Incoming: Organizations Must Transform Digitally—Now

August 1, 2017
By Maj. Gen. Earl D. Matthews, USAF (Ret.)

We are living in the second major wave of digital disruption. Most consider the advent of the Internet and ubiquitous email to be the first wave. In this second wave, where the cloud features prominently, modern apps and analytics will usher in unprecedented levels of productivity that will significantly differentiate militaries, companies and governments by their mission execution.

These technologies encompass the latest buzzword, a broader concept known as digital transformation. This is the change associated with applying digital technology to all aspects of human society, says Ahmed Bounfour in his 2016 book Digital Futures, Digital Transformation. On-demand processing power, data, analytics and intelligence, accessible by every device and object, enable the capability to sense and control almost everything in the world. No one would argue that these changes are not deep.

Amazon.com is a world leader in digital transformation. Fortune magazine noted in an article last January that Wal-Mart and Amazon were valued at $250 billion each; but Wal-Mart needed $154 billion of capital to create that value, while Amazon, increasingly a platform company, used only $35 billion to achieve the same result. This comparison of an old-age company with a young-age company shows how business models that are asset-light in physical capital are shaking up many industries. This asset-light mindset needs to be brought to the U.S. Defense Department.

Because of the need for digital transformation in corporate America, information technology is back as a topic in the boardroom. Most of us see digital technology as the engine of innovation and growth. This is a far cry from 2003, during my first chief information officer (CIO) job, when Nicholas Carr’s article “IT Doesn’t Matter” was published in Harvard Business Review. Until the end of the 20th century, information technology was seen as an exciting but unreliable source of innovation. Then came Y2K, along with the dot-com boom and bust, after which information technology was again relegated a back seat and considered a support function. CIOs primarily focused on business process improvement, information technology efficiency and effectiveness. I’ve seen things dramatically change from my first CIO position.

From a business perspective, although improved customer experiences are arguably the most visible and exciting aspects of digital transformation, companies also are realizing strong benefits from overhauling internal operations through process digitization, worker empowerment and performance management. Digital transformation is a constant rhythm of change collectively across people, technology and processes.

A digitally transformed organization skillfully gathers and shares information and makes data-driven decisions on a wide scale. No longer are just a few operations researchers asking—and answering—warfighting and force structure-shaping questions. Now the entire work force can be augmented by artificial intelligence to enhance decision making and to eliminate basic time-consuming tasks.

In a transformed organization, anyone, anywhere, anytime can access information securely on any device. Instead of the barriers to information created by physical boundaries, the digital platform enables the free flow of information as well as the systems for accessing it, generating mission value.

A digitally transformed organization recognizes the benefits of automation, robotics and straight-through processing to remove humans—and human error—from the workflow for improved accuracy, speed and reliability. The organization relies on carefully considered mission and business logic and policies to determine how data should be used. Further, it makes time for people to focus on not only process and policy improvements but also the automatable components. By having better information and more of it, transformed organizations will discover changes in adversaries’ behavior that they had not considered, the next disruption intent on draining U.S. global power or the next security vulnerability that could create chaos in our critical systems. More importantly, they will have more time to counter these threats.

Digital transformation requires strong leadership to drive change. But leaders also must have a vision for how they want their organization to transform. Ultimately, the transformed organization will deliver more personalized and collaborative experiences; recognize that control has shifted to the user; and make better data-driven decisions, whether those are by humans or machines. Innovation is a key element of its culture.

The best-managed organizations constantly are identifying ways to redefine how they work in this digital era by executing clear transitions from legacy to emerging technologies. Leaders must assess where they are at in their digital transformation journey and determine how they can help accelerate it—or they will be left behind.

 

Maj. Gen. Earl D. Matthews, USAF (Ret.), the former director of cyberspace operations in the Air Force’s Office of Information Dominance and Chief Information Officer, is vice president of the Enterprise Security Solutions Group for DXC Technology (formerly known as Hewlett Packard Enterprise Services), U.S. Public Sector. The views expressed here are his own.

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