Just what is a digital operating model?

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I’m sure folk get bored of people like me banging on about digital transformation being more than web forms, or fancy integrations with back office systems. “It’s about fundamentally redesigning your operating mode for the internet age!” I bellow. “What on earth does that actually mean?” thinks everyone to themselves.

Coming up with a digital age operating model for a service means redesigning it in the knowledge that the majority of your service users, and colleagues that deliver the service, have access to internet enabled devices. It means mapping your value chain, identifying all the components that make up a service, and removing any elements that could feasibly be replaced by networked computing capabilities.

That probably makes no sense. Think of it this way: a lot of the value add for services as they are currently delivered involves some kind of intermediary performing a role – linking people up, checking things, making decisions about things. In many (not all, of course!) cases, these days activities such as these can be done by software, connected to the internet, that users and service providers can both access, whether through the phone in their pocket or the corporate laptop on their desk (or lap).

Here’s an example. It’s a somewhat trite one, and over simplified, but has the benefit of being comprehensible. To book a cab, traditionally, one phoned the cab company (where you got the number from is another story, but not an irrelevant one), where someone took details of you and your journey, and they then got in touch with the cab drivers to find who was free and nearby, and then they made their way towards you while you hang around waiting, and hoping. Oh, and you needed to go to the cashpoint so you could pay – and might not know how much til you reach your destination.

Now, in recent times, cab companies have done stuff to reduce some of the friction in this process by enabling online bookings, booking via an app, SMS notifications of likely arrival times, and so on. All these are examples of digital efficiency, not transformation. The service remains essentially the same, and the intermediaries retain their role.

Uber, however, disrupted this by starting from scratch, assuming that everyone (passengers and drivers) have phones with internet connections, apps and GPS. Users can now log the journey they want to make on their phone, and see themselves the drivers available to them, and choose the one they want based on a number of criteria (feedback ratings for the driver, the type of car they drive, how nearby they are etc). Users also know the prices, their payments are handled online with no cash changing hands, and they can track their driver’s progress as they make their way to them. Afterwards they can rate their driver and also receive feedback on how they conduct themselves.

In this way, Uber has removed a whole section of the value chain (the cab dispatcher role) in such a way that makes the whole process both more efficient and delivers a far better user experience, because it takes as a core assumption the fact that the internet and smartphones exist.

So to apply this to a public service, first map your value chain. Identify those areas where you are just providing an intermediary role, which could be replaced by an internet enabled service, that adds little value and just slows things down. Design those roles out of the process, then assemble the tech needed to deliver the new services.

Too often transformation processes skip the value chain mapping element. This leads to fundamental misunderstandings about what benefits services actually deliver to users, and thus miss huge opportunities to improve user experiences and reducing the cost of service delivery. As I have said before, there’s no shortcut around truly understanding the service you are meant to be delivering.

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Photo by JESHOOTS.COM on Unsplash

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