In today’s digital world, it’s not about the big eating the small. It’s the fast that beat the slow, and the nimble that outmanoeuvre companies constrained by old systems and business models. The rapid pace of innovation and disruption means businesses must continuously transform themselves to stay ahead of competitors.
Speed and agility are the name of the game. IT must respond faster than ever to shifting business needs. To succeed at digital transformation, companies must rethink how they design, build, deploy and source enterprise applications. They must adopt new approaches that accelerate delivery and anticipate, and even bake in, ongoing changes.
Here are five best practices from digital leaders that are breaking with the past, to deliver a successful digital future.
1. Accelerate and iterate software delivery
Digital leaders outpace their rivals by adopting methodologies and mindsets that shorten software delivery cycles. They’re also really good at rapid, iterative change.
Shift to Speedier Methodologies
Digital leaders rely on Agile development methods such as short sprints, scrum teams and user feedback loops, which accelerate the design and development of new applications. With its emphasis on design thinking, rapid iteration and continuous improvement, they’re a proven way for companies to churn out new innovations quickly. Studies show that adopting this approach achieves on average a 50 per cent faster time-to-market than a waterfall model.
DevOps is also a catalyst for speed. Automation and tighter collaboration between development and operations make it easier to put new code into production. Led by companies like Facebook, Google and Amazon, the world is moving away from “that ten-year-old solution everyone’s afraid to touch” to flexible platforms that are updated multiple times a day.
Adopt an Agile Mindset
Being agile also demands a willingness to take risks, learn on the fly and adjust continuously. Digital leaders don’t just respond to change; they embrace and design for change.
Digital leaders test and then invest. They fail fast and then swiftly correct and adapt. The most successful way to do this is to experiment rapidly and incrementally, so if there is a stumble they fall from the first floor, not the tenth. Digital leaders also think big, not just digitising current processes but completely reimagining business models and technology systems. Pitney Bowes did this with its transformation into a digital commerce powerhouse and GE, with its launch of the Predix industrial IoT platform.
2. Adopt new application architectures and infrastructure
Move to Microservices
Digital leaders are building in flexibility with new application architectures and deployment models, leaving legacy systems behind.
Monolithic applications are hard to change, costly to maintain, and ill-suited to today’s dynamic business environment. Hence the move to an agile, microservices-driven architecture. Converts include Netflix, eBay, Amazon, Twitter, Gilt, Liberty Mutual, and the UK Government Digital Service.
Assembling applications from small modular services, each a self-contained building block, allows digital leaders to transform quickly and at scale and mix and match services to fast-track new offerings and processes - as well as tweak and scale services to adapt to changing business models and customer expectations. Innovation is also pushed across the enterprise by reusing services, all without adding armies of developers or getting locked into any one technology.
Step Up Cloud Migration
Digital leaders gain speed and agility by plugging into on-demand services and computing resources and cloud is their preferred foundation for digital transformation. They short-circuit long design and procurement cycles and focus on innovation not infrastructure. This enables them to deliver differentiated capabilities and customer experiences at a fraction of the time and cost.
According to IDC, at least half of IT spending will be cloud-based by 2018, reaching 60 per cent of IT infrastructure spending and 60 to 70 per cent of software, services, and technology spending by 2020. Nike, Xerox, General Mills, Liberty Mutual, and the U.S. federal government, have already migrated mission-critical workloads to the cloud in order to support new, more digital ways of doing business.
3. Use novel, unexpected sources of innovation
Digital leaders rely on open source innovators and third-party collaborators to shorten development cycles. They’ve also abandoned long RFPs in favour of shorter, more effective proofs of concept (POCs).
Embrace Open Tech with Open Arms
Open technologies, including open source, open standards and open Application Programming Interfaces (APIs), dominate the digital landscape. According to a study by North Bridge and Black Duck, open source software makes up more than 50 per cent of the typical enterprise and application stack. Digital leaders like Ticketmaster, Box, eBay, and Goldman Sachs rely on open source software to speed solution delivery and utilise innovations of millions of developers worldwide.
Digital leaders also innovate openly with others, they hold hackathons, crowdsource, and co-create with customers and partners. They also contribute back to the community with projects like Walmart Labs, Ericsson’s open source hub, and GE’s Industrial Dojo for the Cloud Foundry ecosystem.
Say RIP to RFPs
Digital leaders have pulled the plug on massive RFPs for complex, multi-year development projects. Instead, they favour faster, more flexible procurement processes that reward innovation and accelerate vendor selection, approaching the RFP like a “request for partnership”. They conduct POC tests to evaluate alternative technologies and use iterative prototyping to refine requirements and determine the best solution for the job. As well as keep their options open with shorter timelines and smaller deliverables.
Digital success calls for a more collaborative relationship with technology providers. It’s the whiteboard sessions, technical conversations, and joint problem-solving that yield breakthrough results.
4. Integrate data and systems in transformative ways
Such open platforms and APIs are also used to integrate information, people and processes across their extended value chain. These connections lay the foundation for faster business flows and new digital products and services.
Connect Quickly with APIs
APIs enable diverse applications to connect and share data. Digital leaders use API-led integration to combine services and expose information in ways that deliver unprecedented customer and business value. They can roll out service innovations, revamp internal processes, enliven customer interactions, extend their digital reach, and enable entirely new business models within days, and without lots of coding.
2017 has been dubbed the year of the API economy. ProgrammableWeb lists more than 17,700 APIs, and hundreds of digital leaders are opening theirs up so others can easily integrate and innovate with their technologies. API marketplaces include Mastercard, ADP, Ford, and FedEx.
Achieve Digital Flow
Silos slow the flow of business. Digital leaders excel at integrating disparate systems. They connect processes from end to end, across all customer touchpoints and organisational boundaries. While open platforms ensure that information and structured data and unstructured content, flows to the right person, at the right time, in the right context.
This allows digital leaders to be much more nimble and responsive, and leverage connections to make huge improvements in customer experience.
5. Bring business and IT closer together
Digital leaders treat digital transformation as a partnership between business and IT, with a shared focus on meaningful outcomes and better experiences for customers and employees.
Engage and Empower Users
Digital leaders put customers, citizens, employees and partners at the centre of their transformation efforts. Design thinking is a priority, a user-centric approach that shifts the focus from adding features to adding value. They take advantage of platform tooling to involve users in solution design and invest in dedicated UX teams to deliver better experiences faster. Capital One, for instance, regularly solicits customer input at its three innovation labs. Other proponents of design thinking include Citrix, Airbnb, BMW, DHL, and Procter & Gamble.
Another winning strategy is to empower users with self-service tools that add business agility. Examples include self-service analytics for rapid decision-making and process services that make it easy for users to modify workflows as business needs change.
Take a More Strategic Role
Now that every company is a software company, IT is increasingly strategic to the enterprise. Successful CIOs have seized this opportunity and are making the most of it.
Forward-thinking IT leaders have recast IT in the role of business partner and change agent for digital transformation. They look for ways to drive growth, deepen customer engagement, and shorten time to market. As well as help colleagues understand and realise the value of digital initiatives, adopting a service mindset that one CIO calls “ego-free IT”. Every digital transformation is different but the underlying challenge is the same. How can IT accelerate the pace of delivery and change simultaneously? By following the lead of digital trailblazers. Adopting their methods enables any organisation can gain the speed and agility needed to compete in a digital-first world, and win.
Chris Wiborg, VP of product marketing, Alfresco Software
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