October 10, 2016

Internal silos slow down digitalization

Mikael Ekström

Senior Digitalization Advisory Consultant, Tieto

I feel the word digitalization is being used more and more when referring to the need for business and IT to work better together.

Many IT-professionals also tend to state that they have always worked with digitalization, ever since they started to work in IT.  This is to some extent true, from a pure technology perspective, but today digitalization actually has many different meanings. Digitalization often means having a focused end-customer journey or experience view, changing the way of working and breaking down the internal silos inside the organisations, as well as creating efficient integrated external value networks.

Traditional IT has during many years mostly catered for the internal organizations’ structure and needs. IT has developed and delivered Sales and Customer systems to sales, Marketing systems to marketing, Finance systems to the finance department etc. Efforts to integrate and move information between departments or external partners have so far mainly been aimed at reducing duplication of effort and manual entries into each system. However, I believe that too often it has not radically changed the end-customer experience, or created the needed scalability.  In other words, it has not disrupted the traditional business processes.

I think that the driving forces of working more and more mobile, of having an individual end-consumer point of view,  of delivering services that are always on and globally accessible, mean that the traditional way of working will or must radically change.  The hierarchical internal structures of the past with departments working in silos have prevented businesses from optimizing their processes. It has not allowed the innovation culture to thrive nor allowed for the development of better customer experience, inhibiting radically new ways of working from evolving. 

I believe that it is no longer the traditional way of working inside different departments that will give you a good digitalized business process. Let’s take an example from sales and marketing. By aligning and digitizing the business processes, a company can now approach a customer exactly at the right point of his customer journey, meaning that he will be much more receptive for the offer than when becoming flooded with lots of unwanted advertising.

Once a person is aware of a service and has decided to look for information or evaluate it, he will want to be guided and informed on that specific topic only. Once the consumer’s interest is known to the seller, they don’t need to  waste their efforts in advertising at a general level to the masses, but can rather guide the customer at his/her phase of the journey in an individually targeted way.

Co-creation

By following the customer journey thinking you will automatically start breaking down the internal silos. When implementing the services you will have to ask yourself how to automate the decisions and give the relevant information to your customer at that specific given moment - and how to make it as easy as possible to be your customer.  This principle goes for any end-consumer, like citizens in healthcare, government or municipal organisations, or customers in private companies.

You can read more about Tieto “Co-creation” methodology for developing the Customer Journey.

Business processes that took days or months in the past, may now be handled in seconds by the end-consumers themselves. Internal departments will cooperate and take an active part in enhancing the customer needs for the complete business process, instead of protecting the old way of working and siloed budgets. You will also in most cases start to involve and work with an ecosystem of partners (see my previous blog!).

This new way of thinking and working will open up for massive enhancements and new business opportunities. By then you have most probably even started to think of ways to disrupt your own industry, and create totally new ways of doing business. I am sure you will find this so called Digitalization Journey very exciting and amazing!

Business Technology Advisors

I hope you have enjoyed my discussion about the internal silos! Finally I just want to mention that in Tieto we have a team of senior Business and Technology Advisors that cover areas like Digitalization, Cloud and Security. Please feel free to contact me, if you want to discuss more on this topic, on our services or if you have any questions.

PS. I will be at Cloud Confessions, in Stockholm on October 20th. Come and meet with me there, it would be great to have a discussion!

Stay up-to-date

Get all the latest blogs sent you now!