Roland CarandangThis blog was originally posted on Protiviti UK’s LinkedIn page.
To know thyself is the beginning of… business agility
Businesses continue to transform. The pandemic drove an overall increase in digitalization across advanced economies and companies now recognize this as a movement rather than a moment. Technological advancements, increasingly sophisticated insights from data, regulation and changes to ways of working and human sentiment are interrelated facets of modern life that require businesses to be ever adaptable.
The overall uplift in digitalization isn’t progressing evenly across sectors or even within businesses. For reasons ranging from cultural (e.g., differences in risk appetite of the executive team) to commercial (e.g., lags in technology and service renewal periods), organizations that were not born digital will have a messy mix of old and new technology. Sustained cost pressure in a cautiously optimistic economy means the introduction of new technology will be subject to intense scrutiny – portfolio governance – and only the ‘highest priority | high confidence’ initiatives will be sponsored. So, digitalization will happen piecemeal and will require integration into an ever more complex environment as well as decommissioning of overlapping technology. This is, of course, further complicated by mergers and acquisitions and, less obviously, divestures (as shared services get de-coupled and require one of the parties to implement something new).
Businesses are starting to successfully shift into a digital and innovation mindset, hiring digital leaders from within and across industries, sponsoring significant shifts in their technology stacks and ways of working. Less progress has been made, however, in something more foundational – understanding what technology is currently in place and how it enables the business.
Myopia and missed opportunities
We are not in this situation for a lack of trying. The Sarbanes-Oxley Act of 2002 (SOX) drove the mapping of processes and applications deemed critical to a company’s financial reporting processes. The Payment Card Industry’s Data Security Standard (PCI) pushed merchants and service providers to enumerate and protect their cardholder data networks. More recent requirements from the Bank of England (various policy statements) and the European Union’s Digital Operational Resilience Act (DORA) are adding focus via an operational and technology resilience lens.
On one hand, we have produced reams of Visio diagrams and spreadsheets. These are often done by project teams who create what they need at a point in time but aren’t motivated or funded to do this in a way that will sustain once the project is completed.
On the other hand, we spend billions on tools – Configuration Management Database (CMDB), business process management, enterprise architecture and governance, risk and compliance (GRC). Attack Surface Management is a relatively new tool in the Chief Information Security Officer’s arsenal that exists, arguably, because other efforts to understand the environment have failed.
Deploying anything across the enterprise for the long-term benefit of the business is difficult to sell and execute. As a result, software sales teams typically start with narrow use cases to land and hopefully expand. This combination of pressure results in isolated initiatives and insights. The shift to near real-time data gathering recognizes the limitations of manual efforts but falls short of generating enterprise insights because of a lack of business context. Machines, for now, lack the awareness to illustrate the relationship amongst applications, infrastructure, supplier, customers or regulators.
In either case, we end up with an overly narrow view of the business and its relationship with technology. There is a better way, and the combination of human and data driven approaches have a role to play.
Curtailing the cycle of complexity
The digitalization process is not self-generating or sustaining. On the contrary, systems thinkers may see a stock of enterprise capabilities intended to increase business agility being delayed by the inflow of… new capabilities. This is a pernicious loop akin to an investment product which promises decreasing returns as you invest more. This, of course, assumes the organization has the confidence to move past the more comfortable state of doing nothing.
Simplification can, on the hand, create the virtuous cycle needed for ongoing adaptability and resilience.
Shift the mindset – This is a solvable problem. By reimagining and repurposing enterprise software tools, Protiviti has created a framework to tie new and previous ‘discovery’ efforts into a sustainable business and technology insights platform. This combines:
- Human-driven engagement – Unsurprisingly, the gap in completely data-driven approaches – inability to overlay systems with a dynamic business context – is where human-driven intelligence proves vital. Workshops and surveys, effectively planned and executed, are still the favored approach to capturing components that are closest to users, for example, processes, applications, suppliers and risks.
- Data-driven automation – Any sustainable, modern approach to understanding business and technology requires the ability to automatically extract, transform and load (ETL) data from a variety of sources. This is particularly useful for capturing commodity system components, e.g. servers and data centers, but also any other indexed data. Advances have also been made, for example, in process mapping using reusable components and relationships.
Secure sponsorship – This shift in mindset requires the backing and active participation of executive leadership. The drivers are clear. By enumerating the complex relationships amongst business and system components, business can:
- More rapidly change business models
- Avoid costs and increased regulatory scrutiny resulting from unplanned outages
- Maximize returns on compliance efforts
Start small – While this capability will ultimately cut through the enterprise, it is a different approach to business intelligence and a ‘lean cycle’ or ‘model office’ approach will facilitate quick wins and continuous improvement. Executive sponsorship will ensure the lean approach doesn’t result in overly narrow efforts.
Sustain – To drive continuous benefits through this framework, the data needs to be managed like any other important business data. Large organizations have teams dedicated to Master Data Management, who enforce rules on data that cannot be configured into applications. Organizations with strategic data fabrics have proportionate data governance practices. The same or greater attention should be given to understand how your business interacts with technology.
Act like a start-up … with inherited business value and complexity
As we navigate through this era of ongoing transformation, businesses must embrace change while addressing complex integration challenges. By shifting our mindsets, securing executive sponsorship and driving sustainable outcomes like a lean start-up business, we can leverage technology effectively to drive business success. Remember the heritage of our businesses don’t only bring complexity, but also business value and richness that can be unlocked by combining human-driven engagement with data-driven automation. Remember also that digitalization is not just about surviving; it’s about thriving in an ever-evolving business landscape. Let’s embark on this journey together, guiding each other towards a future where technology empowers us to excel beyond our expectations.
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