Internet Solutions (IS) is no stranger to digital transformation (DX). Back in 1993, IS began by building the infrastructure that would connect South Africa’s people, societies, services and things, moreover, this was done when the digital world was still very much in its infancy. Today, hyper connections are a given while the next evolution of our digital world – digital transformation – is our new normal.
According to a new IDC Spending Guide, worldwide spending on the technologies and services for DX of business practices, products, and organisations is forecast to be more than $1.1 trillion in 2018. The majority of DX spending ($662 billion) will go towards technologies that support new or expanded operating models as businesses seek to make their operations more effective and responsive by leveraging digitally-connected products and services, assets, people, and trading partners.
The second largest DX investment area for 2018 ($326 billion) will be technologies supporting an ecosystem that transforms how customers, partners, employees and things communicate with each other and the products and services created to meet unique and individualised demands.
It’s clear – business leaders are challenged to move their enterprises to the next level and employ digital technologies to create new ways of operating and growing. But what exactly is digital transformation, or DX? And how can businesses achieve profitable growth and advantage in this complex digital age?
Introducing DX while keeping the lights on
The jump from old to digital isn’t as easy as one thinks.
New businesses today are born digital, and it’s simple for these organisations to leverage the digital assets that already exist. But for existing businesses that operate in a legacy environment, DX can be seen and experienced as an ever-changing game of leapfrog.
Legacy can be defined as an information system that may be based on outdated technologies, but critical to day-to-day operations. It can be both a liability as it carries technical debt, but also an asset as it has significant embedded intellectual property.
Let’s not easily dismiss legacy. A Bain & Company survey of 150 technology decision makers revealed that 55 percent of their budgets would be allocated to modernising existing IT to become digital ready, leaving 45 percent for digital initiatives. In an IDG survey, 40 percent of respondents indicated that existing infrastructure could not be replaced due to budgetary or other reasons.
So, it’s true. Most established market leaders are struggling to implement digital objectives while maintaining the legacy technologies that support their current success. Luckily, IT departments are beginning to recognise the importance of leadership in their DX efforts, and Chief Information Officers (CIOs) almost invariably find that traditional IT modes cannot cope with the challenges brought by DX, and they need a completely new working mode.
Introducing the Bimodal approach.
Bimodal is the practice of managing two separate but coherent delivery modes – one focuses on predictability while the other concentrates on exploration. Mode one leverages the legacy infrastructure and introduces a level of automation and orchestration to what exists, and is optimised for reliability, availability, and low costs. Mode two is exploratory, with an eye to resolving new problems. It’s all about innovation, and this is where true DX happens. Mode two tackles every facet of an organisation and the roles required to support the business, from people, to infrastructure, to apps, connectivity and new launch cycles.
In effect, a bimodal approach allows an organisation to start delving into DX, without completely scrapping the existing infrastructure and starting anew. For businesses that weren’t born digital, embracing legacy can deliver a host of benefits because of the wealth of historic data.
Case in point – at IS we launched a world-class cloud management platform called Skylight. Instead of launching a ‘Digital only’ platform, we endeavoured to ensure the platforms connected both legacy and digital worlds through a single interface. It required multiple teams and many integration points to achieve the desired outcomes. We didn’t ignore our legacy, we embraced it.
When it comes to managing legacy and adopting a bimodal approach, there are several strategic paths to pursue. These may include wholesale replacement of infrastructure in favour of a more modern package or cloud-based solution; rationalising legacy technology; rearchitecting for digital or re-platforming onto more cost effective hardware. The chosen path will be determined by your budget, resources, and how much value an organisation’s legacy system can still provide.
Given the pace at which technology is changing, true DX and adoption depends on having a defined plan in place. Organisations that have successfully embraced DX do not simply adopt individual technologies to solve incidental problems as and when they arise; but rather have a much more focused approach to ensure they stick to a long-term, linear DX vision.
To succeed you must have a digital transformation strategy
When a company begins their transformational journey, they must first define the ‘Business Why’ behind the reason for their DX initiatives.
All too often we see organisations attempt to keep up with the next level of digitisation, panicking and knee jerking, and not thinking long term. Simply put, this doesn’t work. Digital transformation must be tied to a strategy and a ‘Why’, while allowing for the organisation to optimise those DX processes that fit within this strategy. Random investment will do little more than add unnecessary bulge to the budget, and complexity to the ecosystem.
Legacy and digital does not need to be an ‘either, or’. Legacy information can support digital objectives while systems and application are being modernised, via a bimodal approach. Rather than deferring digital objectives until legacy is fully remediated and up to date, remarkable results can be achieved by approaching both tasks in tandem.
DX is a movement no one can halt. Ultimately organisations need to decide how they transform their businesses, rather than if.
By Theo Reddy, Head of Technology Solutions at Internet Solutions