter assesses how VeriSM helps organizations thrive in a digital world.

Organizations, regardless of their sector and what they do or sell, can grow by embracing the digital world. Those that do not run the risk of becoming inconsequential. Household names who did not anticipate the changes that digital transformation brings or thought they would not be affected are now just distant memories in the minds of aging consumers who reminisce about the ‘good old days’.

Blockbuster, Kodak, Borders Books and a long list of others are no more – they either did not see, listen or understand that the world is changing, and they paid the ultimate price. Yet there are others that were in the same – or worse – position that managed to reinvent themselves and are now shining examples of what is possible for organizations that are willing and prepared. Their journeys were not simple, easy or straightforward. These pioneers can serve as examples.

Real world examples

The Wall Street Journal was first printed on 8 July 1889. When the internet destroyed its business model, its response was typical – let’s hunker down, let’s consolidate. They did everything that conventional business theory said they must do and yet the bleeding continued until they truly reinvented themselves in the late 2000s. Today, it has a circulation of about 2.277 million copies, of which 1,270,000 are digital subscriptions.

Barnes and Noble started in 1873 – they had to deal with Amazon just like Borders Books. B&N is arguably one of the most successful online bookstores, Borders Books was liquidated in 2011 and 11,000 employees lost their jobs.

In 2009, Pages Jaunes, the French market leader in the Yellow Pages Industry was in trouble. The market for printed products was dying because of widespread use of the internet. The organization had to adapt to the new digital reality or, in case of failure, go out of business and cease to exist. The board developed a strategy to safeguard the organization by redefining its mission. It said that Pages Jaunes had never has been in the business of producing heavy printed books. It is (and always was) in the business of connecting small businesses to local customers. And what could do the job better that new digital technology? Within five years, more than 75% of the revenues came from digital business, thanks to a strong, simple and appealing vision and through perseverance and exemplary behavior of the leadership1.

It is important to consider how some organizations survive, whilst others do not. More interesting is to explore how people with a good idea could not deliver that concept because the world has changed around them.

Even the most traditional ‘brick and mortar’ organizations can learn to outperform competitors by embracing the digital world, in a practical and pragmatic way. Some observers say that, when it comes to digital transformation, “some industries can, and others cannot”, often citing examples such as government organizations. However, public sector organizations including the Estonian government administration, and the cities of Boston, New York, Chicago and Seattle have transformed. They now provide better services to citizens, engage more, and have created a sense of community by embracing the change that digital technology brings. They have indeed made their cities a better place for their citizens2.

Case study: Aylesbury Vale District Council

For more about digital transformation in a local government organization, go to Chapter 21 to learn about Aylesbury Vale District Council and how it transformed its services in the face of severe budget cuts.

“AVDC is an ambitious council with a strong culture, based on clearly defined values and underpinned by a new commercial behavioral framework.”

Andrew Grant, Chief Executive, AVDC

The 2018 Digital Transformation Survey

As shown in Figure 8, respondents believe that 76% to 100% of their organizations‘ products and services rely heavily on technology.

Figure 8 Products and services supported by technology in the 2018 Survey

They also feel that the percentage of products and services that rely on technology is increasing rapidly, as shown in Figure 9.

Figure 9 Percentage change in products and services that rely on technology in the 2018 Survey

2.1 VERISM AND DIGITAL TRANSFORMATION

VeriSM enables an organization to work as a single entity to provide products and services to consumers. It facilitates an organization where everybody understands their contribution to serving consumers and to achieving organizational goals and objectives. The key benefit of VeriSM for C-level executives is how the organization and its constituent parts act and think as a collective whole, ensuring that the entire organization is focused on the achievement of defined goals.

VeriSM is an evolutionary, not a revolutionary approach. An organization can start where it is and evolve into its unique digital future. It is important to remember that the role of leadership is to enable digital transformation and to ensure that managers have the resources, direction and authority to act on the direction given and make it a reality. Without support and input from the leadership level, managers’ efforts will be worthless.

2.2 DEFINING THE DIGITAL AGE

VeriSM does not endorse one definition of the digital age. How the digital age is defined will vary, depending on people’s location, background, industry, role and age. Adding to the range of possible definitions and interpretations are phenomena and concepts such as:

■ Digitization;

■ Digital transformation;

■ Automation;

■ The Internet of Things (IoT);

■ Socio-technical evolution;

■ Generations;

■ Big Data;

■ Bring-your-own-device (BYOD);

■ The proliferation of the internet;

■ Knowledge management, learning and education;

■ Artificial Intelligence (AI);

■ The influence of social media;

■ New means of communication;

■ Transacting, paying and unique views on what constitutes value, especially within the context of the digital age, all of which are continually evolving.

As quickly as technologies change, so do terms. Today’s definition may be described differently from tomorrow’s. Ensure there is consistency in understanding in each organization – define terms and communicate the definitions. If this is not done (and there are abundant examples where actions are taken without clear understanding), stakeholder decisions and actions become unexpected and potentially contradictory. To illustrate this point, consider the fact there is no single, accepted definition of ‘digital transformation’.

Any organization that is concerned with digital transformation needs to consider:

■ The meaning of the ‘digital age’ – how it affects the organization, the context of the impact and how that effect will be embraced and managed;

■ Governance and the role leaders play in helping the organization to transform, as well as how leadership can enable and facilitate organizational change;

■ Ways in which the organization needs to respond to survive;

■ The skills, competences and actions of leaders to be effective in a digital age;

■ Knowledge and data and how organizations need to understand and utilize them in a digital age.

Each individual organization will view ‘the digital age’ differently. That view will have a material impact on governance, strategy, the portfolio of services and products, the way organizations manage and realize products and services and the way these translate into management activities. These management activities include creating Service Management Principles, the definition of the Management Mesh, processes, procedures, capabilities, and technologies used.

Real world perspectives

While writing this book, the author team have heard people and organizations express such divergent views as: “We have been digitally transforming since the 1950s, so what’s the big deal?” to “Digital transformation is a socio-economic or/and socio-technical phenomenon that affects not only products and services but also markets and society as a whole.”

How each organization views the digital age will influence how it digitally transforms or optimizes its products, services and ways of working.

The digital age, like any other preceding age, is defined as an ‘age’ because it represents a fundamental socio-economic and behavioral shift. The digital age is an evolution within the information age – where technology serves as the catalyst for creating a knowledge-based society surrounded by a high-tech global economy.

The digital age also means the realization of a commercialized society that allow individuals to explore their personalized needs, simplifying decision-making and transacting with counterparts on a global scale. Air travel has made the world a small place, the digital age takes this further and makes it fit on a handheld device or a desktop computer. The outcome of the digital age is an entirely new way of transacting, learning, and socializing – necessitating a fundamental rethink of how organizations operate. No business unit is immune, including any of the traditional supporting functions (e.g., HR, finance, IT, marketing, etc.) that were previously seen as non-core activities.

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1 Bonnet, D., Westerman, G., & McAfee, A. (2014). Leading digital: Turning technology into business transformation. Boston: Harvard Business Review.

2 (2016, March 23). How cities score, (Online). https://www.economist.com/special-report/2016/03/23/how-cities-score [2018 January].

3 The digital age and the digital organization

Introduction

What does the digital age mean for organizations? This chapter looks at what is meant by a ‘digital organization’, the impact of digital transformation on systems of record and systems of engagement, people and the digital age and digital products and services.

This chapter also introduces digital transformation approaches and options.

3.1 WHAT IS A DIGITAL ORGANIZATION?

A ‘digital organization’ is more than just the use of technology or digitizing existing ways of doing things. A digital organization enables existing business models or results in new business models and ecosystems of consumers and collaborators (and possibly competitors). A digital organization requires clearly defined and efficient processes that are data-driven. Additionally, the organization must have the ability to react quickly to changes within its ecosystem based on consumer demand and business model changes.

One significant distinction between the organizations of the past and the digital organization is a more flexible culture, involving continuous improvement, experimenting and learning new ways of working. This includes technical flexibility as well as flexibility in design. A digital organization must take steps to make progress in these areas. Not all aspects, as listed below3, need to be fully realized in each organization. The level to which each organization aspires will depend on specific market conditions, enterprise governance and relevant products and services. For each organization, a gap analysis can be conducted, based on these aspects, to compare the desired and current situations.

1.Consumer focus: The digital organization thoroughly knows its consumer (e.g., habits, preferences, needs, requirements…) before those needs are expressed. The organization must understand what will contribute to the achievement of the consumer’s goals and then deliver that in its products and services. Creating personalized products and services while maintaining consumer privacy supports the consumer’s digital ‘happiness’.

2.Everything by design: The digital organization designs consumer value and outcomes (e.g., addressing consumer ambitions, tastes, feelings, concerns…) rather than products and services. Design experiences that are sustainable and create lasting added value.

3.Learn by experiment: The modern world changes faster than traditional training and ways of working can be developed and delivered. So, the digital organization must experiment, fail, succeed and most importantly, learn by doing. Learning through trial-and-error while processing feedback is key to a successful digital organization. This ‘learning by experimentation’ often creates the new product or service and certainly influences working practices and principles.

4.Automation: Consumer demands change constantly, so time-consuming design, development and production cycles may not be suitable. The digital organization automates activities from demand to delivery, reducing waiting time as well as errors. There is, however, a risk to be aware of. Radically applying automation to the delivery of products and services may create a disconnection between the service provider and the consumer as the consumer focus becomes lost.

5.Continuous renewal: Today’s consumer will have different needs tomorrow, so developing and delivering new products and services to meet those needs is a continuous process. The digital organization will embrace continuous learning to ensure it remains relevant to its consumer base.

6.Immediacy (Now): The world sits in the palm of the consumer’s hand. Connectivity and immediacy are expected by the consumer, who often has less time and expects instant response and satisfaction. The digital organization must be able to deliver requested products and services immediately. And, should the consumer change their mind, the digital organization will immediately adjust – all from the swipe of a finger. Consumer loyalty cannot be relied on in the digital age.

7.Open network player: The digital organization embraces the openness of the network. Through digitalization, distance no longer exists. Factories and offices disappear. Co-creation is the new norm, allowing organizations to create business models that are not limited by geography and can include multiple suppliers and partners.

“Technology doesn’t provide value to a business. It never has (except for technology in products). Instead, technology’s value comes from doing business differently because technology makes it possible.”

George Westerman, Principal Research Scientist with the MIT Sloan Initiative on the Digital Economy

Embracing the concept of being a digital organization drives the ‘how’ of product or service delivery. Even physical products have digital aspects involved in their lifecycle. The digital organization ensures all aspects operate effectively in the creation and support of the products and services.

But the digital organization has challenges. Often, there is a remote and distributed workforce, which can make communication and process standardization difficult. There may be an ecosystem of subscription services which teams rely on, often with untapped integration opportunities and duplicated service offerings.

To transform successfully, an organization must effectively establish and embed the following digital capabilities through all of its organizational capabilities (Sales, Marketing, HR, etc.):

■ Consumer centricity and focus;

■ A focus on operational excellence;

■ An overall strategy defined in digital terms;

■ Leadership involved with and driving the organization from above;

■ Governance models and structures that support the new approach4.

These capabilities and their associated practices will ensure an organization is nimble enough to exploit opportunities and achieve sustained competitive advantage. Disruptive technologies can be copied by competitors; digital capabilities are substantially more difficult to replicate.

Real world perspective

Steve Chambers is the Chief Operating Officer at Cloudsoft Corporation. Having worked with dozens of organizations in a career spanning more than 20 years, Steve shared some characteristics of organizations that will struggle to transform, based on his experience. These include organizations that:

• Think ‘IT’ is not core to their business and outsource it;

• Expect vendors to ‘innovate’ on their behalf;

• Fail to reward IT staff for agility, resilience and innovation and instead punish them for change, outages, and experimentation;

• Favor status-quo over reinvention;

• Leave ‘agility and innovation’ to a small unsupervised ‘special squad’ who do not understand the big picture;

• Talk a good game about consumers but have no evidence of consumer obsession in their execution.

Real world perspective: Technology Business Management, Jack Bischof

In Chapter 23 Jack Bischof from the TBM Council shares his perspective on how the world has changed, the new skills that are needed, and how businesses need to adapt.

“Without your finger on cost, risk, value, volume, demand, and consumption of resources, services, products, and vendors, by consumer, operating or legal entity, you’re not making intelligent choices.”

3.2 DIGITAL TRANSFORMATION AND THE DIGITAL ORGANIZATION

VeriSM defines digital transformation as “the changes associated with the application of digital technologies across all areas of an organization, from sales to marketing, products, services and new business models”.

For many business people, words like ‘digital’ and ‘systems’, mean that they can ‘switch off’ and let the IT department solve the problem. In the digital age, nothing can be further from the truth – digital systems, products and services are just different representations of what the organization is doing. In real terms, they are the enablers of everything that happens in the business.

3.2.1 Systems and digital transformation

Digital transformation (or optimization) affects an organization’s systems. To understand what this means, start with clarity about what a system is.

System

Systems are generally described in two ways:

1. a set of things working together as parts of a mechanism or an interconnecting network; a complex whole, or, more operationally;

2. a set of principles or procedures according to which something is done; an organized scheme or method.

People often talk about the railway system or a system of government. How often has the phrase, “Don’t buck the system!” come up in the workplace? These terms and phrases illustrate that a system does not solely rest in IT, an application or technology and rightly so. The word ‘system’ comes from the Greek sun (with), histania (set up) to form sustema (in Latin systema). A system describes how a set of ‘things’ are set up to make sense within a particular context.

Having an understanding and an appreciation of organizational systems is important for the leader, the executive and the manager, regardless of their area of responsibility or specialization. The organization itself is a system, truly, an ecosystem – hence the term ‘organization’. To embrace the digital organization fully, understanding a system is critical in order to understand how to ‘do’ business.

3.2.2 Systems of record and systems of engagement

To start to understand the impact of digital transformation on an organization’s ‘systems’, consider the definitions of systems of record (SoR) and systems of engagement (SoE)5 drawn from Geoffrey Moore’s book, Crossing the Chasm6.

Systems of record

Traditional IT systems (in business terms) are systems of record. They represent how business transactions are ‘done’. The business transactions are a digital representation of a business system and its processes and procedures. The main advantage of using IT systems to facilitate what happens in the business system is that it helps to manage large volumes of data and, to some extent, make better decisions by transforming the data into knowledge using analytics.

Systems of record form the main part of organizational digitization that has taken place since the advent of computing. They have grown from applications and IT infrastructure supporting a very specific business procedure or process to applications and related infrastructure that support a business ecosystem such as Material Requirements Planning (MRP) systems in manufacturing or Enterprise Resource Planning (ERP). This type of IT system can potentially digitize every process in an organization. Systems of record are very efficient but rely on pre-existing order, processes and procedures.

Systems of record are relatively easy to understand if there is clarity about the business system they represent. They bring solid gains to organizations, mostly through increased efficiencies and sometimes because they highlight systemic problems, prompting the organization to improve the way they do things (process improvement, re-engineering, etc.). Another potential gain from understanding and using systems of record is that they serve as an enabler for future automation, as new and more sophisticated technologies become available. Automation is an area where virtually all organizations can unlock gains. It enables faster and better (increased consistency and less variance) products and services while unlocking scalability not previously possible.

Systems of engagement

Systems of engagement (SoE) represent a new way of engaging with consumers, users, customers, or a community. This new and often unexpected engagement happens when something is used in a completely different manner from what was intended. The impact is usually completely unknown and has unforeseen consequences, even if the original system was well-planned and designed. When a new SoE is introduced, its designers will not know how it will affect the socio-economic environment – in other words, they learn its impact through consumer experimentation.

Real world example

System of engagement: email

Email was not originally designed as a business tool but as a way for scientists on different University campuses to communicate in a Defense Advanced Research Projects Agency (DARPA) sponsored project. Commercially, email was initially intended to replace letters and memos in an office environment. It later grew to include scheduling, analytical tools (surveys), a way of socializing, a means to share data beyond text, including very complex data, as a delivery mechanism for products and services, a political tool, a marketing and sales tool and many other uses and applications.

If the original designers were asked what email could – and will – do, their answer would be limited to the design specification.

With hindsight, it is easy to assume that email does all the things mentioned, as we have experienced the expanded social influence of email. It now seems only natural and logical to use email in this way.

When email is used in many different ways, organizations experience so-called ‘email pollution’. Email pollutes working environments and encroaches into personal lives.

Some organizations take actions to reverse this trend and try to become email-free (see Chapter 6 – Collaboration)

As an early adopter using email on Fidonet7 in the early 1980s, email was both innovative and utilitarian. Fidonet became the new HAM Radio network (already an unintended use) for electronic hobbies and computer enthusiasts. Even in those early days, email morphed into a system of engagement.

Today, most people would probably say that email is part of the business fabric, a necessity without which organization cannot operate. Some may even say that email is a human right.

No-one has ever said the same for a financial application or ERP system. Systems of engagement become part of the fabric of society, or a community, and continuously morph into new and interesting areas of application. Consider the impact of the introduction of cell phones, the internet, email and social media platforms – there is no denying their significance.

SoE/SoR example

Consider the purchase of car insurance:

• An application used by a car insurance salesperson, where information is gathered from customers via phone calls or a face-to-face meeting would be an example of a system of record;

• An online portal allowing the customer to pick and choose their own policy, its features and complete the transaction, would be a system of engagement (particularly if it involves the user creating a user-id on the system for future relationship building or sales).

Just 10 years ago, most static consumer data was stored in SoRs (such as databases and spreadsheets). Today, the same information is stored in SoEs like collaboration systems that are used by customers, providers and other stakeholders and have direct connections to social media or other Big Data sources. These systems might use artificial intelligence and learning algorithms to optimize consumer engagement.

This does not mean, however, that systems of engagement are more important than systems of record, or that they should receive the service provider’s total focus. The gains possible from digitization and automation of systems of record are similarly astounding and quite often the starting point for digital transformation initiatives. Organizations may build ‘digital twins’ of their current organizational capability that serve as a platform for innovation and, which in turn, identify and highlight opportunities to create systems of engagement. A digital twin is a replica of a physical object that can be manipulated to find different ways of using/managing it.

Organizations should ideally give attention to systems of record and engagement, as both play an essential role in digital transformation. The creation of systems of engagement will almost always be an empirical process including experimentation, experience and observation. The emergent practices introduced in the first VeriSM publication may become part of an organization’s Management Mesh as part of its journey in a digital age.

The Gartner view of systems

Gartner has a slightly different view that was influenced by Moore’s thinking. Gartner focuses on three application categories, or ‘layers’. Using this ‘Pace Layered View’ of systems, business applications can be categorized by the nature of the problem they address, their rate of change and the distinctiveness of the solution, helping organizations develop more appropriate strategies for each8:

• Systems of record: established packaged applications or legacy systems that support core transaction processing and manage the organization’s critical master data;

• Systems of differentiation: applications that enable unique organizational processes or industry-specific capabilities;

• Systems of innovation: new applications that are built on an ad hoc basis to address new business requirements or opportunities.

These three layers are not fixed and will change over time. SoRs may shrink as they are transformed or modernized, becoming SoD or SoI. SoD and SoI may become SoRs as they become stable and predictable.

3.3 PEOPLE AND THE DIGITAL AGE

For an organization to survive in the digital age, its leadership and management must deal with changes in technology along with changes in its consumers and staff, their attitudes and behaviors. Until very recently, the attitudes and behaviors of Generation X dominated commerce: the individual and individual advancement (to a large extent) drove attitudes in the workplace and choices made by consumers. (For more on Generations X, Y and Z – refer to VeriSMTM: A Service Management Approach for the Digital Age.)

This Gen X focus on individual advancement is no longer as dominant. Managers from Gen X may find it difficult to deal with millennials (Generation Y) and Generation Z employees and consumers9. Although financial stability is still one of the main concerns of Gen Y and Gen Z, a much stronger emphasis is placed on work being meaningful and creative. Staff from these generations expect instant feedback from teachers, parents, managers and supervisors. Therefore, leaders and managers need to adapt their working practices to create, facilitate and maintain the environment that will engage these characteristics.

Real world perspective

Although data changes from year to year, the generalizations stated above continue to repeat. Review the Deloitte Millennial Survey10 on an annual basis to keep track of trends.

From a product and service perspective, these needs and ideals must be engrained within the product and service design as well as in consumer engagement. Services now need to provide virtually instantaneous results, and gratification.

“To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”

Larry Fink, CEO of BlackRock

3.3.1 Generation Y and Z as consumers

Generation Y and Z consumers display similar behavior and attitudes, making life complicated for a product or service provider. Products and services need to enable flexibility and potentially have the ability for the consumer to reconfigure the product, service or workflow in new ways they find meaningful at the time – and be able to change it again tomorrow. This makes what service providers have to offer much more dynamic, but also less predictable. Consumption of digital products or services should have a much higher social context, perhaps integrating with social platforms to provide a rich and seamless experience.

From a marketing perspective, Gen Y and Z consumers want instant service. They are less likely to spend disproportionate amounts of money on items that are perceived as non-utilitarian (traditional status symbols) and they are acutely aware of the environmental impact of their spending habits. Providers of digital products and services need to be sensitive about how these are promoted, sold and marketed. If the product or service fulfils a social or environmental need, consumers can become willing participants in the promotion and selling of the product or service. This is achieved without expecting any compensation or, perhaps, just receiving a simple form of social recognition, such as a digital badge.

Real world example: Tribesports

Tribesports is an example of a brand appealing to the Gen Y and Z community and using the power of digital technology.

Tribesports launched its product on the Kickstarter platform in August 2013, aiming to create high quality sportswear using feedback from real consumers.

Now a global brand, it maintains a strong relationship with its customer base, requesting input into products and features and feedback on its products, evolving the products continually in response.

3.3.2 Generation Y and Z as staff

To be effective when working with Gen Y and Z, managers or supervisors need to adopt a new management skillset to make the workplace function effectively. These managers and supervisors need to focus on coaching and leadership, reducing micromanagement. Additionally, organizations need to consider flatter hierarchies. The ‘command and control’ way of managing an organization has proven to be less effective with the Gen Y or Gen Z workers. (See Section 5.1 – Kill the hierarchy.)