The Essence of Data Transformation - Data Masters Process and Technology to serve People

In promoting the 7 Habits of Highly Effective CDOs, next on the list is #4 #DeliveringDynamicallyConfigurableProcesses

The essence of moving to a Data Driven (Intelligent Business) is to move away from a Process-centric Operating Model, and hence this Habit is central to the Data Transformation of your business.

Summary

I summarised this as creating the operating model where processes instead of being fixed and embedded with systems logic, can be dynamically reconfigured to meet the rapidly changing needs of customers enabling the organisation (business) to operate as a set of Services.  Servitisation (as this is known) has been a concept for many years. Airline Engine manufacturers for example, don't sell companies an Engine, instead they sell them a service enabling xxxx hours of flying over yyyy years. In doing so they moved from a business geared to manufacturing engines to a business providing a lifetime engine service.

• now imagine that instead of taking years to move from one business model to another, that you can enable you services to your customers in a matter of weeks or months.

TRANSFORMATION

The essence of this model is that the Organisation - lets call it IB will be looking to the needs and demands of customers on a forward looking basis, and depending on their planning horizon this could be days, weeks or months - or more likely all of the above, IB Managers will be looking to optimise the range of products/services available to customers.

• identifying a new service to offer to customers, IB will understand which key activities it will perform to meet the customer need, and which ones could be provided through its partner/supplier ecosystem. Communications and connections are made with those suppliers initiated by management but directed and managed through the AI/ML capabilities. The business can complete forward facing testing of capabilities with it's suppliers - assuming that it has customer permission to share appropriate data with them and likely revenue and profit models developed. IB can choose to optimise the 'process' in real-time by continually which elements it continues to be best placed to deliver and which other suppliers can best support in deliver the optimum service (product) to the customer.

To achieve this IB will need:

• A fluid business operating model, where Agile Practices cover the majority of the work of its people.
• sophisticated data and analytics that give it a deep understanding of its customers and an ability to predict their needs and likely responses to market and other conditions.
• has isolated the key activities that it can and wants to perform to deliver respective products and services, and is continually improving and refreshing those activities;
• has an equally deep set of connections to a supplier/partner ecosystem that can perform other activities required to deliver its portfolio of product/services far better than it can.
• Underpinned by a Cloud based set of Technology Microservices and APIs, powered by Machine Learning (ML) and AI algorithms (underpinned by Data). APIs, machine learning and analytics, all supplied by your Data & Analytics leader, and managed by your integrated Data Model. 

Over time the most data driven and capable companies will sit at the heart of an ecosystem, effectively acting as Conductors of an Orchestra, able to dynamically configure their customer lifecycle processes in (close to) real time to deliver services for its customers. Other companies will have to specialise in providing component capabilities/services and operate in the 'orchestra'(s) of these data-driven conductors.

Moving to this model is a fundamental transformation for most large/mature companies. However, and for or the avoidance of doubt, (for those people who think this is some way away), this is in essence how Amazon operates today!

• Breaking the mantras of the Process Centric business, where processes such as Order to Cash, Procure to Pay, Record to Report are entrenched across the systems landscape, requires a fundamental mindset shift and change management approach. We will not be following process steps from A to B to C, with the option to branch to step D, and E, but dynamically configuring activities to meet customer and organisational needs BUT
• 6Sigma and Kanban style total quality management, which are derived from those process centric manufacturing ecosystems, are in fact ever more valuable. However, it will be Machine Learning and AI that is operating the approach to deliver 6Sigma or even better, as th optimisation of capabilities will be way beyond what anyone human being or group of humans can achieve,

The business itself should be driven by the same core objectives - optimising the creation and delivery of valuable products and services for customers, and optimising the revenue, profit and related capabilities for shareholders. And in addition, balancing the ESG and Circular Economy needs of Employers and external Stakeholders.

• To achieve this it needs a dynamic set of input and output KPIs so that management are always confident that they are driving towards the right customer and business outcomes.
• Let's be clear - managing all of these needs can only be delivered by a business that has mastered value creation through data, and has developed a powerful set of Machine Learning and AI capabilities. And again for the avoidance of doubt - I am acutely aware that regulators do need to audit the 'process' by which a service was delivered - again this can be documented at the point of delivery to meet that regulatory need.

IMPLICATIONS

The implication for most organisations is that the role of the Chief Data (& Analytics) Officer will in essence need to be the left hand of the CEO as the CFO is the right hand. The CDAO, who has the insights of what customers and the business needs will need to lead and task the enabling functions of the business. The CIO and CTO providing technology services and the Chief Operations Officer who in large businesses looks after all of those Business Processing Centres locally and offshore, will be part of the leadership team working with the CDAO. Only in that way will those enabling services be driven by data and continuously optimised.