A couple of weeks ago, I was talking to a group of IT leaders on the topic of digital transformation. One of the questions I received was one I often get: How does one know where to start? It's certainly a fair question.
Conceptually, it's easy to understand why a business must become a digital one. However, it's unlikely that companies have the right resources or staff to go from zero to Amazon overnight. My advice is always to be much more methodical about it, applying digital technologies in a series of small "chip shots" instead of a big, scary moon shot. I also recommend finding the processes with the most human or technical latency in them, as this is where digital transformation will have the biggest impact.
The problem is that if a business doesn't know where the delays are or has no way of measuring it, digital transformation will be like throwing darts blindfolded. You might get lucky and hit a bullseye, but there will be a lot of misses along the way.
Last week application intelligence company AppDynamics (now owned by Cisco) held its AppD Summit where it announced a new service, called Business Journeys, that can take the guesswork out of deciding where to go digital. There are many application performance management (APM) products on the market today that measure or infer the experience of a specific application or a service. Business Journeys ties several of these together to look at a business process holistically. The example AppDynamics gave was in banking where approving a mortgage is made up of the following discrete processes -- loan application, document verification, credit check, underwriting, and loan approval.
Anyone who has applied for a mortgage understands how slow and frustrating the process can be. Any bank that is able to make the process faster and less painful stands to take a chunk of market share. The graphic below shows that Business Journeys discovered that the underwriting process is taking 10 days, far longer than all the other processes combined. This is where the business should be looking to apply digital technologies first.
One possibility to speed up the underwriting process might be as simple as having the underwriters use a team collaboration tool to make sharing data and communications faster than traditional file sharing and email. More advanced solutions could involve the use of machine learning to analyze a person's data faster, giving the underwriters more insight to give a "yea" or "nay." The point is that digitizing underwriting and even only getting a small benefit, like 25%, will cut 2.5 days off the process. On the other hand, digitizing document verification and getting a 50% benefit will only cut the overall process down by about two hours. The company will know this because the AppD dashboard can quantify it.
AppD does this by building a massive inventory of transactions from measuring business log data, browser events, clickstream data and soon IoT and network metrics. AppD's algorithms links the data and constructs a measurable metric it calls a "business journey". Without it, IT organizations have to try to tie the processes together manually, which is nearly impossible with complex processes.
Business Journeys should also be invaluable in giving lines of business, application development, and infrastructure operations a common lens to view the business through. It seems today that everyone talks about measuring "business outcomes" but how can one measure something it doesn't fully understand? The new service lets all responsible parties understand the overall experience for these complex processes such as a customer being approved for a mortgage, completing an on-line shopping transaction, or a worker submitting expenses for approval. Determining business outcomes requires measuring business metrics instead of technical ones and then trying to infer the impact to the processes.
APM is a mature industry that has seen very little innovation over the past decade. AppD has taken APM and evolved it to reflect the changing times. Instead of providing IT managers with a view of the application, Business Journeys now provides a business leader a view of business outcomes.
At the event, AppD also announced something called Experience Level Management that gives companies the ability to create custom journeys for specific customers. AppD gave the example of premium flyers, like me, getting priority over riff-raff, like Dave Michels, when booking a ticket or looking up flight information. Other use cases could be online trading applications giving priority to high net worth individuals or sports teams prioritizing season ticket holders.
One more important point to note: Once the Business Journey and Experience Level Management paths have been created, machine learning can be used to model them. These can be used to continually analyze behavior and predict problems that will impact user experience.
Digital transformation can scare IT and business leaders as much as ghosts scare kids on Halloween. AppD's Business Journeys gives everyone in the organization the insight to make the best decision as to where to apply new technology to maximize the business outcome.
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