Digital transformation manager new role v4.0

Digital Transformation Manager - new role 1
Digital Transformation Manager -
new role
Jun. 26th, 2018
Eng. Mohammed Al-Arabi
BSP, CSSBB, MPM, PMP®, PMI-RMP®, PMI-SP®, PMI-PBA®, MCP,
MCTS, MS Project, Project+, ITIL®, PRINCE2®, MSP®, MOP®, P3O®,
PMOC®, ISO 21500, ICC, CQIA, Marketing Diploma(s)
marabi@NexusBusinessManagemenrt.com

 Computer and Systems Engineer with 30+ years experience
 MSc Candidate in Organization Psychology during 2019
 Professional Field:
 Co-founder at Nexus Business (www.NexusBusinessManagement.com)
 Main Focus:
 Training and Consultation services in management fields
 Short Bio:
 Developed Methodologies and Frameworks in Business, Project, and HR Management
 An author for two Arabic books; one in Marketing and one in Project Management
 A speaker at PMI EMEA (Malta - 2008) congress, P2P (Egypt - 2009) conference, Business
Women conference (Riyadh – 2011), Saudi Council of Engineers conference (Riyadh –
2014), Privatization Forum (Riyadh – 2016), and EPPMA conference (Virtual – 2017)
 Some of the consultation services that have been provided:
• assessment using OPM3® and P3M3®
• establishment of PMO, QMO, IMO and SMO
 Some courses that were delivered during 2016 – 2018:
• Strategic Planning, Balanced Scorecard, Governance, Portfolio Management, Project
Performance Management, PMOC®, PMP®, PRINCE2®, MoV®, Six Sigma, Total Quality
Management (TQM), Business Process Management (BPM), ITIL®, Writing reports
Mohammed Al-Arabi

Agenda
• Definitions and Case Study
– Digitization vs. Digitalization
– Change vs. Transformation
– Digitalization vs. Innovation
– Sustaining vs. Disruptive Innovation
– Business Model vs. Operating Model
– Digital Transformation
– Digital Transformation of Business Model
– Case Study
– Roadmap to the Digital Transformation
– Modeling the Digital Transformation
• Domains of Digital Transformation
– Harness Customer Networks
– Build Platforms not just Products
– Turn Data into Assets
– Innovate by Rapid Experimentation
– Adapt your Value Proposition
– Associate Domains with Strategic Themes
• Collaboration of CxOs
– Bimodal IT Definition
– Model layers (Run, differentiate, and
innovate)
– Digital Transformation Leader
– CxO Collaboration in the Business Model
– CxO Collaboration in the Strategy Map
• Questions & Answers

Definitions and Case Study
This part helps you better comprehend the digital
transformation subject and enhance the
understanding by presenting a real case study

Agenda
– Case Study
innovate)

Digitization vs. Digitalization
“Digitization is the connection of people,
process[s], data and things to provide
intelligence and actionable insights
enabling business outcomes” (Surber
2016)
Cisco (2016)
“Digitalization means the use of digital
technologies and of data (digitized and
natively digital) in order to create
revenue, improve business,
replace/transform business processes
(not simply digitizing them) and create
an environment for digital business,
whereby digital information is at the
core.”
I-SCOOP (2016)

Change vs. Transformation
Change fixes the past
• CHANGE requires becoming familiar
with the current situation, and
working to make things better, faster,
cheaper, or some other “er” word.
• The past is the fundamental
reference point and actions are
intended to alter what already
happened.
• When you choose CHANGE, your
future is really a reconditioned or
improved version of the past.
Transformation creates the future
• TRANSFORMATION doesn’t describe
the future by referencing the past
(better, faster, or cheaper); it births a
future that is entirely new.
• When you choose the path
of TRANSFORMATION, it becomes
easier to leave the past behind after
thoroughly considering the As Is.

Digitalization vs. Innovation

Sustaining vs. Disruptive Innovation
• Sustaining innovation, seeks to
improve existing products. Meaning,
it does not create new markets or
values, but rather merely develop
existing ones.
• Disruptive innovation means to
reinvent a technology, business
model, or simply invent it all
together.
• Disruptive innovation generates
new markets and values, in order to
disrupt existing ones.
No Cars No Real EstateNo Inventory

Business Model vs. Operating Model
• Who are the customers?
• What is the product mix and
pricing?
• What are the distribution
networks or platforms
required to commercialise
the business and derive
profit growth?
• What are the funding and
asset strategies required?
• How, where and when is the
organisation operating,
using people, process, data
and technology resources?
• How are current
performance and capacity?
• Where are the current
problems that need
attention?

Digital Transformation
A more data-oriented approach allows for the
opportunity to gain new knowledge and in turn
reimagine innovative business models and operations

Digital Transformation of Business Model /1
• Objective Dimension:
WHICH objective
dimensions initiate the
Transformation:
– Time: e.g. faster services
deliveries, faster production
– Finance: e.g. cost savings,
revenue increase
– Space: e.g. networking,
automation
– Quality: e.g. product quality,
relationship quality, process
quality.
• Procedure: HOW
Transformation occurs:
– Sequence of tasks and
decisions which are related to
each other in a logical and
temporal context
– Use of technologies/enablers
to generate new
applications/services
– Acquisitions and exchange of
data including analyses and
use for option calculations.

Digital Transformation of Business Model /2
• Transformation Degree: HOW
intense is the transformation:
– Incremental (slight)
– Radical (fundamental)
• Reference Unit: The
Transformation is new for
WHOM:
– Customers
– Own business
– Partners
– Industry
– Competitors
• Objects: WHAT is transformed:
– Individual Elements (e.g.
processes, customer
relationships, products)
– Entire Business Model
– Value Chains
– Value Creation Networks

CASE STUDY
ThyssenKrupp Elevator MAX

Introduction
• ThyssenKrupp is a German industrial
group with different divisions. The
Elevator Technology division produces
passenger and freight elevators as well
as escalators for office buildings,
residential buildings, hotels, airports,
shopping centers, and other facilities.
• In addition to the sale and installation
of elevators and escalators,
maintenance, repair, and modernization
services are also offered.
(ThyssenKrupp 2016a)

Initial Situation and Problem Definition
• ThyssenKrupp’s current business model mainly focused on the
manufacturing of elevators, installing them, and carrying out
maintenance when needed.
• An increasing number of tall buildings in major cities led to an
increased demand for high performance elevators and customers
and users demanded superior elevator reliability.
• Additionally, ThyssenKrupp’s competitors also offered elevator
maintenance services, services which are high margin compared to
pure product sales.

Objective and Solution Approach
• The objective of ThyssenKrupp’s elevator business was to
reduce the outage duration of their elevators by identifying
causes of potential failure in a timely manner. This would
ultimately allow for faster maintenance and repair times.

Results /1
• ThyssenKrupp’s MAX Elevator Monitoring System is an
example of a maintenance-oriented digitization initiative.
• MAX collects relevant technical and mechanical information
through sensors to reduce maintenance backlogs and improve
ThyssenKrupp’s overall maintenance services.

Results /2
• An interactive screen/
billboard could be
implemented into elevators.
• The interactive elevator
billboard
– could be used by
ThyssenKrupp to collect
customer satisfaction
feedback
– could be leased or sold
outright to end users or third-
party advertising agencies.

Business Model Dimensions /1
• Customer dimension
– Communication with regards to
maintenance repairs and improved
their customer relations
– Billboard space in the elevators
creates a new customer channel
• Benefit dimension
– The enhanced transparency with
regards to the maintenance
requirements
– Elevator riders has an opportunity to
provide personal feedback
• Value-creation dimension
– The gathered data and simultaneous
create tremendous value
– Possessing the internal capabilities
(e.g. resources) to develop
interactive elevator billboard space
• Partner dimension
– Improving the relations between
ThyssenKrupp and their partners.
• Financial dimension
– The revenue stream created by the
MAX system
– An interactive elevator billboard
space provides an additional revenue

Business Model Dimensions /2

Roadmap to the Digital Transformation

Modeling the Digital Transformation

Domains of Digital Transformation
This part explains how digital technologies are
redefining many of the underlying principles of
strategy across these five domains, and changing the
rules by which companies must operate in order to
succeed. Many old constraints have been lifted, and
new possibilities are now available

Agenda
– Case Study
innovate)

Rogers, David L.. The Digital Transformation Playbook: Rethink Your Business for the Digital Age
(Columbia Business School Publishing) (pp. 5-6). Columbia University Press. Kindle Edition.

Harness
Customer
Networks

Harness Customer Networks /1
• Key concept #1: Reinvented market funnel

• Key concept #2: Path to purchase

• Key concept #3:
Core behaviors of
customer networks

Build
Platforms
not just
Products

Build Platforms not just Products /1
• Key concept #1:
Platform business
models
Platform means
“something on which you
can build.”

• Key concept #2: (In)direct network effects
The platforms value increases as more customers use them. This
phenomenon is commonly called network effects.

• Key concept #3: Dis(intermediation)
A new business manages to insert itself as an intermediary
between the customers and a company that used to sell directly
to them.

• Key concept #4:
Competitive value trains
It provides a lens for understanding the
simultaneous competition and
cooperation among supply chain
partners, traditional rivals, and
asymmetric competitors.
Simple Value Trains - without competitors
Value Trains - with competitors

Turn
Data
into
Assets

Turn Data into Assets /1
• Key concept #1: Templates of data value
– Insight - Revealing the Invisible: Understanding customers’
psychology, their behaviors, and the impact of business actions
– Targeting - Narrowing the Field: Narrowing your audience, knowing
who to reach, and using advanced segmentation
– Personalization - Tailoring to Fit: Treating different customers
differently to increase relevance and results
– Context - Providing a Reference Frame: Relating one customer’s data
to the data of a larger population

• Key concept #2: Drivers of big data

• Key concept #3: Data-driven decision making

Innovate
by Rapid
Experimentation

Innovate by Rapid Experimentation /1
• Key concept #1: Divergent experimentation

• Key concept #2: Convergent experimentation

• Key concept #3: Minimum viable prototype
Traditional development roadmap MVP development Roadmap

• Key concept #4: Paths to scaling up

Adapt
your
Value
Proposition

Adapt your Value Proposition /1
• Key concept #1: Concepts of market value /1
Concept Concept pros and cons (in italics) Examples - Automotive
Product • Important in portfolio decisions
• Ignores customers and value to
them
• Leads to strategic myopia
• SUV
• Sedan
• Minivan
Customer • Customer-centric
• Helps identify whom to focus on
• Not focused on value
• College student drivers
• Parents with small kids
Use case • Value-centric and customer-centric
• Helps with better segmentation
• Obscures that a customer may have
multiple use cases
• Night out with friends
• Driving and carpooling
with kids

• Key concept #1: Concepts of market value /2
Concept Concept pros and cons (in italics) Examples - Automotive
Job to be
done
• Value-centric and customer-centric
• Helps identify nontraditional
competitors
• Lacks concrete specifics
• Safely and comfortably
transport several kids from
points A to B
Value
proposition
• Value-centric and customer-centric
• Helps assess threats and ideate
new innovations outside of existing
products
• More concrete and specific
• (includes multiple elements)
• Reliable transportation
• Accommodates several
passengers
• Safety in an accident
• Personalization of car zones
(e.g., for climate or audio)
• Communication for driver
(e.g., hands-free calling)
• Entertainment for passengers
(e.g., Wi-Fi or video)

• Key concept #2: Paths out of a declining market

• Key concept #3:
Steps to value
proposition

Associate Domains with Strategic Themes

Collaboration of CxOs
This part distinguishes among the CIO role, CMO
role and CDO role in order for them to collaborate
in a digital transformation environment

Agenda
– Case Study
innovate)

Bimodal IT Definition
Bimodal IT refers to having two modes of IT, each
designed to develop and deliver information and
technology-intensive services in its own way.
– Mode 1 is traditional, emphasizing safety and accuracy.
– Mode 2 is non-sequential, emphasizing agility and speed.

Model layers (Run, differentiate, and innovate)

Digital Transformation Leader
CIO
Chief Information Officer
CMO
Chief Marketing Officer
CDO
Chief Digital Officer
+Governance-
-Change+

CxO Collaboration in the Business Model
CMOCDO
CIO
Canvas Business Model

CxO Collaboration in the Strategy Map
CIO
CMO
CDO

Questions & Answers
Should you have any other queries, please
contact me at:
marabi@NexusBusinessManagement.com

Digital transformation manager new role v4.0

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