Digital transformation 4.0
Digital Transformation 4.0 actually says it itself: this is not about an incremental transformation, but about a step-change change, aimed at disruption and exponential value creation by using DATA to guarantee the continuity of the organization. In fact, it is more of a metamorphosis than a transformation.
Digital transformation is a business issue, not an IT issue
Digital transformation is making your business model adaptive, flexible and simple. This makes it easier for a company to scale up or down at lower operational costs and exponentially accelerate the time to market. Nine out of ten digital transformations are incorrectly labeled as an IT project and therefore do not realize the potential growth value. Digital transformation is not an IT issue but a business issue on the board of the CEO and CFO.
Most operating models are:
- Not or very limited scalability for disruptive growth and value creation;
- Application- and not DATA-centric;
- Too complex due to outdated IT environments, including many ‘legacy’ applications.
- Practically all IT infrastructure has reached its maximum stretch, is human-intensive, has high management costs and has security issues. In addition, it is not data-centric, which means that it is not scalable and often in violation of laws and regulations.
The management often sees the digital transformation process as an assignment for the IT department/CTO. However, change management and data-centric thinking is the job of a CEO/CFO. DATA is the core, IT just a resource.
Time To Market
A good time–to–market is crucial to disrupt the market approach at delivery costs of approximately 25% of the current costs for the service. The advantages of a shorter time to market are of course well known: you trump the competition, achieve higher margins, recover costs faster, and extend the life cycle of your product or service. But why not everyone shorten the time-to-market? Because the limitation of merely executing existing processes faster rarely proves to be the solution. If you really want to make big strides, you have to go for a complete transformation. In other words, redefining the fundamental parts of your business.
Do you want to be future-proof? Then there is an urgency to create an agile business model and to create a short time to market. The transition to a new business model is self-financing, without using CAPEX (Cash flow neutral) or working capital.
What does it bring?
The results are an increase in the operational cash flow and an increase in the underlying value of the organization and a substantial reduction in the operational costs of the organization. All this without relying on the working capital of the organization.
We make an organization ‘Future fit’ in a maximum of 10 months through a cash flow neutral process! The operating costs are adjusted downwards by a factor of 4 to 8. As a result, at the same time, the operating cash flow increases exponentially, causing the underlying value of the company (market capitalization) to increase exponentially. This makes it easy to withdraw liquidity from the market to finance the growth of the organization.
The outcome is a ‘lean & mean’ operational model that is functionally and financially flexible based on a DATA-centric operational model.
Digital transformation should add value to the business, not additional costs associated with an even more complex operating model.
Our building blocks as a basis for digitization
We distinguish six parts that are tackled partly parallel, partly sequentially.
Organizations have to make the transition from application to DATA-centric if they want to work DATA-driven. Opening up the company’s DATA is the only alternative to reduce the “cost to serve” of the Operating Model with factors on the one hand, and also to reduce the raw material, provided that DATA is organized centrally, on the other hand, to create exponential balance sheet value. We build a digital strategy that addresses who and what the organization wants to be in 5 years and how to achieve this as quickly and efficiently as possible.
The great advantage of DATA-centric working is that you can quickly respond to the continuously changing needs of the customer. This means that a flexible Business Model must be supported by an adaptive Business Model. This lays the foundation for the transition from a transactional Business Model to a ‘recurring’ Business Model with recurring revenues. This shortens the Time to Market to such an extent that it becomes possible to convert innovations into functionality and financial value without agile teams and robust IT departments. In our approach, we build a flexible business model on a DATA-centric basis.
A DATA-driven transformation offers the unique opportunity to unlock the stored financial assets in the DATA. And also to make it liquid to finance the transformation. By simultaneously striving for a data-centric Business and IT architecture, it is possible to activate that DATA as digital intangible assets (DIA) on the balance sheet. Provided there is a substantial cash flow over it. The transition is the foundation, if properly executed, that ensures that the operational costs (or the “cost to serve”) are drastically reduced. Because the business operating model has become flexible and adaptive, the “time to market” is shortened. As a result, we move from a transactional to a recurring business model (Recurring Business model). The end result is an exponential increase in value by boosting cash flow.
Governance, Risk & Compliance
Legislation and regulations remain one of the subjects that takes up a lot of time. GDPR legislation is way ahead of business and market developments. Laws and regulations can benefit the organization.
Because what if the DATA-centric platform gives the organization direct access to comply with the applicable legal provisions?
This means that due to the way in which we carry out the Digital Transformation, the risks of cyber attacks and the resulting possible legal consequences can be minimized.
What is needed to ensure that employees start thinking from DATA? How does the top of the company bridge the gap to all employees in the organization? Because if the employees do not embrace the new philosophy, the transformation is not complete. Bridging the gap to the rest of the organization is primarily a communication issue. Second, generating engagement by explaining the what, how and why is a strict condition for the transformation to succeed. Because we mobilize the entire organization through exemplary behavior and training, this will lead to desired behavior and acceptance of all changes.
Digital Transformation is not a task for IT alone, but the IT transition is an important part of the transformation. The strength of our approach is that the IT transition from DATA is accelerated. The impact of this is that on the one hand the IT transition is self-financing and on the other hand leads to a shorter transformation, a reduction in operational costs and less capital expenditure (Capex).
We don’t look at processes. We only look at DATA where it affects the organization. Much of this DATA is traditionally ‘locked up’ in Legacy systems. By thinking from DATA, we develop that functionality that leads to value creation. By using DATA-centric technology we can on the one hand dismantle the Legacy systems and on the other hand build a new DATA-centric operating model.
We start in the IT transition with a DATA Discovery where we initially investigate where all DATA is located. Next we will index, categorize, classify and clean the DATA. We then transfer the cleaned data to a NextGen DATA centric platform. From the Power Of Information sessions (POI) we are able to shape the remaining existing and new business processes on the new platform without the need for essential IT knowledge.
Consequence of this approach
The consequence of the approach is that the IT transition is driven from a business perspective and not from an IT perspective. By simplifying the IT transition and making it more effective, we are able to accelerate and robustly implement the IT transition as part of the digital transformation in a very short time. financing.