The strategic role of technology in enterprise agility
For agility, the innovation ecosystem has to be built bottom-up
The Digital Enterprise — The new reality…
When Marc Andreessen said “Software is eating the world” way back in 2011, he meant every word of it. Today we are seeing that in action everyday as leaner companies armed with modern digital armoury dislodge established enterprises, which are reluctant or slow to adapt and accept the new digital reality. It is interesting that the new disruptive companies are not traditional product companies with just domain expertise, but are software companies. They tend to be more agile, not just because they are leaner but also as they are digitally enabled to serve the new-age digital customer.
But the digital revolution is not spearheaded by the leaner digital competitors, but by the consumers themselves. The smartphone revolution, which arguably started in 2007 when the first iPhone was launched, revolutionized the way consumers transacted with businesses. And the technological onslaught is continuing unabated in the form of consumerization of hardware through cloud computing, Internet of Things, blockchain-based smart contracts and crypto currencies, SaaS-based services, and Rapid Application Development (RAD) platforms.
“For the first time in the history of any company that exists today, there’s a threat that takes away all your customers, that throws a wedge between a company and its customers,” says Karl-Heinz Streibich, CEO of Software AG. What are the reasons behind the continuous failure of the enterprises to respond, how can they become more agile, how can they reprogram their businesses to cater to the new digital needs of the customer, or in essence “How can they become a truly digital enterprise”? Let’s explore that in this article.
Reasons for a non-agile enterprise
The reasons why an enterprise is not able to respond to a changing and digitally enabled customer ecosystem can be bucketed into two complementing categories — Technical and Cultural. For every technical reason mentioned below, there is a complementing cultural reason as well.
The legacy baggage — Keeping the lights on
Traditional organizations spend a major part of their IT budget to maintain legacy systems and technologies and this is termed as “Keeping the lights on”. . Legacy technologies eat up a big chunk of an enterprise’s IT budget. Though this budget among early digital adopters has shrunk from 90% to 60% in a decade, it’s still a significant number when compared with a new-age company, which is digital to the core. The cultural aspect of this problem is that some organizations are reluctant to change. Cultural changes inside enterprises are seldom bottom up and are generally propelled by the C-suite employees. Remember, in spite of being the first mover in the digital photography space, Kodak had to file for bankruptcy due to a consumer movement to new-age digital photography and continued reluctance on its part to move away from film-based photography.
Customer neglect — Blurred digital customer journey
As per World Economic Forum, if Facebook was a country it would be the largest in the world. New-age companies like Xiaomi and OnePlus sell almost all their mobile phones online. Moreover, in the age of instant gratification, a brand’s image can shine or suffer, based on consumer reactions on social media. This is the digital reality today and enterprises acknowledge it. But some lack a clear vision for a digital customer journey. This is because there is a need for a cultural shift within an enterprise with a top down push to engage with the new-age consumer.
Departmental silos — Scattered disconnected data
Traditional companies mostly operate in operational silos. It’s not very uncommon to see departments like Finance, Marketing, Sales having their own way of fundamental digitization. An unfortunate technical impact of these siloed operations is not just the vagaries of adopted technologies but also the scattering of disconnected data in an organization. A lot of organizations do realize this but as mentioned earlier, they “keep the lights on”.
Technology Autocracy — IT’s iron-clad grip on app development and delivery
Technology silos by technical and engineering teams create unnecessary bottlenecks. New-age RAD platforms, which takes away the iron-clad grip of technical teams on app development and delivery, is a reality. Democratization of app development is highly topical. But is the traditional company ready for a cultural shift?
Becoming Digitally Agile — Establishing an innovation ecosystem
A holistic approach to these problems — not resolving them as separate, siloed points — is the need of the hour. The first thing is to fix the cultural problem. The executive management has to chart out the entire journey of the digital consumer with products and services of the organization. Silos between departments have to be broken to breed collaboration as the consumer touchpoints are more or less going to traverse across departments. It is also imperative to take employee inputs to remove any pain points and optimize these consumer touchpoints. In essence, an agile enterprise ecosystem has to be created where innovative ideas are collaborated and implemented in visibly finite time.
Technology has that strategic role within an enterprise that can usher in a culture revolution, foster an innovation ecosystem, and make your enterprise agile. Customers and employees start engaging in an ecosystem only if they are properly mapped to their journey of engagement with the company’s products and services.
Here is a pictorial stack representation of what can be done technically to enable a digitally agile enterprise:
From the above figure, one can see how the innovation ecosystem is built bottom-up.
● It all starts with unifying the scattered data by API-fying them. API is the glue that connects scattered data into a standardized and structured form. API Management takes care of API security, sharing, consumption, versioning and a lot of other things in the entire API lifecycle.
- Once the APIs are designed and shared, they can be used to get controlled access to the underlying data. For instance, one can set security rules for APIs to be accessed by external stakeholders like third-party digital channel partners. Internally, these APIs will give employees full access to a gold mine of data that can be analyzed to gather intelligence. New ideas can be formed that are more relevant. These ideas need to be actioned quickly to become consumable entities (read: apps) for everyone.
● But app building needs to be far more democratized. One needs app-building tools that minimize or totally make codes irrelevant. These Rapid Application development or low code development platforms make app building visual in nature, reduce the time and effort required to build an app, and let any user with or without coding skills to build an app. Empowering citizen developers democratizes app development. This is digital innovation; this is agility.
● Only when one moves an app to production, it becomes a consumable unit for internal and external entities. Gone are the days when going live in production was in the domain of the DevOps or the IT teams or the System Admin. New-age tools let you handle app life cycle stages — that is, development to QA to staging to production — with just a few clicks. The provisioning of these environments has also been simplified with private and public cloud provisioning tools.
● And finally, in the figure above, notice the block on the right side that traverses the entire technology stack of the digital innovation system. That represents the collaboration block that lets one collaborate internally and externally with the consumer. Internally, companies invest in enterprise collaboration tools to foster employee engagement and sharing of ideas. Social platforms like Facebook, Twitter, etc.have become inevitable when one talks about external collaboration with consumers and fans alike.
An interesting proposition that emerges in this digital enterprise story is that technology, which was responsible for creating the new-age digital consumer issue for enterprises, also acts as a solution to the problem. Technology is the enabler — of agility inside an enterprise, an innovation ecosystem within an enterprise, engagement with the consumer, and more. There lies a plethora of new technologies in the way ahead that can help attain a digital innovation ecosystem. And this digital innovation ecosystem will help one survive disruptions and market flux, thereby giving birth to “A Truly Agile Digital Enterprise”.
With digital technology comes the ability to mix functions and processes of the business to create new forms of business value. As if it were all software. This is a radically new approach to thinking about business. It’s the new era of programmable business.
This story got published in Business-Standard
