What is digitalization
Today’s elevators contain tens of thousands of lines of code. Today’s pacemakers contain hundred of thousands of lines of code. Today’s cars contain hundred of millions of lines of code. Why are we talking about digitalization now? Aren’t we already there?
Digitalization isn’t about replacing relays with digital logic, analogue filters with digital filters or vinyl records with mp3s. That is digitization. Digitization is what has happened during the last half century but it is not until the last 5-10 years we have reached a tipping point of compute power, connectivity, standardization and software platforms where we can really start to draw wide benefit of this digitization. And to make use of these all these benefits in there fullest sense is what digitalization is and what this this site is about.
But we are not talking digitalization in general. We are focusing on helping the people in organizations developing embedded systems which are in the process of, or already have undergone, a transformation to being digitized. Now when your products have made this transformation, it is your turn to become digitalized.
It is time to realize you are not a hardware company anymore. In symbiosis with the new digitized products, new business models will emerge. And to become capable of producing these new products and realizing these new business models, the internal capabilities of your company needs to grow. This will affect everything from organization and leadership to strategy to processes.
There are two parts to the digitalization of an organization; external digitalization and internal digitalization.
With external digitalization we mean that which affect our surroundings. The evolution of digitized products will create the need of new business models. In turn, to really make the fullest out of the new business models, the products needs to evolve in symbiosis to match the business models.
To build these new products and to realize the new business models, how you run the company will need to change. We call this internal digitalization. It will affect both the culture of the company and the processes where value is being created.
Digitalization is changing the marketplace.
Firstly, the speed of the market is increasing. The product cycles are decreasing. And the window you can make money from a functionality is decreasing. Therefore the time to market is becoming more and more important. This leads to a need to optimize your products for time to market.
Secondly, hardware and even product level software features are being commodity. Instead of optimizing products you will need to start optimizing for your customers outcomes to bring more value to the market. This in turn leads us from the selling of hardware to the selling of managed services, usage and even selling explicit customer outcomes.
Thirdly, as complexity is increasing the chance to get things right the first time around is decreasing. This in turn means you must foster much deeper relationships with your customers and also suppliers to work together to create awesome solutions.
To meet the changing marketplace the products needs to change too.
To meet a need for a decrease in time to market, systems needs to be designed with the time to market in mind. This includes choosing flexible hardware. For example, FPGA:s over ASICs and touch displays over physical buttons.
To meet the complexity explosion there needs to be a great focus both on managing the usage complexity and the development complexity.
On the usage side you will need adoption services which introduces features just in time. You will also need to start automating away complexity by using artificial intelligence to optimize the products instead of having human experts tweaking obscure parameters.
On the development side you will need to work hard on architecture to manage the complexity for the developers.
Finally, as the chance of creating the perfect product the first time around decreases because of the complexity, you will need to add new ways of gaining usage feedback directly through your products.
We have already talked about the increased complexity and speed created by digitalization. With these new circumstances, it is not possible to lead an organization in the same way as before.
As the speed and complexity goes up, long time plans and strategies breaks down. So instead of having the organization break down long time plans, the new control surface must be the culture created by having mission, vision and values.
The best data to make decisions does not exist in the top of the organisation any longer. Nor does it exist in any one other place. Instead, decisions needs to be pushed out as close to autonomous teams but these teams must also seek out information which previously was across silo boundaries.
The agile community grown out of the software world has much to teach organizations building embedded systems which are often born out of a hardware world. But copy-pasting practices from small web developers directly on top of existing processes of large embedded systems development organizations comprised of both software and hardware teams is a recipe for failure.
It is easy to end up in with a software factory with teams which are anything but autonomous and where coding velocity is premiated instead of customer value created.
Silos between customers, business, development and maintenance must be broken down to create short feedback cycles to be able to outlearn the competitors in a faster and more complex market.
To further answer to the increased need for speed, practices such as Continuous Delivery, making a release a decision instead of a process, and the focusing on flow efficiency, where focus is on the work being done instead of the workers doing it, can help a lot.
When we at Sigma Technology Consulting help organizations developing embedded systems we always do it by digging where we stand. All organizations have their own cultures dependent on their values and their experiences. But together we try to set a direction towards what is needed to transform into the organization needed in the digitalized world of today.
We do this no matter on what level we come in and do work:
The individual developer brings with themselves the mindset of working towards missions instead of just being factory workers.
The team leads and scrum masters work with creating autonomous and cross functional teams which can handle complex tasks together.
The system architects and product owners knows the value of listening and gathering information to decide what to do and working with short iteration when getting things done.
The Coaches helps the organisation and individual leaders on all levels in creating the environment needed for the teams to thrive.
If you need help with your embedded transformation we are here for you.