Does your digital transformation strategy focus on protecting the past from the future or does it aim to protect the future from the past? This is the dilemma all but the youngest organisations face today.
Established companies and conventional business models face disruption from new, technology-driven rivals, yet they have to deliver the revenue flows needed to satisfy shareholders and stakeholders. They also have to provide the surplus that can be invested in new digital technologies.
And though some organisations have, in effect, walked away from large parts of their traditional markets to embrace new digital opportunities, protecting a hoped for future from the past, this simply isn’t an option for most.
At the same time, however, breaking free of the past is extremely difficult. The old can weigh like a dead hand on the new. CEOs, CIOs and CTOs trying to drive through digital initiatives are still finding it hard to move their business beyond its traditional functional siloes, supply chains and markets.
For some companies, the sheer pace of business and technology, combined with their own organisational inertia, risks inducing digital paralysis – freezing with fear in the face of fundamental change.
For others, the response is to throw more technology at the problem, to use modern technologies to industrialise and automate an increasing number of processes, but not to sufficiently adapt those processes to changing times and new opportunities.
Both approaches are bound to fail, because the digital revolution, like the great industrial revolutions that preceded it, is not about doing the same things more quickly. It is about doing new things in new ways.
The organisations that will succeed in this digital future are those whose people can link together new and legacy technology and the many data sources that are the fuel of the digital revolution, to create operations that are built for permanent change.
Part of this process is getting the right technology in place. Artificial intelligence (AI), machine learning, big data, the Internet of Things (IoT) and increasingly API-based operations are the bedrock of the digital future
Another key factor is the emergence of a platform-based economy. Where business technology leaders traditionally segmented their technology stack into systems of record and systems of engagement, digital requires systems of innovation, and with it a technology platform and partners to support it.
The core components of such a platform include data-driven automation, cloud services, open-source software, containers and mobile development platforms, together with real-time business models.
Most business technology professionals will be familiar with these technologies and will have introduced many of them into their organisations. Melding them together into a platform for the digital future, however, is not easy, particularly when it is necessary to maintain and develop current business systems to ensure ongoing profitability.
A question of leadership
Turning digital technologies into a platform for permanent change requires much more than experimenting with digital labs or trialling a customer-facing mobile project that is bolted on to an existing system. Enterprises need to fundamentally redesign their businesses and IT architectures, and they must drive through cultural change – empowering the staffthey have and hiring new, highly-skilled and creative people to drive forward the process.
Pete Hulme, Data Centre Technical Lead at Dimension Data says, “Major technology projects have always needed executive sponsorship to succeed, but digital transformation is about preparing the organisation to disrupt and be disrupted by changing markets, new competitors and new technologies. That’s why digital transformation leadership has to come from the very top.”
The C-Suite has to delegate one of its number to track the technology and business ecosystems their organisation inhabits and those in adjacent markets, because that is where both opportunities and threats are most likely to emerge, explains Hulme. The executive sponsor, then,must champion the creation of new ecosystems and digital partner strategies. For the largest firms, this might mean trying to set up new ecosystems, but for most it involves tracking emerging ecosystems, to understand the disruptive forces their company faces and the opportunities they present.
As industry and company boundaries blur, the ecosystem, rather than any specific technology or new service, is the key. Uber, is an overused example of digital disruption, but it isn’t just changing the taxi market. It is leading car manufacturers to redefine ownership and leasing models, and linking into other new ecosystems such as that around the connected car. Here the car becomes a platform for digital services such as mobile hotspots, remote diagnostics, safety and security, infotainment, variable insurance, car sharing, and the like. In turn this is linking into the Smart Cities and digital manufacturing ecosystems.
In these ecosystems, explains Hulme, “Innovation is no longer solely defined by the giant organisation at the end of the supply chain, and nor are business opportunities. Supply chains become less hierarchical and relationships with technology providers can become more partnership-based.”
Rival analyst groups bicker about how technology leaders should organise their operations to take advantage of the digital future. Some say a twin track approach of an empowered digital team separated from the day-to-day operations team is the way to go. Others insist that success depends on getting everyone in the organisation on the digital bandwagon and not leaving legacy teams and siloes behind.
The truth is, however, that most businesses need to continue rationalising and automating their existing infrastructure precisely to create platforms for digital transformation. If they don’t, mobile, cloud, analytics, IoT, AI and other technologies will be shackled adding complexity and cost to organisations, rather than transformational tools.
For Dimension Data, that means delivering IT services that are increasingly automated, proactive and able to handle hybrid and multi-vendor environments as an integrated whole.
“We know IT operations are strategic to digital business and we are trying to deliver IT services that enable, and are linked to business outcomes, rather than just operational SLAs,” explains Hulme.
“The pace of business and technical change is only going to increase, so the way your IT infrastructure is optimised, supported, maintained and developed,and the way you can call up extra, or new, services on demand is going to be central to how quickly your organisation can attain its digital ambitions.”
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