Week-3 - Organizational Responsiveness

and Technology
‫كلية العلوم االدارية والمالية‬ |

Chapter-1-The Big Picture

‫الجامعة السعودية االلكترونية‬
‫الجامعة السعودية االلكترونية‬
Chapter-2-Tech @core

ECOM425 –Department of E-Commerce

26/12/2021
Learning Objectives - The Big Picture

• EDGE is an operating model that connects strategy to delivery.

• To focus Customer value is an outcome rather than an output.

• To modify your fitness functions to encourage the responsiveness

you desire.

• Building capabilities for the future, from technical ones to portfolio

Prioritization.

• To know the importance of customer value and adaptability.

Digital Enterprise
Digital enterprise transformation is the Fourth Industrial Revolution.

Questions for attaining the complete Digital enterprise:

• How are you responding?
• Do you have your digital strategy in place?
• How do you plan to “realize” that strategy? Is your enterprise getting incremental
outcomes in a world of exponential opportunities?
• Whether your goals are for your organization to become a digital enterprise, foster
widespread innovation, or implement a digital strategy, is your transformation vision
thwarted by poor execution?

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE:
Value-Driven Digital Transformation, (1st edition) published by Addison-Wesley
Professional.
 Transformation from the Industrial Age to the Digital
Age:

-Leveraging technology and creating new business models are

important.

-Technological advances generate opportunities, however enterprises’

capabilities—from developing a digital strategy, to portfolio
management, to software delivery—often struggle to keep pace.

-Transforming requires continuous innovation and fast adaptation to the

changing environment.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 4
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 AN OPERATING MODEL.

The enterprises may suffer from strategic

misalignment between their business and
technology functions.

The operating model that stands between vision

and delivery—the critical link that is often
missing.

EDGE focuses on building an enterprise that can

respond quickly to customers’ needs and
emerging technology by defining an operating
model that bridges this strategy–delivery gap. Figure : EDGE: An operating
model.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value-Driven Digital
Transformation, (1st edition) published by Addison-Wesley Professional.
 Building Organizational Responsiveness
- Several agile/lean scaling frameworks focus on planning for and building
“bigger” things.
- The strategy must be broken down into a portfolio of small pieces of
value that can be prioritized.

- This is the model of how

organizations can better
pursue new and existing
market opportunities and
deliver higher value for the
investment made.

Figure :Building a responsive organization.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 6
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
Toward a Customer-Value Fitness Function
• Customer value is the key driver that will lead to improved ROI.
• A fitness function summarizes a specific measure to evaluate how close
a solution is to achieving a stated goal.
• The fitness functions or business goals (Table) from pre-digital to digital
times have changed from focusing on ROI to focusing on customer
value.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 7
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Contn…
• Customer value has both tangible (financial) and intangible
components, intangibles are critical to long-term success, and the
ability to deliver customer value is a critical capability for most
companies.
• The customer value and speed/adaptability as the primary
objectives and ROI and cost/efficiency as constraints.
• The business fitness functions have been transitioning, the
technology transition has been moving from cost and efficiency to
speed and adaptability.
ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 8
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Gap in Enterprise
sustainability

- The growing opportunity–capability gap has

become a critical issue for executive leadership
(Figure). Overcoming this gap requires
innovative thinking and putting tech at your
business’s core, from strategy to delivery.

- Switching IT from a cost/efficiency driver to

one of speed/adaptability requires courageous
technology leaders. Figure: The widening gap between
opportunities and the capability to
- Customer value is key to the present. explore or exploit these
opportunities.
- Adaptability is key to the future.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 9
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Final Thoughts –Big Picture
• An operating model that connects strategy to delivery.

• The number of features that a delivery team produces is an output, whereas the
value that they deliver is an outcome.

• Fundamental change must be driven by courageous executives who are supported

by courageous leaders at all levels.

• The fundamental approach need can be summarized in two simple words:

Envision–Explore

• Moving into the Fourth Industrial Revolution, due to uncertainty and the need for
speed and innovation is the dominating force, portfolio and program management
must be much more responsive than the past.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 10
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
Learning Objectives - Tech @core
• To determine Tech@Core as a centerpiece of your digital
transformation

• Understanding of how technology might impact organizations.

• To understand the gap in technology knowledge between technology

and business groups
 A Digital Enterprise: Technology at the Core

1. Tech@core means that technology is your business no matter what your business.
2. Figure 2-1 suggests that the transition from tech in a supporting role to Tech@Core
followed a linear progression.
3. Long-term businesses will have portions of their technology assets in each of these
categories, their overall approach to tech is the key.
ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 12
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Developing a Technology Strategy
Agilists plan and they document, but not certainly turn the process into a
lengthy, document-centric one.

Fast feedback, iteration, and learning , communicate and collaborate are

important in product development.

To broaden and strengthen your technology capabilities, you need to take the following
steps:

• Shift your technology fitness function to speed and adaptability.

• Accelerate your technology edge over competitors.
• Maintain awareness and take advantage of technology shifts and trends.
• Develop a digital technology platform strategy.
• Reduce technical debt to increase speed and adaptability.
• Get your key tech staff involved and constantly improving their capabilities.
ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value-
13
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Seismic Shifts and
Trends
Shifts and trends evolve together.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 14
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Reducing Technical Debt

Technical debt is the degradation of technology over time due to a lack of

investment in maintaining adaptability and quality.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 15
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Case Study :Limits to Growth

In the mid-2000s, Salesforce.com had a significant challenge: Its rapid growth was
outpacing its software development delivery capability. The drag of its legacy
system’s technical debt and its software development process both contributed to
the company’s problems. But solving this multifaceted problem resulted in Salesforce
being named by Forbes magazine as the most innovative company in the world for
the years 2011–2015 (and in the top three since then).
Salesforce credited its adoption of agile development practices as significantly
contributing to the company’s turnaround. Improving the quality of new code
reduced the introduction of new tech debt, while introducing strategies for reducing
legacy technical debt helped improve delivery times. Of course, this fi rm’s success
was the result of multiple business and technology factors, but introducing agility in
its many forms was critical.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 16
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Investment Decisions to Revitalize Core Enterprise
Systems

• Rewriting these systems, is an expensive and usually high-risk strategy

—one to be pursued carefully.

• Fortunately, a wide range of options between doing nothing and

rewriting are available—migrating to a services architecture (including
microservices), evolutionary architecture, decoupling and wrapping,
employing continuous delivery, and more.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 17
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Digital Technology Platforms

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 18
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Digital Technology Platforms.
Contn..

In our experience, the organizations that have been successful at

digital transformation have unlocked their key assets by taking
three steps:

• Removing friction from engineering teams

• Building an ecosystem around assets

• Experimenting efficiently and effectively with those assets

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 19
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Removing Friction

• Friction is usually considered as resistance to

movement, but it can also be considered as a conflict
between people.

• There are many ways to reduce friction that focus on

removing barriers to faster delivery and improving
adaptability.

• Another option is to correct the false tradeoff between

speed and quality.
ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 20
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Building an Asset Ecosystem

An ecosystem is a system or
network of interconnecting and
interacting parts.
First, look at each asset class and
determine how integral this asset
class is implementing goals across
the LVT:
•Impacts many goals (customer
assets, for example)
• Impacts several goals
• Impacts very few goals

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 21
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Building an Asset Ecosystem. Contn..

Second, for each business capability or product line, you need to anticipate the
future rate of change:
Extremely volatile ,Volatile , Moderately volatile and Relatively stable

the third stage of the asset analysis is to estimate the relative adaptability of each
asset or asset class.
• Highly adaptable—relatively quick and inexpensive to change
• Adaptable—moderately expensive and time consuming to change
• Somewhat adaptable—difficult and expensive to change
• Not adaptable—very expensive and time consuming to change.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 22
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Experimenting

One of the premises of EDGE is that adaptation requires experimentation, and for that
experimentation to succeed, there need an experimental mindset, an experimental
process, and experimental tools.

The second requirement is an experimental process

The third requirement is a platform

Need these technology components for every type of development— legacy back-
office systems, online applications, mobile applications, big data and analytical
systems, and applications with an Internet of Things (IoT) piece.

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 23
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.
 Who Creates Your Technology Strategy?

Delivering innovative, customer-value–oriented products

demands a high-trust, collaborative relationship between
business and IT.

Iterative, experimental processes focused on value delivery

require a different mindset about “plans” and “contracts.”

ECOM425- Jim Robert Highsmith., Linda Luu., David Robinson. (2020). EDGE: Value- 24
Driven Digital Transformation, (1st edition) published by Addison-Wesley Professional.