Stepping Up Your Digital Transformation Game: Are You Ready? Part Two

Why Organizations Need To Implement A Software-Defined Enterprise

Esther Shein

With digital transformation being all the rage — and a race — when it comes to time to market and creating better customer experiences, it’s a good idea for an organization to take stock of where it stands in the process, and what it actually takes to become “digital. In part one of our report, “Stepping Up Your Digital Transformation Game: Are You Ready?” we interviewed Jamie Snowdon, chief digital officer at HfS Research, on what is involved in starting the process, which he refers to as Digital 1.0.

Digital maturity, or Digital 2.0, will occur when a business has achieved the ability to deliver faster responses, quicker insights, and can adapt its processes when markets inevitably shift, according to Snowdon. It’s about anticipating customer demands and meeting them.

Now is a good time to do a digital maturity assessment, he says, recalling that he heard a senior executive at a recent conference comment that "the pace of change will never be as slow as it is now."

The Importance of a Software-Defined Enterprise

It’s no secret that organizations need to become more agile, and Snowdon sees a software-defined enterprise as a core part of making that happen. Like many industry observers, HfS Researcher believes that a large part of enterprise operations will eventually be more software enabled, and virtualization will create more control over IT processes within a software-defined data center.

“In a software-enabled world, you can redesign a data center or duplicate it more quickly; in a software defined enterprise, the building blocks of process can be adapted in a similar way,’’ Snowdon explains. But he adds that “it would be hard for an entire business process to be fully software enabled, particularly where people are fundamental to the process. We could [envision] a world where the underlying platform dictated increasingly larger parts of a process and gave a greater level of flexibly.”

Snowdon believes an organization’s procurement department is the big barrier to overcome when buying services to provide digital transformation and digital operations.

“Digital transformation services often come without a defined path and requires a degree of experimentation, which requires a new style of vendor management that looks at the whole journey and sees failure as part of an iterative process,” he said.

When business units and IT are aligned and work together, it’s a true sign of C-level management’s acceptance of not only digital, but also of the broader impact of technology on the business. There is a need for a symbiotic relationship with IT, he says, which elevates decision making.

For example, he says HfS spoke with the CEO of a large manufacturing organization that got rid of both its IT department and its digital organization because neither was doing what the business needed to succeed.

“The speed of information flow was the fundamental force that enabled the first wave of digital — specifically, the speed to transaction,” he says.

Supply chain flow and the speed of delivery will depend on how complex the product and services are. Fast delivery is not all that difficult when it comes to simple products that are warehoused and then shipped, he explains.

“Complexity comes with planning stock levels and ensuring the overall supply chain is dynamic, while at the same time being able to develop data analytics that enable the prediction of rapid peaks and troughs in demand,” he says. This can only be achieved with a truly digital organization at the 1.0 level, he maintains, where live, end-to-end transactional information can be accessed.

It’s All About The Customer

Leveraging the opportunities presented by the next wave of digital transformation requires an even faster response, which makes automation a must-have, Snowdon stresses. It also means knowing how to accelerate the process of analyzing data, which will force enterprises to look for better systems to not only extract insight from data, but to also quickly apply those insights.

“However, the most important thing is that this next level of digital will drive down response times while keeping customers informed in real-time when issues occur,” he says, and being able to resolve those issues more quickly for an enhanced customer experience.

Snowdon says it is inevitable that most industries will have elements of their business disrupted by digital transformation, and the degrees will vary by industry. There have already been notable examples in consumer entertainment/media and retail, to name a few.

“We've seen big disruption in retail by Amazon, but also a stealth-level disruption by high-end retailers that offer more personal services,’’ he notes. “The expectation will increasingly be that booking your personal shopper will be done online.” Your competitors will inevitably continue to think of ways to use new technology as a differentiator, particularly as the power of data gives them better insights and targeting opportunities.

To reach digital nirvana, Snowdon says, “the trend of increasingly aligned digital and physical operations will need to continue, supported by the realistic possibility of a software-defined enterprise.”