What do such sobering prospects mean for the CEO of most major corporations? Simple – innovation. Innovation and transformation are the relentless treadmill of change and the continuous quest for differentiation. These are what an organization will need for a competitive edge in the future.
But in this digital economy, what does transformation look like?
Time for Change
Key findings from a recent report (the 2016 State of Digital Transformation, by research and consulting firm Altimeter) shared the following trends affecting organizational digital transformation:
- Customer experience is the top driver for change
- A majority of respondents see the catalyst for change as evolving customer behaviour and preference. A great number still see that as a significant challenge
- Nearly half saw a positive result on business as a result of digital transformation
- Four out of five saw innovation as top of the digital transformation initiatives
Much of this is echoed by a study The Future of Work commissioned by Google.
The three most prevalent outcomes of adopting “digital technologies” were cited as
- Improving customer experience
- Improving internal communication
- Enhancing internal productivity
More specifically, the benefits experienced of adopting digital technology were mentioned as
- Responding faster to changing needs
- Optimizing business processes
- Increasing revenue and profits
Meanwhile, the report states that the digital technologies that are perceived as having the most future impact were a top five of Cloud, Tablets, Smartphones, Social Media and Mobile Apps.
So, leveraging new technology, putting the customer first, and driving innovation seem all to connect together to yield tangible benefits for organizations that are seeking to transform themselves. Great.
But it’s not without its downside. None of this, alas, is easy. Let’s look at some of the challenges cited the same study, and reflect on how they could be mitigated.
More Than Meets The Eye?
Seamlessly changing to support a new business model or customer experience is easy to conceive. We’ve all seen the film Transformers, right? But in practical, here-and-now IT terms, this is not quite so simple. What are the challenges?
The studies cited a few challenges: let’s look at some of them.
Challenge: What exactly is the customer journey?
In the studies, while a refined customer experience was seen as key, 71% saw understanding that behaviour as a major challenge. Unsurprisingly, only half had mapped out the customer journey. More worrying is that a poor digital customer experience means, over 90% of the time, unhappy customers won’t complain – but they will not return. (Source: www.returnonbehaviour.com ).
Our View: The new expectation of the digitally-savvy customer is all important in both B2C and B2B. Failure to assess, determine, plan, build and execute a renewed experience that maps to the new customer requirement is highly risky. That’s why Micro Focus’ Build story incorporates facilities to map, define, implement and test against all aspects of the customer experience, to maximize the success rates of newly-available apps or business services.
Challenge: Who’s doing this?
The studies also showed an ownership disparity. Some of the digital innovation is driven from the CIO’s organization (19%), some from the CMO (34%), and the newly-emerging Chief Digital office (15%) is also getting some of the funding and remit. So who’s in charge and where’s the budget, and is the solution comprehensive? These are all outstanding questions in an increasingly siloed digital workplace.
Our View: While organizationally there may be barriers, the culture of collaboration and inclusiveness can be reinforced by appropriate technology. Technology provides both visibility and insight into objectives, tasks, issues, releases and test cases, not to mention the applications themselves. This garners a stronger tie between all stakeholder groups, across a range of technology platforms, as organizations seek to deliver faster.
Challenge: Are we nimble enough?
Rapid response to new requirements hinges on how fast, and frequently, an organization can deliver new services. Fundamentally, it requires an agile approach – yet 63% saw a challenge in their organization being agile enough. Furthermore, the new DevOps paradigm is not yet the de-facto norm, much as many would want it to be.
Our View: Some of the barriers to success with Agile and DevOps boil down to inadequate technology provision, which is easily resolved – Micro Focus’ breadth of capability up and down the DevOps tool-chain directly tackles many of the most recognized bottlenecks to adoption, from core systems appdev to agile requirements management. Meanwhile, the culture changes of improved teamwork, visibility and collaboration are further supported by open, flexible technology that ensures everyone is fully immersed in and aware of the new model.
Challenge: Who’s paying?
With over 40% reporting strong ROI results, cost effectiveness of any transformation project remains imperative. A lot of CapEx is earmarked and there needs to be an ROI. With significant bottom line savings seen by a variety of clients using its technology, Micro Focus’ approach is always to plan how such innovation will pay for itself in the shortest possible timeframe.
Bridge Old and New
IT infrastructure and how it supports an organization’s business model is no longer the glacial, lumbering machine it once could be. Business demands rapid response to change. Whether its building new customer experiences, establishing and operating new systems and devices, or ensuring clients and the corporation protect key data and access points, Micro Focus continues to invest to support today’s digital agenda.
Of course, innovation or any other form of business transformation will take on different forms depending on the organization, geography, industry and customer base, and looks different to everyone we listen to. What remains true for all is that the business innovation we offer our customers enables them to be more efficient, to deliver new products and services, to operate in new markets, and to deepen their engagement with their customers.
Organizations continually have to innovate to match the marketplace-driven rate of change. Readers of the Micro Focus blogsite know that I’m continually banging this drum. The issue seems relentless. Some even refer to tsunamis. But how fast is it?
An article from a recent edition of the UK Guardian newspaper attempted to gauge what the pace of change actually is, using the tried and tested motoring analogy. Here’s a quote.
“If a 1971 car had improved at the same rate as computer chips, then 2015 models would have had top speeds of about 420 million mph. Before the end of 2017 models that go twice as fast again will arrive in showrooms.” Still trying to keep up? Good luck with that.
Of course this is taking Moore’s law to a slightly dubious conclusion. However, the point holds that the clamour for change, the need for constant reinvention, innovation and improvement, that’s not letting up any time soon.
The slow need not apply
But how quickly an organisation can achieve the innovation needed to compete in the digitally-enabled marketplace may depend on the IT infrastructure. Clearly, innovation is easier for funky, smaller start-ups with no core systems or customer data to worry about to drag along with them. But the established enterprise needn’t be left in the slow lane. Indeed look at some of the astonishing advances in mainframe performance and any nagging concern that it can’t support today’s business quickly dissipates.
Meanwhile, innovation through smart software can improve speed, efficiency, collaboration, and customer engagement. With the help of the right enabling technology, mainframe and other large organizations can match external digital disruption with their brand of innovation. Because innovation isn’t any one thing, and therefore the solution must be as comprehensive as the challenge. So what’s the secret to getting the enterprise up to speed? The answer for many is digital transformation.
OK, Digital Transformation may be neologism rather than accepted parlance, the term is common enough that Gartner get it and it has its own wiki definition:
“Digital transformation is the change associated with the application of digital technology in all aspects of human society”
Our customers have told us they are trying to transform, and while they have different ideas about what digital transformation means to them, Micro Focus is very clear about what it means to us.
Digital transformation is how we help keep our mainframe and enterprise customers competitive in a digital world. It can either be tangible, like a better mobile app, a better web interface on to a core system, getting into new markets quicker, ensuring a better overall customer experience, or simply doing things better to answer the challenges posed by the digital economy.
For us, the future is a place where to keep up with change, organizations will need to change the way everything happens. And for IT, that’s Building smarter systems even faster, continuing to Operate them carefully and efficiently, while keeping the organization’s systems and data, especially the critical mainframe-based information, Secure, these are the things that matter to the CIO, not to mention the rest of the executive team.
This is the practical, business incarnation of innovation, but to us the solution is as smart as it is efficient: realizing new value from old. Squeezing extra organizational benefit through increased efficiency, agility and cost savings from the data and business logic you already own. The pace of change is accelerating, so why opt for a standing start? We suggest you use what is, quite literally, already running.
Your digital story is your own journey, but the conversation is heating up. Hear more by joining us at an upcoming event. Taste the Micro Focus flavor of innovation at the upcoming SHARE event. Or join us at the forthcoming Micro Focus #Summit2017.
Transforming? You better be. If so, talk to us, or join us at one of our events soon.