This month I attended PegaWorld 2019, a technology conference hosted in Lаs Vegas by the digital transformation software company Pega. Highlights included talks by Alan Trefler, Pega CEO, and Jeanne Ross, director of the MIT Center for Information Systems Research (CISR).
In his talk on the Heart of Digital Transformation, Alan Trefler emphasized the importance of feeling empathy for your clients, rather than solely focusing on requirements: “requirements are about obviating yourself from what’s really going on. Requirements are what create this rift between the customer, and the business team, and the technology team. . . Instead, we need empathy. We need to be able to . . . understand what the true needs, the unarticulated needs, the evolving needs of the customer are.” My 20 years of experience in IT definitively align with Trefler’s conclusions: requirements might enable us to build workable products, but without empathy, we cannot build successful partnerships with clients and deliver products with the greatest possible value.
Meanwhile, Jeanne Ross broke down digital transformation into two types: operational excellence and rapid business innovation. Operational excellence involves digitizing your existing processes, data, and technology to create a stable, operational backbone. Strong operational backbones ensure efficiency, reliability, and quality customer experiences. Yet, though crucial to success, they are hard to build: out of 150 large companies surveyed by MIT CISR in 2018, only 14% had established successful operational backbones. The rest were in different stages, with 56% of companies suffering from processes or environments that limited their capabilities. Thus, companies should prioritize operational excellence before diving into business innovation.
Rapid business innovation refers to designing new solutions and offerings by creating novel digital platforms based on business, data, and technology components. For example, Amazon began as a regular bookstore, but harnessed web browsers, social media, and AI to become an online bookstore, then an online retailer, and ultimately a provider of digital convenience. To achieve similar success, Ross suggests pairing digitization with innovation: while digitizing your existing platform, think about designing a new digital platform. To be effective, this platform should be created gradually, solving one problem at a time. Additionally, digital innovation should never take away from the separate management of the operational backbone; balancing both forms of digital transformation are crucial to long-term success.