In its 2019 FutureScale outlook focusing on ‘Digital Supremacy’ IDC argued that operating as a software-driven “digital innovation factory” will be at the core of an enterprise’s ability to sustainably differentiate and compete in its own industry. They suggested that, by 2025, nearly two thirds of enterprises will be prolific software producers with code deployed daily, over 90% of apps cloud native, 80% of code externally sourced, and 1.6 times more developers than today.
A clue comes from McKinsey & Co. in its paper published in August 2020 titled, ‘The Next Normal—Digitizing at speed and scale’ where the management consulting and analyst firm suggests the recovery will be digital. They write, ‘The COVID-19 pandemic has heightened the need for companies to adopt digital business models—and only cloud platforms can provide the agility, scalability, and innovation required for this transition. Although there have been frustrations and false starts in the enterprise journey to the cloud, companies can dramatically accelerate their progress by focusing investments in it where they will provide the most business value and by building cloud-ready operating models.’
No business today can ignore the importance of transitioning incumbent sow-burn enterprise systems towards an agile, cloud-born digital platform that serves the information management demands of all stakeholders.
There are two major drivers of this move to the cloud. They are:
1. Speed of Change
The pace of change in markets is unprecedented. It means laggards are no longer ‘just slow’ and missing out on opportunities. Without a place in the digital future, companies face extinction. According to research conducted by PWC in 2019 and 2021, around 1 in 5 surveyed companies (18%) implemented some form of Artificial Intelligence in 2019, but that dropped to 4% in 2020 when the pandemic gave businesses something else to think about. 2021 is likely to be the rebound year when businesses accelerate their digital plans to innovate their way out of the economic slowdown.
Frank Gens, Senior Vice President and Chief Analyst at IDC, argues, “As more than half the global economy turns digital by 2023, a new species of enterprise will be required to compete and thrive. IDC’s 2020 predictions show that enterprises will prepare for the digitized economy by accelerating investments in key technologies and new operating models to become hyperspeed, hyperscaled, and hyperconnected organizations.”
2. The Need to Re-Define Customer Value
For many industries, customer aspirations have changed in the past year. Some businesses will be impacted by the raising demand for PPE and medical products. Others will have to deal with the consequences of more home working that reduces foot-fall in major commuter cities. Covid-19 brought the travel and tourism industry to its knees. Office space will drop in demand and value. And ANY business not already trading successfully online will need to get their act together in 2021. Those, however, are the top-line impacts. Consider too that consumers have reset their perspectives on what’s important. The pandemic has raised questions in the minds of buyers in the efficacy of a wasteful consumer society. Re-cycling, re-use, and business models framed around protecting the planet will trump behaviors that promote excess and extravagence.
Every business will face its own unique blend of challenges, and to counter them, the solution is to create a technology ecosystem that maximizes customer value and experience, while minimizing cost. Unfortunately, that doesn’t just come out of a box in a form executives can plug in—it needs to be crafted and deployed.
What Does an Innovation Factory Look Like in 2021?
A modern innovation factory relies on a partnership between the IT team and ‘the business’ comprised of Line-of-Business (LoB) managers, execs and application stakeholders (which could be employees, contractors, customers, suppliers, industry partners, shareholders, etc.).
To herd the cats, you will also need a Project Manager to drive the ideation process. Additionally, a Business Analyst should be on hand to create the apps using a modern codeless Integrated Design Environment (Today, the app creation role has shifted away from the tech-stack deployment, scaling, backup and architectural considerations, and the operational governance responsibilities of IT).
Bringing these disparate interests together is the role of the FUSION TEAM. This is a transitional decision making ‘meeting of minds;’ where stakeholders come together to agree what should be built, how it should be deployed, and what people, process, technology and data considerations need to be thought about to make any app deployment a success.
The technology toolset will be a Platform-as-a-Service of one form or another, deployed on a private cloud by the vendor. Expect to find in your tool-kit the Integrated Development Environment (IDE), together with data management and governance tools, heaps of data security, and the necessary data crunching and integration tools needed to harvest data from existing and third party repositories. It’s worth noting that almost no application exists as an island these days. Inevitably, your apps will need to harvest and serve up data to third party tools. With modern tech-stacks, this is normally achieved using codeless data connectors, so whilst still not a trivial task, it is surprisingly simpler than using APIs and third party integration platforms and tools.
Where to Start for Late Adopters
How companies think about their enterprise stack has been slow to change. Company IT teams were educated to code and script. They have invested hours of their lives in learning the systems and tools your business uses today. Asking them to forget all that and adopt a new approach and set of skills is a big ask. Therefore, managing change is best done by bringing in some fresh thinking, either from a third party, or by hiring a Digital Officer familiar with the latest generation of cloud-born application ecosystems—such as Appian, ServiceNow, Encanvas, Outsystems, BettyBlocks or force.com.
Transitioning to become an INNOVATION FACTORY is a people, process, data, and technology transformation—and it’s never easy eating an entire pizza in one serving. For businesses that have yet to transition to FUSION TEAMS and no code development, the likely starting point is to find a technology partner able to advise on how to progress.
The good news is that no company has to be left behind. Every opportunity exists to get on the band wagon and to build up your capability to develop a digital ecosystem to build agility into your tech-stack and orchestrate your business model one app at a time.