We believe with the advent of hyperconnectivity, the process of business change, rather than get easier, will become of whole magnitude more difficult for organisations. So difficult in fact, it may threaten their very existence – as we shall explain.
The subject of change
No one could argue changing the way businesses and governments work isn’t challenging. Behind every product there lays a trail of dependency. A change at the front end could ripple all the way down the value chain, from after-sales services, through
to inbound logistics and even down the supply chain. Any significant transformation requires a wholesale review of this chain
and the resources involved. Mature organisations study the affect on processes, organisation, technology and information. As
the business change lifecycle progresses these impact assessments increase in their depth of analysis. Sounds logical?
The emergence of hyperconnectivity
In the last ten years organisations have been busy developing integrated supply chains, implementing ERP, unifying customer experience with CRM and multi-channel platforms. Larger companies, in attempt to leverage economies of scale have implemented the same system across many business units, business entities and even countries. Previously siloed systems
and siloed activities are now unified or linked together and automated.
In parallel with this, information technology and operational technology have continued their convergence and now Internet of Things is starting to take centre stage. Together with big data systems and artificial intelligence (or the less scarily named machine learning) we are seeing the emergence of increasingly complex systems.
A decade of integration has created a massive network of inter-dependency that was not previously there.
Complex systems: fragile to change and dangerous to replace
The definition of mainframe is in question these days with the advent of cloud-based virtualisation, but every large organisation did and probably still does run a mainframe somewhere. Many of these systems date back to the 1970s and 1980s and one
may well ask, why are they still running? The answer is of course that no one then expected the systems to be running for so long. Many organisations face a demographic time bomb: those who were around when these legacy systems were developed are now retired, nearing retirement or have just gone on to greater things. These systems are complex and in attempts to continue their lifespan, many have become surrounded by a web of interfaces and layers of software that nobody understands how to change. Because they are so complex and so undocumented trying to change or replace them causes catastrophic failures.
Take British Airways (BA): its new IT system has completely crashed five times inside a year, and in May 2017 it added a sixth global crash to the roster.
It appears that BA has outsourced its IT to India – possibly under the expectation that risk is transferred and any problems that occur are the problem of outsourcing company to solve? As can be demonstrated by a total service failure, the detrimental effect on customer confidence and corporate reputation, any company who outsources these kinds of problems may be misplacing their trust. So, what’s going on?
Changing a hyperconnectivity by way of a model
In today’s world, an organisation is made up of a massive network of inter-connected network of nodes and links. Our two-dimensional model below doesn’t do the scale justice, but image a multi-dimensional network of millions of nodes and even more connections.
In BA’s world, these nodes could represent passengers, flights, flight paths, seats, baggage, tickets, airports, terminals, gates, staff, planes and much more. When change is required, the business change team has to understand the nature of the change and home in on where the business change needs to occur.
Let’s pick a point of change in our model. Ordinarily there will be many points of change, but let’s pick one for illustration and after reading this you can image ten or a hundred times fold.
Assuming this point is a process, on inspection there is a temptation to remove an existing process and replace it with a new or upgraded process. This was never easy but now - the game has changed.
Any attempt to extract and replace the process will disrupt the network. Change efforts have to understand every link or interface and disentangle the nodes under change. This cannot be done in haste and not without a formal impact analysis. First the node directly identified for change must be established. Then, the neighbouring nodes must be examined and the footprint of change revealed.
The problem with impact analysis is you always uncover more than you expect. The more you look the worse it gets: a small area of change rapidly expands as analysis reveals the nature and extent of the inter-dependencies. The blast area it if you like.
Those involved in changing systems and organisations may well say, “we have a formal impact analysis process now”. We don’t disagree, but this is about degrees: as organisations become more inter-connected or hyperconnected existing practices of change analysis will not suffice.
It has been demonstrated time and time again. Organisations contain complex webs of dependency and susceptible to systemic failure - new tooling and new information is required to make the invisible visible. Organisations can no longer “fly by the seat of their pants” by taking short cuts. More method and discipline is required in determining what and how change occurs. More importantly more rigour is required in the very methods used to build organisational capability and its processes and systems.
Polished presentations, animated PDFs and slick spreadsheets may look impressive but the fact is they are out-of-date before they are even published. Since they represent unstructured, independent data sets and pictures – these glossy outputs are inherently full of misalignments, contradictions and errors.
The danger to organisations using these kinds of output is clear – poor information only enables poor decision-making. These architectural artifacts may look great and convince senior management but they are never going to reveal the true complexity, cost and time to make change. More likely they set false expectation and future disappointment.
We believe the only way to understand business change is to 'make the invisible complexity visible'. Hyperconnectivity is not going away. Over the coming months we shall be blogging about how to manage it.
Kipstor specialises in the development of formal architectural business models used to plan, execute change and operate new ways of working. If your change efforts are struggling with budget overruns and late delivery, contact us.
Written by Graham Meaden
Graham is an international professional with 25 years of experience. Graham has provided management and design‑authority leadership on programmes and projects delivering solutions to end-user, consultancy and consortium organisations. Over a broad spectrum of technology, Graham has acted as a translator between business leaders and technologists.