I can’t be amazed enough about the Universe. Isn’t it incredible that the planet we live in is spinning around itself at over 1,000 miles per hour and going around the Sun at 67,000 mph, and the whole solar system going around the center of the Milky Way at 448,000 mph, all without throwing us off the surface of this planet?
What goes around comes around, as the saying goes. In the World of Business we continue to see many instances of the pendulum swinging between one ‘preferred’ way of doing and another. Think of centralized versus decentralized organizational/operating models, centralized versus distributed computing, Monolithic versus Componentized / Microservices architectures, Brick-and-Mortar versus Online, Merger versus Spin Off, Globalization versus Localization, Build versus Buy, Waterfall versus Agile, the list goes on and I am sure you can add more. And of course, thankfully we have always been able to find a middle ground or a hybrid way in all these things. Two recent happenings made me wonder about this circular phenomenon, bringing to my mind immediately all the celestial bodies that so beautifully do it on and on. One – the whole ‘work from home’ (WFH) situation triggered by Covid-19 and, Two – the critical role played by Cloud Technology in facilitating this.
WFA (work from anywhere)
I remember like it happened only yesterday how in IT industry we used to go through a tough exception approval process with Clients finicky about allowing someone (or a team) to work from home due to an extraordinary situation. Working from office has been the norm and in many cases the Indian IT industry had to convince Clients of how they will maintain secure environments even within the protected confines of the office spaces. Now to see that the Covid-19 has forced everyone to WFH and many companies across industries even thinking of making WFH a more permanent way of working is very interesting to see. I was also amused to see in the newspaper about businesses going back to the humble pedestal fans in offices in lieu of centralized air conditioning to prevent faster spread of any viruses! It will be interesting to see which way the WFH phenomenon swings but one thing is sure – if your organization is well positioned for WFA (I am generalizing beyond WFH), then you are in a good place. With the right security architecture, it then becomes all about business flexibility.
Cloud – No longer a cloud of suspicion but a silver lining
At the beginning of this decade and even until 5 to 6 years back, Cloud adoption was not very prevalent in many industries and some like Banking were, understandably, very cautious about going on the Cloud especially for their customer-facing systems. I believe 2015-2016 was a critical period when the banking regulators in the major markets at last saw that the advantages Cloud could offer the banks and their customers outweigh the paranoia around security. And I haven’t even talked about the impact FinTechs have had on the Banks! I will leave it at that. Like an object in a static state getting shaken by a force strong enough to set it in motion, the momentum to Cloud adoption, especially Public Cloud, picked up. Free availability of Cloud-based collaboration tools such as videoconferencing and digital smart-boards for team collaboration have really made WFA possible. It is again interesting to see how those businesses that were already Cloud-enabled were in a much better position to shift to WFA without disrupting the business than the ones who weren’t. In fact, Covid-19, if nothing else, has made businesses across industries realize the criticality of going Digital and leveraging the Cloud as much as possible. So Cloud, and broadly Digital, have become essential to business, rather than just being competitive differentiators.
What has really changed in the Business World today?
Not just in today’s context of the Covid-19 situation but also pre-Covid-19, economies around the world have been facing downturns due to various reasons. Tough times always put the spotlight on what is essential to survive and thrive. I believe the following forces standout as being seminal in determining what will separate the real businesses from the also-rans, now and for the rest of this decade:
- Discerning Customers with ever increasing expectations on businesses; the bar is getting raised every day by businesses that set the standard
- Trust, Convenience, and Value have become table stakes
- While businesses which provide and excel in them are in a better position to attract customers, retaining customers longer and reaping higher customer life time value will require the businesses to continuously innovate
- Increased business uncertainty and complexity due to geopolitical, economic, technological and social factors at play
So what does all this mean and what should Businesses do?
The factors I have mentioned above have inexorably changed the business landscape everywhere, pushing them to change in ways distinctly different from ever before. For a business to survive and thrive this decade, it needs to acquire, develop, and enhance the following key organizational capabilities as a way of doing business:
- Business flexibility and agility
- Continuous innovation
Each of these organizational capabilities has its own nuances and I will dwell on them in subsequent blogs.
The strategic response needed from businesses to achieve these capabilities, in two words, is Digital Transformation. While this is a hot topic and subject of much interpretation, the shape of this transformation will vary across the industry ecosystem in which a business operates plus regional/local variables to take into account. That said, one essential requirement on businesses across any industry is to have a solid Digital IT Foundation to be in a position to achieve the organizational capabilities mentioned above.
Essential ingredients of a solid Digital IT Foundation
While the Technology Department of any business has always been faced with ever-increasing changes in business’ needs, supporting a business in a Digital World requires both business and IT to acquire a much higher ability to handle transformative changes of a continuous nature, in a much more uncertain context (we do operate in a VUCA World). Hence it has become imperative that Business-Technology is based on a solid foundation that can support such transformative changes; and that has to be the top priority.
So what does a well-architected solid Digital IT Foundation look like? In my experience advising and helping clients in their Digital Transformation journey, here are the ingredients that are absolutely essential:
- A sound Digital Business Strategy aligned with Digital IT Strategy, putting the customer at the center of everything; this needs a major shift both on the business process side and the technology side, and should be based on journey maps of various customer persona for both online and offline touchpoints, guided by an overarching set of customer experience KPI’s; everything will be underpinned by a new organizational design which promotes cross-functional collaboration for creating customer value consistently.
- A good handle on the strengths and weaknesses of the current IT landscape, a vision of what the Target Digital IT architecture should be, and a key digital initiatives roadmap to focus on to get to that target in a concerted and focused way across the organization; the target architecture must ensure all aspects that are critical to customer experience including platform stability and resilience, security, performance, scalability, and enabling quick response to customer issues, just to name a few.
- A Cloud-first mentality, Cloud adoption strategy, and migration approaches based on a solid risk-adjusted return model; Cloud is a critical ingredient to give business flexibility, agility, and ability to continuously innovate at the speed of light.
- A focused commitment to Intelligent Automation across the organization; it is critical to automate the right processes (get the process right in the first place) and to architect automation the right way, for if done badly such automation can only lead to customer and employee dissatisfaction; automation will also be critical in enhancing the quality of data that the organization collects over time (the accuracy of any Machine Learning model can only be as good as the quality of the input data).
- A flexible and adaptable Data Architecture and domain model, that will simplify complex information requirements from the business; in the context of a Digital World, the shape of who the customer is and the business’ relationship with the rest of the ecosystem will keep changing with time, needing carefully crafted adaptable representations for the customer, products, business relationships, transactions, etc; the data architecture has to address holistically the entire value chain of data-insight-actions-learn-refine.
- A permanent shift to the way of working with and within IT, a Digital IT Operating Model, that is characterized by many small-sized cross-functional teams collaborating closely with the business in an Agile way, leveraging DevOps and Test Automation, and encouraged to continuously experiment and innovate like a startup.
A final word
While we have seen and will continue to see many things in the business world go around in full circles, I am confident some of these transformational forces and changes I have outlined in this blog are here to stay for quite a while…until we get to see some things which will be even more transformational, that is.