“What’s at stake in the digital economy?” Tough question, right? Tough enough to keep you up at night? Maybe not. One thing is for certain, the answer will be different, depending on who you are asking.
In truth, there is collective fear across industries of being outsmarted and outplayed by a more nimble, innovative bright young start-up, that is prepared to think differently and harness the advantage of greenfield digital implementation. Worse if it is a known competitor. More disruptive and existentially threatening, if the challenger comes from a seemingly unrelated market sector. In short, everyone is afraid of being “ubered, amazoned, facebooked or Googlelised!”
The fight back for established organisations is to become a smart digital operator. A simple enough conclusion when, even without the aid of any Artificial Intelligence (AI), it can be seen that those organisations doing well in the digital economy clearly demonstrate strong handling of digital technologies and their deployment into operations. And they do so with enviable flexibility and agility.
But is being a smart digital operator all just about building software effectively?
Clearly there is more to it. The creation of software is part of a means to an end. But what is that end?
Insights from the field
In Creative Intellect Consulting’s (CIC) 2016/2017 study on the market realities for digital transformation, 63% of the 300 plus interviewed respondents, from across the market landscape and global regions, found one of the essential core attributes was the ability to create better experiences. 57% believed it to be the automation of business processes. However, when asked to rank the most important considerations for digitally transforming, 73% placed efficient operation of the business at the top, followed by 72% placing improved and connected customer experiences. Employee experience was not far behind, at 67%, and 64% saw delivering products and services innovation being core considerations.
Looking at the barriers that organisations face to transforming then, it ranges from costs, speed and time to market of solutions, through to a lack of knowing what it takes to become a digital enterprise and where best to implement apps that can support a digital workplace and workforce. As well as general lack of access to the right skills, and poor training and educational support, there is also significant concern about poor access to app developers who understand the business domain.
Early learnings from those on their digital journey
Speak to a range of organisations that have already embarked on journeys of transformation as we have done at CIC, and you get a more nuanced picture.
The foundations for a digital organisation are crucial and if they do not provide, or allow for, flexibility, then the ability for agility or fast response will be lost. There are a number of other factors that have been found to be important and CIC will be publishing these on its website over the coming months. However, many of those organisations spoken to, attribute early successes down to putting in place strategies that allow them to know what they don’t know. The results have seen them reflect on their business and operational strengths, while honing in on the value that they really offer to their client base. They have better understood the business or operational outcome they want, or need to achieve, and have identified risks and pinpointed where and how to make investments, in order to mitigate them. Their insights have acknowledged which aspects of the latest trends in development and operational technologies and practices are vital for aiding their transition to an organisation that is able to operate flexibly and effectively in the digital economy.
A case for transformation is there for all to see
The reality for all is that digital technologies offer opportunities for greater engagement and improved experiences with suppliers, employees and customers alike. Transforming to employ their use more effectively, not only opens up the potential for new avenues of revenue, it also paves the way for efficient business processes and operations.
Making it work for you may be harder
However, to create better experiences one needs to be more specific, because it is not just about experiences or enabling a better ‘how’. It is about new ‘whats’ as CIC’s Principal Analyst and Webmaster, Paul Herzlich rightly points out. Moreover, it chimes with the insights and lessons learnt from those organisations that CIC has spoken with who are now experiencing the art of the possible from their own transformational directions.
Ultimately, it is about meeting needs that sometimes no one realised they had – for instance social networking. Old assumptions – both about the business and technology – are hard to see through. Just applying new technologies to old business models is not enough.
Technology, as our own survey results and end user engagement repeatedly feedback is step two in digital transformation. To stop being amazoned, businesses have to see new possibilities for their business – to reimagine the business, not as a more technical version of what they use to do, but as an entirely new business that is better for the customer AND (oh, by the way) can only be implemented through deploying technology in new ways. Read CIC’s case study on Harman International and you get a working example of how this process can come about.
Crucially, CIC does not fully believe that ‘small gains’ mentality is right for digital transformation.
‘known knowns’ for digital transformation
Therefore, being a digital organisation requires clarity, direction and recognition of a move towards a defining step change, as much as being well versed in the building, deployment and lifecycle management of software solutions. But, despite the relative maturity of the software industry and the established footprint of software solutions and systems across myriad organisations, it is a reality that few experience well. For some organisations, achieving clarity and direction will prove tough to resolve, especially if they do not have a good handle on their strategic journey; or are not unified in their organisational goals and internal operations. For others, who have begun a journey to transform to adapt and take more advantage of digital technologies, clarity and direction may be less of an issue, but progression more so.
The technology mix to sift through
Crucially, organisations are faced with a litany of competing and complimentary technological advances, most of which reflect variations of the leading trends coursing their way through the market: Mobile, Cloud, Big Data and Artificial Intelligence (AI), through to cognitive analytics and machine learning. Whether they are of immediate value now or not, there can be no doubt that technologies and initiatives, such as the Internet of Things (IoT), Virtual or Augmented Reality (VR/AR), Bots, Advance Robotics, Blockchain, and the cohort of AI technologies, will have an impact on future business and operations.
The starting point to digitally transform and progress will undoubtedly be different for many organisations, as will be the endpoint. Also, transforming to a digital organisation, capable of operating smartly in the digital economy, is not without its challenges. The complexity that underpins many IT estates is a productivity drag that faces many organisations, from the large to the small, and from across the maturity spectrum.
No matter whether you believe we are entering a new era of software or industrial revolution, survival is one that is based on operational adaptability and flexibility, business and product innovation and relevance. It makes the case for Application Programming Interfaces (APIs) that formalises the handshake of data and policy exchange without impinging on the technologies used and the workflows involved. While container technologies that enable self-sufficient lightweight portable applications and microservices delivery models that allow for autonomous delivery and scaling of software services, underpin the drive for greater adaptability.
Nor should we forget the clamouring demands for faster and more stable and sustainable delivery speeds. All of which raise both the prospects and the march towards greater automation and wider employment of agile and more collaborative execution strategies such as DevOps and Agile Methodologies.
Change is coming, do not be blind to the possibilities
Ultimately, no organisation, no matter the industry – manufacturing, financial, healthcare, retail etc. – should be under any illusion as to the change that is coming their way and the transformation that is going to be required to stay relevant and in the game. Moreover, what is built today must depend on how an organisation sees the future shaping, i.e. from the basis that the market may act and operate differently five years or more down the line.
“No man is an island”, is a well-known quote from John Donne’s 1642 seminal poem on devotions. Metaphorically speaking, neither is any one organisation. An ecosystem of partners will be vital for successful operation as a digital organisation. Choosing to build, versus buying, may still be the order of play in the digital economy. Any partner or supplier nuanced to this dynamic; with the expertise and flexibility to operate accordingly; and armed with insights into the challenges of implementation, will be instrumental to achieving a solid foundation for digital transformation.
Read the transformational experiences of leading enterprise organisations in the CIC Digital Transformation research stream. Gain insights into the underpinning software delivery and operational processes, the strategic directions adopted and the business and organisational execution lessons learnt.
Case study selection:
- Deutsche Telekom: Enhancing employee engagement to improve the customer experience
- Capgemini: Design by contract enables consistency and scale in the digital economy
- Swisscom: Innovation labs can identify what digital transformation success entails
- Harman International: Technology innovation expands room for growth
- BP Castrol: Joint business and IT ownership delivers digital success
- Healthcare Transformation
- City Furniture Mobile Transformation