Organisations will not be in a position to employ all the skills it needs to implement, develop and maintain for its digital infrastructure and applications. The choice is going to be which skills are most important to an organisation. This selection needs to be very discriminating and focus on differentiating skills – those that really make a difference within your ecosystem, particularly for your customers and employees.
Organisations will need a great partner who can deliver generic skills and more services. They will have better economies of scale and skill and will free management to attend to those things most important to customers and employees.
Hybrid Cloud has an Edge
Almost every organisation has a hybrid cloud environment. This is not a projection – it has already happened. And most organisations are not well equipped to deal with this situation.
Organisations may not be aware that they are using multiple public clouds. Many of the niche SaaS applications used by an organisation will use Microsoft Azure, AWS or GCP, so it is highly likely organisations are already using multiple public clouds. Not to mention the offerings from vendors such as Oracle, Salesforce, SAP and IBM. IT teams need to be able to monitor, manage and maintain this complex set of environments. But we are only in the early stages of integrating these different services and systems.
But there is a third leg to this digital infrastructure stool that is becoming increasingly important – what we call “the Edge” – where applications are deployed as part of the sensors that collect data in different environments. This includes applications such as pattern recognition systems embedded in cameras so that network and server delays cannot affect the performance of the edge systems. We can see this happening even in our homes. Google supports their Nest domestic products, while Alexa uses AWS. Not to mention Amazon’s Ring home security products.
With the sheer number of these edge devices that already exist, the complexity it adds to the hybrid environment is huge. And we expect IT organisations to be able to support and manage these.
Simplify, Specialise, Scale
The lessons for IT organisations are threefold:
Simplify as much as possible while you are implementing new features and facilities. Retiring legacy infrastructure elements should be consistently included in the IT Team objectives. This should be done as part of implementing new capabilities in areas that are related to the legacy.
Specialise in the skills that are the differentiators for your organisation with its customers and employees. Find great partners who can provide the more generic skills and services to take this load off your team.
Scale your hybrid management environment so that you can automate as much of the running of your infrastructure as possible. You need to make your IT Team as productive as possible, and they will need power tools.
For IT vendors, the lessons are similar.
Simplify customer offers as much as possible so that integration with your offering is fast and frugal. Work with them to reduce and retire as much of their legacy as possible as you implement your services. Duplication of even part of your offer will complicate your delivery of high-quality services.
Understand where your customers have chosen to specialise and look to complement their skills. And consistently demonstrate that you are the best in delivering these generic capabilities.
Scale your integration capabilities so that your customers can operate through that mythical single pane of glass. They will be struggling with the complexities of the hybrid infrastructure that include multiple cloud vendors, on-premises equipment, and edge services.
And many of the traditional businesses are turning themselves around. Foxtel, the “legacy” cable TV provider in Australia, has grown its subscriber base by 19% off the back of its streaming services – where subscriber numbers are growing at over 60% YoY. ComfortDelgro – a transport provider based out of Singapore – is seeing its revenue start to increase again after being hit hard by digital competitors and the pandemic. CBA’s “Ceba” virtual assistant is winning plaudits in Australia and globally.
It’s Not Too Late to Catch-up!
In many respects, the fact that the digital disruptors got SO far ahead is an indication of just how slow the rest of the market was to respond, and a credit to the significant investments these innovators made to get ahead. But now that the rest of the market is catching up shows that there is no secret sauce when it comes to innovation. What Uber, Tesla, Amazon and every other digital innovator has done is replicable. Your business just needs to make the necessary changes to give you the ability to catch up to the digital innovators in your industry – do it well and you will even keep up with them or get ahead. And innovation is the leading business priority for most organisations today!
What all of the digital disruptors did fifteen years ago, and many other businesses have done since then, is develop the ability to create and improve digital customer experiences at pace. Nearly every customer experience is digital – at least in part. So creating great digital experiences will go a long way to creating great customer experiences. Sounds easy right?
However, what this actually means is they changed their culture, structure, KPIs, technology, skills and the nature of their business. Many organisations have beaten the path to becoming digital businesses – in fact, it is a well-worn path. When you set off on the journey you are no longer taking risks or heading out alone. There is a very clear playbook as to how to become a digital business today.
What Does a Digital Business Look Like?
If you are part of your organisation’s tech team and wondering how digital your business is, ask these questions:
Do you mainly deploy new technology services with the Waterfall project methodology?
Do all of the development work with the IT team (and not in business or customer teams)?
Does it take months or years to deploy new services?
Are your KPIs the same as they were 5-10 years ago?
If the answer to some or all of these questions is YES, then it is likely that you are working for a business that will not catch up with or get ahead of your competitors. You might have a few initiatives that see you make some ground on them – but innovation today is not about leaps and bounds – it is about continual improvement. If you catch up today but don’t have the ability to continually improve, you will have fallen behind again tomorrow…
The good news is it is never too late to start this journey. It typically starts from the top of your business – the CIO cannot make the entire business agile. The head of the digital cannot change the culture of the entire organisation. But the IT and digital teams can get the ball rolling by changing their structure and work processes. Start by moving some developers into the Customer Experience team (if you have one!). Stop funding projects and start funding squads, tribes and teams. Structure the team around the customer journey – or at least make it easier for customers to get value from the digital assets and services you offer. Hopefully, someone will notice the fact that the tech team is helping a business unit or team to operate with agility and they’ll start asking why they cannot have that same ability?
And by then the ball is rolling down the hill and you are on your way to being a digital business – and on your way to giving customers the products, services and experiences they demand today and tomorrow.