Imagine the following situation: you have a quarterly business review and must present the results and performance of your business unit. No panic, you think, but at the same time, you know that you do not have enough data and you keep receiving contradictory and customized reports from different departments and colleagues. On top of that, it seems that everyone has different definitions and interpretations of the data. So you no longer know who and what you can trust, what to believe, and whether everyone is looking at the same data.
This is an example that we as Deep Value often encounter.
The reason is that most organizations have their processes embedded in different business applications. Old legacy systems, ERPs, HR systems, maybe a special Procure-to-Pay system, or even a nice BI system. This leads to fragmented and inconsistent processes in your business and in your data and IT infrastructure. To avoid this, you need to define and agree on your goals and plan to achieve this.
Step 1: Create a digital Business canvas
The first step is to capture your business model in a digital canvas. This enables you to create an unambiguous picture of all the different disciplines and departments. You will describe not only your business model but also your objectives. For example, to focus more on the customer, become a market leader, comply with laws and regulations, or organize processes as efficiently as possible to reduce costs. Once this digital business model has been validated and everyone in your organization has committed to it, you can move on to the next step in creating a Digital Twin.
What are you going to measure?
Next, you are going to determine what to measure and how to achieve it. After all, you can only work effectively on your goals if you know where you are today and in which direction you want to go. This also marks the beginning of your strategic plan.
This gives immediate insight into the current situation and how much effort is needed to achieve your goals. By performing process analysis, you immediately understand where the bottlenecks are that prevent the goals from being reached. Maybe because the processes are not executed in a standardized and consistent manner? Or that you must request additional information or a signature from your customer during the process.
Determining KPIs
After defining your strategy and capture it in your digital canvas, you will define the most important KPIs. If increasing customer satisfaction is an important goal, you use Net Promoter Score (NPS) to determine which processes contribute positively or negatively. You can also look at the financial, HR, and compliance KPIs. You determine the scope by starting with one department or business unit and then use the same approach to help the rest of the organization move forward.
Step 2: Monitoring
After clearly defining the business strategy, goals, and KPIs, you are ready to enter the second phase of your digital transformation. This phase involves unlocking data from the relevant source systems, so your digital canvas and KPIs come to life. Once you have done that, you will immediately see where you’re performing well, and which processes you need to improve to achieve your goals.
You also can decide at what level of detail you want to view your canvas. Whether that is at the strategic or operational level. You get the insight where processes are underperforming and which buttons you need to push to remove the bottlenecks to make decisions faster.
How do you start the process?
The world has changed very rapidly in the past year. To cope with this kind of change and to be able to adjust quickly is to start the digital twin project on a small scale. This allows you to establish a much closer collaboration between the business and IT. We advise you to start with your business model instead of diving straight into the data and creating reports and dashboards.
What is the impact on IT?
You may choose to implement a Digital Twin outside your current IT landscape. Once it becomes clear where the bottlenecks and blind spots are in the processes and data, it can be seamlessly incorporated into your current IT architecture. We leverage existing data and reporting systems such as BI, data warehouses, and data lakes. So you don’t have to start from scratch when implementing a Digital Twin.
Step 3: Simulate and improve with a Digital Twin
We are in the middle of a pandemic; companies are facing many uncertainties and challenges. They are forced to re-evaluate their business model, products, and services. Service organizations, for example, can use the Digital Twin to track the entire chain from on-boarding to after-sales of their consumers in real time. The organization can better utilize the regional service capacity for customers and meet the agreed service levels.
No one can predict the future. However, with a Digital Twin of your organization, you can simulate your processes to get predictable outcomes. Many questions that would have remained unanswered can now be answered with simulations. Questions such as what are the consequences of introducing a new product or service? Or questions related to capacity, finances, risks, and meeting SLAs. With a Digital Twin, you can predict the effects of your decisions now and protect against bad investments.
Step 4: Your own Digital Twin
When implementing a Digital Twin, organizations find it very important that process owners are closely involved, so that after the implementation they have enough knowledge to work with the system independently.
That is why Deep Value sets up a Competence Center, to focus on training and knowledge transfer from day one. Of course, Deep Value stays involved for support and specific expertise. First, we show you how to do it, then we do it together so that afterward you can do it yourself.
If you recognize yourself and your organization in this story, contact us. We offer full insight into your business processes, so you not only have the right data but also know what decisions you need to make to achieve your business goals.
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