Jun02
We are living in a hyper-digitally dynamic ecosystem. As we are moving towards a digitally dependent future, the need for Digital Resilience is increasing rapidly.
Digital Resilience helps companies by providing several ways for businesses to use digital tools and systems to recover from crises quickly. Today, digital resilience and supply chain resilience no longer imply merely the ability to manage risk. It now means that managing risk means being better positioned than competitors to deal with disruptions and even gain an advantage from them.
The need for Digital Resilience and sustainable supply chains has undoubtedly brought about a change in business IT taxonomy, enhancing business processes and performance.
In this article, I intend to highlight these very transformational changes in IT systems that have happened over two decades and new IT systems that enterprises need to develop and transform to become more successful, productive, and efficient.
Systems of Records (SoR) are software solutions that serve as the backbone for business processes.
The power of SoR is that they are the ultimate source and therefore “record” of critical business data. Essentially, SoR can be understood as a data storage and retrieval system for a company that works as an authoritative data source for the entire organization.
Systems of Records (SoR) are valuable to a company as it becomes a single source of truth that provides essential insights and information to a company’s management teams.
Initially, SoR’s were similar to the enterprise resource planning (ERP) systems, when on-premises ERP’s (like from Oracle, SAP) were in full use. However, over time, companies started to realize the time and cost inefficiencies of incorporating ERP. It required dedicated IT teams to set it up and had just had a sub-par user interface.
During the last decade, SoR took a turn by incorporating SaaS-powered software lock-in tools such as Workday, SuccessFactors, Salesforce, Dynamics 365, which have proved to be a little more efficient than the previous ones. SoR is critical for companies to mandate data integrity.
Systems of Engagement (SoE) was introduced to help employees, customers, and partner ecosystems to engage with the Systems of Records (SoR), data, and process flow better. SoE are systems that essentially collect data and enable customers, employees, and partners to interact with the business and associated methodology. They are task-based systems or tools used to retrieve specific information and data. Enterprises are incorporating SoE, not for their software, but for introducing new, data-driven processes to talent acquisition and talent management and business processes for operational excellence.
Organizations see changes in their internal management systems and are now moving away from top-down management to creating a more agile self-management system. Enterprises usually integrated Systems of Records (SoR) and Systems of Engagement (SoE) for better efficiency. Stand-alone traditional ERPs were becoming more and more expensive to handle and couldn’t keep up with the faced-paced digital transformation and innovation. Hence, by integrating SoE (a two-tier approach), organizations could make their business operations much more agile and cheaper.
The idea is simple:
Systems of Engagement are placed to “engage customers or engage with customers” and are supposed to be designed for flexibility and scalability. In contrast, Systems of Records (ERP, HRMS, ITSM, etc.) are just data repositories.
As innovation accelerated and businesses started automating and utilizing analytical tools in their operations, the need for different systems grew. As data-driven companies began to grow, the necessity for high-quality data and data modeling tools grew to gain actionable insights to make better business decisions. Hence, IT systems that support decision-making started to include Systems of Innovation and Intelligence (SoII) into their operations.
Systems of Innovation and Intelligence (SoII) gathers data from Systems of Record (SoR) and Systems of Engagement (SoE) and derives insights. It analyses the accumulated data and suggests improvements to enhance business performance and decisions. Earlier in businesses, SoR and SoE were examined and observed separately. However, now, SoII converges these data to derive better insights that can be turned to create better business outcomes or to innovate new products.
According to Forrester’s research, businesses are “drowning in data” and failing to gather insights. Big data, agile business intelligence, data analytics, etc., surely do give enterprises insight. However, they solve the problem partially. The solution lies in companies employing a structured system that harnesses the actual value from gathered data. The answer lies in embedding “closed looped systems” or nothing but the Systems of Innovation and Intelligence (SoII).
With SoII, enterprises can perform different types of analysis on collected data through predictive analytics, descriptive analytics, cognitive analytics, etc. Although enterprises have incorporated BI and analytics to gather insight, it won’t be enough without proper systems that convert these insights into actions. It is crucial to test what works, what doesn’t and understand the required changes. With data, you need to act intelligently.
To be successful in the new normal world, it is crucial to adapt to the fast-paced digital transformation and take a holistic approach to enhance business agility and performance. Here’s what needs to change going forward, in my opinion:
Systems of Records (SoR) should modernize with a cloud-first approach to transform them into Systems of Records and Intelligence.
Modernizing an existing SoR to Systems of Records and Intelligence will require a view of the workloads from an underlying infrastructure perspective and core application architecture characteristics to determine its suitability to operate on the cloud. But a cloud-first approach will leverage a rich ecosystem of services from the cloud marketplace, enabling rapid development of SOE applications
Systems of Engagement should now transition and offer different experiences for employees and customers, at least from a perspective of:
It is essential to know whether employees/customers can seamlessly adapt to these or not. For example, employees of different generations (Gen Z to Gen X) must engage with varying factors of form and experience mediums. They must offer different experiences to employees, and this can happen by refining your Systems of Engagements to a new System of Engagement and Experience.
Systems of Innovation (SoI) should now define the enterprises’ future. They need to focus more on establishing a System of Innovation (SoI) with a cloud-first mindset. SoI should enable fast-paced innovation for developing newly Sustainable and Resilient Products and Services.
Enterprises need to ensure they leverage Data as Assets and implement Systems of Insights to support Data-Driven Decision making across the entire Supply Chain and the broad spectrum of business processes and functions. Today enterprises are under immense pressure from Regulatory Authorities, Cyberattacks, and the pivot in customer buying patterns to prefer Trusted, Responsible and Sustainable Products. This effectively means enterprises need to look at Security and Compliance by design – which is best implemented by transitioning to Systems of Insights and Compliance.
Skills and Talent are the new currency for the business. It is critical to capture the knowledge and experiences across the company both from a perspective of improving productivity and faster time to market.
Many enterprises implemented Learning Management Systems (LMS) in some shape or form. Still, they were seen as a secondary system for Talent Retention and tracking employee training. But to succeed in this new fast-paced innovation, businesses should now plan to implement Systems of Knowledge and Learning (SoKL).
SoKL reduces the costs of inefficiency by making company knowledge more available, accessible, and accurate.
Some of the benefits of Systems of knowledge and learning are:
Digital transformation has revolutionized businesses and IT Systems that support decision-making. Building digital Resilience into every aspect of IT infrastructure, systems, and software will enable organizations to rapidly meet changing market and customer needs and create sustainable competitive advantages in this new reality.
To be successful in the hyper-digitally dynamic ecosystem, enterprises need to relook at their Business IT systems and transform the outdated Systems of Records, System of Engagements taxonomy to differentiated Systems of Records and Intelligence, Systems of Engagement and Experience (SoEE), Systems of Innovation (SoI), Systems of Insights and Compliance (SoIC) and System of Knowledge and Learning (SoKL).
Keywords: Cloud, Digital Transformation, Digital Twins
Friday’s Change Reflection Quote - Leadership of Change - Leaders of Change Prioritise Bold Action
The Corix Partners Friday Reading List - April 19, 2024
Leadership in the Digital Age: Understanding People and Technology
Revolutionising Manufacturing: AI + IoT = The Sustainable Factory of Tomorrow
Effective Communication Tips
