Why Digital Transformation?

Times are changing and IT is no longer about business support, it now drives the business.


The following is an excerpt from my book Digitally Remastered, which outlines how to successfully build a software factory to support your digital transformation efforts now and into the future:

Until recently, the primary application of digital technology has been to support business rather than to actively drive business. Throughout this process, the technological footprint of companies has expanded exponentially, but most companies’ business model, processes, and organizational framework have remained fundamentally unchanged. IT departments were built to increase the effectiveness of the existing pillars of the business —sales, marketing, product development, HR, and finance. The core mission of the classic IT department was deploying and operating technology to ensure the smoothest, most efficient execution of the various business functions. The business viewed software primarily as a productivity tool rather than as a core component of the business’s DNA—an essential element, in other words, for creating value and driving sustained competitive differentiation.

The convergence of the Internet, mobile devices, and pervasive connectivity has fundamentally changed the business relationship with digital technology. Any business can now engage directly with their customers anytime and anywhere through Internet-connected applications and social media—and vice versa. The engagement is real-time, it is one-to-one, and there are no intermediaries between the company and the customer. Most importantly, it is this two-way engagement that is turning the traditional business world on its head. Today, digital engagement through software has become more than a basic expectation: software actually enables your customers to define your business with you through this new interaction model.

Redefining Technology’s Role in Business

Using technology as the primary interface with your customers has profound implications for how your business is organized and operates. As the most direct conduit between a company and its customers, technology must now bear the weight of responsibility for the brand on its shoulders. A company’s product may not be technology, but its brand will be represented, communicated, and judged through technology. Businesses must now be able to connect with and satisfy customers through software-based experiences. To successfully transform your business to enable this new channel to create value, you need to integrate software into the very core of how your business operates.

In order to build software into your business DNA, it’s important to understand the drivers in a world where the digital experience you deliver is your brand. This new kind of experience is dynamic and continuous, and technology, instead of supporting relatively static line-of-business applications, must now deliver live, always-on software services. Where completeness of application functionality was once the prime technology metric, a continuously evolving user-centric experience is now paramount.

The traditional IT function that has served business effectively for decades is not equipped for these new responsibilities. Despite its limitations, many organizations today insist that IT operate in a dramatically different way and for a different purpose than the one for which it was originally constructed. It’s no wonder IT falls short, seems less than strategic, and struggles to deliver—it’s been given a completely new job description, yet few new capabilities to fulfill it. But the answer isn’t to simply enhance IT with new capabilities; it’s about how to build a new operating model for business that puts technology—specifically software—at the very heart of the business itself.

 

Otto Berkes
By Otto Berkes | October 24, 2016

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