The Age of the Digital Enterprise Imperative
Speed Is of the Essence
Welcome to the age of the digital enterprise imperative — where every organization must use new technology to innovate, to empower new business models. Not just moving faster, but also moving differently.
There’s nothing optional or voluntary about an imperative; one must do it. And that’s how we at CSC feel about the digital enterprise imperative. It’s a necessary undertaking, one required of every organization, no matter its size, geographic region or industry.
Consider, for example, Uber. Whatever you think of the company’s “sharing economy” staffing practices, there’s no denying that Uber has dramatically disrupted the taxi and limousine industry. For decades, taxi fleets have invested heavily in cars, drivers, licenses, medallions and meters. But not Uber. Instead, it invested in technology — not for the sake of technology, but to compete with traditional taxi companies via a Web and mobile interface, superior ease of use, and high levels of speed and accessibility. It’s no accident that the company’s full name is Uber Technologies. With those technologies, Uber has disrupted an entire industry.
You can argue that industry disruption is nothing new. The first mass-produced car, the first canned-food product, the first consumer PC — all created major challenges (and headaches) for older industries. But what’s different now is the sheer speed with which disrupters can move. New technologies make it fast and easy for them to gain access to broad, useful applications that are inherently mobile, data-rich and customer-friendly. This gives the industry upstarts a powerful new foothold. It also requires that established organizations — including yours, perhaps? — react and respond to the new competitors’ moves, even anticipate them, with speed and agility. That, too, is part of the digital enterprise imperative.
Raising your ‘innovation quotient’
Fortunately, there are several paths forward. One effective start involves cutting an organization’s spending on maintaining enterprise systems, freeing up capital and resources for innovation. That’s important, because many organizations spend far too much on simply “keeping the lights on.” For some organizations, this spending can represent as much as 80 percent of their annual IT budget. That leaves them unable to fund the kind of innovation demanded by today’s digital enterprise imperative. What we call their “innovation quotient” is far too low.
There are several ways to raise it. An organization can move core applications to the cloud, dramatically lowering capital expenses by shifting those costs to an operating expense and moving to a pay-for-use model. It can retire obsolete systems and software, replacing them with up-to-date replacements that are highly secure yet inexpensive to run. And it can quickly add new digital applications to change how customers interact with its business.
These aren’t just good ideas; they’re real-world actions that organizations are taking now. For example, CSC worked with a rail-transport company that could imagine cool and innovative digital projects, but was spending too much on maintaining its analog assets (tracks, switches, etc.) to fund them. CSC showed the company that it could store and manage information in new, digital ways, in turn helping to fund other innovations.
Bright side of the cloud
One key to the digital enterprise imperative is cloud computing. Yet it’s a technology that’s also badly misunderstood.
Cloud is a core technology because it empowers frictionless access to compute power and storage, making those assets distributable in ways that were previously impossible. The cloud also empowers applications that are comparatively easy and quick to create, and highly shareable throughout an organization. While many IT and business professionals overlook these important benefits, they shouldn’t.
The cloud also provides a kind of virtual petri dish for innovation. IT departments can use the cloud to experiment and share in ways that deliver big, important benefits. People can use the cloud to gain frictionless access to ideas, pilot projects and other contributions. That can lead to the incubation of innovative, industry-disrupting ideas. Shared know-how. And new, higher levels of collaboration.
Unfortunately, many people believe cloud technology to be an all-or-nothing proposition. They believe an organization, to benefit from the cloud, must give up all its data, all its security and all its proprietary applications. That’s just wrong. Today’s hybrid cloud options offer organizations the best of both worlds: the low cost and scalability of the public cloud, plus the control and security of the private cloud. For many companies, this is a powerful way forward.