Digital Transformation - Exploiting the Power of Digital Technology

Updated: Feb 9, 2019


Over the last several decades companies have invested in paper-on-glass solutions as part of their digital progression. However, what only a few companies have done is change their processes to exploit the power of their digital technology.

Dr. Goldratt, developer of the Theory of Constraints, speaks to this issue directly:

"Technology can bring benefit if, and only if, it diminishes a limitation. Long before the availability of technology, we developed modes of behavior (policies, measurements and rules) to help us accommodate our limitations. But what benefits will any technology bring if we neglect to change the rules?"

To achieve the benefits from technology, Dr. Goldratt suggests answering the following questions:

  1. What is the power of the technology?

  2. What limitation does the technology diminish?

  3. What rules enabled us to manage this limitation?

  4. What new rules will we need?

The answer to the last question is most critical. To increase your return on investment from digital transformation you must change the way you currently do things. To do otherwise will:

Limit your benefits to efficiency at the expense of improving effectiveness.

As an example, converting paper forms to electronic forms and routing them around electronically may improve overall process time but will not achieve the benefits available using the power of the new technology.

One of the limitations that paper-based systems had was its inability to use data to adapt the process to contend with risk. This often manifested itself in having complicated processes to accommodate every situation along with the need to incorporate multiple layers of approvals. However, using digital technology, it is possible to adapt work processes and incorporate the appropriate level of approvals based on collected information to contend with different levels of risk.


Risk-based Process

By removing the limitation of static workflows companies can benefit from using adaptive work processes resulting in even greater efficiency but also increased effectiveness at contending with uncertainty.

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