Digital transformation needs business models
There’s something missing from digital transformation.
The commonly used defition of ‘digital’ within UK government is:
“applying the culture, processes, business models, and technologies of the internet era to respond to people’s raised expectations.” Tom Loosemore
It follows that ‘digital transformation’ of public services requires the transformation of culture, processes, business models, and technologies. However, it could be argued that we’re focussed on the transformation of technology. Spend controls and service standard have had a huge impact on culture and processes of government (albeit mainly within the digital/technology ‘bits’ of government). What strikes me is that transformation of business models remains conspicuously absent from digital transformation to date. I have an assumption that transforming business models would help us to bring together pieces of digital transformation to date, creating a whole that is more than the some of its parts. Specifically, I think that business models will provide focus on two important perspectives: (i) value; (ii) time.
You can find my take on what a business model means in practice here.
Digital transformation is often a way of describing attempts to get a large organisation to work with agility. The first principle of the Agile Manifesto for Software Development is that increasing value is our highest priority. But the Agile Manifesto forgets to tell us how to figure out what’s valuable. Subsequent frameworks based on the Agile Manifesto (like Scrum) also assume that ‘value’ is figured out somewhere else, and focus instead on telling us how to deliver ‘stuff’ through ever more efficient build-test-learn feedback loops.
Transforming business models requires us to figure out if our ‘stuff’ is actually valuable:
- Our first challenge is to figure out what ‘value’ means in public services, where our focus isn’t generating profit or generating a return for shareholders - read about how to measure value without profit
- Our second challenge is to figure out how to measure ‘public value’ when working on ths software features of public services - read about how to measure the value of software here
Value means different things during the lifetime of a product and this is critical for thinking about how we make investment decisions in software features of public services. Transforming business models requires us to figure out how we manage risk to outcomes through understanding characteristics of the software features of public services as they age. Our challenge is to understand that software products require different delivery conditions throughout their lifetime and to stop thinking that we can have one-size fits all organisational conditions - read about how value changes over time and how we can use this to help balance a digital portfolio here.