The enterprise is under the gun these days to implement a digital transformation strategy, and in all likelihood the executive suite is calling for dramatically faster change than what IT considers prudent. But with services like Uber and Airbnb showing how easy it is to upend entire industries with little more than a cell phone app, the need to shift infrastructure, processes and even core business models to a digital services footing is urgent to say the least.
As can be imagined, this is not a simple task, nor is it something that affects technology alone. While abstract architectures, cloud computing, collaboration and other advances are crucial to digital transformation, the effect on business cultures, hierarchies and markets are expected to be equally profound.
Naturally, since this movement is brand new and emerged rather suddenly, there is little in the way of actual experience to help guide the enterprise. But based on what we’ve seen so far, there are some general “do’s and don’t’s” when it comes to crafting the basic outlines of transformation. (For more on digital transformation, see Improving Customer Experience With Digital Transformation, Big Data and Analytics.)
Be Proactive, Not Reactive
According to Red Hat, most organizations are engaging in digital transformation in reaction to moves made by competitors. The problem with this approach is it tailors the decision-making process toward the business environment the enterprise is leaving, not the one it is entering. Already, cloud-native startups are building entirely new business models around agile development, mesh cloud computing and containerized infrastructure, so the challenge to legacy enterprises is not to leverage transformation to shore up existing capabilities, but to devise new services and new markets that are uniquely suited to its talents.
All or Nothing
There is always a temptation to implement a new program on a piecemeal basis, but this won’t work with digital transformation. Concepts like agile development cannot thrive under a traditional hierarchy, says tech consultant Steve Denning, so the change must be broad enough to allow agile teams and processes to grow but not so overwhelming that they cause undue disruption to existing patterns. This is a tricky dance for even the most forward-leaning enterprise, but as Barclays Group and others have shown, it is possible to strike the proper balance between agility and control as long as the top leadership of the organization is committed to change.
Results, Not Technology or Processes
In the old days, new technology replaced aging systems and new processes were devised to take advantage of the expanded data footprint. Nowadays, infrastructure can be had in unlimited quantities with just a few mouse clicks, so processes can be designed to suit virtually any need. This gives the enterprise the ability to reverse-engineer the normal development process by focusing on the desired outcome and then working backward from there. As CIO.com noted recently, companies as diverse as JetBlue to Domino’s Pizza are embarking on digital transformation with specific goals in mind, not simply because it uses cutting-edge technology.
Break Down Barriers
The enterprise has been fairly adept at demolishing the silos that isolate data sets from one another, but to fully transform into a digital entity this will have to play out on a cultural level as well. As Essar Group CTO N. Jayantha Prabhu pointed out recently, the predetermined roles that define executive-level jobs can actually hamper business agility. In the future, the CIO will have to ensure that IT experiences become intuitive for users, which can only come about through tight integration between data, systems, infrastructure and services. And as DevOps and other initiatives replace traditional business models, the CIO will have to learn when to take the lead, when to foster collaboration among colleagues and when to take direction from other stakeholders. (For more on silos, see Destroying Silos With Integrated Data Analytics Platforms.)
Of course, digital transformation is not something that can be assigned to a template or conducted in a step-by-step manner. With multiple factors to consider across a wide range of organizational components, the change will play out differently from enterprise to enterprise.
But the upside is that, if done correctly, digital transformation will put organizations on a solid footing for the next-generation economy, and competitive positions will become more firmly established because digital enterprises will have the ability to define their own markets and service them in their own way.