How does digital transformation impact your secondary organization and what changes are required?
Can we still deal with the world we live in by reproducing the past?
Overview
The oil and gas industry has always been a complex sector that requires highly skilled and efficient business processes to run in place while abiding by the highest environment and safety protocols. For that reason, it was also one of the last industries to join the wave of digital transformation.
Globalization, competition, and technological advancement have made it feasible to produce items of all types more individually in recent years. New working methods like lean or agile have been developed and used in large numbers.
However, most of their efforts are focused on product development, which is merely the first stage in the overall product or service lifecycle management process. To explain this further, Traditional Business Process Management (BPM) techniques generate business processes statically, which means they typically adhere to a development time target specification (Design Time) (Bauernhansl, 2014). However, in order to properly place these items or services, a company must adhere to a few essential “success factors.”
The Golden Triangle as a Measure of Success
According to research, the golden triangle is one of the most important parts of any organization’s success from a strategic standpoint.
The three pillars of success are
quality,
cost,
and time.
When it comes to building and designing new business processes or enhancing existing ones, the focus should be solely on these three factors.
David Hutchison, in his book Product-Focused Software Process Improvement proves this point as he describes how to map a software development process into the business goals by applying a gap analysis, (Hutchison, 2014). His work shows that even in an organization with extreme dynamics, it is essential to optimize the process based on the golden triangle mentioned above, rather than only internal concerns such as happiness of employees or efficiency. These aspects are undeniably fundamental but should not be the focus for the optimization of the processes.
Innovation to improve quality and process optimization
Innovation focuses on the products and the services an organization has to offer. The innovation and creativity of the product team help to improve the functionalities and quality of the product or service. When it comes to markets, it is common to observe an unstable state at the beginning. Companies then require acting in a precarious situation. Many of the new ways of work like design thinking or lean development react to feedback from the community or internally directly into the product or service. An enterprise organization should not only respond to the product itself but must optimize the business processes within different layers and structures. It is here that we see the value of business process optimization. Max Weber (Weber, 1948) believes that after a certain amount of time the reaction should be again on the products and innovation rather than overengineering of the processes to avoid bureaucracy. Bureaucracy is one of the biggest trade-offs of business processes in general.
The primary and secondary organization
When we discourse concerning the business process, it is essential to know two different organizational structures. An organization structure that describes only the highest level of an enterprise itself is called the primary organization. The organization for each project or program in the primary organization is called a secondary organization, (Schwegmann & Laske, 2012). The primary organization is responsible for the routine and the core business structure. Routine is to reproduce the past and know that tomorrow will only be what it is today.
Corporate routine is not bad at all, but the problem is:
Can we still deal with the world we live in by reproducing the past? The answer is NO!
Especially in the aspect of continuous change in the competition world and customer journey, an organization needs to have a structure to react to these changes. An organization has its own sustainable life by defining the corporate high-level goals, vision, and missions with its routine and culture. At the same time, a structure to be able to react to the uncertainties and surprises, react to the changes and the challenges is the opposite of the reproduction of the habits.
When the time comes that the experiences an organization did in the past are not enough to lead the projects and programs to success by reproducing the skills in the past, we face a high uncertainty situation.
It is natural that personas sitting in the primary organization usually have more static roles and responsibilities in comparison with the secondary organization with more flexible and dynamic responsibilities.