Managing Digitalisation Risks with Lean and Agile Thinking
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Transcript of Managing Digitalisation Risks with Lean and Agile Thinking
Managing Digitalisati
on Risks with Lean and Agile Thinking
ICMAC 2014
measurity commercial in confidence | 2
We operate in a VUCA environment
VUCA
olatility
ncertainty
omplexity
mbiguity
Unexpected and unstable challenges
Unclear cause and effect
Numerous Interrelated variables
Unprecedented challenges and “unknown unknowns”
Create unpredictable demands on resources
Challenge decision making abilities
Overload current processing capabilities
Unsure about course of action to be pursued
measurity commercial in confidence | 3
Digitalization is VUCA
1% of world
population
40% of world populationThird billion
First billion
Second billion
Source: http://www.internetlivestats.com/internet-users/
4.4 zettabytes of data in the digital world
1 billion
websites in 13 years
Changed the way we create and communicate
Transformed organisation design and business models
measurity commercial in confidence | 4
Technological Revolutions GDP Growth
F
S
D
First Industrial Age (1760 – 1840)
Second Industrial Age (1860 – 1914)
Digital Age (1950 – today)
Convergence
Social
Mobile Big Data
Cloud
DigitalisationMegatrend
measurity commercial in confidence |
Digitalisation occurs at three waves and levels
Digitising Information1
Digitising process activities2
Digitising business models3
Converting analogue information into digital resources
Automating or reengineering processes for efficiency and to manage greater
complexity.
Driving the participation age and shifting the paradigms of customer engagement models.
Convergence of
technologies
Most obvious and immediate
use
Other industries and
applications
Change the way we operate
Three Waves of Technological Revolutions
Connected people and
things
Network bandwidt
h
Cost of data
storage
measurity commercial in confidence | 6
Digitalization challenges require new risk thinking
VUCA
olatility
ncertainty
omplexity
mbiguity
Looking beyond the instability to have a clear intent and direction for the desired future state
Having insights into factors to be considered, discovering new ways of thinking and acting
Focusing on what is required to deliver increasing value through digitalisation
Being ready and responsive by taking a nimble, flexible and lightweight approach
VUCA
ision
nderstanding
larity
gility
measurity commercial in confidence |
VUCA demands preparedness and anticipation
Strategies
Programmes
Projects and Operations
Decis
ion M
aking
Risk Management
Materialise intent and contain risks as they appear
Strategic decisions to
achieve goals
Tactical decisions to
determine plans
Operational decisions to implement
actions
Adjust plans in agile manner to mitigate potential impact
Eliminate preventable risks
measurity commercial in confidence | 8
Traditional risk approach applied on digitalisation
Consider traditional approach for managing technology risks when applied to a digitalisation project at the tactical level.
Identify all “known” technology risks with adverse impact on the project
Prepare risk statements detailing the loss potential
Debate probability and impact to determine the risk exposure
Consider preventive and detective measures to mitigate the exposure
Aggregate risk profile with analysis of other digitalisation projects to form bottom-up larger risk picture for the overarching digitalisation programme
12345
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Possible issues with traditional approach
Produces risk profile
and mitigation plan that is ineffective against the actual risks
Complexity from possible use cases and interplay of risks between different technologies and platforms
Interplay of Risks
Point-in-time assessment does not take into account the time horizon
Linear Approach
Unable to comprehensively identify all risk events upfront and accurately pinpoint the likelihood of each risk due to limited digital knowledge
Limited Information
Influenced by individual prejudices and past experience which may not be a reliable indicator of the digital future.
Subjectivity of
Assessment
Barrier in the increasingly competitive and VUCA environment when focus is not value creation
Loss Prevention
Focus
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Need for more agile and lean approach
V UC A
Digitalisation Megatrend
Interplay of Risks
Linear Approach
Limited Information
Subjectivity of Assessment
Loss Prevention Focus
Risk Management Problem
+ +
Lean thinking brings clarity of vision for understanding and insights into managing digital
risks
Requires more forward looking approach to
address unprecedented future risks
Create new risks, alter risk profiles and disrupt
existing business models
Demands more active and responsive approach in
engaging with VUCA
Agile thinking brings continuous improvement, and
ability to be adaptive and responsive to change
=
measurity commercial in confidence | 11
Applying lean and agile risk thinking
Focus on value as the highest priority 1
Foster a highly collaborative environment2
Take an iterative and incremental approach 3
Eliminate waste in resources 4
Create flow and pull in value stream 5
Our senior practitioners build organisational capabilities across Asian economies. Bringing deep domain expertise and decades of leadership experience to every engagement, we deliver measurable, purposeful, and sustainable outcomes.
This is measurity.
© ASEANTLC PTE. LTD. (Registration No.: 201406978D) 2014. All rights reserved. No part of this publication shall be reproduced or transmitted in any form or by any means, without express consent.