Virtualization Featured Article

Digital Transformation Initiatives Must Begin With Knowledge Not Data

October 10, 2017
By Special Guest
Donald Thompson, founder, president and COO, Maana -

IDC predicts that by the end of this year, two-thirds of CEOs at Global 2000 enterprises will have digital transformation at the heart of their corporate strategy. Most current digital transformation initiatives take, on average, five years to deliver a return on the investment enterprises make.

Optimize Decision Flows to Achieve Digital Transformation

The 30,000-foot definition of digital transformation is: the digitization of critical decisions in every major decision flow across the enterprise. A decision flow refers to the series of daily decisions employees must make in order to manage operations. In the case of Global Fortune 500 enterprises, many of these decision flows revolve around the management of physical assets and processes that keep the enterprise humming.

Digital transformation is complete when every high-impact decision flow within an organization is digitized in order to accelerate the impact of that operation. A typical Fortune 500 company will need to rapidly digitize the top few hundred assets and decision flows with the greatest impact on the profitability of the enterprise.

Digital Transformation Must Begin With Knowledge

Digital transformation is often confused with a data-centric approach. The reality is that the expertise around the operations of equipment and business processes resides with subject-matter experts that are responsible for those operations. Digital transformation is about capturing the knowledge of these experts, combining that with the most relevant data and turning that into digital knowledge so employees can make better and faster decisions.

So What Is Digital Knowledge? 

Digital knowledge is a network of models that collectively provide recommendations into a specific decision flow. These models are the digital encoding of data and human expertise that answer specific operational questions. To have a significant impact on gross margins hundreds of decision flows must be optimized. So, creating models at scale is key to digital transformation.

The best way to achieve that is modularity. By representing each workflow as one or more models, companies can create a currency of digital transformation that can be minted, spent (applied), re-purposed and tracked.

Human Expertise Combined With Data Is the Key to Digitization

The most innovative companies are quickly creating digital knowledge, transforming their business at a much faster rate and gaining a competitive advantage.

A major transportation and logistics company, for instance, operates an extraordinarily complex, global logistics infrastructure. One of the most important operational decisions the company faces over 1000 times per year is when a port does not allow a cargo ship to dock, due to weather or labor strikes. These port omissions cost the company over $300 million per year as an average re-routing decision takes anywhere from six to thirty-six hours to make when evaluating multiple port options.

To address these important logistics operations decisions, the company wanted its port operations experts to make better and faster ship re-routing decisions based on all available information. 

The company developed a logistics and contingency optimization application powered by models, that provide a simulation of the re-routing decision process using data from key systems such as vessel schedules, container moves, equipment management, and bookings. This simulation model scores all possible re-routing options based on time and cost and generates recommendations on the most optimized port to re-route the cargo vessel.

Port logistics experts can now make accurate rerouting decisions in sixty seconds instead of the six hours such decisions used to take.

Knowledge Not Data Increases Gross Margins

The innovators in the industrial sector are at the forefront of using digital knowledge to transform their organizations. For the top 700 major industrial companies, digital transformation equates to the creation of a million models using information locked in hundreds of thousands of disparate sources. Workers use this information to make tens of millions of daily decisions. Capturing knowledge is critical to successful digital transformation. 

About the Author: Donald Thompson is the founder, President and Chief Operating Officer of Maana’s product vision, overseeing technology and product management, and is responsible for building and delivering cutting-edge solutions to Maana’s customers, some of the world’s largest corporations. With over 25 years of experience delivering high-profile, large-scale software and services, Donald has worked closely with top executives at Fortune 30 companies to develop and implement computing strategy across an array of industries, including oil and gas, health care, finance, retail, and travel. Prior to Maana, Donald spent 15 years at Microsoft (News - Alert) as director of engineering, architect, and development manager within multiple divisions. He founded Bing’s Knowledge and Reasoning Team (project Satori); was co-founder of project Arena, which shipped as the SQL Server 2012 Semantic Engine; created Microsoft’s first contextual ad delivery system, spanning multiple international data centers to deliver over 14 billion targeted ads daily and generating $700MM annual revenue. Donald also oversaw numerous incubations in Microsoft Research and Windows.

Edited by Mandi Nowitz

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