What is all this hype about Digital Transformation these days? You can’t seem to miss it …blogs, presentations, conferences, presentations are all talking about it. What is this rage about..?
Why should you care ..? Research firm IDC, for example, anticipates global digital transformation spending will reach $1.7 trillion¹ by the end of 2019, a 42 percent increase from last year’s already large numbers.According to IDC spending on digital transformation projects was $1.07 trillion in 2018 which is expected to grow by 16% $1.97 trillion in 2022. Click To Tweet According to the study, 38 percent of all technology spend was on digital transformation, and that two-thirds of all firms have deployed IT initiatives in support of digital transformation.
Sting and Ecommerce
Virtually every business feels the pressure to up its digital game. To make sense of this let us take a quick look at how we got here! With the headline “The Internet is Open”, the August 12, 1994, issue of New York Times chronicled the online sale between two friends of a Sting CD. The Times said, “The team of young cyberspace entrepreneurs celebrated what was apparently the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy.”
The advent and acceleration of cloud computing (mid-2000) laid the foundation of this “Digital Divide” between legacy and current state and it seemed harder for enterprises to stay current with every subsequent wave. As ubiquitous connectivity and high-speed internet became mainstream, the pace of transformation amplified further with the advent of apps economy, rich media uptake, and mobile transformation. For the first time the consumers were ahead of the enterprise, and in control of the technology adoption, uptake and industrialization. The elements of the Digital economy started to emerge piecemeal from the dotcom bubble (2000’s) with eCommerce players and distinct trends emerging, laying the foundations of modern-day customer experience and interaction. Amazon patented its 1-Click service, which allows users to make faster purchases in 1999.
Fremium to 24X7 Frenzy
Digital transformation fundamentals and foundational drivers started to emerge rapidly with e-commerce adoption and acceptance. With the transition from laptop to handheld, the interactions and intensity of consumers and producers of technology and services intensified! While the freemium model was very well received by the consumer for services and software, physical goods exchange needed a platform to transact with trust. It became clear that customer convenience and customer preferences(aka data) were fundamental to this new interaction.
The positive experience would manifest in repeat visits/re-orders and hence it became critical to track not only positive but negative interactions to address any issues in the process and get a sense of this emerging revenue model. Layer the social media growth that exploded on the scene and you had a voice of the customer that could go viral and make or break a brand in the short term and potentially have serious consequences to the bottom line. The ability to transact and collaborate very quickly replaced business 9-5 days to a 24X7 model. This new medium’s interaction was a primarily digital and existing suite of applications and infrastructure was not able to support and scale this new opportunity. Rather legacy (than the current state) architecture stifled the rapid explosion and growth for many enterprises. The increasing volume of transactions created the need for web-scale platforms and increasingly focused on measuring customer interaction via time and browsing habits on their website. This need spawned an ecosystem of platforms and tools that pushed the boundary in terms of transaction enablers. Hence the need for digital transformation emerged and defined by the transition from “legacy” to the “leading edge.”
There is now a strong consensus on not having a viable future state without a conscious initiative and planned digital transformation program in place. The entire expanse of an organization along with its departments, business units, and subsidiaries are in scope to engage in modernizing the operations to the current state of technology and at a level of desired maturity and flexibility.
Fear of FAANGed
The fear of “unknown” competition driven by 20-year-old upstarts is further driving the adoption and pace of digital transformation amongst other things. Corporate leadership and executives are on-board with the idea and support digitization to move away from segregated data platforms and limiting workflows. Armed with the added advantage of a fresh slate, default usage of the latest cloud tools has created this need for continuous innovation interlaced with digital transformation as a viable and competitive advantage sustaining strategy.
According to Boston Consulting Group, “ Three-quarters of large-scale change efforts fail to meet their objectives — and digital transformation efforts are among the riskiest because of the depth and breadth of change involved, the capability disadvantage of many incumbents, the pace at which digital disruption can unfold, and the fact that customers’ expectations are typically set by a digital native like Amazon or Netflix rather than a direct competitor.”
Bi-Modal or Multi-modal Environments
The long laundry list of overdue projects and initiatives provides the feedstock and starting point for some of these initiatives and early conversations. A careful consideration requires that an enterprise defines its strategic and business priorities and then works with the business units to validate and build the required execution plans.
The realization has led to “Bi-Modal IT” where the two distinct, but not strategic and operational streams need to co-exist together and be able to fuel the business processes to drive the engine forward. While the pace, productivity, and performance of the two front’s may be out of sync with each other, the co-existence is certainly something that is a precursor for the next stage. The focus is to leverage and drive existing knowledge into industry-specific, and workflow-driven models to deliver 10x user experience.
Whatever the case may be, whether to enhance existing offerings, improve responsiveness, and or collaborate at the FAANG level, there are certain sets of activities and steps that need to be undertaken. Following themes may be helpful to galvanize the scope with a focused and repeatable set of constructs:
Define the most important client experiences and interactions
|Build a baseline||Transform legacy operations||Transformation approach||Legacy inventory||Technology roadmap|
|Phased Approach||Risk Mitigation||Agile Project approach||Low risk compute retire||Reduce-reuse-repurpose|
|Drive Innovation||Collaborate with ecosystem||Drive for Innovation COE||Adopt Open source||Embrace Open source|
|Productivity Gains||10 X planned improvements||Problem Solution vs. point solution||PoC and PoV’s|
poc=proof of concept pov=proof of value
Technology accelerators will drive the adoption and acceptance of the overall change quotient for the enterprise. However, it is difficult to infuse this and drop large chunks of change into faq, runbooks, and operations manuals! Technology adoption has to have its “stickiness” and industrialization within the enterprise and business unit. Everyone has to be on-board and a practitioner for this to work truly and succeed. Limited risk-taking and ability to innovate, within the bounds of legal, regulatory, and company cultural norms is a recipe for accelerated adoption and ownership wherein the team members and employees, will not only be willing participants but take the reins and be in the driver’s seat. The right culture and medium are vital to the longevity and effectiveness of the cultural and technology changes envisioned and as such should be used to build the foundation for digital transformation programs.
What specific phrases could accomplish this?
Phase – I Decommission Legacy Environments
Phase – II Build a foundation for Leading Edge Environments
Phase – III Innovate in place
While the ability to innovate is driven by a deep desire to develop compelling products and services, digital transformation is an enabler of customer experience. Customer interaction and outcomes become the focal point of digital transformation and provide the theme, vision and building blocks of the proposed workflows and future state models.
Leverage and use Design Thinking
Digital transformation is enabled by an array of processes and technologies including design thinking. Design thinking allows the practitioner to ideate and innovates with deep empathy for user requirements and truly focusing on user-centered design. The focus on generating broad-based solutions vs./ point problem solution raises the bar and focuses on more holistic options and opportunities vs isolated and localized solutions.
Digital Transformation is:
- Owned by the business <—————>Technology is the enabler
- Change management <—————>provides its stickiness
- Adoption is accelerated <—————>by empowerments
- Continuous innovation <—————>sustains it
Whether you are running your business on the mainframe, on-prem client-server, cloud-native, or are in DevOps and agile stages, some of the strategies and approaches listed may provide the framework for starting and sustaining your digital transformation journey. Keep in mind this is a point in time view, all steps of the journey should support the ability to continuously move and push the bar towards digital excellence. The hyper-acceleration of technology and its adoption is creating opportunities at an unprecedented pace while a dizzying array of challenges are emerging in terms of harnessing, harvesting, and integrating into our daily workflows.
Built for Change
And there is where hyperspeed comes in. The value of unlocking data sets in a timely manner and ability to interact in real-time will continue to accelerate and enterprises will be challenged to innovate and compete for clients. Those built for change will survive and last! While the stickiness provides the cohesion for stepping to the next level, only stickiness for change will provide the lasting results. All industries are entering into a new orbit and a hyperspeed approach to digital transformation gives the force to propel and stay in the orbit. The rapid and almost borderline rampant change will not change pace into a steady-state for now, as a portfolio of extremely disruptive and seminal technologies are unveiling on the horizon with AI and machine learning leading the charge with fierce intensity. New ways of engaging, working, and sharing will ride the most efficient, fast, and free-flowing networks. While the future technology building blocks may evolve and mature, it is certain that entities, organizations, and enterprises who adopt, embrace and industrialize new ways of working powered by new technology will flourish and lead the charge. In the words of Bill Gates, “ The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” The approach to undertake digital transformation should carefully consider NOT just remapping of existing products and services into a glorified digitized look & feel, instead should look to create new products, platforms, and services to scale. Remember this is the battle from the 4 walls to the last mile! The fortification will not defend the kingdom, but the ability to build bridges using innovation, openness, collaboration, and client focus will drive success and the moat between winners and losers. Digital transformation enables, empowers, and engages with internal and external customers and has the potential to take the leap and build future proof systems and platforms to scale to meet and exceed the needs of your customers.
For more information about SpringML’s digital transformation services email us at [email protected].