Digital Transformation

Debunking the myth of modernization

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As adoption of cloud, analytics and AI accelerate, new business strategies are emerging, new processes are being implemented, and new methods of engagement are being introduced. Yes, it’s a time of monumental transformation. Leaders are reshaping their organizations to appeal to rapidly evolving customer needs and expectations and to create competitive advantage. But is this something radically new to the business world? Not at all, according to Keith Costello, a respected strategist and prominent industry visionary.

Mr. Costello believes that digital transformation began over 40 years ago, and the shift we’re witnessing now is a natural continuation of that process. What’s changed are the capabilities made possible through advancements in technology and how they impact every facet of the business. Organizations are finding that as they transform their business models and processes, as they look to scale innovation, they need to modernize their back office — their digital core.

Mr. Costello recently joined IBM where he is responsible for leading our partnership with SAP. He’ll be working with clients to ensure their SAP installations are fully modernized to provide the integration and AI capabilities required to transform their organizations.

Recently, we asked Mr. Costello about the current shift in technology, and where he’s seeing success in transformation.

Mr. Curtis: What changes are you seeing in the market?

Mr. Costello: “We’re experiencing another great wave of digital transformation, and all the problems and opportunities that come with it.

“I’ve been in enterprise software and technology from the beginning of my career, working with leaders like Oracle, Siebel and SAP. Digital transformation is nothing new to them — or to the business world, either.

“Doctors’ offices adopted computers to manage patient billing. Then they started using them to write and process prescriptions. Now, physicians throughout the world depend upon the IBM AI powerhouse, Watson™, to help them determine the most promising cancer treatments.

“Digital transitioning has been with us for decades, and will continue for decades to come. What’s different is how it’s impacting us.”

Curtis: Can you explain that difference?

Costello: “New capabilities that enable competitive differentiation — such as mobile apps, personalization, and real-time response — require a certain level of technology. Without the right operating systems in place, you can’t employ the necessary cloud, analytics and AI to remain competitive. That’s the biggest issue right now: we’re getting right to the core of business — the digital core.

“Over the years, corporations have invested millions, if not billions, of dollars on the ERP technology that runs their business. You don’t want to “rip and replace” if you can modernize the investment you’ve already made. You need to be pragmatic.

“That’s where we come in. IBM works with SAP to help our clients upgrade the systems they already have in place, with the least amount of disruption. Our goal is to quickly implement, deploy and ensure users are adopting technology. This is not technology for technology’s sake. What we’re driving are business outcomes, helping ensure the desired objectives are achieved.”

Curtis: You mention you’ve been involved with change throughout your career. Why the change to IBM?

Costello: “IBM is pivoting from its heritage as a solid, successful hardware and software provider to a leader that’s driving innovation using analytics and AI, IoT, mobile and so many other capabilities we’re developing.

“And while IBM is transitioning itself, we’re also providing other organizations with the capabilities they need to move forward with speed, efficiency and transparency. Collaborating with IBM, they can perform better, and introduce new products and services more quickly.

“My Dad worked here for over 40 years, and he said that the organization was always changing. It’s in the company’s DNA. Considering my father’s lengthy career with the organization, and my recent arrival, I’d have to say that IBM might be in my DNA as well.”

Curtis: You were previously with SAP and you’re now directing their relationship with IBM. Obviously you have an affinity for SAP and their products.

Costello: “It’s an organization I’ve always respected, and I’m very happy to be working with them again. IBM and SAP have a natural partnership. All four founders of SAP came from here, and built one of the most successful software organizations on the planet. It’s a relationship that shares a lot of history, and we foresee a dynamic future together.

“We’re especially enthusiastic about the introduction of S/4HANA, and what it can mean for organizations as they upgrade to this new platform. The digital core enables them to run live, so they’ll have near real-time capabilities with seamless enterprise-wide integration. That means faster analytics, faster decision-making and the ability to respond more quickly to changes in the market.

“With the introduction of S/4HANA, there’s a tremendous opportunity to help organizations become more competitive and more successful.”

Curtis: How have these transitions been going for your clients?

Costello: “Already we’re seeing excellent results from early adopters that we’re assisting with S/4HANA deployments. These forward-thinking companies have begun moving their operations onto the new platform, doing it thoughtfully and deliberately, because they understand the complexity of transitioning business-critical processes.

“IBM is helping SAP clients develop the strategy behind their move, assess and address the impact it will have on their people and technology, and help ensure their journey is a smooth and satisfying one. We have the expertise and the processes to do that.

“Additionally, as we’ve gained more and more experience, we’re able to apply our learning to improving the implementation process so that everyone benefits.

“We appreciate that what we’re delivering are complex, mission-critical solutions in a highly charged, sensitive environment. The very core of our clients’ businesses are affected by our work, so there’s no tolerance for inefficiency.”

Curtis: What do you envision in the future?

Costello: “I see IBM’s continued global success in the market and substantial growth in our SAP business. Our clients are undergoing significant and rapid changes in their businesses, and IBM is no different. We have a one-hundred year history of adapting to new business models and the changing demands of our clients. The difference I see now is that IBM is a more nimble and rapidly adaptive company, building skills and solutions that drive digital transformation for our clients. In the future, I see more of the same. The IBM-SAP partnership will continue to play a significant role in digital transformation, and together, we will continue to deliver year in and year out for our clients.”

If you’d like to introduce yourself to Keith Costello, please send an email to him at: keithcos@us.ibm.com

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