Want to stop digital failures? Try complexity absorption and VSM

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Want to stop digital failures? Try complexity absorption and VSM

Different priorities and demands drive our daily lives. Understandably, convenience has become a central hallmark to modern services. A successful service or product must work as intended, respond seamlessly to user interactions and operate across different scenarios.

 

When you order a car on a ride-hailing app, you do a few simple things: you point to where you want to go, confirm where you will be, and the system does the rest. It co-ordinates with potential drivers, queries your payment choice, and assigns the most efficient route, including arrival estimates.

At face value, the transaction is elegant and straightforward. But behind the scenes, a complex orchestration of different systems, processes and services collaborate to deliver on your expectations. Apply this dichotomy to any digital service – whether for external customers or internal users – and you can see why many technology projects don’t deliver on their anticipated value.

“The big challenge today is that you have one customer-facing identity that you need to align with many integrated background services,” said Sekhwela Moses Mokgala, Senior Digital Systems Manager at Axiz. “People want seamless experiences. But to do that, you have to mask the complexity of transactions with the customer.”

Mokgala would know – he wrote his engineering masters, which was awarded best track paper at IEOM 2018 South Africa, and currently his PhD research at Wits University, on this subject. The paper: A Complexity Management Approach for Designing Viable IT Service Systems in South Africa, is a technical deep-dive into the nature of complexity and what to do about it. But the conclusions are not difficult to wrap one’s head around. His research uncovers solutions to a significant issue that continues to sabotage digital transformation projects.

Silos vs integration

If you follow the debate around digital transformation, you’ll hear silos mentioned many times. Silos help separate and manage functions within a complex system such as a business. But they are also frequently at odds with modern technology.

When services such as mapping, payment, rider identity and driver availability can’t co-ordinate with each other efficiently, the results are frustration and a sense of failure. Silos are not compatible with rich integration. So when the two meet, their results often fall short.

Business experts have wrestled with this problem, conceiving several different strategies. One is spinning off a business unit not to be influenced by the larger company’s culture. Another is pursuing high-level transformation projects within a company, with leading executives championing and protecting it from interference.

There are several more, but their successes vary. The type of company has as much to do with success as its digital strategy.

“Every company is unique, so their approach to digital often also has to be unique. You can’t just copy one strategy and apply it elsewhere. That’s because the challenge isn’t just to adopt new services or technologies. You have to re-engineer the entire business, both internally and across the supply chain. You have to look at fundamental things like the org chart or compensation structure. This is often much more than what the company is prepared for.”

But companies don’t have a choice. Digitally savvy customers expect a lot, and the benchmark is being set by digitally native companies that didn’t have to transform from silos to integration. Even business-as-usual practices, such as devops work and project teams comprising different departments, reflect digital’s influence.

Absorbing complexity

Companies that want to succeed must mask the complexity of transactions to users and that means background integration of services both inside the business and from different partners. How can they do that?

Mokgala’s research highlights the Viable System Model (VSM) as a prime way to achieve the above. VSM is a logic framework, initially developed to help the guidance systems of high-speed missiles adapt to external conditions. Then, operations and management theorist Prof Stafford Beer adapted VSM to a business context.

VSM is a framework based around cybernetics, which is the art and science of building machines that adapt to their environments. Yet when applied to a business situation that needs guidance around complexity, VSM is incredibly powerful.

“Humans struggle to articulate complexity. If I asked you how complex one thing is to another, it’s not easy to answer. Is it twice as complex? Five times? What does that even mean? So you need a model that everyone can follow.”

The absence of such a model or framework is frequently at the heart of digital transformation failures. It explains why buy-in is often lacking, why competing interests can sabotage the outcomes, and why companies usually don’t fundamentally change when they should.

Mokgala noted that being able to control complexity isn’t an IT problem or even a business problem. It’s a structural problem – if you want to get value from digital, you need to align the organisation’s culture and structure with the integration required by digital systems.

“VSM lets you define the structures in your environments,” he explained. “Then you can see how different parts can work together in different ways.”

The catch-all for this approach is complexity absorption. As you discover new dimensions and relationships in your company, complex environments become a catalogue of choices for the business. Soon enough, agile combinations and integrations of those choices are what deliver the value you expect from digital investments.

It’s good practice for a company to familiarise itself with VSM and complexity absorption. But it is even more critical that its technology partner understands and can apply this framework.

Many can’t, which helps explain so many digital shortfalls. But it’s no longer a mystery how to evolve from silos to integration.

 

2020-04-02T08:02:28+00:00February 17th, 2020|News|
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