Today we think nothing of using our smartphones to access systems and share information with colleagues, partners and customers anytime, anywhere. It may be hard to believe, but ten years ago those capabilities were just wishful thinking. The decade-long (and still on-going) maturation of technologies like cloud computing, mobile, big data and social media platforms is fueling a digital transformation in how we get work done.
But the IT organization can do more than oversee the ad hoc adoption of these technologies. IT has the opportunity to drive an executive-led, enterprise-wide strategy that leverages technology to improve business processes. That means moving away from IT's traditional role of maintaining systems and troubleshooting users' problems to offering services that improve users' productivity levels and spur revenue growth. That's a significant change, so your first question is likely along the lines of, "What are the first steps to creating this digital transformation strategy?" This three-part series will answer that question.
Imagine if you asked an IT professional in 2005 to set up several servers and storage resources, install the various applications, ensure that users at all branch offices and other remote locations have seamless access on all their devices, and to have it all up and running within 24 hours. That IT pro would have laughed out loud. After all, that would have been before the 2006 introduction of Amazon Web Services (AWS), the 2007 unveiling of the first iPhone and other developments that served as the catalysts for the digital transformation.
Today, you can spin up servers, storage resources and applications in minutes. And users don't just ask for 24/7 access on all their devices, they demand it without suffering poor performance-related issues.
That's why it's so important to understand that digital transformation is a business strategy, not simply a technology trend. There is no automatic competitive advantage in adopting what everyone else is adopting. Mobile is a given in today's digital environment. Social is a business requirement. Big data and cloud are nearly universally used by businesses, as well, if they wish to remain competitive. To achieve competitive advantage from digital transformation, companies must move beyond the mere adoption of these digital technologies.
According to Capgemini Consulting and MIT Sloan Management, less-mature digital companies tend to take a tactical, piecemeal approach as they solve discrete business problems with individual digital technologies. As a result, they don't fully integrate digital technologies with their business operations, don't solve the underlying infrastructure problems that cause frequent application performance issues across the enterprise, and fail to deliver the required technical capabilities at scale.
These companies face mounting challenges down the road. IDC predicts that:
■ By 2017, 60% of digital transformation initiatives will be unable to scale due to a lack of a strategic architecture.
■ By 2018, 70% of siloed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing, or project management.
In contrast, maturing digital companies take a strategic approach, integrating digital technologies to transform how their businesses work. As a result, they are able to:
■ Generate 26% higher profits than less digitally mature competitors.
■ Generate 9% more revenue.
■ Achieve a 12% higher market valuation ratio.
These companies embrace and absorb cloud, mobile, social, and big data technologies. They create competitive advantage with the superior ability to orchestrate these technologies enterprise-wide to create and deliver digital services. Of course, that's easier said than done.
Today's globally distributed, hybrid application environments are more complex than ever. There are so many moving parts and operational dependencies that the weak links in the chain are bound frequently to get stressed to the breaking point.
The primary culprit is the network. Even as enterprises adopt new digital technologies, network operators still remotely maintain routers and push applications over the Web to each branch office.
As a result, users must contend with more instances of poor application performance. Their productivity suffers, and IT shoulders the blame. That should raise red flags in the executive suite considering the importance of the remote and branch office (ROBO). Application performance fails to meet the needs of the business not just some of the time but most of the time.
This is why a strategic approach to managing your organization's digital transformation is necessary. In parts two and three of this series, I will more closely examine the factors behind this "performance gap," and why it's time to move on from the traditional WAN architectures built on routers and switches.
Read Making Digital Transformation Work for You – Part 2: Bridging the Performance Gap
Joshua Dobies is VP of Product Marketing, Riverbed Technology.