Naef The Technology Illusion

Dispelling the Myth of Digital Transformation
1. Auflage 2025
ISBN: 978-3-8192-9059-6
Verlag: BoD - Books on Demand
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 152 Seiten

The rules have changed. The digital revolution has ushered in an era of unprecedented disruption, and CIOs are now the key architects of the future. This book isn't a simple instruction manual; it's a guide to reimagining the role of the technology leader. How do we not just survive, but thrive in this new landscape? How can technology unlock entirely new business models? This thought-provoking exploration offers fresh perspectives, challenges the status quo, and provides inspiration from companies that are leading the way. Take control of your organisation's destiny through the power of Digital Transformation.

Patrick Naef is a partner at Acent AG and the founder and CEO of ITvisor GmbH, a boutique consulting firm specialised on advising organisations on their digitalisation journey. He is also a managing partner at Boyden Global Executive Search and a member of the board of directors at the Franke Group, a global industrial company headquartered in Switzerland. He is chairman of the board of directors at UpGreat AG and senior advisor in the Travel & Transportation practice of McKinsey & Co. He also advises and supports several technology start-ups, serves on advisory boards of venture capital firms, lectures on digital transformation and business models in the digital age at universities in Europe and the United States, and is a mentor at the Center for Technology Management at Columbia University, New York (USA) and at the Center for Technology Management and Digital Leadership at Northeastern University, Boston (USA). From 2006 to 2018, Patrick Naef was the Chief Information Officer (CIO) of Emirates Airline & Group in Dubai. During this time, he was also a member of the board of directors at SITA, a global telecommunications and IT services company focusing on the aviation industry. From 2006 to 2014, he was CEO of Mercator, an Emirates Group subsidiary that provides IT products and services to airlines around the world. In the late 1990s, he was a founding member and CTO of the start-up Beyoo, the first European online travel portal. He previously served as CIO of Swissair and SIG Group and held senior positions at HP, Zurich Insurance Group, and Bank Julius Bär. In 2011, he was recognised with the prestigious CIO of the Decade award by Germany's CIO Magazin and IDG Inc. He holds a master's degree in computer science from the Swiss Federal Institute of Technology Zurich (ETH), Switzerland and an executive MBA from the University of St. Gallen (HSG), Switzerland.

Autoren/Hrsg.

Naef, Patrick

Leseproben

2 The four-stage model of digital transformation

Unfortunately, the term “digital transformation” has become a corporate buzzword and nearly every company that launches a new mobile app or automates its internal processes with an ERP system now boasts of having undergone a digital transformation. Merely shifting a company’s systems or applications to the cloud or rolling out Microsoft Teams for home office users has very little to do with a digital transformation. Several years ago, a Chief Information Officer (CIO) of one of the larger US industrial companies told me that he had already completed the digital transformation of his company by moving all of its systems to the cloud and giving out iPads to all employees. Well, to me a digital transformation requires a little more than that.

As its name suggests, a digital transformation must be transformational. It must fundamentally alter a company’s business model, its value-creation processes, its sales channels, or the products and services it provides. To help ensure that executives fully understand the nature and implications of digital transformation, I have developed the following four-stage “maturity model.” Most of the maturity models developed by consultancy firms, such as Capability Maturity Model Integration (CMMI), Cybersecurity Maturity Model Certification (CMMC), or Information Technology Infrastructure Library (ITIL), consist of five stages. If I worked for one of these large consulting companies, I would have probably also thought up a fifth stage, but as I am not being paid by the hour, I can afford to keep things simple.

Stage 1: Digital cosmetics or “lipstick on a pig”

Sadly, this is the stage that I see most often. Companies digitalise for the sake of digitalisation or for reputational reasons, as these days every firm is expected to present itself as a digital company. In many cases, an innovative technology of some kind is introduced somewhere within the company and then exploited for marketing purposes, but it never becomes embedded in core business processes, let alone integrated into the traditional back-end systems. The example I gave above of a CIO colleague who simply shifted the firm’s systems to the cloud and distributed iPads to all employees is typical of Stage 1. The goal was not to add value but to be able to claim that they had migrated to the cloud and adopted sophisticated but familiar end-user devices. Beyond this, nothing had been changed in terms of the firm’s business model, its organisational processes, or the products and services it provides.

I encountered another example of an alleged Stage 1 digital transformation a few years ago. On a flight from Dubai to Frankfurt, I read an article about a large US-headquartered hotel chain, which the article announced had completed a digital transformation. It described how a new personalised booking site was developed for customers, together with a corresponding mobile app, and it highlighted the introduction of robots in hotel reception areas to welcome and check in customers. The article also praised the chain’s new cloud-based loyalty programme, which would ostensibly enable a high level of personalisation.

As chance would have it, I had booked a room at a Frankfurt hotel belonging to that very chain, and I am also a member of their loyalty programme. I had completed the booking on their website, and my information – payment methods, passport details, preference for a non-smoking room, etc. – was stored in my online profi le. When I made the booking, I had the option of indicating the flight on which I would arrive in Frankfurt. On arrival, however, there was no sign of the personalised service described in the article. After making my way from the terminal building, over a footbridge to the hotel lobby, I joined a lengthy queue in front of the reception counter. I waited in the queue for about 20 minutes. When I reached the counter, I explained to the friendly woman working there that I had already booked a room and showed her my loyalty programme membership card. She then asked me for my booking confirmation, passport, and credit card, and she handed me a form to fill out. I had to enter my residential address, mobile phone number, e-mail address, passport number, and other information that I knew was already stored in their systems. She then typed on her keyboard for a couple of minutes, probably assigning me to a suitable room, handed me a keycard, and wished me a pleasant stay. Imagine my surprise when I found that she had assigned me a smoking room, even though the fact that I am a non-smoker is stored right there in my loyalty programme profile. As one might also imagine, I found it quite annoying to have to go back down to the reception area and join the queue again to request a non-smoking room. Check-out was a similarly traditional process: I went to the counter, spoke with a receptionist, and used my credit card to pay for additional expenses. Where was the digital transformation touted in the article?

Obviously, something went wrong during this alleged digital transformation. Let us consider how my customer experience could have gone, had the hotel chain exploited the full potential of the digitally networked world in which we live. I had booked my room online and entered my flight number. My credit card details were already stored in the hotel’s system, along with my mobile number, e-mail address, personal preferences (e.g., a non-smoking room), and other information. Had the hotel chain connected its systems with the airport system, the hotel would have been informed when my flight from Dubai landed in Frankfurt. If integrating with the airport system proved challenging, the chain could have accessed one of the numerous websites, apps, and other publicly available platforms that provide this kind of information almost in real time. A simple algorithm could have allocated me a suitable room the moment I landed, prioritising a non-smoking room if one were available. The hotel could have sent me my room number via an SMS, WhatsApp message, e-mail, or notification on the chain’s own mobile app, and the NFC chip on my mobile device could have been used as a room key. My credit card number is already stored in my profile, so I could have been charged automatically at check out. Multiple steps could have been eliminated from the process – saving me time and the hotel labour hours – had the chain made sensible use of the information that was either already available to it or that could have been obtained from other systems. The check-in/check-out process could have been almost entirely automated and made obsolete to me as customer, with staff interactions reserved for special requests and troubleshooting, or deployed strategically to put a human face on the experience while still maximizing efficiency.

Why had this hotel chain not managed to effectively digitalise a process as simple as this? I believe the root of the problem was a simple failure to understand the meaning of a digital transformation and recognise its potential. It is not enough simply to carry out a few isolated high-visibility projects involving robots, AI, a mobile app, or a new website, to maintain the pretence of being “digital”. This hotel chain was probably more concerned about the marketing effect of digitalisation than about the added value it could achieve for its customers. Introducing humanoid robots in the reception area to automate the check-in process makes little sense if digital technologies can render that process obsolete.

Much like the robots at the hotel reception performing a service that could be fully digital and automatic, many airlines still use physical check-in kiosks in airports to replace check-in counters and agents. Originally, the main function of airport check-in was to exchange the flight ticket with a boarding pass. This process dates back to the time when physical plane tickets included a coupon (voucher) for each flight segment purchased. Some older readers may still remember the red carbon copies that could once be found attached to plane tickets. At check-in, these copies were removed from the tickets (which were small booklets at the time) and exchanged for boarding passes. A flight coupon was a value document, much like a cheque, as the travel agency or airline that sold the ticket had already been paid by the customer. Because the party that actually performs the flight service and transports the passenger is often not the same party that sold the ticket, the passenger was obliged to hand over the corresponding flight coupon to the airline at check-in. The airline would later use the coupon to claim its share of the ticket price – via a clearing house – from the party that initially sold the ticket and therefore had collected the money. Even though this process remains largely unchanged today, the physical tickets and flight coupons have long since been digitised. As a result, the check-in process no longer requires the transfer of a physical document and can be performed entirely online.

Although checking in at the airport has never represented any real added value for customers, who generally regard it as a time-consuming nuisance, some elements cannot be fully automated yet. Handing over luggage at the check-in counter, affixing a luggage tag with a barcode indicating both its destination and the traveller to whom it belongs, and providing a corresponding baggage receipt to the traveller is still necessarily a physical process that requires some degree of human interaction. Over the last few decades,...