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    Digitalization Cases: How Organizations Rethink Their Business for the Digital Age
    Digitalization Cases: How Organizations Rethink Their Business for the Digital Age
    Digitalization Cases: How Organizations Rethink Their Business for the Digital Age
    Ebook865 pages9 hours

    Digitalization Cases: How Organizations Rethink Their Business for the Digital Age

    By Nils Urbach

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    About this ebook

    This book presents a rich compilation of real-world cases on digitalization, the goal being to share first-hand insights from respected organizations and to make digitalization more tangible. As virtually every economic and societal sector is now being challenged by emerging technologies, the digital economy is a highly volatile, uncertain, complex and ambiguous place – and one that holds substantial challenges and opportunities for established organizations.

    Against this backdrop, this book reports on best practices and lessons learned from organizations that have succeeded in overcoming the challenges and seizing the opportunities of the digital economy. It illustrates how twenty-one organizations have leveraged their capabilities to create disruptive innovations, to develop digital business models, and to digitally transform themselves. These cases stem from various industries (e.g. automotive, insurance, consulting, and public services) and countries, reflecting the many facets of digitalization. As all case descriptions follow a uniform schema, they are easily accessible, and provide insightful examples for practitioners as well as interesting cases for researchers, teachers and students.

    Digitalization is reshaping business on a global scale, and it is evident that organizations must transform to thrive in the digital economy. Digitalization Cases provides first-hand insights into the efforts of renowned companies. The presented actions, results, and lessons learned are a great inspiration for managers, students, and academics.

    Anna Kopp, Head of IT Germany, Microsoft

    Understanding digitalization in all its facets requires knowledge about its opportunities and challenges in different contexts. Providing 21 cases from different companies all around the world, Digitalization Cases makes an important contribution toward the comprehensibility of digitalization – from a practical and a scientific point of view.

    Dorothy Leidner, Ferguson Professor of Information Systems, Baylor University

    This book is a great source of inspiration and insight on how to drive digitalization. It shows easy to understand good practice examples which illustrate opportunities, and at the same time helps to learn what needs to be done to realize them. I consider this book a must-read for every practitioner who cares about digitalization.

    Martin Petry, Chief Information Officer and Head of Business Excellence, Hilti 


    LanguageEnglish
    PublisherSpringer
    Release dateSep 20, 2018
    ISBN9783319952734
    Digitalization Cases: How Organizations Rethink Their Business for the Digital Age

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      Digitalization Cases - Nils Urbach

      © Springer International Publishing AG, part of Springer Nature 2019

      Nils Urbach and Maximilian Röglinger (eds.)Digitalization CasesManagement for Professionalshttps://doi.org/10.1007/978-3-319-95273-4_1

      Introduction to Digitalization Cases: How Organizations Rethink Their Business for the Digital Age

      Nils Urbach¹   and Maximilian Röglinger¹  

      (1)

      University of Bayreuth, Bayreuth, Germany

      Nils Urbach (Corresponding author)

      Email: nils.urbach@uni-bayreuth.de

      Maximilian Röglinger

      Email: maximilian.roeglinger@uni-bayreuth.de

      Abstract

      Digitalization confronts organizations with huge challenges and opportunities. With all economic and societal sectors being affected by emerging technologies, the digital economy is highly volatile, uncertain, complex, and ambiguous. Against this backdrop, this book reports on best practices and lessons learned from organizations that succeeded in tackling the challenges and seizing the opportunities of the digital economy. It illustrates how 21 organizations leveraged their capabilities to create disruptive innovation, to develop digital business models, and to digitally transform themselves. These cases stem from various industries and countries, covering the many facets that digitalization may have.

      Nils Urbach

      is Professor of Information Systems and Strategic IT Management at the University of Bayreuth, Germany, as well as Deputy Director of the FIM Research Center and the Project Group Business and Information Systems Engineering of Fraunhofer FIT. Nils has been working in the fields of strategic information management and collaborative information systems for several years. In his current research, he focuses on digital transformation, smart devices, and blockchain, among others. His work has been published in renowned academic journals such as the Journal of Strategic Information Systems (JSIS), Journal of Information Technology (JIT), IEEE Transactions on Engineering Management (IEEE TEM), Information and Management (I&M), and Business & Information Systems Engineering (BISE) as well as in the proceedings of key international conferences such as the International Conference on Information Systems (ICIS) and European Conference on Information Systems (ECIS). ../images/451554_1_En_1_Chapter/451554_1_En_1_Figa_HTML.jpg

      Maximilian Röglinger

      is Professor of Information Systems and Value-based Business Process Management at the University of Bayreuth, Germany, as well as Deputy Director of the FIM Research Center and the Project Group Business and Information Systems Engineering of Fraunhofer FIT. Maximilian has been working in the fields of business process management and customer relationship management for many years. His current research centers around digitalization, digital technologies, and setups for agile and ambidextrous organizations. Maximilian’s work has been published in leading academic journals including the Journal of Strategic Information Systems (JSIS), Journal of the Association for Information Systems (JAIS), Decision Support Systems (DSS), and Business & Information Systems Engineering (BISE) as well as in the proceedings of key international conferences such as the International Conference on Information Systems (ICIS), European Conference on Information Systems (ECIS), and the International Conference on Business Process Management (BPM). ../images/451554_1_En_1_Chapter/451554_1_En_1_Figb_HTML.jpg

      1 The Impact of Digitalization—and Motivation for This Book

      Digitalization reflects the adoption of digital technologies in business and society as well as the associated changes in the connectivity of individuals, organizations, and objects (Gartner 2016; Gimpel et al. 2018). While digitization covers the technical process of converting analog signals into a digital form, the manifold sociotechnical phenomena and processes of adopting and using digital technologies in broader individual, organizational, and societal contexts are commonly referred to as digitalization (Legner et al. 2017).

      The key driver of digitalization are digital technologies. Due to considerable investments in technological progress, various digital technologies are on the market. Thereby, an ever-faster commoditization and time-to-market can be observed. For example, early hardware-heavy information and communication technologies such as the telephone required 75 years to reach 100 million users, whereas lightweight applications such as Instagram achieved the same coverage in little more than 2 years (Statista 2017). Digital technologies include both emerging technologies such as the Internet of Things (IoT) or blockchain and more established technologies such as social media, mobile computing, advanced analytics, and cloud computing (SMAC) (Fitzgerald et al. 2014; Gartner 2017). Loebbecke (2006) refers to digital technologies as all technologies for the creation, processing, transmission, and use of digital goods. Further, Yoo et al. (2010) argue that digital technologies differ from earlier technologies in three characteristics: re-programmability, which separates the functional logic of a device from its physical embodiment, homogenization of data, which allows for storing, transmitting, and processing digital content using the same devices and networks, and a self-referential nature yielding positive network externalities. Digital technologies can be further classified with respect to whether they involve humans actively or passively, how they treat data, whether their input and output is purely digital or can also be physical, or whether they serve infrastructural or application-oriented purposes (Berger et al. 2018). In sum, digital technologies enable platforms, autonomous products, sensor-based data collection, analytical insight generation, as well as analytical and augmented interaction.

      Based on advances in digital technologies, digitalization impacts business and society. Digital technologies enable innovative business models such as the platform-based models of well-known companies including AirBnB, Uber, or Facebook, or decentral models enabled by blockchain and 3D printing (Fridgen et al. 2018; Goodwin 2015). Digitalization also changes industry structures (Gimpel et al. 2018): reduced entry barriers make technology-savvy start-ups flourish and digital giants such as Google or Apple push forward to manifold sectors. Regarding the IoT, for example, 50 billion smart devices are expected to be connected to the Internet by 2020, having an economic impact of $7 trillion (Macaulay et al. 2015; Wortmann and Flüchter 2015). Further, the volume of available data is known to double every 3 years (Henke et al. 2016), and insights-driven businesses are predicted to take away $1.2 trillion per year from less-informed competitors by 2020 (McCormick et al. 2016). Digitalization also empowers customers and impacts our private lives. Today, more people have access to cellphones than to toilets, and one in five people has an active Facebook account (Halleck 2015; UN International Telecommunication 2014). In the digital age, wowing customers is more critical—and more challenging—than before, independent from an organization’s position in the value network, as customers decide themselves how to interact organizations (Hosseini et al. 2018). Likewise, employee behavior and thought patterns evolve towards a new future of work, calling for new work and collaboration models (Brynjolfsson and McAfee 2014).

      Digitalization, however, is neither a new phenomenon nor will it be the final evolutionary stage of information and communication technology (Porter and Heppelmann 2014). Data has been processed and exchanged digitally for more than half a century. An early example is electronic data interchange. Further, the Internet has been used for civil purposes since the 1990s, and e-commerce was first promoted around the year 2000. With smart devices and mobile applications, digitalization experienced an additional boost. While, in former times, digitalization only concerned data managers of corporate IT departments, it now affects all business departments as well as product and service offerings (Urbach and Ahlemann 2018; Urbach et al. 2017). Consequently, discussions moved (again) from support to core processes, from efficiency to excitement, from hygiene factors to opportunity factors, as well as from cost reduction to revenue generation.

      In our opinion, the most significant characteristics of digitalization are not the usage of data or adoption of technology, but the unprecedented speed of change and level of connectedness, which also facilitates the customers’ dominant role as well as the convergence of the physical and the digital world (Gimpel et al. 2018). As such, digitalization shapes a world that is at once the cause and effect of its own characteristics: volatility (i.e., constant and massive changes), uncertainty (i.e., lack of predictability), complexity (i.e., multitude of interrelated and self-organizing actors), and ambiguity (i.e., confounding cause and effect relationships) (Bennett and Lemoine 2014).

      As our discussions with senior managers (e.g., Chief Executive Officers, Chief Information Officers, Chief Digital Officers, and Digital Transformation Officers) in the last years showed, nobody doubts that digitalization came to stay, continuing to impact on all facets of organizations, i.e. customer relationships, value propositions, data analytics, operations, organizational setups, collaboration, and transformation management itself (Gimpel et al. 2018). Rather, the key questions relate to the what and the how, i.e. what organizations should look like in the future and how the to-be state can be reached both in an agile and adaptive manner as well as without jeopardizing existing assets and capabilities (A.T. Kearney and Project Group BISE of Fraunhofer FIT 2017). Many organizations already defined accountabilities for digitalization and set up transformation initiatives. Nevertheless, digitalization remains a vague concept. What is missing are success stories, good practices, and lessons learned that make the benefits of digitization tangible, help prioritize investments, choose among action possibilities, reveal internal homework that needs to be done before customer-facing initiatives make sense, and provide a platform for exchanging thoughts on challenges and opportunities ahead. However, in our research and project work, we also came across many successful companies—be it incumbents or start-ups—that successfully leveraged their capabilities to create digital innovation, develop digital business models, and transform themselves. These organizations have valuable first-hand insights to share.

      Against this background, we initiated the Digitalization Cases book project to match the supply and demand for ideas, experiences, benefits, and lessons learned related to digitalization. Together with an editorial board of forward-thinking digitalization experts, we compiled 21 identically structured case descriptions that provide rich insights into the digitalization activities of renowned organizations from diverse countries and industries.

      Below, we first structure the field of digitalization into digital disruption, digital business, and digital transformation as a first step to make it more tangible (Sect. 2). After that, we overview the cases included in this book structured around these three fields of action (Sect. 3). We conclude with hints on the unified structure of the included cases and on how to read this book (Sect. 4).

      2 Structuring the Field of Digitalization

      To structure the field of digitalization, we use an enterprise architecture model that consists of five layers (Fig. 1). These layers include: business model, business processes, people and application systems, data and information, and technological infrastructure. To tackle the challenges and to seize the opportunities of the digital age, it is essential for organizations to align these layers.

      ../images/451554_1_En_1_Chapter/451554_1_En_1_Fig1_HTML.png

      Fig. 1

      Structuring the field of digitalization along the enterprise architecture

      Considering the turbulence of business environments and the rich set of opportunity available, a key challenge for organizations in the digital age is to distinguish sustainable opportunities promising in the long run from short-term hypes. Against this backdrop, an organization’s business model is of utmost importance, as it enables exploiting existing market potentials and seizing new opportunities. Business models specify on target markets, operating models as well as cost and revenue streams. This also involves the organization’s value propositions, describing which customer needs are satisfied by which product and service offerings. In the digital age, digital technologies allow for entirely new business models such as platform-based business models or innovative decentral models.

      To turn their business model into reality, organizations require cross-functional work routines structured around business processes. In the digital age, process thinking must not only span across departmental but also organizational boundaries, covering entire value networks and ecosystems. Thereby, business processes define the tasks to be performed to achieve specific goals. Beyond established business process management (BPM) concepts that support efficient and stable execution of routine operations, organizations also require agile BPM concepts that support non-standard operations, the management of emerging and proactive organizational behavior as well as fast reactions to changing customer needs.

      The tasks included in business processes can be performed manually by employees, automatically by machines or application systems, or collaboratively. Thus, people are part of an organization’s structure that systemizes roles, responsibilities, and reporting lines. In line with the shift towards agile BPM concepts, organizations must also foster people agility by moving from hierarchical to networked-like structures as well as by fostering employees’ digital mindset and related skills. Further, organizations must account for new roles involved in business processes such as crowd workers, freelancers, robots, and autonomous things. Particularly, the collaborative execution of tasks is strongly advanced by technologies related to human–machine interaction, artificial intelligence, smart devices, and robotics. Many of these technologies also push the frontier of automation, because not only well-structured, but also unstructured tasks can be automated. Consequently, organizations need not only adopt traditional enterprise systems (e.g., enterprise resource planning or customer relationship management systems), but also novel system types such as mobile apps or digital assistants.

      Employees, application systems, and machines create and process data and information. In line with the increasing adoption of digital technologies, the volume of data available is growing rapidly, revealing new knowledge potential. Structured data (e.g., tables or relational databases) can still be analyzed by means of statistical analytical methods. In addition, modern algorithms, leveraging advances in artificial intelligence (e.g., cognitive computing or deep learning), allow for an increasingly precise processing of unstructured data (e.g., texts, graphics, videos, and audio files). Big data analyses enable analyzing and combining large amounts of data from different sources, and thereby enable organizations to make better decisions, predict trends in their business environments, reveal optimization potential, and, above all, understand the needs of customers and employees.

      To exploit the potential associated with digitalization, organizations need an appropriate technological infrastructure. Besides traditional components (e.g., personal computers, tablets, servers, network, and security components), the infrastructure includes also novel components such as cyber-physical systems as well as shared resources such smart meters, smart grids, autonomous cars, or cloud infrastructure. In the digital age, conventional information and communication infrastructure is becoming increasingly integrated with production infrastructure (operations technology) to bridge the gap between the physical and digital world.

      Organizations that aim to thrive in the digital age must unfold the potential of digital technologies, rethink their business models, and transform themselves. Accordingly, we see three major fields of action spanning the different layers of the enterprise architecture as described above (Legner et al. 2017):

      Companies face the challenge of making strategic decisions on the timely use of disruptive technologies. Due to the extensive impact on organizations at large, the goal of the action field digital disruption is to monitor and analyze emerging and maturing technologies to reduce uncertainty in the selection of technologies. In this context, systematically analyzing potentials and threats as well as deriving recommendations for action is of great importance. This also includes developing competences for utilizing these technologies.

      In the digital age, many companies are forced to adapt their business models, e.g. from product to customer and service orientation as well as from stand-alone to ecosystem-enabled value propositions. In fact, digitalization is not about making existing models more efficient, but about designing new models. Thus, the action field digital business refers to the realization of new business models that are enabled by digital technologies. This often results from the fusion of the physical and digital world. Data-driven services, smart products, product-service hybrids, and platforms are examples for new business opportunities in the digital age. Developing viable business models requires organizations to understand the effects of digitalization on the individual, organizational, competitive, and increasingly societal level.

      Due to fundamental changes in business models, a thorough transformation of the entire enterprise architecture is necessary. The technology-induced change is covered by the action field digital transformation. This embraces the necessary goal-oriented organizational, processual, and technological transformation necessary for organizations to succeed in the digital age. Digital transformation requires organizations to understand how business models can be implemented and how digitalization itself changes how organizations must be managed. Existing business processes and organizational structures, application systems and data as well as the underlying infrastructure need to be aligned with the requirements of new customer needs and business models in an integrated manner.

      3 Introducing Cases of Digitalization

      We classified the digitalization cases included in this book in line with whether they relate to digital disruption, digital business, and digital transformation. Below, we briefly overview all cases structured around these three fields of action.

      3.1 Digital Disruption

      First, the case of Schmitz et al. reports on Deutsche Telekom, which aimed to implement a digital strategy and identified Robotic Process Automation (RPA) as an enabling technology to digitalize and automate transactional processes. In addition to the setup and execution of the RPA initiative, the case outlines the most important results, such as an increasing number of automated transactions per month.

      In their case with Lufthansa Systems, Ripolles et al. tackle the challenge of creating software applications while accounting for desired security levels. By applying the so-called Multi-cloud Secure Application (MUSA) approach to create a new prototype, the case not only demonstrates the use of this approach, but also analyzes the impact it has on development, deployment, and operations.

      Confronted with novel customer interaction forms such as attended shopping or virtual fitting, the fashion retailer Baur aims at systematically accounting for the customer perspective in its site engineering process. By conducting an extensive survey among different customer segments, Baier et al. provide valuable insights into the use of digital technologies not only for product selection, but also in ordering, packaging, and delivery processes.

      Auf der Mauer et al. report on the case of the automobile manufacturer Porsche, aiming to leverage predictive maintenance. With predictive maintenance requiring a deep integration with the machines to be monitored, Porsche developed a solution concept called ‘Sound Detective’, an approach based on deep learning algorithms that monitors sound sequences from microphone. The case demonstrates the feasibility of the Sound Detective’s reference architecture and discusses challenges as well as learnings during its implementation.

      3.2 Digital Business

      As KAESER COMPRESSORS, a manufacturer of compressed air systems and services, started to transform and expand its traditional business model, a service-based operator model was introduced where customers no longer purchase customized air compressors, but pay a monthly rate for the air they used. Besides the introduction of the service-based operator model, the case of Bock et al. highlights related benefits for both KAESER and its customers.

      In their case with Danske Bank, Staykova and Damsgaard report on the challenges of an established bank regarding the new technologies and changing customer preferences. The case demonstrates how Danske Bank ventured into disruptive digital initiatives and launched ‘MobilePay’, a digital payment platform used by more than 90% of the Danes today.

      Further, Wildhirt et al. describe the case of GKN, a leading manufacturer of high precision parts for the automotive industry, that faces the question of how to deliver the technology of metal additive manufacturing to its customers. Together with a 3D printing start-up, GKN realized a new business model and succeeded in digitalizing related back-end processes.

      The case of Blaschke presents the recently lunched digital platform Helix Nebula—The Science Cloud, which aims to deliver easy and large-scale access to a broad range of commercial cloud computing services, competing with leading digital platforms. The case shows how the organization implemented different consecutive and interrelated actions to cope with complexity.

      As Sitecore, market leader in the web content management industry, was forced to include an integrated commerce and content platform in its product portfolio, they required a commerce engine. Henningsson and Nishu show how Sitecore established the strategic rationale for the acquisition of a company named SMITH. In the end, Sitecore investigated the feasibility of achieving its strategic aspirations, and is about to integrate both the technology and the development team of the e-commerce engine into a coherent platform.

      Asiedu and Boateng contributed the case of the Presbyterian Church of Ghana, which struggled to reach out to larger and younger communities, and therefore developed an interactive online presence as well as launched social media activities. Besides the development of an online community and a better promotion of worship services, mobile money and a point of sale device were used to facilitate cashless payment of voluntary contributions.

      Nissen et al. report on the consulting provider Dr. Kuhl Unternehmensberatung, which decided to develop a flexible architecture for virtually assessing the project management situation in the form of a digital assessment tool available to its clients. The case describes the design and development of a prototype process model and suggests other consultancies to build up experience and knowledge in virtualizing own services as soon as possible.

      Using an anonymous insurance company as example, Weingarth et al. present a strategic digital transformation initiative driven by the top management to build up digital capabilities and to meet the state-of-the-art agility/innovation requirements. The case demonstrates that actively managing cultural change is paramount across all business and functional areas right from the beginning.

      3.3 Digital Transformation

      As for digital transformation, Sandberg et al. discuss how ABB became a global leader in the process automation industry by successfully transforming their operations. Facing the infusion of digital technology into ABB’s physical production environment, the case describes a substantial adjustment that led to an ambitious transformation of the organization’s business model.

      As the strongly customer-oriented company ENGEL Austria GmbH aimed to decrease the lead time of one of its machines by at least 30%, Value Stream Mapping was used to document the production process and identify weak as well as opportunity points. After that, subject-oriented Business Process Management served as foundation for specifying new and improved processes. In sum, the case of Moser and Říha describes the optimization of cross-company processes as well as the digitalization formerly manual processes.

      Deelmann and Müller present the case of BruderhausDiakonie, a social services organization, willing to engage in digital transformation under the slogan standardization before digitalization. By identifying routine tasks, implementing an easy-to-use technology platform and mobile devices, as well as giving data security a number one priority, the organization already achieved the first digitalization successes.

      At Aarhus Denmark, the case of Meister et al. captures the initiative of the Danish Government to build five super hospitals in different regions that implement vertically and horizontally digitalized processes by having a common information architecture. The preliminary results deduced from the case are used to define a basic framework and to define a method called maturity index for hospital 4.0 to measure the digital maturity of hospitals.

      Also located in the healthcare sector, the case of Vogt et al. focuses on the digital transformation of care processes by presenting the innovation project Bea@Home at Charité. Introducing this new care model, the development and implementation of coordinated processes across all relevant healthcare sectors has been identified as an important foundation for inter-sectoral change processes before technological aspects can be addressed.

      The case of Scheffler and Wirths shows how the insurance company AXA plans to unlock the potential of its data. Focusing on this challenge, they founded a Data Innovation Lab to build up an interdisciplinary work environment between the Data Analytics and the Data Management Office. The target operating model shows how AXA simultaneously increased data and customer centricity.

      Operating in a challenging business environment, Volkswagen was required to build up skills through new corporate education and training solutions. In their case, Wildgrube et al. elaborate on the establishment of the Volkswagen Education Lab, an independent unit for target group centered problem-solving.

      The case of Fortmann et al. demonstrates how Deutsche Bahn Vertrieb reorganized its IT division in the passenger transportation industry. After restructuring the IT division into a single digital IT unit, channel-spanning strategies were enabled, and the organization experienced a boost in motivation and employee engagement, although bringing different modes of operation together took longer than expected.

      The last case of our book examines how the U.S. Federal Communications Commission (FCC) executed its IT modernization effort. Desouza et al. outline how FCC analyzed the current status of IT and human resources and conceived several initiatives for diverse employees and other stakeholders in the process of IT modernization.

      4 How to Read the Cases

      The case descriptions compiled in this book aim to provide insightful examples for practitioners and interesting cases for researchers, teachers, and students. Each case illustrates how a specific company or public organization leveraged its capabilities to create disruptive innovation, to develop digital business models, and to digitally transform itself.

      To make the case descriptions easily accessible and comparable for readers, they follow a unified structure, which has been initially proposed by vom Brocke and Mendling (2017). Each case elaborates on the situation faced in the focal organization, the actions taken, the results achieved as well as lessons learned. The situation faced highlights the initial problem situation and specifies the needs, constraints, incidents, opportunities, and objectives that induced action. The actions taken reflect what the organization did to tackle challenges and opportunities. The results achieved reflects on realized and expected outcomes of the actions taken and how they changed the organization. Finally, the lessons learned reflect the overall case and propose learnings empirically grounded transferrable to other contexts.

      Due to the unified structure, each case can be read independently from all other cases. Readers may read the cases in line with their preferences regarding digital disruption, digital business, or digital transformation. Further, many cases reveal the organization where the case was conducted such that readers can select cases by the most similar organization or industry, or just focus on the cases that interest them most.

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      Part IDigital Disruption

      © Springer International Publishing AG, part of Springer Nature 2019

      Nils Urbach and Maximilian Röglinger (eds.)Digitalization CasesManagement for Professionalshttps://doi.org/10.1007/978-3-319-95273-4_2

      Enabling Digital Transformation Through Robotic Process Automation at Deutsche Telekom

      Manfred Schmitz¹  , Christian Dietze¹   and Christian Czarnecki²  

      (1)

      Detecon Consulting FZ-LLC, Dubai, United Arab Emirates

      (2)

      Hochschule für Telekommunikation Leipzig, Leipzig, Germany

      Manfred Schmitz (Corresponding author)

      Email: Manfred.Schmitz@detecon.com

      Christian Dietze

      Email: christian.dietze@detecon.com

      Christian Czarnecki

      Abstract

      (a)

      Situation faced: Due to the high number of customer contacts, fault clearances, installations, and product provisioning per year, the automation level of operational processes has a significant impact on financial results, quality, and customer experience. Therefore, the telecommunications operator Deutsche Telekom (DT) has defined a digital strategy with the objectives of zero complexity and zero complaint, one touch, agility in service, and disruptive thinking. In this context, Robotic Process Automation (RPA) was identified as an enabling technology to formulate and realize DT’s digital strategy through automation of rule-based, routine, and predictable tasks in combination with structured and stable data.

      (b)

      Action taken: Starting point of the project was the aim to implement DT’s digital strategy. In an early stage of the project, it was decided to utilize RPA as enabler, in particular to drive digitization and automation of transactional activities. From a methodical perspective, the set-up and conduction of the RPA project was structured into (1) organization and governance, (2) processes, and (3) technology and operations. From the content perspective, the RPA project defined and implemented a multitude of detailed RPA use cases, whereof two concrete use cases are described.

      (c)

      Results achieved: Within less than 6 months from the project start, the first transactions were performed automatically through RPA. In March 2016, approx. 229 thousand automatic transactions were successfully realized. Since then, the number of automatic transactions through RPA per month has been increasing significantly. The increase of automatic transactions per month was realized through a growing amount of usage of RPA in different process areas of DT. Within 1 year, the number of automatic transactions per month has been increased to more than 1 million.

      (d)

      Lessons learned: The case provides an example for a concrete technology-induced change as part of a digital transformation. The concept of RPA provides an opportunity to automate human activities through software robots. The lessons learned utilizable for future RPA projects are: (1) Agile design and implementation are important for a successful digital transformation. (2) Understand technical innovations as enabler of the digital transformation. (3) Investigate technical and organizational interrelations from the beginning. (4) RPA is more than a pure cost cutting instrument. (5) The impact of RPA on the people dimension should be managed carefully from the beginning.

      Manfred Schmitz

      is Managing Partner at Detecon Consulting FZ-LLC, Abu Dhabi, UAE. He holds an MSc degree in electrical engineering from University of Applied Science in Cologne as well as an MBA from Henley Management College in the UK. He provides more than 20 years of experience in telecommunication business. He gained severe experience as Software Engineer at Siemens, Technology Manager at VIAG Interkom (now Telefonica O2), Head of Service Management at MobilCom Multimedia and Senior Manager at Vodafone Group Technology. In more than 10 years at Detecon he performed more than 60 projects and developed towards an Managing Partner. He is Detecon’s thought leader for CAPEX & technology strategy, as well as automation and operation topics including e.g. Managed Services, automation and RPA.

      ../images/451554_1_En_2_Chapter/451554_1_En_2_Figa_HTML.jpg

      Christian Dietze

      is Partner at Detecon Consulting FZ-LLC, Abu Dhabi, UAE. Christian has been working in the international telecommunications industry for more than 15 years. He has held various leading positions in the telecommunications industry and has been responsible for the management and quality assurance of significant re-structuring projects. Christian is a senior advisor in digital transformation and most recently he has been supporting chief executives of leading international telecommunications operators to successfully establish their digital business units. In the TM Forum he has a leading position in the further development of eTOM and the development of the Digital Maturity Model (DMM). He received his Master’s in Computer Science from the University of Koblenz-Landau, Germany.

      ../images/451554_1_En_2_Chapter/451554_1_En_2_Figb_HTML.jpg

      Christian Czarnecki

      is Professor of Information Systems at the Hochschule für Telekommunikation Leipzig, Germany. During his academic career, he received a Doctor of Engineering from the University of Magdeburg. He has worked in different consulting companies for more than 10 years, and has managed numerous transformation projects in Europe, North Africa, and the Middle East. His research includes digital transformation, process management, and enterprise architectures. In the industry organization TM Forum he is involved in the further development of the reference model enhanced Telecom Operations Map (eTOM). His work has been published in leading academic journals, in proceedings of international conferences, and in various books.

      ../images/451554_1_En_2_Chapter/451554_1_En_2_Figc_HTML.jpg

      1 Introduction

      Recently, digital technologies are seen as an important driver for technology-induced changes of organizations and business models, referred to as digital transformation (e.g., Matt et al. 2015; Legner et al. 2017). In this context, Robotic Process Automation (RPA) is an innovative approach to transform the process execution without changing the underlying application systems. The general idea of RPA is that software robots perform formerly human work (Allweyer 2016). In contrast to robotics in production processes (Groover 2008), RPA does not use tangible robots but autonomous acting software systems—so-called software robots. They learn and adopt human activities, and handle application systems through user interfaces. From a technical perspective, the realization of RPA ranges from simple rule-based tools to complex tools based on machine learning and artificial intelligence (Willcocks et al. 2015; Czarnecki 2018). Compared to traditional process automation through process-aware systems (Rosemann and vom Brocke 2010; Dumas et al. 2013), RPA does not require changes of the existing application landscape, but replaces the human interaction through a software system (Willcocks et al. 2017) (cf. Fig. 1). There are vendors offering RPA solutions that range from rule-based emulation of simple activities to self-learning of complex activities through artificial intelligence (Schmitz 2017). The benefit of RPA is seen in the fast implementation results combined with high increases in efficiency. In summary, RPA is a new technical approach to process automation that has the potential to enable a technology-induced digital transformation (Lacity et al. 2015; Willcocks et al. 2017). Different cases of RPA usage are documented, such as the automation of core processes at Telefonica O2 (Lacity et al. 2015), the RPA usage at the University Hospitals Birmingham as well as at Gazprom Energy (Willcocks et al. 2015). Scheer (2017) has collected eight RPA use cases ranging from a bank in Great Britain to a car dealership chain in the United States. Furthermore, an analysis of different standard software systems for RPA shows that the general systems are applicable in different industries, however, some suppliers offer specific pre-defined processes (Schmitz 2017). Hence, the general concept of RPA can be seen as industry agnostic. In this case its application is illustrated based on a concrete project in the telecommunications industry. Consequentially, the application presented in this case contains industry-specific requirements.

      ../images/451554_1_En_2_Chapter/451554_1_En_2_Fig1_HTML.png

      Fig. 1

      General RPA architecture (Czarnecki 2018)

      Subject of this case is the integrated telecommunications operator Deutsche Telekom AG (DT) which is one of the largest operators worldwide with approximately 200 million customers in 50 countries (Plunkett 2016). Headquartered in Germany, DT offers fixed-line, mobile, application, and business services based on extensive own network infrastructures. As most traditional telecommunications operators, DT faces the challenge of new competitors offering services via DT’s network—so-called Over-the-Top (OTT) provider (Czarnecki and Dietze 2017a). In combination with overall stagnating revenues of the telecommunications market (Telecommunications Industry Association 2015), DT has to invest in innovations while reducing costs through increased efficiency. Hence, virtualization and automation are major pillars of DT’s strategy. These strategic challenges are typical for the current transformational needs of the telecommunications industry (Peppard and Rylander 2006; Pousttchi and Hufenbach 2011; Czarnecki and Dietze 2017b) that can be summarized in changed market conditions, restructured value chains, and new products and services (Czarnecki and Dietze 2017a).

      Focus of this case is the work stream Process Digitalization which is understood as an important part of DT’s strategy. As a concrete realization, RPA is used to achieve the goal of highly efficient workflows. This chapter describes the concrete implementation of RPA at DT. The first author of this chapter has worked on the entire project as a consultant. The situation faced (cf. Sect. 2), the action taken (cf. Sect. 3), and the results achieved (cf. Sect. 4) are a summarized description based on the author’s observations as well as official project documentations. The lessons learned (cf. Sect. 5) are a retrospective discussion of the case.

      2 Situation Faced

      As one of the world’s leading and fastest growing integrated operators, DT continuously faces challenges in terms of competition, cost pressure, and operational efficiency. DT is headquartered in Germany and has National Companies (NatCos) in several European countries and in the USA. DT provides fixed, mobile, as well as broadband products and services to its customers.

      In 2016, DT has reported more than 200 million fixed, mobile, and broadband customers globally. Telekom Deutschland GmbH (TDG)—the organizational unit that is in charge of consumers as well as small and medium enterprises within Germany—has a customer base of around 75 million fixed, mobile, and broadband customers. This requires efficient and effective processes to meet the demands of existing customers and new subscribers.

      According to the industry-specific reference model enhanced Telecom Operations Map (eTOM), processes in the telecommunications industry can be categorized into customer-facing processes and technical processes (Czarnecki and Dietze 2017b). Customer-facing processes comprise activities that are related to customer order handling, customer (change) requests, and customer complaint management. For the management and execution of customer-facing processes, TDG has established several call centers and back offices. Technical processes comprise activities including technical provisioning, dispatching, performance measurement, maintenance, and fault management. For the technical processes, a dedicated business unit within TDG was established that is responsible for the technical field service in Germany. The unit is called Deutsche Telekom Technical Services GmbH (DTTS).

      Across Germany, DTTS has to handle a significant amount of customer contacts, fault clearances, installations, and product provisioning per year that are depicted in Table 1.

      Table 1

      Number of activities performed by DTTS per year

      The given number of customer contacts, fault clearances, installations and product provisions requires efficient and effective processes, a high degree of process automation, and a large workforce supported by appropriate capabilities and tools to successfully perform their daily work. Especially in those areas, DTTS has identified a couple of shortcomings that directly affect customer experience and customer satisfaction.

      As an important part of DT’s customer-facing processes, DTTS has the overall objective to provide customers with a highly efficient and effective technical field service. In general, DTTS considers latest technologies as an important enabler to provide state-of-the-art services to customers. Through technology penetration, DTTS has the ambition to be ahead of its competitors and to play at the forefront in international comparison.

      However, through reviews and surveys, DTTS has identified several challenges in their existing field service operations that included:

      Incomplete technical provisioning of new products and services;

      Inefficiencies in dispatching;

      Ineffective fault management processes;

      Waiting times of customers not in line with set targets; and

      Dissatisfied customers while dealing with technical field service staff.

      The overall situation persuaded DTTS to consider RPA as an enabling technology to address several of the challenges listed above. At the same time, DTTS has seen RPA as an enabler to formulate and realize its digital strategy. The cornerstones of the digital strategy developed by DTTS and the key actions taken by DTTS to deploy RPA are described in Sect. 3.

      Increased process automation through the usage of software robots, and reduced time-to-market for new products and services were expected. Furthermore, a higher degree of process automation should lead to a lower number of technical field service employees required for process execution. These objectives were in line with the overall target of DTTS to reduce personnel cost by decreasing the number of full time employees (FTE) in the technical field service organization.

      Besides the argument of FTE and cost reduction, several other factors including customer experience, process transparency, technology disruption, and innovative strength have also motivated DTTS to consider RPA as a major technological enabler for its digital strategy realization.

      3 Action Taken

      In this section a summarized description of the actions taken based on observations during the project and documented deliverables is provided. The explained actions and artifacts are related to design decisions based on specific practical requirements, and consensus of the involved executives and team members. Therefore, the structure and terminology might differ from general references. The case is reflected in the lessons learned (cf. Sect. 5).

      As described in the previous section, DTTS faced various challenges related to efficiency and effectiveness. In order to address those challenges, DTTS has developed a digital strategy for the domains quality, growth, and efficiency (cf. Table 2). Selected principles of this digital strategy are summarized in the objectives of zero complexity and zero complaint, one touch, agility in service, and disruptive thinking. As part of the digital strategy, enabling technologies that facilitate the transformation were taken into consideration. As part of the implementation, DTTS has defined four cornerstones that are namely digital journeys, process digitization, predictive services, and digital assistants. Each cornerstone includes a selection of core elements to be considered for successful realization of the digital strategy. Table 2 provides an overview of the four strategic cornerstones with their respective core elements.

      Table 2

      Cornerstones, core elements, and enablers of DTTS digital strategy

      In an early stage of the project, DTTS took the decision to utilize RPA—which is the focus of this case—as technology enabler of its strategy implementation, in particular to drive digitization and automation of transactional activities. Therefore, an RPA project was set up in order to facilitate technology-induced organizational changes with the overall target of a process automation level that allows a reduction of 200 FTEs (cf. Sect. 2). This overall objective was used as starting point for the actions taken in the RPA project. As the project was conducted in an agile manner, the further analysis of the situation and continuous definition of operational targets was part of the project implementation described in this section.

      From the methodical perspective, the set-up and conduction of the RPA project were structured into (1) organization and governance, (2) processes, and (3) technology and operations, which are described in the following subsections. From the content perspective, the RPA project defined and implemented a multitude of detailed RPA use cases, of which two concrete use cases are described more in detail in Sects. 3.4 and 3.5.

      3.1 Organization and Governance

      Due to the strategic importance of the digital strategy, the realization of quick results and savings was a major requirement. Hence, a lean and agile organization was defined to reflect this mindset (cf. Fig. 2). A major challenge was the interrelation between project and line organization. The overall responsibility for the RPA implementation was linked to the Automation & Development Department. The design and implementation of RPA in various concrete processes (e.g., field service, proactive problem solving) was structured according to a project organization methodology, while the operations of the automated solutions have been handled by the IT line organization. Overall, the Automation & Development Department was accountable and responsible for the entire lifecycle of the RPA solution.

      ../images/451554_1_En_2_Chapter/451554_1_En_2_Fig2_HTML.png

      Fig. 2

      RPA organizational set-up

      In the design and implementation domain, a team of RPA project leaders was defined to drive multiple smaller automation activities as separate subprojects following a SCRUM-based agile development method (e.g., Maximini 2015; McKenna 2016). The RPA project leaders had a central role in identifying, designing, and implementing concrete RPA use cases that contribute to the overall objective of increased process automation. The project leaders were supported by a project office that was responsible for overall project management activities. Especially with respect to the various separate subprojects, a central project office was important. For each concrete use case, a team responsible for the design and implementation of the individual RPA process automation was formed. Jointly with the RPA project leader, this team worked according to a project-based approach.

      After the implementation, the RPA use case was handed over to a dedicated team responsible for testing and operations of all automated processes. They were also responsible for change management to ensure necessary adaptations of the RPA implementations. These changes could be triggered by user requirements, but also by adaptations of underlying systems, such as user interfaces, web pages, or tool templates. Finally, a team responsible for reporting of the RPA automation was defined. They were in charge of calculating the license fees to the external RPA vendors. These fees typically follow a pay-as-you-grow principle and are based on the number of automated process steps or the number of executed transactions.

      Furthermore, governance aspects have been considered in order to ensure a successful RPA implementation. As software robots take over work originally performed by humans, social partners and human resources (HR) have been involved as part of the overall governance. Their approval was a mandatory prerequisite to start the implementation of concrete RPA use cases. Whenever the automation led to a headcount reduction in a specific organizational unit, the options to transfer these employees to another position were discussed with the social partners.

      3.2 Processes

      One of the key tasks of the RPA project leaders was the identification of relevant processes that could be automated by RPA. Furthermore, a prioritization of the processes was required to balance the ease of implementation with related saving potentials. Some processes were identified that could be easily automated by RPA foreshadowing low saving potentials, while others promised substantial savings related to high implementation efforts. Therefore, end users have been involved into the identification and prioritization of use cases. For typical work areas, such as, field technician, back office, or dispatching, end users were selected to support the respective teams. The RPA project leaders visited those users at their workplaces to understand their daily tasks. The detailed operational understanding helped to identify and prioritize ideas for RPA use cases. Furthermore, in later phases of the implementation, the project leaders were also able to directly guide the users to areas where process automation helps to simplify their work. This was an important factor for the acceptance of the RPA implementation.

      After the identification and a first prioritization of RPA use cases, a two-week workshop called CAMPUS was conducted. Using creative moderation techniques, for each RPA case, about 20 users, 5 software developers, and the dedicated project leader worked together for 2 weeks to further detail the use case. This resulted in a design of multiple concrete RPA concepts, detailed requirements specifications, and the first RPA prototypes. At the end, approx. 1000 RPA ideas were discussed, 50 qualified RPA use case were formulated, and five RPA prototypes were implemented.

      The prioritization of RPA use cases was based on the following two dimensions:

      1.

      Process complexity; and

      2.

      Amount of process execution.

      Leveraging these two dimensions allowed the achievement of a prioritization of the processes according to their maximum of impact in an optimal manner. Overall, it was the target to find the optimum between the two dimensions process complexity and number of process execution. This was a slightly simplified perspective as it focused on the potential benefit side only and neglected the required efforts as well as costs for the automation implementation of the different processes. Therefore, this approach was used as a first prioritization step to derive a ‘short-list’ of potential automation processes. It was followed by a cost evaluation of the short-listed processes to derive the final decision.

      Following this approach, for each qualified RPA use case an individual qualification sheet was created. The qualification sheet included a description of the process, detailed specifications of its automation, and an evaluation of implementation efforts as well as saving potentials (e.g., Becker et al. 1999; Bandara et al. 2015).

      Based on an appropriate set of specifications produced during the CAMPUS workshop the concrete implementation of each RPA use case was initiated. Typically the implementation of a specific RPA use case took between 6 and 8 weeks and was based on multiple

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