Digital Transition vs. Digital Transformation

Recently, my wife had heart surgery. It was the most amazing technological procedure imaginable. Talk about digital transformation. Robots, fiber optic cables, micro cameras, and digital imagery made it possible for surgeons to go inside her heart and make the necessary repairs. It was easy for me to imagine that the surgeon could have performed the operation at home, miles away from the hospital.  There was no cutting. She had no scars other than a couple of tiny pin holes.

My wife came through just fine. That was the good news. The bad news was that although the surgery itself was a miracle of modern technology, the work flow and procedures getting her in and out of the hospital were right out of the 20th century.

During the run-up to the operation, she had to go to from the waiting room to the emergency room. The time spent we spent waiting seemed endless. The staff determined my wife had to go the cardiac care unit. The problem was that no beds were available. No one could predict when a bed would be ready. Would it be minutes or hours? No email, no text message, and no display showed the time when a bed would be available. Not even a tweet. The only way the emergency room staff learned about a vacancy was when staff in the cardiac care unit finally called them.

Seven hours later, my wife finally got the bed she needed.

After a test procedure and prep for her surgery for the following week, she was cleared to go home. That would free up a bed in the cardiac care unit and make way for someone in the emergency room to go to the cardiac care unit. Then medical staff in the emergency room would have space to see the next patient in the waiting room. Carrying the idea forward, a patient leaving the hospital would free up a space in the parking lot for another patient entering the hospital. I’m guessing I have made my point.

The hospital was not done with us yet. Before staff would release my wife, she needed to get a prescription filled at  the hospital pharmacy. Unfortunately, the pharmacy was backed up with a bunch of other prescriptions and no one could predict when our prescription would be ready. Again, we just had to wait. No communication, no collaboration, and certainly no coordination between the pharmacy, the emergency room, and the cardiac care unit occurred. After four hours of waiting, I took the initiative to plead our case with the pharmacist and, at long last, got the prescription filled. We left the cardiac care unit five hours after my wife was cleared to leave. All procedures were dependent on a routine filling of a prescription. Meanwhile, the emergency room was backed up and the waiting room was stuffed because the pharmacy had been unable to communicate, collaborate, and coordinate with other hospital service teams.

Tony Zingale, the executive chair of Jive Software, once quipped, “We know more about what our teenager’s girlfriends had for dinner than what’s going on within our organization.”

Why is that? If we can travel within someone’s heart, why can’t we figure out what is going on the fifth floor of a hospital. Similarly, why doesn’t a power company know about the repair work an electrician is doing  in a bucket truck or an airport know about an accident that baggage handlers are managing on the tarmac. Why is it so hard to do the simple things?

The reason is that organizations need to adopt a new approach inside and out. Despite all the talk about digital transformation, only a few industries have actually done it. What most organizations are doing is really digital transition. Upgrading a project’s technology and automating a few manual workflows do not indicate a digital transformation. As long as the enterprise itself continues to maintain its old ways, its modernization efforts are merely digital transitions that won’t live up to the agency’s expectations.  

I’ve been in the electric utility business most of my life. My observation is that like the hospital, infrastructure industries are a blend of high tech (like robots, drones, SCADA systems, advanced analytics) and ancient rituals. Despite all the technology in place, paper is still king. Red tape still reigns. Digital transformation occurs when the business model itself is transformed completely–not just inside the business, but in all its interactions with all its stakeholders.

When I ran electric operations for a power company, my crews routinely dug up streets to install new cables. In most cases, these digging projects required a fair amount of advanced planning, including obtaining city permits. Yet on a regular basis, we would dig a trench across a newly paved street. The city was always furious. Why didn’t we dig the day before they paved the streets instead of the day after?

I told this story a few weeks ago and half the utility people in the audience knowingly nodded because they had experienced the same frustration. All of them had GIS. They all had work management systems, outage management systems, advanced metering infrastructure, and digital relay protection systems. Why was it so hard to communicate, collaborate, and coordinate the simple task of digging a trench in a street?

The answer? The city and the company still clung to ancient rituals. Too often companies adapt new technologies to old business models, and, consequently, to old work processes. Their improvements are incremental.

Digital transformation requires:

  1. Deploying dramatic new technology.
  2. Turning work flows on their heads.
  3. Blowing up old business models.

The concept of technology platforms as well as society’s increased use of the cloud and web technology have already set the stage of digital transformation. Itunes, Netflex, Amazon, Facebook and Uber all use platform technology. So does Esri’s ArcGIS.

In his book, The Age of the Platform, Phil Simon talks about how platforms have transformed business. He says that a platform allows people to connect with one another to get information. Connection leads to immediate communication, collaboration, and coordination – the three C’s that drive digital transformation. Imagine if the power company used social media to collaborate, communicate, and coordinate instantly with the city,  the water, gas, and telephone companies, and all its other stakeholders. This modern approach would up-end familiar rituals and change the business model for the better.  Social media communications would save money, delight customers, provide a safer workplace, and alert the company and customers to trouble.

What’s this got to do with GIS?

Location is critical to the operations and business model of infrastructure companies. Sure, most have GIS. Many still use it like the kid brother of CAD. It’s not. ArcGIS is a platform, similar to those of social media, Amazon, Facebook, Apple. ArcGIS provides immediate location based access of critical infrastructure assets. It leverages the cloud. It draws data from the web, like traffic, demographic, weather, emergency data, crime, and real-time sensor data.  Everyone is completely aware of what’s going on right now. Finally, the ArcGIS platform provides advanced analytics. This capability has driven decision making in directions unimaginable even a couple of years ago.

Some forward-thinking infrastructure companies are using the ArcGIS platform to transform their business. They constantly adopt new technology, kill off old habits, and consider how to interact with the world in a whole new way.

What does digital transformation look like? You will see it in a hospital’s ability to communicate, collaborate, and coordinate via a platform that connects the emergency room, cardiac care unit, and the pharmacy to improve patient care and services. You will see it where a water utility team knows exactly where and when the gas company is planning to repair a gas leak.

Once we rethink our technology, blow up our old habits and rituals, we begin to see the flaws in our old business models. Then we change them for the better.

 

Bill Meehan

About Bill Meehan

Bill Meehan, P.E., heads the worldwide utility industry solutions practice for Esri. Author of Enhancing Electric Utility Performance with GIS, Modeling Electric Distribution Performance with GIS, Empowering Electric and Gas Utilities, Power System Analysis by Digital Computer, and numerous papers and articles, Bill has lectured extensively and taught courses at Northeastern University and the University of Massachusetts. Bill is a registered professional engineer. Follow Bill on Twitter.
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