So you think you’re not a software company?
In 2011 a poster-boy Silicon Valley entrepreneur quixotically declared that: “software is eating the world”.
As an original member of Jim Clarke’s team at Netscape, co-founder and Chairman of Opsware when it was sold to HP for $1.6bn and an angel investor in Facebook, Twitter, GitHub and Skype – when someone of Mark Andreessen’s track record speaks out, people tend to listen.
But there was a flaw with this particular statement: it felt drastically exaggerated. The average banker, retailer or industry titan would have almost certainly grunted and gone back their copy of the daily paper and business carried on as usual.
Or was it?
The problem (with Information Technology)
For most large organisations, IT has always been about decreasing cost. It is common to invest in large enterprise systems in order to make core business processes more efficient, as well as less prone to human error and more secure. Likewise most organisations will now interact with their customers or users across the internet using one or more digital channels, such as a website or a mobile app.
But these things are seen as complementary rather than core business. Symptomatic of this stance is the undisputable fact that IT is seen simply as a cost to be contained, reduced and outsourced where possible. “Do more for less” is the CIO motto, the role is to manage a cost center.
Taking the IT out of DigITal
But this is not what Mr Andreesen was talking about. Instead, he was referring to an impending socio-economic step-change in human behaviour and how this revolution would fundamentally impact business, whether its leaders were prepared or not.
He was talking about the birth of what we now know of as the digital era, a time when technology is business, there is nothing else. Technology, software and data is a means to actually create value: to make money, rather than merely to save it.
Of course there are forerunners like Google, Amazon and Facebook who have continued to show the world what good digital looks like, mercilessly colonising existing markets, and frequently conceiving entirely new ones. And there are the born-digital start-ups who seem able to reach new heights of innovation with little or no resources.
But in truth, digitally speaking, most businesses today are aspirational stragglers desperately peddling to keep up, for fear of impending obsolescence. No one wants to become their industry’s version of HMV. Digital transformation has become an industry in its own right, a rescue mission to modernise and digitise yesterday’s economy.
And it’s not going well…
See here where it’s claimed that 84% of companies fail when undergoing a digital transformation and 70% here: Digital Transformation failure rates are startlingly high – survival is a risky investment in the fourth industrial revolution. ‘Me too’ strategies don’t appear to be working, only those with genuine vision seem smoothly able to make progress where others struggle.
How to be Digital
So what is it that these digital visionaries have that others don’t? Well, there is no playbook for mastering digital, but here are some key characteristics to focus on:
Strategy is understanding where you are today, where you want to be tomorrow and having a plan to get there. The reason many digital transformations fail is lack of strategy. Having a digital strategy and an understanding of the impact it will have on your organisation is extremely important, preferably before embarking on the journey.
2. Ownership over outsourcing
Outsourcing is a tactic used to lower cost and is normally used for tasks that are operationally critical but non-strategic. In other words, never outsource the crown jewels! The technology that powers a digital enterprise is a key asset and is core intellectual property.
Without the right leadership there is no leadership- no vision, no sponsorship of innovation and no cultural change to support it.
People are both the biggest asset and the biggest risk in a period of digital transformation. Building a suitably motivated and capable team is the key to accomplishing great things in the fast-paced world of software.
There are many skill sets required by a successful software organisation aiming for success in the digital economy. A few key ones are:
- Public Cloud
What: turn hardware into software, reduce or even eliminate data centers and allow technology teams to focus on delivering digital value, not on running I.T.
Public Cloud is an essential ingredient for digital as it provides the secure, performant, irrepressible, innovative building blocks of modern digital business, while at the same time providing a ready outsourced alternative for physical infrastructure that has become utility.
Who: cloud infrastructure architects and DevOps engineers.
What: industrialise the process of creating and changing software so change becomes routine. Automation provides the agility needed to rapidly evolve bespoke software that is the point of distinguishment from competitors and a means of enticing potential customers.
Who: DevOps engineers.
- Customer Experience
What: experiment with, measure and analyse everything in order to learn and adapt quickly as well as entice and preserve as many customers and users to digital channels as possible. Also appeal to as broad an audience as possible to avoid the need for any physical presence (including call centers).
Who: User Researchers, UX Designers, Service Managers.
- Digital Marketing and Communications
What: every digital organisation requires a regular stream of captivating content in order to engage its customers.
Who: Content Designers, Copywriters, UX Designers.
- Data and Analytics
What: a digital enterprise has the ability to measure user behaviour, usage, performance and thousands of other data points in ways limited only by the imagination. This generates unprecedented levels of data that can provide empirical evidence to inform decisions. With public cloud, previously unimaginable amounts of computing power can be brought to bear cost effectively for short periods of time to provide incredible levels of insight.
Who: Big Data Architects and Engineers, Data Scientists.
- Cyber Security
What: with new technology comes new risks. Now more than ever it is crucial to have a comprehensive cyber security strategy. It must cover everything from threat detection, incident response, forensic analysis, prevention, continuous assurance and testing of the ever changing software environment. The strategy will most likely be deployed across a expansive hybrid of on-premise, private and public cloud.
Who: Enterprise Security Architects, Security Architects, Security Analysts, DevSecOps Engineers, Pen Testers.
What: transforming a technology estate for digital poses both difficulty and opportunity. It is best done when carefully planned in order to avoid huge potential waste of resources, unknowingly taking security risks, incurring unforeseen costs and ultimately becoming another failure statistic. Architects will provide the means to properly analyse a problem in context and help to provide a strategy for how to approach and fix it.
Who: Enterprise Architects, Infrastructure Architects, Solution Architects, Security Architects, Data Architects.
6. (The right kind of) Help
It is unlikely that most organisations at the start of a digital transformation journey will have the skills and experience needed to succeed. It is invaluable to have a technology partner who has ‘seen the movie’ before and is able to provide trusted advice in order to fast-track the transition in a proper manner. Understanding how and when to use an objective consulting partner is a vital management skill essential to any successful transformation.
About the Author
Chris Porter is Digital Transformation Director at 6point6. 6point6 is a fast growing, award-winning technology consultancy specialising in Big Data & Analytics, Cyber Security, and Digital Transformation. Its client base spans both public and private sectors including technology, media and financial services. To date, the firm has delivered over 30 major complex and transformational projects, including those with budgets exceeding £50 million. They are a proud member of the Government’s G-Cloud and Digital Services frameworks and have their UK headquarters in St James’s, London.