7 Common Digital Transformation Themes Companies Experience
Recently, I had the privilege of attending a tour of three IT service providers’ facilities along with 25 IT leaders from other companies in Australia, Peru, Philippines, Mexico and the U.S. All three of the service providers showcased their tools and use cases in the hopes of earning new business.
What I found most striking about the experience was that all the companies – both the service providers and the visiting companies – are doing the same things in the digital space, yet the concept of “digital” had widely different meanings for the participants on the tour.
Specifically, the understanding and implications of a company’s “digital journey” seemed to fall out along audience-based lines. A digital transformation – and the branding that accompanies it – for a business-to-business company are much different than for companies that speak directly to consumers. The capabilities and outcomes desired were prioritized very differently based on what the company is selling and to whom.
For some companies, for instance, digital transformation is about automating processes internally to gain operating efficiencies that might result in a better customer experience in a business-to-business setting. For others, it is about leveraging data collected from their products and services, courtesy of the Internet of Things, to build and market products differently and better to a consumer audience.
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Nevertheless, despite different concepts of “digital,” seven clear, consistent themes emerged:
Everything is migrating to the cloud. The cloud, as Jabil has already discovered, allows for speed, capacity and resiliency that enables a new level and pace for innovation that simply can’t be matched by on-premise offerings. And if it isn’t migrating to the cloud, it’s being built in the cloud (and only the cloud), validating Jabil’s cloud-first strategy.
Agile is the methodology of choice. Because of the agility (no pun intended) and the speed-to-market it offers, the Agile methodology -- with its short development cycles, iterative and collaborative style, and ability to reprioritize enhancements rapidly -- is being used almost exclusively compared to waterfall or other methods. This is likely because they require longer development cycles and are less flexible. The aptly named methodology allows companies to deliver technology enhancements rapidly that are responsive to customer needs and feedback.
Automation is the foundation. Companies are automating everything possible using Robotic Process Automation (RPA) technologies. Automation of repetitive tasks allows companies to be more efficient and to focus their existing labor pool on more value-added tasks that add more depth to their service offerings. RPA is found most often in the back-office setting (versus on the factory floor) and is software-based automation (as opposed to actual robotics), and Jabil is examining how it can automate processes related to back-office functions like accounts payable/receivable.
Everyone has data issues because everyone has process issues. Even the companies you think do everything right struggle with data integrity. The issue is that data is a function of process, so without consistent process, there can be no data consistency. Since data is the lifeblood of a digital company, this is a serious issue companies must wrestle to the ground. This sentiment was recently echoed by a piece in the Wall Street Journal citing a study showing that, “[c]ompanies are also failing to optimize processes or address data quality issues” that make the introduction of RPA problematic.
Hyper-integration drives the customer/user value and accelerates digital transformation. All technology must contribute to the end-user and/or customer experience by making task completion easier and faster and by providing the greatest end-to-end value possible. That is enabled through hyper-integration of back-end and core systems using API management tools and Blockchain (see below). Some of the service providers we visited are clearly aiming to move up the value chain by offering custom-built solutions that achieve this hyper-integration to accelerate digital transformation for their customers.
Blockchain is the way forward. Blockchain, the underlying technology of cryptocurrencies like Bitcoin, is the key to unlocking the next layer of digital transformation. Because of its distributed model, Blockchain offers increased security, greater speed and unlimited capacity, so its applicability in businesses and an economy driven by data-based transactions is integral.
“Upskilling” talent is a must. Whether a company outsources to a service provider or uses their internal development resources, the need to have talent with the capabilities to apply the latest technological advances in support of digital transformation will be a key differentiator between the winners and the losers in the digital economy.
I was both encouraged and intrigued by the alignment in priorities and strategies for achieving success in digital transformation. While companies are moving at different paces due to the key variables in their businesses, they are on a similar path. Indeed, when it comes to the digital transformation journey, the route may be the same but the destination – and the reason for the trip – is vastly different.