Organizations are becoming fast aware that they must digitize. This change is happening at a disorienting speed as the online and digital increasingly intertwine with our physical and tangible world. Some of our oldest, even ancient industries, like printing and clothes manufacturing, are becoming increasingly digitized.
Process-based to overcome silos
When companies embark on digitization, it quickly becomes apparent that they need to work on their processes. Through re-examinging and streamlining processes, digitization becomes an opportunity to completely re-think the way an organization is structured to achieve its goal.
Silos are the greatest barrier to effective flow in communication and throughput. When organizations come to understand the limiting effect of artificial barriers in their structure, they can open up to creating more effective workflows supported by technology. Technology is often seen as a way of increasing efficiencies and cutting costs. This is an impoverished view. Digitization can be a way to create more effective processes, but more than that, it can be an opportunity to actually grow sales, engage customers better and create new solutions. Companies can learn to embrace a new organizational model built on processes, effective interdependencies and projects. In other words, a systemic organization that enables Quality, Involvement and Flow.
Rethinking the role of the CIO
For this to happen, the role of the CIO has to change drastically from the person who manages IT as required by the company strategy, to the person who is indispensable for creating strategy and designing the IT infrastructure to enable better business solutions. The CIO is naturally emerging as a leadership figure for future organizations thanks to their unique end-to-end understanding of the organization as a whole. However, to occupy this role satisfactorily, CIOs will need to acquire a series of interpersonal and business skills that have not always been part of their job description.
The Digital Thread
In an interview in CIO.com, the CIO of GE, Jim Fowler, uses the term “digital thread” to describe a new kind of interdependence at the heart of digitization:
I am excited about the way IT is coming together with operations technology in the physical world. Inside GE, we refer to this as the digital thread, where you take the data that flows from the moment the first part of a piece of equipment was designed through its entire life cycle of operations. That includes the operational data, the sensing data that comes off the factory floor when the equipment was produced, and the data that comes off the asset when it’s being used by our customers. All of that data allows us to work in ways that we’ve never seen before.
The digital thread is more than just an innovation that comes with digitization. It is a cognitive shift because it describes a world where there is no longer a separation between the physical and the digital. This is the new reality that will increasingly involve us all. To understand, be at ease with and operate successfully within this digital reality, organizations must learn to think differently. They must be able to challenge their assumptions in order to innovate continuously. We believe that to be successful at this over time requires not just the desire but also a method. The Thinking Processes provided by the Theory of Constraints supply just such a method.
We are grateful to our long-time friends Hyphen-Italia, experts in digitization. Through their cutting edge work, they have embodied over the years the meaning of digitization and the opportunities that lie ahead when systemic understanding and practice are applied to enterprises.
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About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management and author of the business novel+ website The Human Constraint that has sold in over 20 countries. She is co-author with Dr. Domenico Lepore, founder, and Dr. Giovanni Siepe of ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York.