Digital transformation - changing the way ANZ enterprises operate
Digital transformation is set to grow from strength to strength in 2016, and the ANZ (Australia New Zealand) region is no exception. Analyst firm Gartner reported that more than half of Australian and New Zealand CIOs are leaders of digital transformation in their enterprise.
In fact, the Gartner 2016 CIO Survey reports that the average ANZ CIO expects digital revenue to grow from 14 percent now to 32 percent of total revenue in the next five years Furthermore, in the ANZ public sector, CIOs are predicting a rise in digital processes from 38 to 79 percent, signalling that hardcoded business and operational models will not suffice and that a more adaptable approach is needed.
As the Internet of Things (IoT) segment continues to grow, smartphones, apps, wearables, smart refrigerators, self-driving cars and other networked smart items will become much more embedded in our daily lives; generating one thing above all else: data.
IT experts predict that by the year 2020, around 50 billion networked machines and devices will generate a data volume of about 40,000 exabytes (1 exabyte is equal to circa 1 million terabytes) —more than five times the level in 2015. To channel this flood of data productively, companies need to strip off their stiff corset of standard software and use flexible, multifunctional platforms instead. In so doing, they are already taking the first step to a secure future in the volatile era of digitisation.
As data volumes continue to grow along with the number of (mobile) devices, agile jacks-of-all-trades such as enterprise apps are taking the place of standard applications. These programs allow companies to combine analytical functions and transactional capabilities to design flexible business process. At the same time, apps support smart decision-making and offer a link to social networks.
Achieving success through co-innovation
There are a few paths into the digital business world. For example, the change can start with designing business processes or analysing customer data that a company has collected. Generally speaking, there is no clear sequence here: Companies provide the starting point with their IT and business activities—and the IT service provider stands by their side as a software expert.
First they collaborate to develop a digitalisation roadmap. This includes the company’s digital strategy, business objectives and models, as well as the appropriate strategy for apps, IoT and cloud computing. The digital capability map is based on this roadmap and provides an overview of the company’s future digital capabilities and its new IT structure.
Based on experience, up to two months should be allotted for this discovery phase. Then the IT service provider trains the IT organisation and different departments on how to use the new systems. Users learn in real-world examples how to integrate cloud systems and link them with the backend, among other things. The goal for users is to work as independently as possible under initial supervision on implementation, execution and controlling within the new business processes, learn from them and improve them through further innovation. Experienced service providers allocate around six months for such an innovation cycle.
User companies should concentrate on planning, realising and later autonomously developing the minimum of innovation needed. However, neither side should lose sight of the roadmap and both need to ensure that they communicate the necessary knowledge in small steps so users are not overwhelmed, which could place the entire digitalisation process at risk. Moreover, these agile methods give the team a certain leeway to familiarise themselves with the digitalisation processes on their own. Shaping IT projects themselves will require some companies to rethink their approach.
A secure future thanks to digital business platforms
Digital business requires open, fast IT. Aside from the technology being used, whether and how quickly companies develop, implement and improve promising business ideas also plays a key role. Companies that unite all these factors are successful—whether as a digital player in the business world or in public administration. That and the opportunity to integrate all process controls in the backend are the advantages of the platform strategy.
A platform pursues a generic approach, so it gets by without business logic and offers functions for designing, controlling, managing and developing software. It is not about software packages, but rather about flexible, changeable, individual applications that are customised for specific needs. These include cloud-capable services, in-memory databases, and CEP, integration and process engines.
Digital business platforms unite these and other functions in modular core components that can be implemented and expanded individually, but can also be built on each other and interlock like teeth on gears. These building blocks can be assigned different levels, such as data management and analysis, integration, modelling or process and program logic.
This offers a structure that allows companies to remain competitive while focusing immediately on known weak points and expanding the platform incrementally over the medium term. The situation in the digital market is constantly in flux and innovations that will revolutionise processes are increasingly difficult to predict.
Monolithic legacy systems are obsolete. So for ANZ organisations looking to stay ahead of the curve, only digital platforms allow the greatest possible flexibility and reaction time to be prepared for all eventualities of the race of digitalisation speeding ahead.
Article by Gordon Gakovic, Managing Director, Software AG ANZ