Business continuity is at stake for many organizations in the public and private domain. The pace of change and increasing complexity makes it extremely hard for organizations to sustain business value and assure survival. All public and private organizations experience in their own way the consequences of the fundamental shift that has taken place from a manufacturing paradigm to a services, information and hybrid economy.
The manufacturing economy was dominated by transactions, while the new economy is based on interactions. A shift to a new digital enterprise operating model is happening. However, patterns of the old paradigm still dominate our organizations. Becoming an organization that relies on interactions is difficult due to its current (hierarchical) command & control structure, and cultural obstacles.
It is inevitable that enterprises, both public and private, need to become more intelligent to overcome the challenges of the 21st century. They are facing increasing complexity, as a consequence of global competition, severe cost pressure, demanding stakeholders, constant change and uncertainty. Everything is somehow intertwined.
It becomes more and more clear that the isolated traditional approaches don’t work anymore. It is a systemic challenge that requires a systemic approach. Having an appropriate answer to the challenges gradually becomes mission critical. Having no answer leads to a significant reduction in business return, both in financial and in efficiency terms, and to a sudden or gradually erosion of the position in the value chain.
Complexity is often abused to argue why
organizations cannot keep up with the pace of change and become full-hearted engaged
in business transformation initiatives. It is indeed a fact that organizations
stand out by the way they handle complexity. Organizations that try to reduce
complexity will find out that it cannot be reduced. Complexity is a natural
phenomenon. However, there is a difference between what is complex and what is
complicated. ‘Complicated’ is the undesirable result of what we create
ourselves, such as complicated systems, processes or organizations. In short,
what can be reduced is the complicated nature of business processes – by
introducing new systems and better processes, but not complexity itself.
Consequently, instead of fighting complexity, organizations should embrace it. However, not all complexity is the same. There are three aspects of complexity; dynamic, social and emerging.
Dynamic complexity describes matters in both depth and breadth. When a subject requires extensive explanation, it is complex in terms of depth. When a subject is multifaceted, it is complex in terms of breadth. Moreover, the rules change continuously, which makes it hard to keep up with reality. Social complexity arises when there are many interactions with a fast-changing environment. For instance, business operations usually involve multiple stakeholders, each having different, changing and sometimes conflicting requirements. Emerging complexity is characterized by disruptive change and the uncertainty that these disruptions create. Organizations which are unable to deal with uncertainty risk being outperformed by new entrants and existing competitors.
Only an intelligent enterprise can deal with this kind of hyper complexity.
Ultimately intelligent enterprises will survive the struggle for life. Intelligent enterprises are ‘three in one’: social enterprise, high performance enterprise and organic evolving enterprise at the same time. They have important characteristics like:
- They are and remain trustworthy in the interaction with all stakeholders.
- They are not only customer centric but all-stakeholder centric without any reserve.
- They are and remain actionable in the way they govern and execute their processes and take informed decisions.
- They assimilate frequent change and continuous improvement as part of the life stream.
- They are and remain transformable in the way they act on foreseen and unforeseen events and are able to anticipate the unexpected.
- They constantly innovate their products, services and even their business model.
Consequently organizations must embed both business change and business transformation in their processes. These concepts are positioned on a gliding scale and intelligent processes make it possible to support both endeavors.
For more information see: Blueprint for an iBPMS competence center; leverage the transformational power of intelligent Business Process Management Suites and accelerate intelligent business operations.
NB: This article is also published on LinkedIn.