Perspectives

Digital Transformation: Don’t make it open heart surgery!

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Digital Transformation: Don’t make it open heart surgery!

Technology has for many years been a key driver of revenue growth in a time of crisis, but according to an IBM IBV Study, 60% of organisations are using the COVID-19 pandemic to dramatically accelerate their company’s digital transformation.  Organisations need to be agile, robust and secure, and importantly now, they need to be able to seamlessly engage customers and employees in both physical and digital domains.

Accelerating digital transformation requires new approaches to IT. The coming 3 to 5 years are pivotal, and success will be achieved by both growing the core business whilst rotating to the future. Organisations must provide best in class customer experience, and digital experiences will not be a ‘nice to have’; instead they are a strategic imperative to fuel revenue growth.

There are however some obvious major obstacles to the pace and success of any digital transformation:

  • Legacy technology means there is complexity in the current systems landscape
  • Access to data is difficult, owing to outmoded data management and data being held in silos. Data is available, but disparate which means we do not have the real time insights needed to grow our revenue.
  • Skills and business alignment of the technology team – there is still a gap between the understanding of the business needs and the capability of the technology team to deliver growth in an agile way, coupled with significant talent gaps in the workforce.
  • Conventional IT approaches are inhibitors – large programs, re-platforming, and complex replacements take many years, cost companies more than they can afford, are risky and highly unlikely to deliver on time and in budget.

It’s vital to understand which strategic partners can help unlock business value, and to put the customer at the heart of everything we do.

Companies cannot (and do not need to!) perform massive overhauls. At IBM we believe steps can be taken to achieve the goals needed without a major ‘rip and replace’ approach. Here we split it into five main themes:
  1. Nextgeneration technology
  2. Data driven insights
  3. Knowing our customer
  4. Harnessing the ecosystem
  5. Re-skilling the workforce

Let’s take each one in turn.

1. Nextgeneration technology – there is a need to build an agile, innovative architecture from what you have. The platforms need to be scalable and adaptable. Modern Compute’ must be adopted in all aspects of IT architecture.  It’s also really important to decouple digital business transformation from core IT transformation. This builds value much faster than traditional ways, with new digital services being delivered in weeks rather than months. Use hybrid cloud and open-source software for deployment, and begin to introduce, or progress, the use of Artificial Intelligence, Augmented Reality and Virtual Reality. A great example is TSBs use of an IBM developed Smart Agent, built and deployed in just 5 days. In fact, in IBM’s 2021 CEO Study, technical factors are viewed as the number one external force impacting the enterprise, with IoT, Cloud Computing and AI as the top three expected to deliver result

2. Data for insights – back to the idea that you don’t need to do a massive overhaul to use data faster. Decoupling the architecture and taking a modular approach removes huge barriers in accelerating the use of data, thus enabling companies to deliver new capabilities in parallel. Data must be ‘liberated’ from the old, inflexible legacy core systems. The logical model for data should also be owned by the business, and IT will help the business design it. This is critical to prioritising and driving business use cases. Deploy automation and intelligent workflows across IT processes and business functions.  Virtualise data so that it can be shared across the functions of the organisation. Use intelligent analytics to drive and inform our business decisions. And leverage all possible customer touch points where analytical and behavioural data about the customer is gathered, to give greater insights and enable cross selling.

3. Knowing our customer – firstly, create ‘customer journey maps’ based on various personas within the client base. This will aid understanding of the customers individually. A great customer experience now is not about segmentation, but more about providing a hyper-relevant customer experience across all channels, digital or otherwise. It needs to feel connected and personalised to them, not to a segment of them! For instance, non-essential Retailers have gone 100% to digital trading and adapted to survive. But going forward, there’s no doubt that bricks and mortar retail sales will never recover to its pre-2020 levels. However some clients will rush back to our stores just to savour the experience, whilst for others the new mastery of digital coupled with their personal health concerns will have changed their behaviours forever. IBM’s 2021 CEO study found that whilst valuing customer feedback to provide insights was a priority to the Underperformers in revenue growth, Outperformers prioritised Customer Service Etiquette and then Dynamic Feedback at one and two, focussing more on the experience.

4. Harnessing the ecosystem – forming partnerships within the ecosystem unlocks more value. Organisation structures are usually hierarchical and bureaucratic making it hard to adopt new ways of working. New ways of working are needed!  IBM’s 2021 CEO Study found that Outperformers designated partners and ecosystems as a key tool at double the level of Underperformers.

5. Re-skilling the workforce – to enable these changes, there are some key skills which need to be built within the organisation in the areas of digital, AI and analytics, Hybrid cloud, and cyber resilience. Differentiating engineering capabilities can be re-shored and built in-house, improving time to value.  Staff should be focussed on real projects in the style of ‘Do With’ rather than ‘Do To’. We learned this really well at the start of the pandemic! We need to almost bottle that approach and repeat. People need to be opened up to new ways of working. The IBM 2021 CEO study discovered that flexibility and innovation can only be realised with an empowered remote workforce.

At the heart of this is the investment in a strong digital platform: it’s fundamental to executing the digital transformation.  As I’ve said, modernising IT does not mean that you need to revamp all your IT architecture before implementing digital services. A critical first step is implementing a digital platform, which can both scale up and deliver value fast. Digital platforms offer that flexibility using APIs and microservices to drive standardisation and consistency, leveraging re-usable components to speed up delivery and reduce complexity. Prioritising of business critical use cases and high value processes is also of huge importance. It’s these actions which will lead to rapidly delivering business outcomes, boosting revenue, and reducing costs while modernising the legacy applications in parallel. IBM’s work with Audi UK for instance is a great example which provided a 59% increase in online sales enquiries in a time of dramatic industry decline.

IBM runs proprietary Digital Platform Assessments – these enable companies to benchmark against various industry options to build a strong digital platform strategy for the future. Our firm belief that a successful digital transformation requires decoupling the customer experience and data layers from legacy IT, negating the need to modernise back office applications all at once (an expensive, time-consuming, and risky proposition) is the way forward. This is at the heart of IBM’s market leading asset – iX Experience Orchestrator. We can also run Accelerated Visioning workshops which are designed to drive thought provoking discussions about maximising business value and to highlight opportunities to implement specific platform capabilities with notable ROI impact. 

So how do you get started? Let us come and run a one day Maturity Model Assessment, bringing IBM’s wealth of experienced and creative people, to help you build a roadmap to this powerful, agile new world. Details of all our offerings in this space can be found on our website.

Executive Partner - iX Digital Platform lead

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