Is your IT infrastructure set up to support innovation?

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There was a time when IT referenced racks of servers hidden away in office closets or basement data centers, but that’s a thing of the past. Virtually all industries — from global banks to retailers, manufacturers, and healthcare organizations — have experienced some form of market disruption (in some cases massive overhaul, due to evolution in technology). Organizations are either deriving competitive advantages from technology or are actively investing in IT infrastructure to survive amid digital transformation (DX).

International Data Corporation estimates worldwide spending on DX technologies will reach $1.3 trillion in 2018, up 16.8 percent from the $1.1 trillion spent last year.

Consumers have unprecedented access to computing power these days, fueling what’s been coined “Industry 4.0.” This fourth industrial revolution is completely digitizing the manufacturing sector with artificial intelligence, machine learning, blockchain, and the Internet of Things.

It’s creating a data-driven ecosystem across the entire supply chain, and it’s disrupting every industry. Businesses that don’t adapt by upgrading technology will get left behind.

The next industrial revolution

Think about some of the breakout companies achieving exponential growth over the past few years: Airbnb, the largest hospitality chain, doesn’t own any hotel properties. Uber and Lyft, the largest passenger driving companies, don’t own fleets of cars. Instead, both unicorn companies invested in highly scalable, technology-driven concepts and sophisticated IT infrastructures that enabled them to completely disrupt billion-dollar global industries.

These disruptors are changing the game, and companies hoping to compete have no choice but to upgrade IT infrastructure to be more agile and respond to new consumer expectations. Machine-to-machine communication, AI, and other sophisticated analytical tools drive innovation and inform business strategies in real time. These technologies improve customer experience and employee productivity by transforming both front- and back-office processes. They help inform physicians' decisions at the bedside and alert nurses who monitor hundreds of digitally monitored beds. They define new risk thresholds for traders who leverage cloud computing and AI platforms to vet effectiveness of trades from previous days.

A recent McKinsey study found superior digital strategies can boost revenues by more than 15 percent. But despite there being room for technology-driven innovation and heightened revenues, many businesses aren’t effectively harnessing the power of technology. According to an Avaya study, 42 percent of customer issues aren’t resolved on first contact. Less than a third of companies report doing a good job of integrating front-office functions with the back office, even though consumers consider timely delivery the third most important factor of the buying experience.

The “Amazon effect” is alive and well, and organizations need to evolve and embrace technology to thrive.

Surviving in the post-Amazon era

Thanks to Amazon, consumers expect the convenience of shopping from home with fast and cheap delivery. The expectation expands beyond shopping online, though. Consumers want a seamless experience with near-instant results no matter where they are, and Amazon proved it’s possible.

Now retailers across North America and Europe are racing to compete with the e-commerce giant. It’s creating a ripple effect that’s spreading quickly to other industries around the globe.

According to TechCrunch, Amazon is expected to earn more than $250 billion in retail sales in the United States alone in 2018, which eMarketer estimates will account for nearly 50 percent of all online retail spend (up 7 percent from its 43 percent ownership of the online retail marketplace it touts today). The company disrupted the global economy so much that the U.K. is now including the “Amazon effect” in official inflation statistics.

That’s a massive impact for a company that’s only 24 years old. And that’s just one company in one industry. How many industries do you think have been disrupted in that time frame versus the previous 50?

The ease of cloud computing — a business Amazon also happens to be in — eliminated the historic barrier to accessing sophisticated software, analytics, neural networks, and compute platforms for running businesses and turning ideas into reality.

Cloud players are seeing droves of companies leveraging their highly scalable and pay-as-you-go platforms to foster growth and innovation like never before. This disruption is happening, and to thrive amid this rapid change, all businesses must be nimble, innovative, and technology-forward.

Forging a path to the future

A scalable, agile IT infrastructure is needed to leverage modern technologies like AI and blockchain. Legacy network infrastructure simply can’t handle the required speed to market or development time frames — let alone handling a successful delivery on consumer expectations anymore.

Not only are outdated systems too slow, but they also increase risk of cyberattacks and operational failures. The problem with these systems is they don’t easily scale to support emerging platforms and agile business processes. Technology evolves quickly, and failure to keep up leads to problems. It’s important to analyze existing IT infrastructure for four key points.

1. Scalability: Looking two months to five years out, the IT solution needs to grow with your needs in a cost-effective, highly responsive manner. Ask your provider’s team whether they can grow with you from a bandwidth standpoint, as well as technology evolution, cloud partnership, and geography.

2. Customization: It’s important that your technology provider design the right solution specific to your business needs. Your provider should partner with you, sit at the table, and invest in features, functionalities, and network assets that truly empower and fully support your business.

3. Diversity: As Industry 4.0 takes place, communication architecture becomes increasingly ingrained — and thus mission-critical. True network and carrier diversity is essential to business continuity and customer experience.

4. Technology-forward: When investing in go-forward solutions, select partners who continue to invest in their core competency, build out network diversity, invest in more capacity, and expand to new geographic regions. They should also be technology-forward themselves through transparency with design, deployment, self-service platforms, and bills.

Investing in scalable solutions that can evolve with changing requirements is vital in today's Industry 4.0 environment. Companies must embrace digital transformation and invest in IT infrastructure that enables innovation and agility.

Services must be highly resilient, diverse, scalable, and cloud-connected. Providers must be responsive and offer customized solutions. Highly scalable infrastructure (that’s diverse and designed for maximum resiliency and uptime) is the key to remaining competitive and supporting complex, technology-driven initiatives.

DX isn’t a fleeting buzzword; it’s a force to invest in, care about, and flourish from. And if Airbnb and Uber recognized this (and now dominate their respective markets), it’s clear they’re doing something right. Innovation is necessary to survive — let your IT infrastructure achieve it.

Karin Ratchinsky, VP of Marketing at Zayo Group

Image Credit: Everything Possible / Shutterstock