DIGITAL TRANSFORMATION
ANTICIPATING, AVOIDING
UNINTENDED CONSEQUENCES
The digital disruption doesn’t have to be disruptive. Here’s how to recognize and address volatility.
igital disruption, the transformation caused by emerging digital technologies and business models, is a reality across industries worldwide, including railroading. It is a paradigm shift that is here to stay, with bone-deep effects for all organizations. Organizations are now challenged to think about their operating principles. They must realize that while strategy is of paramount importance, strategy must be informed by near-real-time understanding of an organization’s operating models and the stresses they undergo. Experimentation needs to be part of the new strategic spirit, where “failing” small and fast is part of the culture, so that the organization can learn quickly, and pivot as needed: guiding globally but acting regionally or locally as needed. Often, as an immediate reaction to addressing digital disruption, organizations resort to making improvements at the surface level, because they appear to be easier to do and are more visible to stakeholders. Unintentionally, organizations end up increasing the volatility in their systems by changing “easier” user interfaces without understanding the full
28 Railway Age // May 2021
implications of those changes, thus spurring a domino effect of one breakdown after another and increasing the risk of failure. Making a seemingly simple change on the surface, such as a more flexible user-friendly application, can create unforeseen problems in back- and middle-office operations that can impact safety and security. How do railroads and their partners anticipate and avoid the unintended consequences that emerge from their digitalization efforts? Based on our experiences in railroading and other industries, we found recurring patterns, three of which we’ll present here, along with approaches to address them. RECURRING PATTERNS, UNINTENDED CONSEQUENCES At its core, digital disruption creates recurring patterns for solutions, which readily transcend across industries. They also spur unintended consequences, of which no industry is immune. These patterns include (see Figure 1): 1. Brand Loyalty through Immersive User Experience – The current level of digital disruption has an impact on brand awareness, which in turn impacts loyalty
of customers, ecosystem partners, and an organization’s employees. Attempting to create a better “user experience” on the surface, while ignoring or short-cutting the much harder to address operational logistics behind the scenes, will not help the brand. Consequently, and unintentionally, mobile applications or user interfaces, for example, become the default brand of the organization. Aspects such as response time, reliability, range of available functionality, language, privacy, and security are all part of that experience. Expectations for more frequent functionality updates increase, to reflect seasonal needs, demographic trends, regulatory rulings, emergency responses, and so forth. In turn, these functionality updates generate more volatility across the entire operating environment, affecting the back office, middle office, and all aspects of logistics that need to support these updates. The processes, data, and application architectures will be stress tested as changes occur in response to forces. The architectures could break at a time when agility and flexibility is needed more than ever. The railwayage.com
Nathan Cervantes
D
BY SONIA BOT AND SHEPPARD NARKIER
