In the midst of transformation, companies are constantly looking for new ways to meet the expectations of their customers, and to reinvent the way they operate through technology and innovation. In this context, optimizing the digital value chain is a major challenge. It is not just a technical initiative, but an organizational effort that also includes mission, strategy, culture, and operating models.
Today, the digital value chain adds virtual and in-person interactions, so digital leaders value collaboration, innovation, and alignment between business, operations, and information technology to achieve transformative results.
I share five recommendations that enable organizations to create an effective digital value chain:
1. Rethink the value chain from the perspective of stakeholders
Transformation begins with understanding and aligning outcomes required to deliver value to customers or citizens. The simple act of cross-thinking, bringing together different areas – business, operations and information technology – in order to discuss and align your main goal, will itself be transformative. Once the goal is clearly defined, it is up to each area to decide what needs to be done to contribute to the outcome of the whole. What are the inputs, technologies, capabilities and resources needed at each stage of the value chain? How do transitions between different regions occur? What are the basic processes of the organization and what processes can the partners perform or through automation? By breaking down organizational silos and opening new channels of communication, a completely revamped value chain will emerge. Collaboration, innovation, and alignment between business, operations, and information technology will lead to significant transformational results.
2. Unlock the data for a 360-degree view
Collaboration in the digital value chain increases the need to make complex decisions quickly and transparently. However, all too often, leaders do not have access to appropriate contextual information. Traditional value chains tend to “lock” data into functional silos, thus perpetuating decisions that don’t take the big picture into account. Digital leaders manage their companies’ distributed data as a strategic asset, integrating technology such as the Internet of Things (IoT), advanced analytics, artificial intelligence, decision science, and intelligent automation. A common decision-making framework must integrate critical information, business imperatives, and value creation across the entire chain to enable interconnected decision-making.
3. Create a digital ecosystem
Few organizations own and manage all aspects of their value chain. Instead, they build an ecosystem of technology partners who share common values and provide complementary resources, helping them achieve their business goals. In some cases, organizations entrust much of their value chain to partners, so they benefit from greater flexibility and greater access to the right talent at the right time. Creating an effective ecosystem begins with identifying which resources and strategic processes to maintain internally, and which are best supported by specialized partners. In this way, the organization expands its capabilities and offers, ensuring greater efficiency and competitiveness.
4. Analyze how technology is improving your value chain
There are clear strategies for improving or relinquishing non-productive assets in physical supply chains. Numeric value chains should be no exception. When we talk about the role of technology in the digital value chain, organizations need a clear strategy on how to reduce their technical debt. It becomes necessary to update and integrate applications by migrating them, for example, to cloud and XaaS models. It is also critical to enable employees to automate and thus reduce the risk of IT assets limiting overall performance.
5. Protect your digital value chain and stakeholders’ personal data
Optimizing the digital value chain creates a more connected and open ecosystem. At the same time, it necessarily generates complexity due to new cyber risks and threats, the speed and frequency of which are constantly increasing. Just take a look at the latest ransomware attacks, which have caused major disruptions and most likely irreparable damage, involving citizens/clients, production and distribution. Implementing proactive and up-to-date security operations is becoming a business imperative for a real-time view of threats in increasingly complex environments. To get the most value out of data, as it grows exponentially and regulations and penalties increase, it is necessary to identify, classify and protect this data within the organization and across ecosystem partners.
Carlos Gomez, Vice President of Consulting Services, CGI