Managing Radical Technological Change
- Details
- Written by Peter Carr
Information technology influenced disruption is impacting most organizations today. It is helping to accelerate globalization, intensify competition and transform markets, business models, ecosystems, products, services and processes. Most leaders understand that rapid advances in technological capabilities provide revolutionary organizational performance opportunities and also introduce threats that may be existential. For many, investing in and successfully applying information technology is now a much greater priority.
We are seeing this at the University of Waterloo through the requests from organizations that are asking us how information technology can be applied and used in digital transformation. Organizations are increasingly aware of the technological advances that are occurring (Internet of Things, Data Analytics, Automation, Artificial Intelligence, AR/VR, etc.) – their questions are about which should be their priority, what they should do with them, and how?
For many years, we have understood that successful application of information technology requires effective collaboration between the technology people and the business people. The technology people understand the functionality of the technology and have the skills to create, install and support it. The business people consider how that functionality might be applied and then manage its use. In organizations where change is gradual and innovation is incremental (sometimes known as sustaining innovation), research tells us that information technology projects achieve a modest degree of success – between 30 % and 70 % are regarded as successful – but these projects are becoming more challenging.
Our own research shows that organizations are changing at an increasing pace. They are reporting that projects are getting larger in scale, becoming very complex, and are more strategically important. This reflects the intensification of competition caused by technological advances and globalization. It also means that the changes that organizations desire require higher levels of organizational and individual capability than what was necessary in the past.
Digital transformation can take many forms; some gradual, and others both radical and complex. Some are carried out within existing business models, while others are revolutionary in their scope, requiring new capabilities in order to be successful. The following areas need explicit attention:
- The Business: If you don’t know the business, how can you know how the technology should be applied? With radical change, knowledge of the business and its markets needs to be very strong.
- Innovation: Improving innovation in organizations has received substantial attention in recent years. Innovation is now understood to be critical to business performance and national economic success. Radical change will be more successful in organizations that are more open to innovation and are able to imagine and achieve large scale change.
- Business Performance Improvement Options: Information technology isn’t simply an opportunity to automate existing processes. It also offers an opportunity to improve and transform most business areas. Knowledge of effective business organization and management will help achieve radical transformation by intelligently selecting the areas to change.
- Integration consistency: Change in one area will often impact others. Having a consistent approach to the changes happening across the organization will enable conflicts to be minimized and synergies to be achieved.
- Leadership: Effective change requires strong leadership to motivate and empower people throughout the organization. Leaders need to commit to the transformation agenda and be prepared to work to make it happen.
Of the five areas listed above, knowledge of performance improvement is often underestimated in the application of information technology. The knowledge that exists of best-practices can be used to design and manage the application of technology. For example, in operations, lean and more responsive approaches are being used in many businesses. Companies need to consider collaborative approaches to supply chain design, product development, social media marketing, and employee engagement. Substantial opportunities exist from an integrated approach across the organization. As technology application expands, businesses will quickly learn more about its effective use.
The options that are available can be illustrated in the following case: Jeff is the operations manager at Waterloo Automotive Components who manufacture brake assemblies for automotive producers in North America. He is considering how WAC might apply the Industrial Internet of Things. He is aware that IIOT technologies will allow him to install sensors in many of the processes that he manages, including the machining work done on the brake parts and the assembly and inspection areas. The sensors might provide data on the machines, materials and people in Jeff’s operation.
As with many operations managers today, Jeff’s job performance is assessed by his manager based on continuous improvement of his performance metrics. He is expected to show improvement in costs and quality while making periodic updates to the designs of the brakes that he is producing. He is considering how the knowledge provided by the sensors might be utilized and has many choices to make. Some are relatively straightforward – data can be provided to maintenance engineers to improve the reliability of the major machines – while others are more complex.
Data will enable processes to be studied to reduce costs and enhance quality. It is important to define who will be responsible for interpreting the data that the sensors provide and for determining, managing and sustaining the improvements that are made. Should these be the operators, the engineers, or other specialists? What will need to be done to manage the change in roles and responsibilities? How will the changes made be kept consistent with overall organizational priorities and systems of work? How will the performance measurement systems of the organization be impacted?
This limited example illustrates the issues involved in the application of one technological change. They are multiplied when undertaking organizational transformation.
At Waterloo, we have developed our approaches to understand effective practices and to share that knowledge. Students work with many organizations on projects that enable change. Our new 10 week program in Technology Innovation and Entrepreneurship, offered online, is also intended to help implement business change. Our archive of over 1500 case studies on the use of social media for performance improvement in organizations, and a compilation of over 200 interviews on my YouTube Channel are freely available. They focus on informing the public about the radical application of information technology. If you are interested in discussing your work to digitally transform your organization, please get in touch.
Peter Carr’s work focusses on the impact of information technology in society and its application within organisations. He is the Director of three online certificate programs at the University of Waterloo in Technology Entrepreneurship, Project Leadership and Social Media for Business Performance, for working professionals.
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