I see a society that is crumbling. The rampant technology is simultaneously capsizing industries that were previously the bread and butter of economic growth. The working man and woman have felt its effects as wages stagnate and employment opportunities remain fewer amidst a progressively automated economy. Increasing wage inequality and financial vulnerability have given rise to populism, and the domino effects are spreading.
People are angry. They demand fairness and are threatened by policies and outsiders that may endanger their livelihoods. This has caused a greater cultural and racial divide within and between nations. Technology has enabled this anger to spread, influence and manipulate at a much greater speed than ever before resulting in increasing polarization and a sweeping anxiety epidemic.
Globally, we are much more connected – this, to our detriment. We’ve witnessed both government and business leverage technology to spread disinformation for their gains. While regulators struggle to keep pace with these harms, the tech giants continue, unabated, to wield their influence and power to establish footprints that make both consumers and business increasingly dependent on their platforms and technology stacks. We cannot escape them, nor do we want to. Therein lays the concern…
This recent article, “The World is Choking on Data Pollution” offered a profound distillation of what we are witnessing today:
Progress has not been without a price. Like the factories of 200 years ago, digital advances have given rise to a pollution that is reducing the quality of our lives and the strength of our democracy… We are now face-to-face with a system embedded in every structure of our lives and institutions, shaping our society in ways that deeply impact our basic values.
Tim Berners Lee’s Intent for the World Wide Web has Run Off-Course:
Tim Berners Lee had this Pollyannaish view once upon a time that went like this: What if we could develop a web that was free to use for everyone and that would fuel creativity, connection, knowledge and optimism across the globe? He believed the internet to be a basic human right,
…That means guaranteeing affordable access for all, ensuring internet packets are delivered without commercial or political discrimination, and protecting the privacy and freedom of web users regardless of where they live.
Between 1989 and 1991, Tim Berners Lee led the development of the World Wide Web and unleashed the “language HTML (hypertext markup language) to create the webpages HTTP (used to create web pages), HTTP (HyperText Transfer Protocol), and URLs (Universal Resource Locators).”
The now ubiquitous WWW set a movement which has scaled tremendously, reinventing the way we do business, access and consume information, create connections and perpetuating an unrelenting mindset of innovation and optimism.
What has also transpired is a web of unbridled opportunism and exploitation, uncertainty and disparity. We see increasing pockets of silos and echo chambers fueled by anxiety, misplaced trust and confirmation bias. As the mainstream consumer lays witness to these intentions, we notice a growing marginalization that propels more to unplug from these communities and applications to safeguard their mental health. However, the addiction technology has produced cannot be easily remedied. In the meantime, people continue to suffer.
What has been most distressing are the effects of cyberbullying on our children. In 2016, The National Crime Prevention reported 43% of teens were subjects of cyberbullying, an increase of 11% from a decade prior. Some other numbing statistics:
- “2017 Pediatric Academic Societies Meeting revealed the number of children admitted to hospitals for attempted suicide or expressing suicidal thoughts doubled between 2008 and 2015”
- “Javelin Research finds that children who are bullied are 9 times more likely to be the victims of identity fraud as well.”
- “Data from numerous studies also indicate that social media is now the favored medium for cyberbullies”
Big Tech: Too Big to Fail?
As the web evolved throughout the 90s we witnessed the emergence of hefty players like Google, Yahoo, Microsoft and later Facebook and Amazon. As Chris Dixon asserted:
During the second era of the internet, from the mid 2000s to the present, for-profit tech companies — most notably Google, Apple, Facebook, and Amazon (GAFA) — built software and services that rapidly outpaced the capabilities of open protocols. The explosive growth of smartphones accelerated this trend as mobile apps became the majority of internet use. Eventually users migrated from open services to these more sophisticated, centralized services. Even when users still accessed open protocols like the web, they would typically do so mediated by GAFA software and services.
Today, we appropriately apply a few acronyms to these giants: G-MAFIA (Google, Microsoft, Amazon, Facebook, IBM, Apple), or FAANG (Facebook, Apple, Amazon, Netflix, and Google) and now BAT (Baidu, Alibaba and Tencent). These players have created a progressively centralized internet that has limited competition and has stifled the growth of startups, which are more vulnerable to these tech giants. My discussion with a social network founder (who asked to remain nameless) spoke of one of the large platforms which continuously copied newly released features from their site, and they did so transparently because “they could.” He also witnessed a stall of user engagement and eventual churn. He was unable to compete effectively without the necessary resources and eventually relented, changing his business model and withdrawing to the cryptocurrency community to start anew.
Consider this: These eight players Facebook, Apple, Microsoft, Amazon, Google, Tencent, Baidu, and Alibaba are larger than the “market cap of every listed company in the Eurozone in Emerging Markets and in Japan.” G-MAFIA (excluding IBM) combined posted average returns in 2018 of 45% compared with 19% return among S&P500. Now add the high degree of consolidation of the tech industry. Together FAANG has acquired 398 companies since 2007. The type of acquisitions has heightened interest from regulators and economists towards anti-trust regulation. Add to this list the highest-ever acquisition in history with IBM’s purchase of Red Hatat a reported $34 billion.
Big tech valuations continue to rise despite the sins illuminated by their technologies. There is this dichotomy that pits what’s good for consumers against what’s good for shareholders. We’ve derived some great experiences from these platforms, but we’ve also seen examples of invisible harms. However unintended, they surface as a result of the business mandate to prioritize user growth and engagement. These performance indicators are what drive employee performance and company objectives. When we think about the impact of big tech, their cloud environments and web hosting servers ensure our emails, our social presence, and our websites are available to everyone on the web. In essence, they control how the internet is run.
Amy Webb, Author of “The Big Nine: How the Tech Titans and their Thinking Machines could Warp Humanity” refers not only to G-MAFIA but also BAT (the consortium that has led the charge in the highly controversial Social Credit system to create a trust value among its Chinese citizens). She writes:
We stop assuming that the G-MAFIA (Google, Apple, Facebook, IBM, and Amazon) can serve its DC and Wall Street masters equally and that the free markets and our entrepreneurial spirit will produce the best possible outcomes for AI and humanity
These Nine will shape the future of the internet, no doubt. Webb envisions several scenarios where China’s encroaching influence will enable an AGI to control the world much more pervasively than the Social Credit System, and where “democracy will end” in the United States. This is not implausible as we are already seeing signs of BAT’s increased fundingacross gaming, social media, fintech sectors, outpacing the US in investment.
Webb also foresees a future of stifling individual privacy where our personal information is locked in the operating systems of these tech giants, now functioning oligopolies, fueling a “digital caste system,” mimicking a familiar authoritarian system in China.
This future that Webb forecasts is conceivable. Today, beyond Cambridge Analytica and government’s alleged use of Facebook to manipulate voters and seed chaos, the damages, however divergent, are more pervasive and are more connected to one another than we realize. We have seen Amazon’s facial recognition technology used in law enforcement, which has been deemed ineffective and wrought of racial bias.
In the same vein, Buzzfeed reported the use of facial recognition being used in retail systems without the regard for user consent. We believed in Facebook’s initiative to safeguard our security through two-factor authentication, while they used our mobile numbers to target our behavior and weaken our privacy in the process. Both Facebook and Amazon have been known to have experimented with our data to manipulate our emotions. When Tiktok was fined $5.7 million for illegally collecting children’s data, it was only following the lead of its predecessors.
The biggest data breaches of all time have involved some of the largest tech companies like FB, Yahoo! and Uber as well as established corporations like Marriott and Equifax. The downstream effects are yet to be realized as this data is bought and sold on the dark web to the highest bidders. When 23andMe created the Personal Genome Service as an offer to connect people to their roots, it was, instead, exposed as “front for a massive information-gathering operation against an unwitting public.”
This epidemic continues. What is emerging are the hidden intentions behind the algorithms and technology that make it more difficult to trust our peers, our institutions and our government. While employees were up in arms because of Google’s “Dragonfly” censored search engine with China and its Project Maven’s drone surveillance program with DARPA, there exist very few mechanisms to stop these initiatives from taking flight without proper oversight. The tech community argues they are different than Big Pharma or Banking. Regulating them would strangle the internet.
Technology precedes regulation. This new world has created scenarios that are unaddressable under current laws. There is a prevailing legal threat unleashed through the GDPR, however, there are aspects of it that some argue that may indeed stifle innovation. However, it’s a start. In the meantime, we need to progress so systems and governance are in sync, and tech giants are held in check. This is not an easy task.
Who is responsible for the consequences of AI decisions? What mechanisms should be in place to ensure that the industry does not act in ways that go against the public interest? How can practitioners determine whether a system is appropriate for the task and whether it remains appropriate over time? These were the very questions we attempted to answer at the UK/Canada Symposium on Ethics and Artificial Intelligence. There are no clear answers today.
Back to Basics: Can we re-decentralize an increasingly centralized internet?
Here’s a thought! How do we move our increasingly digital world into a place where we all feel safe; where we control our data; where our needs and desires are met without dependence on any one or two institutions to give us that value? The decentralized web is a mindset and a belief in an alternative structure that can address some of the afflictions that have risen from data pollution. This fringe notion is slowly making its way back to mainstream:
A Web designed to resist attempts to centralize its architecture, services, or protocols [so] that no individual, state, or corporation can substantially control its use.
Is it possible to reverse the deterioration we are experiencing today? I spoke with individuals who are working actively within the values of the decentralized web and are building towards this panacea. Andrew Hill and Carson Farmer developed Textile.IO, a digital wallet for photos that are entirely controlled and owned by the user. Textile.io didn’t start out as a decentralized project. As Andrew recalls:
We started this project asking: what was the future of personal data going to look in the future? We didn’t like the answer at all. It seemed like the ubiquity of data with the speed of computing power and increasing complexity of algorithms would lead us to a state that wouldn’t be good for us: easily manipulated, easily tracked and personal lives easily invaded by third parties (government, individuals and companies)
Carson Farmer noted that GMAIL is fundamentally a better user experience because individuals didn’t need to run their own protocols or set up their own servers. This “natural” progression” to centralized technologies has served the Big Nine well.
Since then, it’s been this runaway because of the capitalist value behind data. They are building business models behind it and it will not go away overnight. By putting our blind trust into a handful of corporations who collect our data, we’ve created a run-away effect (some folks call it ‘data network effects’) where those companies now create value from our data, that is orders of magnitude greater than any new entrant into the market is capable of. This means that the ‘greatest’ innovation around our digital data is coming from only a handful of large companies.
However, people, en-masse, don’t understand this imminent threat. Few really understand the implications of cybersecurity breaches, nor the impact to individual welfare or safety from the data they willingly provide these networks. How much of this needs mainstream to care about it to achieve the scalability it requires? Hill argues that few will abandon technologies unless their values are subdued by risk. Hill explained our “signaled intentions actually differ from our intended behaviors.” For example, many would support legislation to reduced speed limits in certain areas to minimize deaths from auto accidents. However, engineering this feature into self-driving cars so they are unable to go faster, would be far more objectionable because it impedes us.
Adoption of a decentralized web cannot play by the old rules. New experiences and interactions that are outside of current norms needs to appeal to individual values, that enable trust and ease of adoption. Pulling users away from convention is not an easy task. However, emerging organizations are starting to build bridges into the old technology in an effort to re-decentralize. Matrix.org has created an open standard for decentralized communications. The Dat Project, largely funded mainly by donations provides a peer to peer file sharing protocol to create a more human-centered internet, without the risk of data being sold. For Textile.io their version of Instagram allows users to add a photo to their mobile application, which exists on your phone, with a privately encrypted copy existing on an IPFS (“a peer-to-peer protocol for sharing hypermedia in distributed file system”) node off your phone. No one sees the encrypted photo version unless you share the private keys to that photo. Textile has no view into the data, nor an intention of processing or keeping it. Handshake.org is a “permissionless and decentralized naming protocol to replace the DNS root file and servers with a public commons”, uncensorable and free of any gatekeeper. The Internet Archive, started by Brewster Kale, is a non-profit library that has cataloged over 400 billion web pages in the last 22 years, also digitizing all-things analog (books, music, movies), with the attempt to save web history and knowledge with free access to anyone.
Wendy Hanamura, Director of the Internet Archive is also the Founder of DWeb, a summit which started in 2016 bringing together builders and non-builders within the 4 levers of change: 1) laws 2) markets 3) norms and values 4) technology to advocate a better web. The intention was to do a moonshot for the internet and create “A web that’s locked open for good.” Why now? Wendy declared,
In the last few years we have woken up to see that the web is failing us. We turn to our screens for information we are getting, instead, deception in fake news, non reliable information, missing data. A lot of us in the sector feel we could do better. Technology is one path to doing better.
The prevailing vision of the Dweb:
A goal in creating a Decentralized Web is to reduce or eliminate such centralized points of control. That way, if any player drops out, the system still works. Such a system could better help protect user privacy, ensure reliable access, and even make it possible for users to buy and sell directly, without having to go through websites that now serve as middlemen, and collect user data in the process.
While it’s still early day, for at least a decade many players have chosen to become part of this movement to fix the issues that increasing centralization has created. From Diaspora to Bit Torrent, a growing list of technologies continue to develop alternatives for the DWeb: for storage, social nets, communication and collaboration apps, database, cryptocurrencies, etc. Carson sees the Dweb evolving and feels the time is ripe for this opportunity:
Decentralization gives us a new way forward: decentralized data storage, encryption based privacy, and P2P networks give us the tools to imagine a world where individuals own and control their personal data. In that future, all technologies can build and contribute to the same data network effect. That is exciting because it means we can create a world with explosive innovation and value generation from our data, as opposed to one limited by the production capacity and imagination of those few companies…
Can the decentralized web fix this? In a world where trust is fleeting, this may be a significant pathway forward but it’s still early day. The DWeb is reawakening. The emergence of its players sees tremendous promise however, the experiences will need to get better. Many things must work in tandem. The public needs to be more informed of the impact on their individual rights and welfare. Business needs to change its mindset. I was reminded by Dr. George Tomko, Expert in Residence at the University of Toronto, that if business can become more human, to be more compassionate
…and have the ability to feel a person’s pain or discomfort and to care enough by collaborating with others in alleviating her pain or discomfort… what emerges is a society of greater empathy, and a culture that yields more success
Regulation has to also be in lock-step with technology but it must be informed and well thought out to encourage competition and minimize costs to the consumer. More importantly, we must encourage more solutions to bring more data control to the user to give him/her the experiences they want out of the web, without fear of repercussions. This was the original promise of the internet.
This originally appeared on Forbes.
Hessie Jones is the Founder of ArCompany advocating AI readiness, education and the ethical distribution of AI. She is also Director for the International Council, Global Privacy and Security by Design. As a seasoned digital strategist, author, tech geek and data junkie, she has spent the last 18 years on the internet at Yahoo!, Aegis Media, CIBC, and Citi, as well as tech startups including Cerebri, OverlayTV and Jugnoo. Hessie saw things change rapidly when search and social started to change the game for advertising and decided to figure out the way new market dynamics would change corporate environments forever: in process, in culture and in mindset. She launched her own business, ArCompany in social intelligence, and now, AI readiness. Through the weekly think tank discussions her team curated, she surfaced the generational divide in this changing technology landscape across a multitude of topics. Hessie is also a regular contributor to Towards Data Science on Medium and Cognitive World publications.
This article solely represents my views and in no way reflects those of DXJournal. Please feel free to contact me firstname.lastname@example.org
4 ways to plan for the post-pandemic normal
When the crisis eases, we will have entered a new digital normal. Your strategies need to reflect this shift: Consider these factors as you plan for the longer term.
When I sat down to write this article, a follow-on to my previous article on common leadership oversights on the path to digital transformation, the coronavirus’s threat to global business had not reached the magnitude that we feel and see today. In a few short weeks, the pandemic has forced a new virtual work reality on businesses and entire operating models have been shifted – and in many cases, upended.
A business environment that is changing so dramatically and rapidly requires speed, innovation on the fly, and the need to scale thinking beyond anything we might have previously imagined. Now is not the time to back-burner digital initiatives but to ramp them up.
Now is not the time to back-burner digital initiatives but to ramp them up.
When the crisis eases, we will have entered a new digital normal. The strategies we use to run, change, and staff the business will need to reflect this shift. Consider the following factors as you plan for the longer term:
1. The right financials
Any business that isn’t digital by now likely won’t be a business for long. Learning to embrace and adjust is imperative. Continuing – or starting – a digital transformation will be more important than ever, and you’ll need to rethink your business’ capital allocation strategies for digital initiatives and the staffing that supports them.
To figure this out, become best friends with your finance team and think for both the short- and long-term. In the current climate, it can be easy to be either too short-sighted or too far-sighted, but you need to plan for the next week, month, quarter, year, three and five years.
Become best friends with your finance team and think for both the short- and long-term.
Consider how your company may bounce back from the pandemic when stay-at-home orders are lifted, kids go back to school, and consumers begin to mobilize again: We will have entered an entirely different digital world, with new digital expectations from consumers. Is there potential for a rapid and significant surge, followed by a normalization? Will you be facing a slow rise? Digital transformation funds need to be allocated to react appropriately to these various scenarios; staffing discussions should follow based on these decisions.
2. The right tools
It is likely that at least some of your employees will remain virtual, even when the majority can get back into the office. How will you support them? You may have sacrificed some tools or technologies in your move to quickly get employees out of your building and into their homes; you may have also overpaid for the sake of quick deployment.
You’ll need to rework your strategy for the long term. This could include better or more consistent access to networks and servers, the capacity to host formal business meetings online, new portable equipment, virtual collaboration and communication software, and more.
For many, this will require working with your corporate legal team to change their thinking. Where they may have once been risk-averse for the sake of the business, they will now need to take smart risks, also for the take of the business. State your case, find common ground, and move forward.
In some particularly dire situations, you may even need to become comfortable with making decisions first and asking for permission later.
3. The right staffing
You’ll need to continue to make smart staffing decisions – quickly. You likely have three types of talent available:
- Employees who are great at running the business
- Employees who are hungry for more
- New talent that may not yet exist in your business but needs to be brought in
Unfortunately, this global crisis may have created gaps in your workforce.
Identify the individuals in the first two groups and work with your talent management team to assess whether you need to advance digital investments previously planned for. Do these individuals have the right type of skills for their teams? Are they collaborative and communicative? IT cannot work in a silo, and team members need to be able to communicate what they are doing and why, and be clear on how their actions are aligned to larger goals.
When you’ve completed this review, identify the additional skills you will need for the future. This might include teams familiar with building out cloud deployments or working with microservices, etc. Push the rest of your leadership team to break through capital allocation constraints to bring in new employees who not only have the right experience but also can quickly teach your existing teams on new tools organically.
4. The right brand permission
As you work through your accelerated digital transformation, you’ll start to think about your business as a truly digital brand. In fact, you might already think so, simply because you’ve been able to get your staff up and running remotely.
But is this the perception all your stakeholders have? According to the Yale School of Management, “Brand permission defines the limits of customers’ willingness to accept a familiar brand name in new marketplace situations.” For example, you can’t simply say, “We are digital now, world!” and expect your market to immediately accept that if you haven’t been digital historically. You need to earn this right.
You can’t simply say, “We are digital now, world!” You need to earn this right.
Brand permission is something you and the rest of the company will need to work on – largely focused on delivering useful and impactful digital products and services – in order to attract the new talent you need. Start thinking about this now.
The global pandemic has thrown us into an entirely new world. Business leaders can no longer rest on their laurels and, certainly, can no longer put off or draw out a digital transformation. Making the right decisions now will help to ensure your business is positioned well when this crisis passes.
As Chief Digital Officer of Agero, Bernie Gracy brings more than 30 years of technology experience helping drive new product/platform introduction, client delivery, and the establishment of new software-enabled business models.
In his role, Gracy is responsible for all aspects of product and technology development, architecture, infrastructure, and innovation for a rapidly evolving ecosystem powered by digital, mobile, the cloud, location-based services, and IoT.
Five key trends shaping the application landscape
According to application services/application delivery company F5 Networks, 98% of organizations depend on applications to run or support their business — hardly surprising considering that most organizations have some version of a digital transformation plan.
In their new 2020 State of Application Services Report, F5 has found that most organizations have entered the second phase of DX, defined as the integration of automated tasks, “and taking advantage of cloud-native infrastructures to scale the process with orchestration.”
As Lori MacVittie, Principal Technical Evangelist, Office of the CTO at F5 Networks explains in a blog post about the rise of cloud-native architectures, the average enterprise app portfolio is now at 15% modern, microservices-based applications.
“That’s now more than the stalwart 11% of monolithic / mainframe-hosted applications,” she adds. “Considering reports of extreme backlogs for new applications in every industry, that modern apps have consumed such a significant percentage of the corporate portfolio is nothing short of impressive.”
Based on a global survey of nearly 2,600 senior leaders from various industries, company sizes, and roles, F5’s report outlines five key findings on the trends shaping the application landscape, “and how organizations around the world are transforming to meet the ever-changing demands of the digital economy.”
1. 80% of organizations are executing on digital transformation—with increasing emphasis on accelerating speed to market.
As organizations work to scale their DX efforts via a digital footprint with cloud, automation, and containers, “it is time to manage the application portfolio like the business asset it is.”
“Organizations able to harness the application (and API) data and insights generated will be rewarded with significant business value.”
2. 87% of organizations are multi-cloud and most still struggle with security.
27% of respondents reported that they will have more than half of their applications in the cloud by the end of 2020.
But despite the crucial importance of applications to business strategy, “organizations are much less confident in their ability to withstand an application-layer attack in the public cloud versus in an on-premises data center.”
When F5 asked how organizations decided which cloud is best for their applications, 41% responded that it was on a “case-by-case, per application” basis — an important strategy, given the uniqueness of each application and the purpose it serves for the business.
“It is imperative to have application services that span multiple architectures and multiple infrastructures,” outlines the report, “to ensure consistent (and cost-effective) performance, security, and operability across the application portfolio.”
3. 73% of organizations are automating network operations to boost efficiency.
Process optimization is a key motivation for DX efforts, which makes it unsurprising that most organizations are automating their network operations. The goal? Consistent automation across key pipeline components: app infrastructure, app services, network, and security.
“Despite the fact that network automation continues to rise, we are still a long way from the continuous deployment model necessary for business to really take advantage of digital transformation and expand beyond optimization of processes to competitive advantage in the marketplace.”
Respondents report that the most frequent obstacles to continuous deployment are “a lack of necessary skill sets, challenges integrating toolsets across vendors and devices, and budget for new tools.”
4. 69% of organizations are using 10 or more application services.
With the maturation and scaling of cloud-and container-native application architectures, “more organizations are deploying related app services, such as Ingress control and service discovery, both on premises and in the public cloud.”
One of the most widely deployed application services are those largely dealing with corporate and per-application security. “For the third year running, respondents told us by a wide margin (over 30 percentage points) that the worst thing they could do is deploy an app without security services,” details the report.
5. 63% of organizations still place primary responsibility for app services with IT operations, with more than half moving to DevOps-inspired teams.
“It’s also no surprise to find that as organizations transform from single-function to modern ops-oriented team structures,” adds the report, “responsibility begins to shift from IT operations and NetOps to SecOps and DevOps.”
One reason why? The shift of application services into modern architectures. “DevOps teams are intimately involved with the CI/CD pipeline, which, for cloud- and container-native apps, includes a growing portfolio of application services such as ingress control, service mesh, service discovery, and good old-fashioned load balancing.”
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Digitized and digital: Two sides of the digital transformation coin
According to a research brief out of MIT, thriving in the digital age means undergoing two distinct transformations: Digitization, i.e. the incorporation of digital technology into core operations like accounting and invoicing, and becoming digital — “developing a digital platform for the company’s digital offerings.”
While both of these require companies to embrace emerging technologies, these present two distinct challenges, each with a differing set of rules and strategies. As explained by Sara Brown from the MIT Sloan School of Management, “Becoming digitized relies on traditional business methods. Becoming digital requires breaking old rules and embracing new thinking.”
Digitization relies on the company’s operational backbone, which supports core operations — i.e. how a company delivers goods and services, maintains its books of record, and completes essential back office processes, explains the research brief. Traditionally, base technologies for these were ERPs, CRMs, and core banking engines. Today, though, it’s likely software-as-a-service (SaaS).
At the same time, becoming digital means creating a digital platform — “a foundation for a company’s digital offerings and their rapid innovation.” Creating speed and innovation, “this platform, a combination of different software components that can link with partners and connect with customers, enables a company to quickly develop and add new digital offerings, and targets revenue growth,” explains Brown.
When it comes to managing both sides of this digital coin, decision-makers must manage leadership, operational, and cultural differences, Brown says:
Leadership: For digitization, leadership is firmly in place, making clear decisions, outlining processes and standards, and ensuring adoption success.
For a digital platform, however, top-down decision making stands in the way of success. Trusted teams are in the driver’s seat, innovating and implementing new ideas. It’s up to management to define an overall digital vision.
Operational: “Changes to the operational backbone can be planned and evaluated using traditional methods like metrics and customer satisfaction,” writes Brown. On the digital platform side, these methods only result in frustration.
Cultural: Digitization isn’t changing the fundamental place of the operational backbone, MIT’s research found. A digital platform, however, “means radical changes in how decisions are made and work gets done. This can be uncomfortable for people at every level.”
When it comes to actually managing these two different teams, MIT researchers suggest these three actions:
Keep ‘em separated: Simultaneous management of digitization and digital means clearly distinguishing their separate responsibilities, says the research brief. Examples of companies that have taken this approach include Schneider Electric, Royal Philips, and Toyota. In another example, one organization’s operational backbone was managed by the CIO, with a Chief Digital Officer taking the lead on the digital platform.
Funding should also be separate. As the researchers outline, “People responsible for digitization can better pursue operational excellence when the operational backbone receives consistent investment, year after year, at the enterprise level.” Meanwhile, funding for short-term digital innovation “experiments” can be easily upped or decreased, depending on outcomes.
It’s important, however, to keep the overall shared vision in mind, explains tech specialist and Tech Wire Asia editor Soumik Roy, for TechHQ. Leaders might feel that separate teams are a waste of resources, he writes, “because ultimately, the business needs its digital initiatives to converge — like its data, analytics, and platforms.” But in reality, separate teams can optimize DX efforts, but only if a shared vision of the organization’s future is kept top of mind: “Each team, working on their own side of improvements, can make contributions that help move closer to the end state. In practice, this is often more productive as well.”
Rule breaking: Inherent in digital innovation is breaking old rules and making new ones, the researchers found — from subverting budgets processes to guarantee resources to bypass CRM approaches, among other challenges.
Rule breaking ends up being manageable because it’s relatively contained to a small team that’s experimenting, though it’s crucial digital teams have sign-off and ongoing support from senior leadership.
New leadership: “Not all people who have successfully led traditional businesses are well-suited to digital business leadership,” says the brief. “The idea of breaking rules to identify what works may feel terribly unnerving for some— even when they have been encouraged to experiment.”
If someone in a leadership position isn’t comfortable with creating new rules, they explain, coaching could be implemented to help guide them in the right direction. Alternatively, there is likely plenty of new talent that is ready to implement a shift.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.