• Six Principles to Orchestrate the Digital Value Chain

    Digital Manifesto

Sustainable success in digital markets requires more than adopting Agile Scrum or replacing the Business IT alignment paradigm with Business IT fusion. These are point solutions. Digitalization requires an integral approach, starting with the business and IT reframing their current belief set and operating model. A successful transformation of an analogue business model into a hybrid or digital equivalent touches on companies’ leadership style, culture, skill sets, strategy, business model, sourcing strategy and process model.

Equally important is not to get carried away by technology-related buzzwords. The Internet of Things, Social Media, Big Data, Cloud are all very important trends but they are no reason to forget everything from the past. Agile Scrum is taking the development world by storm, but there are still plenty of cases where  waterfall  development is preferable. Similarly, the business IT alignment paradigm from Henderson and Venkatraman remains the best choice to collaborate with the business for the stable, efficiency-driven part of the IT portfolio.

The need to differentiate can also be observed at company and industry levels. A manufacturer of roof tiles relies far less on IT for its financial success than Google. Or consider a startup versus an established company. The first starts with a clean sheet while the century old company has a mountain of legacy to consider.

Hence, the world is too complex and diverse to think only in black and white. It consists of many shades of grey too. What the digitalization of markets and business models require is doing certain things much less, and others much more. These practices are embodied by the following six principles.

  • Less defensive, more offensive
  • Less inside, more outside
  • Less uniform, more differentiated
  • Less static, more flow
  • Less isolation, more cohesion
  • Less cost, more value

The similarity with the Agile Manifesto is obvious, including the following quote: “while there is value in the items on the left, we value the items on the right more”. Every year, product lifecycles become shorter, products more complex and markets more uncertain. This requires the IT team and the company as a whole to invest in capabilities embodied by the items on the right.

02
Less Defensive, More Offensive

The attitude and skills required to lead in digital markets.
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02
Less Inside, More Outside

Less inside, more outside represents the ability to manage multiple heterogeneous customer segments.
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03
Less Uniform, More Differentiated

Less uniform, more differentiated represents the ability to deliver contextual IT solutions.

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04
Less Static, More Flow

Less static, more flow represents the ability to integrate multiple, interdependent, life cycles.

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05
Less Isolation, More Cohesion

Less isolation, more cohesion reflects the ability to operate multiple IT Business Models simultaneously.
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06
Less Cost, More Value

Less cost, more value represents the ability to realize value from a business perspective.

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Available January 2018