The future happens all the time
The future happens all the time. Technology is fuelling a fourth industrial revolution that is exponentially increasing the rate of change and threatening the relevance of all businesses, regardless of size and complexity. This is placing digital transformation – a term which is often misused – on the strategic agenda of every business. Digital transformation helps CEOs diversify revenue streams, sustain profitability and increase agility. Most importantly, it is a crucial requirement for companies wishing to remain competitive in the face of accelerating change and disruption.
But comprehensive digital transformation can be complicated. Complex legacy systems with a myriad components make system-wide transformation extremely challenging. And getting it wrong can be consequential. The International Data Corporation estimates that spending on digital transformation technology will have increased to $2 trillion this year. And for every $1 billion invested in new technology, according to a 2018 study by the Project Management Institute, $112 million is lost to projects that fail. This means that by 2020, companies across the globe had wasted a collective $224 billion on failed technology transformations.
As globalisation takes hold and digitisation of industries and ecommerce expands, the world’s biggest software developers, such as Alphabet, Microsoft, and Amazon, have impacted the business models of companies of all scales across the globe. We need to be able interact with them, leverage their capabilities, and also compete with them. As a result, every company needs to become a software company. For us to compete globally in a digital era, we need to be able to build software as well as they do, while ensuring that ethical design and development considerations are top of mind.
All competitive modern organisations need to place far more strategic emphasis on software development, which sits at the heart of digital transformation and competitive advantage. There is very little in the modern world that can’t be automated or enabled with software. At iOCO, we speak of “Devanything”, because literally anything is possible with modern technology, software, data, analytics and integration. Software is no longer about a business requirement spec that gets handed to an IT team. It has become an integrated, continuous process that enables business to develop creative and innovative solutions.
So what does it take to build a world-class posture on software to support digital transformation in your business? At a high level, every forward-thinking CEO needs assurance that their organisation is able to deliver on three crucial components: design, agility, and interconnection.
Design. Software used to be built around how a company could best deliver products and processes. Consumers in the digital age have become far more demanding in pursuit of the frictionless experiences and instant gratification that digital can offer. Technology offers a massive opportunity to differentiate customer experiences, but the stakes are much higher given the pace at which the world is moving. Design of the experiences powered by software has become the essential ingredient of both differentiation and competitiveness. Companies need to place customers at the epicentre, first gaining insight into their needs and problems and then deploying human-centred problem-solving and design techniques to solve their biggest business opportunities and challenges. This ‘design thinking’ approach redefines how we build products and customer experiences. Software designed to solve real problems, and for the customer, is a critical success factor.
Agility. Technology has exponentially accelerated the pace at which business is required to change and this is happening more quickly than we can realistically anticipate: we will not know what is coming until it is upon us. The only strategic response for modern business is to build radical agility into your software development processes. Agility is, increasingly, the only meaningful currency when building resilient, anti-fragile organisations that can adapt to change. To compete in a digital age, all companies, large and small, need to be able to develop with the speed and agility of the best in the world.
What this means is that organisations need to move on from old “waterfall” IT approaches, implement agile enablement methodologies, and put tooling in place that ensures the continuous delivery of quality software. It is crucial for CEOs to have the assurance they are developing software in ways that will truly allow their business to deliver products, features and processes, from design through to development and testing, at a predictable cost and at the scale and pace expected in the digital era.
Forming strategic partnerships with software development companies that can understand and translate end-user requirements, and that can scale up or down in response to immediate needs while delivering exceptional software, allows companies to quickly pivot and respond to strategic digital opportunities.
Interconnection. The third crucial component that organisations need to unlock – and one which is deeply connected to agility – is interconnection. We live in a modern world of networked economies where trading and making connections which previously required years of manual negotiation and integration can now happen in the blink of an eye. The new world of business is fuelled by the ability to rapidly connect internally, with partners, and with other third-party networks to offer new products, services, and business processes. New products are unlocked through digital connections with third parties, and new customer experiences are delivered and enhanced by accessing specific data and services (e.g. location-based services, and operations) available from third parties.
At the heart of modern connectivity is the “application programming interface” or API, a protocol that allows you to securely and seamlessly connect to services provided internally to your organisation and through third parties. To truly lead in a digital age, your CIO should be creating an API-first organisation that builds software based on its ability to connect. Adopting an API-first philosophy, and having the platforms to facilitate smooth exchange of APIs with other businesses, can revolutionise the quality of products and innovation, and rapidly accelerate your time to market.
Digital transformation has become an existential concern for businesses operating today, and has earned its place on the board agenda. A significant part of your digital advantage starts with software. Practically, CEOs need to know they have a range of critical capabilities in place to ensure they are able to develop world-class experiences for their customers, and automation and enablement for their businesses that will allow them to remain relevant and competitive. Strategic focus on design, agility and interconnection will ensure they are building platform businesses fit to compete in a modern digital world.
Managing Executive – iOCO Digital, International & Regions