Digital Transformation Imitates Art
Art and politics chased me over Christmas where business and science left off. Punctuating the end of 2016 with a Christmas holiday I thought I could leave behind thoughts of digital transformation and what it means for business and technology, and their future together. But that didn’t happen. Through my on-demand entertainment provider, I found the TV series Humans. The world full of AI androids performing domestic chores or repetitive tasks at work. (The plot is around some of the robots becoming self-aware).
On my Amazon Echo, I tuned into BBC Radio 4 on how sport is being transformed by virtual reality. Then I read on my iPhone the Guardian app news about how the Belgian government is promoting laws to govern the ethics and behaviour of robots and the need for robots to have kill switches. (Switches which the robots on the Humans TV show have, BTW.) Plus I read how a French presidential candidate says he will tax robots. (Giving new meaning to PAYE - Pay As You Execute).
If "Life imitates Art far more than Art imitates Life" (Oscar Wilde) then in the words of your Sat Nav or Google Maps, “we have arrived at our destination”. And if you haven’t arrived it can no longer be a matter of if, but when.
Typically, most businesses are rising to this challenge by embracing the language and activities of “digital”. Creating roles that include “digital” in their title, and doing “digital” initiatives. If I were to say that these are not enough by themselves - you would quickly agree. But what is enough? What should these digital roles and projects be doing beyond grabbing naming rights?Before we go there let’s understand a bit more about the economic impact and the relative importance of this new wave of tech, to see how important it really is.
Research says that we should expect this new wave of technology to provide more than double the lift that the last wave of tech gave to business productivity. Great! Bring it on. The startling fact is however, the last wave gave an average lift of a minuscule 0.6% to business productivity. And this new wave, according to McKinsey, is only expected to give an average lift of up to 1.4%. So not so startling. I’ll take it rather than not, but I would do better to invest funds in the bank.
At the same time, however, we know that business can do very well from riding tech waves correctly. Not experienced in Australia or New Zealand but the airlines industry in the United States got significant improvements to their bottom line in the late 80’s and 90’s through the right IT investment. And in riding, and in some cases creating the new tech wave, the top five firms in the world are now all tech firms. With other big digital business outside of tech delivery, now household names; NetFlix, AirBnB, Uber, Xero, TradeMe.
Revenue above $100K per employee and even into the low millions is experienced by firms that are now the poster children of digital transformation. Today their names are obvious, but did we think that Google with their simple home screen and primary-coloured logo would be the global $2 million revenue per employee, per year business they are now? (As an aside, more than once since Google’s success have I seen a business strategy that says “we want to be the Google of <enter their industry name here>”.)
So what this tells us is that good - if not amazing - business results are possible via digital transformation wave .But you can not just ride it. You have to harness it if you are to get more than the average 1.4% lift in in your business productivity.
If you don’t harness it does it matter? Well, consider that 50% of Fortune 500 organisations have gone since 2000. According to The World Economic Forum, this is “principally due to digital disruption”. And turn to any Productivity Commission around the world to see estimates of near to or above 50% of the workforce being displaced one way or another due to the same digital reasons.
In short, your business has a 50% chance of survival as does your job.
So how do you harness the digital transformation correctly?
We can turn to further research here. Those that got more than the 0.6%, like the American airlines in the 90’s did what any small, medium or larger firm can do. They made strategic IT decisions, and by strategic I mean they:
- Linked the IT investments to the goals and metrics of their organisation. Those goals and metrics that their Board had signed off on and the CEO was intrusted to execute. No IT pet projects or doing it because it seems right. But projects that we expected to line up and deliver on those goals that are important enough for not only IT, but for the rest of the organisation to lift heaven and earth to achieve;
- They ensured that their IT investments were relevant and tailored to their specific business requirements. Making sure that unique value proposition was not watered down, or worse, lost with how someone else thought they should run a similar business;
- They built on their previous IT investments. Doing the right things in the right order and taking advantage of the past; integrating the best of what they have to continually make the best future; and
- They innovated their technology as they innovated their people. There is no point in the technology getting beyond what your people are capable of and vice versa. They must both continue to evolve; neither can stand still.
Knowing this makes choosing an IT partner easier and harder. Easier, because it helps you understand the criteria to measure them against. Harder, because they will be hard to find.
You will need to find a technology partner that:
- Understands and knows how to engage with your business to create the IT initiatives that lines up correctly with your business strategy. Even if you have an existing IT strategy, the business message may still be lost in translation at the next layer down. So that partner will also have to employ the right thinking and project management techniques to not only create the links but maintain them through the lifetime of the work.
Look for evidence of specific IP in this space. Backed by techniques that use things like Design Thinking and Agile to create initiatives and to maintain that link throughout the lifetime of the work. Their IP is necessary because there is no off the shelf solution for this. And Design Thinking and Agile techniques are known to improve the success rate of a project when measured against business outcomes.
- Can technically configure, customise and build what it takes to ensure that the solution you need matches correctly and is tailored to your specific business. Not compromising on ‘good enough’, but reflecting your unique selling proposition in your front end apps, and matching your business process in the back office.
Look for a partner that has a history and range of different software development skills and experience. A partner that is not a one technology shop; not a Salesforce shop or a Microsoft shop; vendors like that will only give you what’s good for them, not what is necessarily right for you.
- Can make the best use of your existing IT investment. Has IP, understanding, skills and experience that they can apply to reuse, re-platform, retire or integrate your past investment to ensure that as you move forward and continue to improve your technology ecosystem; evolving, not dissolving.
Look for a partner that again has a range of technology skills, but not just in software development, but integration, infrastructure and different platforms including cloud IaaS, PaaS, and middleware. Skills up and down the technology stack.
- Finally, but no less important, a partner that can work at the pace that is right for your business. Doing as much as you need as fast as you need them to keep pace with the changes to your business.
Look for a partner that has DevOps IP and commercial operating models that support your BAU (business as usual), changes. Able to breath in and out for bigger enhancements and even technology transformations.
Fronde has been working with organisations to provide them strategic IT for 25 years. As we pick and invest into each successive technology wave we also bring to it the strategic understanding that we have developed over that 25 years to help our customers implement IT strategically, regardless of the technology and the pace they need to work at.