Budgeting is an key aspect for many traditional IT projects. You often need to ballpark the budget estimation from previous experiences. The tricky part comes when you are doing Digital Transformation project for Cloud. How do you make dollars and sense out of something that have not been done before?
If you are moving to Cloud, it makes sense to starting metering your transactions. Think of it like your electrical bills, where your are being charged at kilowatts per hours. Metering makes it easier to convert to Cloud credits when you are planning your budgeting. The good part with Cloud is that you can adjust or stretch your credits with different Cloud features.
Running cost for Cloud will deviate quite a bit from your existing on premise application. This is because Cloud have factor running cost into its metrics as compared to your on premise cost. If you want to compare the running cost of on premise application, you will need to include support cost, upgrades, manpower or downtime.
Preparation for Cloud move will have to start as soon as possible. If you are still pondering over the move and trying to make sense of the dollars. You can consider to meter your existing on premise applications and sum up your running costs. This will help greatly in your comparison to Cloud costing.
Digital Transformation, system upgrades or migration challenge is not technology but human behaviour. One of the least articulated role is the Change Agent. It is common to see incorrect stakeholders being assigned to these projects. Often, they are not decision makers, high resistance to change and most ignorant of the changes required. Their usual behavioural approach is “No change”. This is where the Change Agent steps in.
By default, majority of humans are not receptive to changes. When existing processes and mindset remains entrenched, user resistance will be at its highest. This is often detrimental for new system introduction. Change management is often ignored due to existing users or teams which are not well adept to introducing changes. Thus, Change Agent will play an important role to guide these users into the new system. This role focus to identify changes and related user resistances. They also helps to manage and soothes users concerns.
The world hates change, yet it is the only thing that has brought progress.
Change Agent usually effect changes by influence and inspiration. This is in contrast to direct authoritative methods by traditional management. They usually have deep understanding of the change impact on users. Change Agent can be someone from with good communication and understanding of negotiation and persuasive skills. So, it will be a good success factor to include a Change Agent in your Digital Transformation or upgrades projects.
Many applications have been shifting from on premise to cloud. There are many debates to whether your application should shift or not. A fact that exist is that all products will be on cloud for the next five years by 2026. This means you shall start preparations for your applications to be deployed to cloud. What does this mean to product owner?
The anticipated shift to Cloud will create a major change to your product architecture. This will pose a huge risk to your application when you have to move to Cloud. Another change impact is your customisation that is done to your application. In Cloud, the level of customisation is usually restricted to REST or API calls.
Ways to Cloud Safely
Rather than a Big Bang approach, you can consider to transform your customisation into cloud first. Another approach is adopt new add-ons on cloud instead of deploying them on premise. Digital Transformation of legacy applications or customisations are tedious and time consuming. Do consider building your insource cloud capabilities in preparation of your “D-Day” to Cloud. Agile is a must because Cloud will throw up surprise in your shift.
The shift to Cloud is inevitable for many. Debates will only determine if it is now or later. Rewards will goes to those who are well prepared and self reliance on their Cloud capabilities.
The transport mode for TMS (Transportation Management System) is getting diversified due to demand of delivery services from the COVID-19 pandemic. Beside the usual truck, vessel or rail, you will see specialised last mile TMS delivery mode like motorbikes bicycles, or even walking. How do you cater to this alternate transport mode?
Extension or Transform
A way to relook into these alternate transport model is to extension or transform your business model. Extension is a classic method that involves leveraging existing product platform by upgrading and tweaking existing model. The pros are lower cost and lesser change impact. However, you will be constraint by your existing TMS technological landscape. The trending way in 2020s is digital transformation of your TMS. This involves relook of your TMS platform in the face of pandemic with these transport mode.
The organisation business model will change to cater to these transportation services. One of the major change is masterdata setup. The default product model will be different from the conventional setup. Can you apply the same masterdata method for the new transport mode? The answer will be yes and no. Yes, some of masterdata model can be applicable with standard capacity like your truck or rating model of parcel with weight or trips. A major no will be related to the relevance of some masterdata type like location. Location becomes more transaction based at address level more than a masterdata.
COVID-19 pandemic creates new opportunities for digital transformation for TMS with alternate transport modes. Contactless deliveries are driving the logistics and TMS vibrantly. We will expect to see more changes in TMS.
Internet Explorer (IE) has finally come to a glorious end in the battle of browsers. For many legacy applications, this can be a nightmare as you need to upgrade for other browser support or Microsoft Edge. However, the announcement does not give an instant end to your application as many layman will think. It just means that there will be no more upgrades or support related to this product.
In most misconception, EOL does not refer to defective product. It is just a risk management. Do not be surprise to see Windows 95 still being in used for many old legacy applications for many years even though the support have been stopped. For the paranoid, there is a push factor to force an upgrade ASAP. This is where the cost of upgrade will be highest for many reasons. Instead, focus on risk management and contingency planning while you budget for a realistic upgrade cost.
Digital Transformation Cost
90% of organisations will go for conservative approach of upgrade and remain in the comfort zone. Rather than an upgrade, it is worthwhile to consider a digital transformation for your product. This will have a double benefits because you are innovating your product at the same time to a new level. You can also reduce cost by marrying your upgrade and digital transformation in a single budget.
The decision of EOL is mostly to upgrade to a newer version or next product. You should take this opportunity to conduct digital transformation for your application. There is actually ample time because EOL does not mean an instant death to that product.
During system automation, there are often key challenges for manual updates. In every system deployment, human behaviour is the topmost problem for data integrity. Thus, one of the key digital transformation objective is to automate manual updates. I am definitely not referring to RPA as the means. Instead, one key method is to build the rules in the system.
A classic way to automate manual updates is using business rules for auto assignment and pre-population of data in a structured manner. This requires deep understanding and observation of existing SOP (Standard Operating Procedures). You can easily setup auto assignment rules within your system. However, you will need to identify and use the correct parameters. This often requires SME (Subject Matter Expert) because they are well versed in business domain and technical expertise.
ML (Machine Learning) is an emerging field that are likely to replace the business rules. You can now see the permeation of ML in many daily systems like email, photo storage, data storage. They have common rules to identify and categorise your data and usage. However, ML is complex to deploy and limited to normal scenarios. It will not work well for exception scenarios and does not resonates well with end users.
The trend of automation will continue to be simplify with ML. It will not be worthwhile to invest in transition tool like RPA. You will be better off to build your SME team and grow your ML expertise.
ROI (Return On Investment) is a quick and useful model to aid your decision making process. Unfortunately, many organisations find it hard to quantify benefits in dollars and sense. Many mid-level management are not able to request or compute ROI to determine if you should proceed with the user request.
Most people find ROI computation overwhelming and time consuming. However, once you start to build your library of quantifiable investments. You will find ROI easier to be computed. A major push in implementing ROI comes from Cloud Computing where you can see a dashboard of your existing investments. An advantage of cloud allows you to collate and link all your organisation investments to your consumption metrics. The next step is the tricky part in which you must map to your qualitative returns.
Making Sense of the Returns
Many cloud metrics are not relatable to business returns values. For instance, a data transfer metric 1 Gb/month makes no sense to a business users who are not really concern of what 1 Gb is. A more relatable metric will translate to how much the order can cost for its documents. This is where the role of SME (Subject Matter Expert) comes in, to make sense of the returns to business.
Cloud advantages of computing investments is a key reason to make the switch to cloud platform. However, you will need to take extra efforts to translate and make sense of your returns in these investments. Do not be surprised if your computation does not translate to a positive returns. This is because you could have excluded other benefits like upgrades or maintenance cost.
Recently, there is an interesting conversation that makes me realise of a deep misconception of technical capabilities within organisations. This leads me to think why organisations choose to outsource with the constant view that “grass is greener on the other side”. On the other hand, I am a firm believer to grow and develop in-house “unrealised” capabilities. This belief will be accelerated by the change in paradigm of digital transformation.
There is always a misunderstanding that capabilities must be acquired inorganically for all new technologies. This thought may be true in the old days where knowledge and information are shared via books and paper notes. Now, capabilities are often unrealised and untapped like a oil in deep reserve. Management and human resource (HR) must look beyond current skillset to uncover and develop new ones.
Another key shift is adoption of Agile to acquired the ability to learn. With Agile learning, you can learn rapidly through practical implementation from your domain knowledge. The investment cost to mine these untapped resources will give you a a much higher returns than acquiring time and materials resources.
The mindset must first be change of management to focus inwards to develop rather than acquisition of “new capabilities”. After all, the best returns of investing in capabilities comes from internal rather than external. Digital transformation goes beyond technology and also involves transformation of you gain new capabilities.
Transportation rate model is becoming an automation for many TMS (Transportation Management System). However, rate model is not commonly adopted in Asia countries. One reason is the different transportation rating methods in each Asia countries. This leads to many customisation.
Common Transport Rate Model
These are some of the most common rate models you can design for your TMS.
City to City
Zip to Zip
Volumetric, weight or volume
Duration e.g daily, monthly
Equipment e.g. truck, chassis
Why Rating Model
Rating model goes beyond system design. Sadly, many rates by sales team are done in isolation with consideration to TMS. Using rating model have many advantages like cost reduction from operational efficiency, automated computation and financial settlement. This model are proven is eCommerce and eLogistics companies who are pure play digital.
Many traditional logistics providers remains entrenched in paper rates while their digital counterparts enter the logistics with rates digitalisation. The digital transformation of rate model remains a constant challenges for many. A major reason is due to user resistance to digitalise and mindset to change. Do realise that rates is no longer an IT or sales task but a collaborative efforts.
Data permeates everywhere now. You may notice that more service providers are starting to charge for data storage and usage. Is data not free and created by you? Unfortunately, data do add up to big running cost. Why will you pay for the running cost?
Data Running Cost
For a layman understanding, your data running cost will mainly consist of the following:
Maintaining the storage
Resources to maintain the storage
Archival and housekeeping
Security and Privacy
Data transfer and exchange
Data as a Service
Paying for all the running cost of your data do come up to a significant amount. In fact, most of the data may not be required often and could be duplicated elsewhere. Data as a Service (DaaS) is gaining popularity for on demand data. Now, you can avoid spending hefty running cost for data like your data analytics. Instead, you can opt for DaaS to achieve similar objective.
The running cost of data is a growing concern for many as we move towards digital transformation and data analytics. You may consider DaaS as an option to reduce your cost and achieve the same desired outcome to your data analytics initiatives.