Digital Economy Dispatch #105 -- How to Face Digital Transformation’s Difficult Trade-Offs

Digital Economy Dispatch #105 -- How to Face Digital Transformation’s Difficult Trade-Offs13th November 2022

I love watching the home improvement programmes on TV. All of them. The ones where they revamp an old property to update it for modern living, those that repair the failings of previous builders to make it safe, and even those that involve redesigning the living rooms of unsuspecting friends and relatives.

My favourite show involves a pair of buyers looking for a new property. They are shown three possible alternatives and then must decide which one they will buy. I’m always interested to see how they make their choice and what approach they take to reach their decision.

My son hates them. When he sees me watching, he chides me by pointing out the flaws in the show’s repeating format:

“Dad, why are you watching this? They are always the same! The first one they are offered is the perfect property at a price they can afford but in the wrong location. The second is ideally located but costs far too much. And the third one is well priced but doesn’t have all the features they want.”

Of course, he’s right. There is a regular, familiar pattern to these situations as the buyers try to reach the best decision. I accept that. But what interests me most about these shows is listening to the discussions and seeing what compromises are required to reach a conclusion. I am fascinated by the variety of tactics (and antics) that are used to move forward when the options are unclear. How will they decide? What are the key factors in making their decision?

A Question of Priorities

As in many aspects of life, juggling priorities is all part of how people understand and reconcile themselves to the compromises they must make across a variety of factors to form agreements. It is as true in successful digital transformation projects as it is in buying a house.

For much of my work in digital transformation I feel a great empathy for the people in home improvement shows. I work with teams that have very difficult choices to make where there is no obvious answer. Do we invest time and effort to introduce a new technology here? Is it better to reorganize our workforce now for longer term gains and accept a short-term loss in productivity, or just tighten our belts to add small incremental changes? What is the effect on our workforce of bringing in more automation of key tasks? And so on.

In my experience, the key to progress in these situations involves two important components: Identifying the critical attributes on which to focus attention; and establishing a managed process for discussing trade-offs amongst them.

In the first area, the goals and objectives of the tasks at hand lead you to focus on a set of concerns that you believe have most impact on success. For now, lets refer to these as the quality attributes for this situation. Typically, a handful of quality attributes are sufficient to offer a reasonable perspective.

For the second, a set of steps must be defined which facilitate discussion on the importance of each quality attribute and allow relationships between them to be explored. We can say this is the trade-off analysis method. This may require a frank, open debate to explore alternatives provoked by considering a range of scenarios and driven by a series of experiments.

Placing a focus on these two areas is something I have seen and used several times before. It is worth reviewing those experiences to see what can be learned about how this approach can improve how we guide our delivery of digital transformation. Let’s see what we can learn.

A Lesson from the Past

Some years ago, I spent a lot of my time in the world of software development and delivery. Working with a team of experts, one of our tasks was to examine large-scale software projects to determine their health, probe the strengths and weaknesses of their software architectures, and make recommendations for improving them. Due to their size, often these programmes involved large teams of people from several organizations, they had been active for several years, and invariably they involved getting to grips with volatile and ambiguous operating contexts. Yet, it was important to make progress quickly despite their scale and complexity.

In our work, we used several techniques to gain insight and offer recommendations for improvement. Something we referred to in subsequent published reports as a software audit method. Eventually, our approach focused on the two components identified above: Defining quality attributes, and creating a disciplined, agile trade-off analysis method. The work we did fed into a series of approaches and standards championed by the Software Engineering Institute (SEI) in their work for clients in the US Department of Defense (DoD).

A great example of one of the emerging approaches from that work at the SEI was the Architecture Trade-off Analysis Method (ATAM). This is a structured process to assess the impact of architectural design decisions on large software-intensive systems. As we have highlighted, at its centre is a focus in two areas:

1. The definition of a set of quality attributes for large software-intensive systems. These are based on the non-functional capabilities of these systems and include aspects such as the system’s reliability, robustness, availability, maintainability, and so on.

2. A process for rapidly testing these quality attributes as part of a disciplined evaluation method. In the case of ATAM, 9 steps were identified including actions to work with members of the diverse delivery team to engage them in discussion, highlight key objectives for the system, prioritize critical quality attributes, identify relationships between them, explore their dependencies in the context of a set of scenario exercises, and reviewing the results.

By centring this approach around the trade-offs among quality attributes, the ATAM not only encourages an open dialogue that places attention on the essential characteristics of the system, it also helps to bring together a variety of viewpoints and perspectives to enable a balanced debate on an appropriate way forward. Something that has been sadly lacking in many digital transformation strategy documents and discussion I have been involved with recently.

From ATAM to DxTAM?

Building on this work, perhaps a useful approach in digital transformation would be to take a similar approach. What we need is a Digital Transformation Trade-off Analysis Method (DxTAM). In this case, the aim is to consider the key characteristics of the digital transformation strategy that is being adopted by an organization, highlight a handful of quality attributes, and evaluate their relationships through a trade-off analysis based on a rapid review process across a set of defined scenarios.

But how would this work? Here are a few thoughts to start the discussion.

First, the DxTAM would need a candidate set of quality attributes to motivate the review and to act as a starting point for the approach. There are several ways to do this. In some situations, they may focus on more technical aspects of the project, similar to those in ATAM. In others they may be embedded in operational concerns so look more like IT issues. The choice depends on the review objectives.

Yet, often the concerns are beyond technology and involve more widescale issues. One approach that I have found useful is to highlight 5 dilemmas that arise repeatedly in assessing the pace and impact of digital transformation programmes. These are in the areas of productivity, values, ethics, leadership, and people. In this context, we could consider these to be a good starting point for the “quality attributes” of the digital transformation.

Second, we would require a process for establishing the relationships and quickly evaluating the trade-offs amongst the quality attributes. Again, various ways forward are possible that combine experimentation, scenario analysis, and continuous review cycles.

In my work I have been strongly influenced by 2 ideas for rapid evaluation of alternative scenarios: Agile delivery and lean startup techniques. From these approaches we gain insight into ways to try out different solutions quickly, build an experimental mindset for evaluating results, creating measures that emphasize innovation and leaning, and offer sufficient governance to ensure disciplined progress can be made. Hence, they can be successfully applied to create short, time-boxed iterations across several scenarios.

In several different digital transformation situations, I am now exploring how these ideas of a DxTAM approach can be expanded and formalized. The initial results are encouraging. This will hopefully lead to a more rigorous approach to manage the difficult trade-offs we all face in digital technology adoption.

We Walk the Same Line

Organizations are at different points in their digital technology adoption journey. The challenges they face in transforming requires them to establish a difficult balancing between many different factors. Inevitably this requires compromise and trade-offs amongst a wide variety of concerns. Perhaps one way forward is to look to other domains with complex situations where assessment techniques have emerged. They focus on defining quality attributes and processes for rapid review of attribute dependencies. Can we use a similar approach to define a Digital Transformation Trade-off Assessment Method (DxTAM)?