Delivering meaning digital transformations excites and torments IT leaders due to its constantly changing nature. Lopez Research is always on the lookout for insights on how to navigate this new IT paradigm, especially when the ideas come from a seasoned veteran of transformation. At the recent CA Technologies. “Built to Change” summit, I had the opportunity to meet with Otto Berkes, the company’s Executive and CTO. Mr. Berkes previously served as the chief technology officer at HBO, spent 18 years at Microsoft and was one of the four original founders of Xbox.
Berkes is also the author of Wiley & Son’s book Digitally Remastered – Building Software into Your Business DNA. (Coincidentally the same publisher as my Right-time Experiences book that describes how to approach building better customer and employee experiences in an increasingly connected world.) The conference and my interview with Mr. Berkes focused on the IT imperative to design a modern software factory. The book, whose proceeds support Code for America, describes the challenge and opportunity of redesigning software for the new world of digital engagement.
As you know, digital transformation isn’t new. However, the pace and extensive IT disruption caused by digitizing the business is more pronounced in this timeframe. Berkes make a prescient point when he states that “technology has moved from a supporting role in the firm to a driving force of growth and engagement.” Perhaps you could say that was always true, but I don’t believe it. Anyone looking at a software package designed in the late 1980s knows that these systems, while digital, aren’t the pinnacle of tools for driving engagement and growth.
When Right-time Experiences was released in 2014, I wrote about how social, mobile and cloud computing would change both employee and customer engagement. In 2018, these concepts are foregone conclusions. Yet many businesses haven’t built the systems to must support in real-time two-way engagement and business process completion for both consumers and employees. Why? I posit that difficulty moving to a modern software-driven organization is the cause of these woes.
Agile development, organizational changes and APIs are key to a modern software-driven business. Agile, much like digital transformation, has been around for decades. However, most companies aren’t organized for agile development which requires small teams, which work in spurts. The team and process incorporate the whole application lifecycle from design to testing to maintenance in one group. It’s a complete shift from the waterfall, command and control model that IT organizations have built their existing practice on. Companies literally must change how the business organizes and operates. As we all know, change is hard.
But the need for speed is real. Software-driven enterprises, whether startups or established companies, can respond to changing market dynamics faster. If it takes multiple quarters to change a system, your company will fall behind the competition. Everyone knows this, yet why don’t we act? For some time, there was a belief that the technologies weren’t ready but that isn’t the case today. The Achilles’ heel of digital transformation isn’t technology adoption, it’s the company’s inertia to change.
Three Roadblocks IT leaders must overcome to build a software-driven enterprise
While I could delineate the various technology solutions and strategies IT should be evaluating (e.g., APIs, microservices and security), I think it’s more important to nail three basic concepts before getting mired in technology selection.
First, don’t toy with agile. The road is paved with good development model intentions but failed execution. Lopez Research has spoken with many companies that have used agile for a project or two, but never committed to moving the entire organization to a new development methodology. Without a strong commitment, your company won’t see the benefits because of its running different tools, processes and development schedules. Agile development can start small, but you have to commit to the organizational change.
Second, budgets need to be realigned for a continuous upgrades mindset. One of the benefits of waterfall development is that you lock the scope and theoretically the cost. While I don’t believe the cost estimates every match the actual expenses, companies need to think differently about budgets in an agile world. You’re actually budgeting for quarterly to bi-weekly upgrades. The job is never done. The software becomes a living breathing part of your organization that must constantly evolve as the market changes. There is no “set it and forget it” mindset in a software-driven organization. Refinement, reinvention and innovation are the goals of a software-driven organization.
Third, effective use of data is crucial to any organization’s success. One of the interesting differences in today’s software driven organization is the need to both consume from and share data with third parties. Businesses must break down internal data silos between groups but also look to developing strategies for sharing data with partners. This may require you to rethink data protection, expiration of content, data storage and analytics strategies. For example, It’s unreasonable to expect you’ll create one repository for all of your data so how do you create a consistent and accurate view of a customer across various data sources? How do you anonymize customer data for sharing with a third party? What data can be shared and for how long? What third-party data would improve your products (e.g. reviews, shipping information, weather)? These are the types of questions companies need to answer before selecting various technology solutions.
Digital transformation is a journey, but if you build a solid strategy for the items mentioned above, you’ll build the foundation for the software-driven enterprise.