Cecilia Edwards
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Cecilia Edwards

Cecilia Edwards possesses 20 years of experience in strategy and management consulting, having worked with a number of Fortune 500 corporations, middle market companies, private equity firms, and non-profit organizations. She brings this strategic expertise to her Everest Group clients with a focus in next generation IT strategies, enterprise as-a-service models, IT enabled business transformation, and service provider growth strategies. To read more, please see Cecilia’s bio.

Digital Transformation: Five Steps to Better Metrics | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Everest Group’s recent Enterprise Digital Adoption | Pinnacle Model™ Assessment suggests that the organizations that are having the greatest success in achieving outcomes from their initiatives have a focus on a set of success metrics the extend well beyond cost savings. They include a focus on things that are relatively easy to quantify such as reduction in process cycle times. However, they also include an emphasis of more nebulous goals such as improving customer experience, introducing innovative offering, and engaging in disruptive behavior in the market.

Measuring this latter set of goals is a far departure from the familiar service level agreements (SLAs) and key performance indicators (KPIs) that IT organizations and their internal business customers are accustomed to using to determine success. Not only are SLAs and KPIs insufficient to measure the strategic impact of digital efforts, they also fail to capture the real essence of what business customers desire. While every SLA and KPI can be met, enterprises on digital transformation journeys tend to find those metrics unsatisfactory.

Five steps enterprises need to take to establish a meaningful set of digital performance metrics

1. Ensure a clear set of business objectives have been established – an objective to improve customer experience is not a clear enough metric to guide a focused set of activities and investments in a digital effort.

Within the customer experience realm, an enterprise could focus on increasing the level of consistency of the experience. In this case, the digital effort may be around automating a set of processes to reduce the variability in results and decrease the dependence upon the knowledge and experience of individuals.

If the desired improvement is to create a personalized experience, the enterprise may be more focused on ways to leverage analytics to consolidate the customer’s activity with the enterprise, make recommendations based upon the behaviors of similar customers, and predict the likelihood of purchasing.

In addition to defining the objectives, a business value should be attached to each. What is the anticipated benefit to the business, in terms of dollars and cents, were the objectives to be met.

2. Develop a quantifiable baseline for the business objective – even with a goal as vague as improving an experience, enterprises who want to ensure their activities are leading to results will find a way to quantify them. For example, if you are trying to improve customer experience through consistency, you may want to measure and set improvement targets for the level of variability in the time to serve a customer or whether the customer experience is similar regardless of the channel through which the customer engages.

3. Track the progress of adoption – while getting a technology solution implemented or a new process defined is clearly the first step, enterprises that get results from their efforts also focus on the level of adoption. These enterprises understand that without behavioral changes to use the technology and follow the new procedures the value potential of the digital efforts cannot be realized.

4. Track the achievement of the quantifiable results – once it is clear that there is a high level of adoption of the technology and redefined business processes, enterprises can begin to track the achievement of the quantifiable objectives identified in step two. Until adoption is achieved, tracking these results is futile.

5. Determine whether the desired business impact is being achieved – a critical and oft overlooked step is to ensure the achievement of the quantifiable results is delivering the desired business impact. In the age of digital transformation, the level of certainty  in effectively achieving outcomes is much lower than in times past. Additionally, the pace of change is greater, meaning that an approach that worked last month might begin to lose its effectiveness this month. Enterprises that want to achieve business results are wise to continuously monitor the impact of their efforts on their desired business results and make the necessary adjustments to both technology and business process to sustain the desired business impact.

Even in the digital era, the adage that what gets measured gets done remains solid advice for enterprises interested in not merely engaging in digital transformation activities but in achieving business results.

With All The Talk of Transformation, Are RPA Projects Bad? | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

This past week, I had the opportunity to deliver a keynote speech at the Dallas RPA and Cognitive Summit that focused on the difference between digital projects (in this case, RPA projects) and transformations. In a nutshell, here are the key takeaways:

  • Your Why Matters: RPA implementation by itself is not a strategy but an enable of a specific objective(s) the organization is trying to accomplish
  • What you want to accomplish can be far reaching: The outcomes of your RPA effort have the potential to range from IT operations improvements, business efficiency, or improvements in the customer experience. The closer to the customer, the more transformative the effort is likely to be
  • How you choose to execute determines your impact: Since technology is rarely a barrier to success, the alignment of the business stakeholders, the cultural adjustments, and the approach to risk management will be the determining factors in the ability to scale and to capture the intended value

While my talk was purposefully focused on pushing the group’s thinking around transformation, the world in which most of the attendees current live is all about projects. The dichotomy between my focus and their reality led one of the attendees to ask whether projects were a bad thing and what they as mid-level manager could do to encourage transformation.

RPA projects are not bad

RPA projects are by no means bad or inferior to transformation efforts. In fact, most transformation efforts are implemented through a series of projects. However, it is important to know that projects implemented outside of the context of a transformation effort will have limited impact. It is perfectly acceptable to do standalone projects – just do not expect them to deliver results that will be significant enough for customers or the marketplace to notice.

On the other hand, understand that you cannot run a transformation as though it were a project and expect good results. Given the level of complexity and need for executive sponsorship, transformation run as projects usually do not scale well beyond the initial pilot, take excessively long to implement, and rarely achieve business impact. If it is a transformation, run it as such.

Use RPA projects to ready your organization for true transformation

Realistically, if your title is Director of RPA, Business Process Improvement, Operations Excellence, etc., the chances of you being able to initiate a digital transformation in your organization are slim. That is not to say, however, that you cannot have some influence on the organization through you work you do with your RPA projects.

RPA adoption is still relatively new and most business stakeholders are not familiar with the potential impact it can have, comfortable with the different type of risk it brings, nor aware of the level of effort required to use it for transformation. An approach that starts with a project focus that creates a pull in demand from the business side of the organization could be just the early experience an organization needs to begin to consider RPA and other automation technologies as a part of its digital transformation efforts company-wide.

View the full presentation.

How to Become a Digital Pinnacle Enterprise | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Transformation goes beyond applying new digital technologies

In years past, in the midst of some hype and some reality, enterprises applied digital technologies to existing processes with the goal of reducing costs, improving quality, and increasing efficiency.

But today, digital native companies – such as Fin Techs, Uber, and Airbnb, with origins in the digital space – and traditional enterprises that rapidly moved towards digital maturity, are causing significant disruption in an already disrupted environment. Their successes are driving today’s enterprises to not only improve but also transform their businesses to deliver value to customers in completely new manners, at radically different price points, and at breakneck speeds.

As presented by my colleague Michel Janssen in his recent blog on Digital Pinnacle Enterprises, the enterprises that are more mature in their digital transformation capabilities have a far greater chance of delivering the necessary business outcomes.

Digital Pinnacle Enterprise differentiators

Interestingly, it is not the choice or implementation of newer or different technology that distinguishes these businesses. Rather, they stand out because of their moves to establish a more collaborative culture, their shift to embracing innovation, their clear approach to move past technology implementation to adoption, and their willingness to change core business processes. These leading companies realize that success in digital transformation is not an event, but a journey.

Executing on those differentiators – culture, innovation, technology adoption, and business model change – is highly complex, cannot be accomplished in one big bang effort, and is more time sensitive than traditional multi-year IT project plans allow. A journey carefully mapped out to efficiently accelerate the impact of digital efforts is required. Elements of this journey include:

  • Establishing a vision for where you would like your enterprise to be digitally. While it will be virtually impossible to predict the exact form it will take, you can well articulate the characteristics of your future aspirations. For example, you can determine whether you want to establish a micro-segmented customer experience, or be able to rapidly introduce products into the market that are responsive to your customers’ evolving desires.
  • Deciding on the priority elements required for your success and, informed with data, determining the characteristics of your target operating model. You will obviously need to make decisions regarding your required technical capabilities, but business process changes, and funding, adoption, and accountability approaches are equally critical to achieving your goals. Determining priorities will also provide guidance into which elements of your business require little change focus as they are anticipated to have minimal impact on your business results.
  • Building a journey map to close the gaps between where you are today and the priority elements of your target operating model. The focuses should be on delivering results as quickly as possible, and remaining agile enough to respond to the evolving business requirements.

Moving at the speed of digital is no longer a nice-to-have

Enterprises that are succeeding in today’s environment understand that their underlying information technology and business model approach must move at the speed of a digital world. They recognize they must be designed for a world in which customer demands are routinely and rapidly changing, and enabling technologies available to them, and their competitors, are evolving even faster. They are prepared to embark upon a journey whose destination is only partially known at any given time, and to shift approaches, as needed, along the way.

Video: Why a Digital Project Isn’t Digital Transformation | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

In this video, Partner Cecilia Edwards explains how many organizations are confusing digital projects with digital transformation and explains the differences between each.

Trascript:

Digital is all the conversation these days. And in particular, we hear a lot of people talking about digital transformation. But when you peal back the onion and see what they’re really talking about, not everybody’s talking about the same thing when they say “transformation.”

Many people are talking about what we’d call digital projects. When you look at things like social and mobility and analytics, even Internet of Thing, cognitive, and artificial intelligence. All of those things are digital technologies. But just because you’re using a digital technology doesn’t mean you’re in the process of a digital transformation.

A digital project is one that really takes those digital technologies and applies them to the same business model, to do things like reduce cost, improve quality, or improve efficiency. All of those things are projects.

Now, when you get to transformation, that’s a whole other story. Those same technologies can be applied in new ways. They can be applied to improvements in the customer experience, the employee experience, or business transformations. And when we talk about digital transformation here at Everest Group, what we’re talking about is the use of those digital technologies to drive a change in your business model.

Everybody’s familiar with all the disruptors. Uber disrupting the taxi business. AirBnB disrupting hotels. What they did was not just make incremental improvements in how those things were done, they changed the business model.

Now, we’re not suggesting in any way that all businesses need to completely disrupt their industries. But what we are suggesting is that those digital technologies have the opportunity to drive so much change that existing companies, mature companies, need to reevaluate their business models in a way that’s going to allow them to take advantage of the capabilities that those technologies bring to the table in a way that causes them to challenge the status quo assumptions of how you do your business and how you deliver value. That is what we call digital transformation.

How to Successfully Fund Your Enterprise Innovation Initiative | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

One of the biggest obstacles to successful innovation efforts is a challenge familiar to any entrepreneur: funding. Good ideas take time and money to get off the ground. But when those ideas are relatively “out there” or unproven, the investment can be hard to justify.

This is especially true in a corporate environment. Standard corporate funding models for technology projects simply don’t align with the way innovation works. Traditionally, organizations base their internal investments on a business case that shows projected improvement from a baseline. The business case requires and includes upfront knowledge of the full funding needed to complete the project, and assumes that every project will in fact be successfully completed.

Read more at Cecilia’s blog

Stop Sweating Your Assets to Start Driving Innovation | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

The popular business book “What Got You Here Won’t Get You There” offers personal and professional advice based on a simple premise: the skills and talents that got you promoted to a senior level are not the same as those required to succeed at that level. This applies in the corporate world or in our home lives; ask anyone who has been married if the equation for a healthy relationship was the same before the wedding and ten years later. But the concept is particularly relevant to today’s IT teams. Given the current pace of technology, what got IT here definitely won’t get us there.

Read more at Cecilia’s blog.

5 Steps to a Realistic, Repeatable Innovation Process | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Innovation in a business context cannot be a simple flash of brilliance. (It typically isn’t a simple flash of brilliance in any case, as we’ll discuss below.) Even in the rare cases that an innovative idea seems to come from nowhere, it must not end there. Businesses, and especially IT departments, need to deliver outcomes. A cool new gadget, algorithm, etc. is essentially meaningless until it enables or produces the desired results, e.g.: improve the customer experience, drive down costs, transform the business model. Only then is the energy from that flash of brilliance harnessed in a way that matters to the organization.

This focus on practicality feels unintuitive and different from how we usually think of innovation; the image of a single inventor being struck by a moment of genius is a powerful cultural paradigm. It is also neither realistic nor repeatable. Innovation driven by an undisciplined creative process will not predictably deliver results. This makes reliance on serendipity an innovation strategy unsuited for a corporate environment.

Read more at Cecilia’s blog

3 Strategies for Measuring the Impact of Innovation | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

For today’s leading companies, innovation is no longer optional. The imperative to transform your offerings while simultaneously driving productivity and cost savings continues to grow more urgent as the pace of technology accelerates. But while innovation is a key component of any modern business plan, it also enjoys a singular status among most organizations’ critical strategies: it’s the only one that is not consistently and rigorously measured. Read more at Cecilia’s blog.

The Biggest Risk to Your IT Department that You’re Not Addressing | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Today’s IT departments face a profound challenge: the delicate and precarious balance between stability and innovation. “Keeping the lights on” has never been more important. Business quite literally runs on technology and any downtime or blips in the user experience can cause major negative consequences, from brand equity and sales to internal productivity and morale. But innovation is equally imperative. The pace of technological change demands that businesses evolve or go extinct. You can’t afford to stand still – but you cannot compromise your core operations, either. In response, most organizations split the difference. IT assumes that legacy systems are stable and continues to rely on them as foundational infrastructure. When new requirements arise, they invest in new technology with a greater emphasis on agility and responsiveness, often in the cloud. Read more at Cecilia’s blog.

A Lesson to be Learned from Delta Airlines’ System Outage | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Bimodal IT has become common parlance. It is the term for the underlying assumption that large enterprises require stability in their core IT systems, and should therefore not take the risk of migrating to new technology. Instead, the old systems should be maintained in their current condition – or a condition that is fundamentally the same with only minor adjustments – and only use current or next generation IT for new requirements.

While the logic seems to make sense on the surface, there is a major flaw in this argument. IT systems aren’t like fine wines that get better with time. IT systems become old and outdated, just like your own personal computer. Think about it – how many years did it take you to become totally frustrated with the computer you LOVED when you first got it? It was the best thing on the market, was lightning fast, and did all the cool new stuff.  But five years later, it has slowed to a crawl, the operating system isn’t compatible with the latest version of the programs you want to use, and no one has the components or software required to service it. There comes a point in time when it is more risky to hold on to the old than to migrate to the new.

Now let’s test this argument to determine whether it makes as much sense for the enterprise as it does the technology forward consumer.

Delta Airlines’ entire system was shut down due, at least in part, to some of their core IT systems not switching over to backup when Georgia Power encountered a switchgear failure that is the equivalent of blowing a fuse. The result? More than 650 flights were initially cancelled, with thousands more likely at risk of being cancelled later in the day. Of course, the impact of an outage of this magnitude is not limited to a single day. Somehow, all of the passengers still have to get where they were going, and will need to fit in on other flights. There is no way Delta will be able to accommodate all those people, so other airlines will have the opportunity to pitch in and serve those stranded by Delta.

The outage began at 2:30 am, and Delta resumed flight by 9:00 am. In just six and a half hours, Delta lost millions of dollars, ran many of its passengers off to other airlines, and served a major blow to its hard-fought battle to build a reputation as the most reliable U.S.-based international carrier. All in just six and a half hours.

This should force enterprises to look at their IT systems and ask just how stable they really are. Their systems, assuming they are similar to most major airlines, were likely built in the 1990’s – more than 20 years ago. Given the rapid pace of technology changes, a 20 year old system is practically ancient. Who has the skills to service systems that old? How well does the system integrate with new technology? What level of customization and patching together has occurred over the past 20 years to keep the system relevant? How has the system been able to address the vulnerabilities and performance issues resolved by newer technology? In other words, what is the underlying risk associated with an IT system that is a couple of decades old, and is it reasonable to expect it to get better?

Bimodal IT might make sense in some instances when the cost of the risk of obsolescence is low. It can also make sense as a short-term strategy. However, nothing is stable forever, and the increased complication of maintaining old systems adds risk that slowly creeps up over time.

Yes, transitions to newer technology are both costly and risky. But so is having an unexpected total business shutdown due to the inability of an ancient system to continue to perform as it has in the past. Transitions to newer technology can be planned and managed, and seem to be much less of a gamble in the long-run.