Digital Transformation
Nowadays, everyone is talking about “Digital Transaformation” and it is the buzzword of the year without a doubt. Digital technologies (social, mobile, analytics, cloud, Internet of Things (SMACIT) ) change the business landscape rapidly. These modern digital advances cause and at the same time enable fundemental changes to organizations. This can be called “Digital Transformation”. New market entrants disrupt competitive environment using digitial technologies and force established companies to rethink their product/service portfolio or go-to market approach.
I’m sure you have seen the picture below. All companies shown are born digital and have changed the competition dramatically. These companies force all ecosystem to make digital their top priority. Here are key drivers that push organizations to transform in digital era:
- Evolving customer expectations
- Speed of innovation
- Competitive pressure
Some established companies have seen and understood the change very well before others. Frontier companies have set the goal to become a digital enterprise which offers digitized solutions. GE is the perfect example, it has established a seperate division “GE Digital” and Predix platform which combines cloud computing, big data and advanced analytics to industrial companies for managing assets and operations more efficiently. Chairmen and CEO of General Electric (GE) Jeff Immelt expresses the degree of transformation strikingly :
“If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company”
Like GE, companies are creating/enhancing their products or services which have a software layer. It wouldn’t be wrong to say “Every company is now a software company”. Become responsive and agile to improve customer engagement you have to use software and technology for sure.
You need integrated operational and digital backbones
I wrote about Bimodel IT in my previous article. I don’t want to deep dive into the topic but let’s look at the concept briefly. Bimodel IT is the practice of managing two separate, coherent modes of IT delivery, one focused on stability and the other on agility. Mode 1 is traditional and sequential, emphasizing safety and accuracy. Mode 2 is exploratory and nonlinear, emphasizing innovation, agility and speed. Some parts of the model are controversial but emphazising 2 new technology architecture is valuable. When I look at the current architectural landscape and I see -As Bimodel IT suggests- 2 backbones. Operational and Digital. In order to be successful in digital transformation efforts you have to have a solid, integrated operational backbone and a digital services backbone which includes rapidly expanding, loosely coupled set of services.
From corporate IT perspective modernization of legacy systems is important issue. Some companies start with small steps in digital efforts; if they don’t get planned value, they stop it and try new one. Assume that new digital service/product has been successful and the next step requires more integration to the core systems. It might need more detail information about sales, customers, employees etc. So 2 backbones have to interact with each other. This is vital consideration in order to get more from digital efforts.
Couple of words about “small steps” which was mentioned above, it is critical to be aware of that digital transformation is all about iteration and continuous cycles of improvement. There is no place for big leaps we only need continuous change with small steps.
There are lots of aspects, considerations, models to be successful in digital transformation but we need to know that it doesn’t aim to a particular static state. This can be seen as a journey, there is not a specific destination. Therefore, organizations should develop an ability to learn and adapt theirself to constantly changing business ecosystem as new digital technologies appears on the scene one after. So there is no need to wait because change is “New Normal” and don’t let “business as usual” prevent you from moving forward.