Why digital innovation starts with a cultural shift

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Digital transformation is fuelling the innovation fire, as organisations race to stay ahead of the competition. Those operating in today’s fast-paced digital economy win or lose based on how quickly they can deliver innovation and change. As a result, they are constantly looking for new ways to improve operational efficiency and deliver more compelling connected customer experiences. IT naturally plays a central role in this, but all too often gets swamped with requests, falls behind and ends up bottlenecking project delivery.   

Furthermore, the speed at which organisations can innovate is often controlled by how well they have integrated their applications, data and devices into a cohesive whole, and how easily they can re-use and re-compose the application interfaces. However, many firms are still running their IT ecosystems within siloes, creating a further drain on innovation. Solving this dilemma is (literally) a million-dollar question for some organisations. According to Forrester estimates, $32 billion will be spent on integration software in 2017 and nearly $400 billion will be spent on integration project work. Many are starting to realise that the integration challenge cannot be overcome with technology alone. It first requires a cultural shift. 

The dangers of playing it safe 

Organisations operating the same way for decades often find it difficult to deliver a change of this magnitude. However, playing it safe is self-defeating: The longer customer expectations and disruptive market players are ignored, the quicker organisations fall behind and join the ranks of Blockbuster and Kodak. 

The threat from new digital disruptors is growing rapidly. Just look at the incredible success of the UK’s FinTech space: It is now regarded as the biggest in Europe, pulling in over $1 billion in VC funding since the start of the year; more than double the amount raised during the same period in 2016. FinTech disruptors are redefining customer expectations, leaving established banks at risk if they remain stagnant. What’s more, most industries are seeing this same disruption with mobile, cloud, big data and IoT converging to elevate agile players. 

Unfortunately, traditional organisations are finding it difficult to achieve that same level of agility. MuleSoft’s 2017 Connectivity Benchmark report revealed that half of IT decision makers were unable to deliver all projects asked of them because of factors like under-resourcing, time constraints and the sheer volume of apps they need to integrate. However,  more established organisations cannot walk while disruptors sprint. A new approach to IT is imperative to their ability to keep up. 

Learning from one of the best innovators   

One way established organisations can start to run is to enable technological change to be delivered in a different way, borrowing from the approach pioneered by Apple’s App Store. Rather than IT being a bottleneck with a centralised model to service delivery, innovation is pushed out to the edge, where it is driven by end-users. In the same way that Apple encouraged third-party developers to create the services that its customers consume through its App Store, organisations should be enabling third-party organisations and technically minded employees to create their own IT solutions. To do so, organisations need to deliver IT-as-a-Service, whereby technology assets are exposed in an easily consumable way, so anyone in the business can pick-up and build upon existing capabilities, whilst IT retains the requisite governance (security, throttling etc) to ensure they are being used appropriately.   

The assets being exposed in this new centralised repository might include APIs, best practice templates or connectors to preferred SaaS providers.These digital building blocks can further be composed into an application network, where the assets and capabilities can be plugged in and out easily to provide the agility organisations need when quickly responding to changing customer expectations and disruptive players.   

Key to the approach is empowering more of the business to deliver their own projects in their own way. Non-IT employees such as mobile app developers, for example, could independently update a mobile app with legacy data by tapping into an existing API. Or, financial analysts could independently integrate different data sources to drive sales insights. The emphasis should be on reuse and self-service, freeing IT to work on higher-level strategic projects while saving time and resources.   

Establishing a new mindset 

The approach is incumbent on changing the dominant mindset that new projects need to be built from the ground up, or purchased wholesale to save time and money. IT leaders should instead encourage teams to first consider whether any part of their project has been built before, and if so whether they can reuse those components. Additionally, organisations need to ensure they are building for the crowd and making their assets as simple to discover and use as possible. As we learned from Apple, this can be achieved through a secure, centralised and searchable environment, where these digital building blocks are stored. And the more building blocks added to the repository, the more its value grows.   

The emphasis throughout should be on collaboration – both among team members and between IT and the rest of the organisation. As such, it’s important for users to have the opportunity to give and review feedback, perhaps via an app-style user rating system. Alternatively, IT departments could set KPIs to measure an asset’s performance. There will also be an educational element involved, especially in the early stages. IT and tech-savvy staff are likely to be the fastest to understand and earliest to adopt the approach, but it may take a bit longer for the wider organisation to join the dots between self-service APIs and business success. 

Leading by example 

There are companies already driving significant outcomes with this new model. For example, Unilever found that there’s a fine balance between too much control – which can stifle innovation – and not enough – which could lead to a lack of component reuse. Its answer was the creation of an “internal integration consulting group”, which could offer advice on integration challenges to each business unit as required. It has already achieved some impressive results, reducing SAP ERP integration costs by 26 per cent in just two years. 

Japanese footwear giant ASICS, meanwhile, is using an API-led approach to unify seven global brands onto one platform and engage closer with its customers. Crucial business data including inventory and pricing is transformed into reusable APIs, creating a more agile, efficient and dynamic company all round. 

To emulate this success, organisations must fundamentally change the way they think about IT. Forget about building systems from scratch and working in silos. Instead, organisations should embrace a new approach based around IT-as-a-Service that will allow them to sprint and truly unlock their potential. 

Ian Fairclough, VP of Services, EMEA at MuleSoft 

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