The rules of the game have changed.
In today’s digital world, it’s not about the big eating the small. It’s the fast that beat the slow and the nimble that outmaneuver companies constrained by old systems and business models.
What’s more, the finish line is always moving. The rapid pace of innovation and disruption means businesses must continuously transform themselves to stay ahead of competitors.
The takeaway for CIOs: Speed and agility are the name of the game.
IT must respond faster than ever to shifting business needs. To succeed at digital transformation, companies must rethink how they design, build, deploy and source enterprise applications. They must adopt new approaches that accelerate delivery and anticipate, even bake in, ongoing changes.
It’s time to update the IT playbook. Here are five best practices from digital leaders that are breaking with the past to deliver a successful future.
Accelerate and Iterate Software Delivery
Digital leaders outpace their rivals by adopting methodologies and mindsets that shorten software delivery cycles. They’re also really, really good at rapid, iterative change.
Shift to Speedier Methodologies
Digital leaders rely on Agile development methods—short sprints, scrum teams and user feedback loops—to accelerate the design and development of new applications. With its emphasis on rapid iteration and continuous improvement, Agile methodologies are a proven way for companies to churn out new innovations quickly. Studies show Agile approaches average 50 percent faster time-to-market than waterfall ones.
DevOps is also a catalyst for speed. Automation and tighter collaboration between development and operations make it easier to put new code into production. Led by such companies as Facebook, Google and Amazon, the world is moving away from “that 10-year-old solution everyone’s afraid to touch” to flexible platforms that are updated multiple times a day.
Adopt an Agile Mindset
Of course, being agile requires more than just new methodologies. It also demands a willingness to take risks, learn on the fly and adjust continuously. Digital leaders don’t just respond to change; they embrace and design for change.
Digital leaders test and then invest. They fail fast and then swiftly course-correct. The most successful experiment rapidly and incrementally so if they do stumble, they fall from the first floor, not the 10th. Digital leaders also think big. They don’t just digitize current processes. They completely re-imagine business models and technology systems—as Pitney Bowes did with its transformation into a digital commerce powerhouse or as GE did with its launch of the Predix industrial IoT platform.
Adopt New Application Architectures and Infrastructure
Digital leaders are building in flexibility with new application architectures and deployment models. They’re leaving legacy systems behind as they take to the cloud with microservices-based solutions.
Move to Microservices
Monolithic applications are hard to change, costly to maintain and ill-suited to today’s dynamic business environment. That’s why digital leaders are moving to an agile, microservices-driven architecture. Converts include Netflix, eBay, Amazon, Twitter, Gilt, Liberty Mutual and the UK Government Digital Service, to name just a few.
Assembling applications from small modular services—each a self-contained building block—allows digital leaders to transform quickly and at scale. They can mix and match services to fast-track new digital offerings and processes. They can tweak and scale services to adapt to changing business models and customer expectations. And they can push innovation across the enterprise by reusing services—all without adding armies of developers or getting locked into any one technology.
Step Up Cloud Migration
The cloud is increasingly the preferred foundation for digital transformation. Digital leaders gain speed and agility by plugging into on-demand services and computing resources. They short-circuit long design and procurement cycles; focus on innovation, not infrastructure; and deliver differentiated capabilities and customer experiences at a fraction of the time and cost.
Digital leaders are betting big on the cloud. According to IDC, at least half of IT spending will be cloud-based by 2018, reaching 60 percent of IT infrastructure spending and 60 percent to 70 percent of software, services and technology spending by 2020. Organizations across industries—such as Nike, Xerox, General Mills, Liberty Mutual, and the U.S. federal government—have migrated mission-critical workloads to the cloud to support new, more digital ways of doing business.
Use Novel, Unexpected Sources of Innovation
Digital leaders rely on open-source innovators and third-party collaborators to shorten development cycles. They’ve also abandoned long RFPs in favor of shorter, more effective proofs of concept (POCs).
Embrace Open Tech with Open Arms
Open technologies—including open source, open standards and open APIs—dominate the digital landscape. According to a study by North Bridge and Black Duck, open source software makes up more than 50 percent of the typical enterprise and application stack. Digital leaders including Ticketmaster, Box, eBay and Goldman Sachs rely on open-source software to speed solution delivery and draft off the innovations of millions of developers worldwide.
Digital leaders also innovate openly with others. They hold hackathons. They crowdsource. They co-create with customers and partners. They also contribute back to the community with projects such as Walmart Labs, Ericsson’s open-source hub and GE’s Industrial Dojo for the Cloud Foundry ecosystem.
Say RIP to RFPs
Digital leaders have pulled the plug on massive RFPs for complex, multiyear development projects. Instead, they favor faster, more flexible procurement processes that reward innovation and accelerate vendor selection. They conduct POC tests to evaluate alternative technologies. They use iterative prototyping to refine requirements and determine the best solution for the job. They keep their options open with shorter timelines and smaller deliverables.
Digital success calls for a more collaborative relationship with technology providers. It’s the whiteboard sessions, technical conversations and joint problem-solving that yield breakthrough results. That’s why progressive companies now approach the RFP like a “request for partnership.”
Integrate Data and Systems in Transformative Ways
Digital leaders use open platforms and APIs to integrate information, people and processes across their extended value chain. These connections lay the foundation for faster business flows and new digital products and services.
Connect Quickly with APIs
APIs (application programming interfaces) enable diverse applications to connect and share data. Digital leaders use API-led integration to combine services and expose information in ways that deliver unprecedented customer and business value. Within days and without lots of coding, they can roll out service innovations, revamp internal processes, enliven customer interactions, extend their digital reach and enable entirely new business models.
This year, 2017, has been dubbed the year of the API economy. ProgrammableWeb lists more than 17,700 APIs and hundreds of digital leaders are opening up their APIs so others can easily integrate and innovate with their technologies. API marketplaces from Mastercard, ADP, Ford and FedEx are just a few examples.
Achieve Digital Flow
Silos slow the flow of business. Disconnected processes, departmental barriers and gaps in information all impede speed and agility.
Digital leaders excel at silo-busting. They integrate disparate systems. They connect processes from end to end, across all customer touchpoints and organizational boundaries. They use open platforms to ensure that information—structured data and unstructured content—flows to the right person, at the right time, in the right context.
The seamless integration of information, people and processes allows digital leaders to be much more nimble and responsive. They can also leverage these connections to make huge improvements in customer experience—such as the bank that slashed loan origination steps by 70 percent or the insurer that processes claims 25 percent faster.
Bring Business and IT Closer Together
Digital leaders treat digital transformation as a partnership between business and IT, with a shared focus on meaningful outcomes and better experiences for customers and employees.
Engage and Empower Users
Digital leaders put people—customers, citizens, employees and partners—at center of their transformation efforts. They prioritize design thinking, a user-centric approach that shifts the focus from adding features to adding value. They take advantage of platform tooling to involve users in solution design and invest in dedicated UX teams to deliver better experiences faster. Capital One, for instance, regularly solicits customer input at its three innovation labs. Other proponents of design thinking include Citrix, Airbnb, BMW, DHL and Procter & Gamble.
Another winning strategy is to empower users with self-service tools that add business agility. Examples include self-service analytics for rapid decision-making and process services that make it easy for users to modify workflows as business needs change.
Take a More Strategic Role
Now that every company is a software company, IT is increasingly strategic to the enterprise. Successful CIOs have seized this opportunity and are making the most of it.
Forward-thinking IT leaders have recast IT in the role of business partner and change agent for digital transformation. They look for ways to drive growth, deepen customer engagement and shorten time to market. They help colleagues understand and realize the value of digital initiatives. They build bridges and buy-in by adopting a service mindset—what one CIO calls “ego-free IT.” The new measures of success aren’t IT-specific metrics; they’re meaningful business outcomes such as dollars saved, customers added and market share gained.
Every digital transformation is different. But the underlying challenge is the same. How can IT accelerate the pace of delivery and change simultaneously? By following the lead of digital trailblazers, any organization can gain the speed and agility needed to compete in a digital-first world—and win.
About the Author / Chris Wiborg
Chris Wiborg is Vice President of Product Marketing at Alfresco Software. In his role, Chris is responsible for setting and executing the go-to-market strategy for Alfresco’s Digital Business Platform. Connect with him on Twitter and Linkedin.