By now, most of us have seen how digital transformation can help organizations cut costs and boost productivity – often with astounding results. But, as some organizations have learned the hard way, simply implementing innovative technology is not enough to increase value.
For instance, implementing analytics may improve the insights you get from customer data, but it won’t change the way you interact with customers to create a competitive advantage. To achieve that objective, you must change your operating model, with a focus on how IT and business teams work together.
[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]
This step can be a make-or-break factor in digital transformation success. One company I observed achieved a 350 percent increase in productivity after adopting a digital operating model, for example.
To improve productivity, teams must be persistent, contiguous, and proximate. Let's explore what that means.
Persistent teams for digital transformation
The best way to ensure that an operational team aligns with business objectives is to build a persistent team – a team that stays together over time.
In the traditional project-oriented model, a team with qualified skills is assembled for a specific project. When the project is completed, team members are dispersed to work on other projects.
With each project, team members must:
- Learn the business and build relationships between IT and the business
- Understand the technical stack and build relationships with the stack owners
- Get to know the other team members and build relationships with them
These necessary tasks create a huge learning curve that can absorb up to 80-90 percent of a team’s time. As a result, the team spends most of its time understanding the new environment and building requirements rather than delivering on the promise.
In contrast, a persistent team – one that stays together for multiple projects in a digital transformation journey – offers huge productivity gains. The learning curve is minimal because people already understand the environment and have built relationships with each other, so they are much better at aligning with business objectives and reducing cycle time.
Contiguous and proximate teams
Contiguous team members work in the same location (ideally), or within one or two time zones of each other. Contiguous teams are generally more productive than distributed teams because proximity facilitates communication. In our work with many clients in various industries around the world, we find that companies experience friction when team members are more than two time zones away.
In an agile digital environment, teams can iterate solutions by changing requirements or solutions quickly and efficiently. This requires team members to be located close to each other.
A proximate team model extends this concept beyond team members to facilitating communication with the rest of the organization. To work effectively in a DevOps model with engineers located offshore, for example, at least some of the engineers and a product manager need to be located with the business.
Some of the world’s top companies achieve huge gains in productivity by building proximate teams. Building teams that are persistent, contiguous, and proximate requires a commitment to creating a working environment that enables the teams.
A real-world example
One well-known cloud service provider decided to restructure its teams when it developed a new product. The objective was to improve collaboration and innovation and speed up development. To achieve these goals, the company took the following steps:
- Divided the organization into small “feature” teams of 15-20 people collocated with the product manager and engineering team
- Eliminated offices to create an open work environment for teams
- Eliminated all titles except product manager and engineer
- Built teams that stayed together over the long haul
- Located some feature teams in China and India to optimize cloud services for local markets
Like its onshore teams, the company’s offshore feature teams are persistent, staying together beyond the project to reduce the learning curve and speed operations.
After shifting to a persistent team approach, the cloud company saw faster, more agile teams that created better solutions thanks to better alignment between technology and the business. Its pace of innovation skyrocketed and product quality improved dramatically, becoming more user-friendly and easier to use. Better still, the company's new cloud product began to capture market share.
The fact that all the company’s teams are persistent and contiguous sets it apart. And because its teams are highly productive, the company operates at a much lower cost.
[ Is your digital strategy up to date? Read also: 8 digital transformation trends for 2020. ]
