IT Enables Scale in Digital Transformation

Few corporate functions have seen their role disrupted as much as IT these last few years. The help desk days are long gone. As digital transformation accelerates, IT is becoming less about outright technology and more about creating capabilities that enable the overarching business strategy. As such, IT is the engine behind any company’s digital transformation.

Here are three ways IT can advance today’s digital journey by empowering the business from a consultative, strategic position.

Going Digital While Digitizing

First, let’s agree on digital transformation’s foundational terms, which understandably elicit some ongoing confusion: “digitization” and “digital,” which the MIT Center for Information Systems Research has described as two discrete yet complementary things. In short, digitization is about leveraging technology to improve or enhance business processes, operations and offer development. By contrast, going digital is about giving customer value to digitization—with the goal of revolutionizing the customer experience and creating new digital business models. What’s the point of digitizing a process or product if the user experience is poor?

Balancing these complementary efforts is essential. It is the role of IT to ensure that digitization and digital can happen at the same time.

Rethinking the Economic Model

To keep up, IT must move away from traditional demand-based models, enabling capabilities with a product mindset instead of a time-bound project mindset. The concept of capability (that is, a business area enabled by a consistent set of IT products) is quite critical to avoid creating one-off or point solutions that are just the means to answer to a specific demand. Instead, looking to IT as the enabler of corporate practices that are always evolving and improving (e.g., cybersecurity) is imperative. Embracing Agile methodologies will bring this approach to fruition.

Pivoting to this kind of a capability-based model requires a modern API-based architecture, which fundamentally is the way out of building and/or replacing monolithic systems. As today’s world requires a fine balance of speed and frugality, a mastery of resource allocation, and a prioritization rigor, we must unburden resources aimed at replacing systems that are working just fine.

To that effect, Amazon Web Services has a great architecture principle referred to as “two is better than zero.” In other words, it is better to have two similar IT components emerge from fast-paced, parallel development than nothing due to project bottlenecks and unmastered interdependencies. Even if we want to drive re-use every time we can (and have mechanisms for that), we should not bog down overall transformation due to one weighty project. So thinking in terms of not just tolerating diversity, but enabling it, is a good way to built an architecture that can empower both agility and resiliency.

Addressing Technical Debt Continuously

Technical debt is perhaps every incumbent company’s biggest challenge when going digital. The cost of maintaining legacy and outdated systems is high, and heavy technical debt is another obstacle to achieving full digital transformation. Accenture consultants see this every day, describing this burden as a price that “hinders [companies’] ability to innovate and adapt in the digital age.”

This is where IT can come to the rescue by having a structured approach and engagement model designed to streamline systems and processes in order to free up resources for reallocation. First focus on eliminating legacy custom-built applications and localized tools based on criteria that are well known and shared (think of a scoring system). Here, again, resource allocation can play its part by ensuring the full cost of those legacies is being recognized by the organization.

A huge added advantage of a continuous effort to remove technical debt (beyond cost, the reduction of obsolete systems and a simplified IT landscape) obviously relates to security. Especially at a time when the average cost of a single data breach globally is $3.9 million. In fact, potential cybersecurity and IoT-related physical safety concerns “will pressure CIOs at G2000 companies to increase IoT security spending by up to 25%, temporarily neutralizing business productivity gains” by 2020 (IDC). Redirecting technical debt can offset part of this essential spending on security.

Accenture notes that 79% of CEOs report that their organization is adopting new and emerging technologies faster than they can address related security issues. IT teams therefore must carry the security torch, determining and implementing ways to make security easier for employees while also protecting the end-to-end digital ecosystem. A continuous effort to reduce the technical debt is one way—among many others—to improve posture.

A Place at the Digital Transformation Table

Indeed, these are exciting times for every business. Digital is all about creating customer value, guided by a better understanding of customer needs deeper in the enterprise. Since providing a great experience is not only about the user interface but also about the ability to mobilize the internal systems in order to deliver at scale, IT experts now have a major seat at the table for revolutionizing the customer experience at scale.

The essential ingredients to full digital transformation are clear: digitizing and going digital, being able to embrace emerging technologies with an architecture that makes diversity efficient when required and creating cyber citizens that continuously reduce the corporation’s technical debt. Behind the scenes and now front and center, IT is pushing forward the transformation strategy for companies staking a competitive claim in today’s digital economy.

Hervé Coureil

Hervé Coureil is the chief digital officer of Schneider Electric. Having joined the company in 1993, Hervé has worked in various roles prior to his current position, including chief information officer. Previously, he spent 15 years in finance and business development. Hervé holds a Master in Management from Reims Management School and a degree in European Business Studies from ICADE in Madrid.

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