Managing Digitalisati

on Risks with Lean and Agile Thinking

ICMAC 2014

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We operate in a VUCA environment

VUCA

olatility

ncertainty

omplexity

mbiguity

Unexpected and unstable challenges

Unclear cause and effect

Numerous Interrelated variables

Unprecedented challenges and “unknown unknowns”

Create unpredictable demands on resources

Challenge decision making abilities

Overload current processing capabilities

Unsure about course of action to be pursued

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Digitalization is VUCA

1% of world

population

40% of world populationThird billion

First billion

Second billion

Source: http://www.internetlivestats.com/internet-users/

4.4 zettabytes of data in the digital world

1 billion

websites in 13 years

Changed the way we create and communicate

Transformed organisation design and business models

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Technological Revolutions GDP Growth

F

S

D

First Industrial Age (1760 – 1840)

Second Industrial Age (1860 – 1914)

Digital Age (1950 – today)

Convergence

Social

Mobile Big Data

Cloud

DigitalisationMegatrend

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Digitalisation occurs at three waves and levels

Digitising Information1

Digitising process activities2

Digitising business models3

Converting analogue information into digital resources

Automating or reengineering processes for efficiency and to manage greater

complexity.

Driving the participation age and shifting the paradigms of customer engagement models.

Convergence of

technologies

Most obvious and immediate

use

Other industries and

applications

Change the way we operate

Three Waves of Technological Revolutions

Connected people and

things

Network bandwidt

h

Cost of data

storage

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Digitalization challenges require new risk thinking

VUCA

olatility

ncertainty

omplexity

mbiguity

Looking beyond the instability to have a clear intent and direction for the desired future state

Having insights into factors to be considered, discovering new ways of thinking and acting

Focusing on what is required to deliver increasing value through digitalisation

Being ready and responsive by taking a nimble, flexible and lightweight approach

VUCA

ision

nderstanding

larity

gility

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VUCA demands preparedness and anticipation

Strategies

Programmes

Projects and Operations

Decis

ion M

aking

Risk Management

Materialise intent and contain risks as they appear

Strategic decisions to

achieve goals

Tactical decisions to

determine plans

Operational decisions to implement

actions

Adjust plans in agile manner to mitigate potential impact

Eliminate preventable risks

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Traditional risk approach applied on digitalisation

Consider traditional approach for managing technology risks when applied to a digitalisation project at the tactical level.

Identify all “known” technology risks with adverse impact on the project

Prepare risk statements detailing the loss potential

Debate probability and impact to determine the risk exposure

Consider preventive and detective measures to mitigate the exposure

Aggregate risk profile with analysis of other digitalisation projects to form bottom-up larger risk picture for the overarching digitalisation programme

12345

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Possible issues with traditional approach

Produces risk profile

and mitigation plan that is ineffective against the actual risks

Complexity from possible use cases and interplay of risks between different technologies and platforms

Interplay of Risks

Point-in-time assessment does not take into account the time horizon

Linear Approach

Unable to comprehensively identify all risk events upfront and accurately pinpoint the likelihood of each risk due to limited digital knowledge

Limited Information

Influenced by individual prejudices and past experience which may not be a reliable indicator of the digital future.

Subjectivity of

Assessment

Barrier in the increasingly competitive and VUCA environment when focus is not value creation

Loss Prevention

Focus

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Need for more agile and lean approach

V UC A

Digitalisation Megatrend

Interplay of Risks

Linear Approach

Limited Information

Subjectivity of Assessment

Loss Prevention Focus

Risk Management Problem

+ +

Lean thinking brings clarity of vision for understanding and insights into managing digital

risks

Requires more forward looking approach to

address unprecedented future risks

Create new risks, alter risk profiles and disrupt

existing business models

Demands more active and responsive approach in

engaging with VUCA

Agile thinking brings continuous improvement, and

ability to be adaptive and responsive to change

=

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Applying lean and agile risk thinking

Focus on value as the highest priority 1

Foster a highly collaborative environment2

Take an iterative and incremental approach 3

Eliminate waste in resources 4

Create flow and pull in value stream 5

Our senior practitioners build organisational capabilities across Asian economies. Bringing deep domain expertise and decades of leadership experience to every engagement, we deliver measurable, purposeful, and sustainable outcomes.

This is measurity.

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