As digital becomes central to achieving growth, organizations that are generally slow in uptake can still manage to realize reasonable gains if only they can adopt a fast-follower strategy; learning from the environment and  engaging in short but continuous digitization.

The advancements in digital technologies and emergence of new-age businesses have forced the traditional companies to rethink their strategies and defend their positions in order to survive in the increasingly dynamic and competitive environment. While the leaders among them have realized the need to reinvent themselves and become digital, many others have struggled to hit the right path and withered away in the market place. The reasons for the failures are many but the common ones are:

• Leadership disconnect – Inability of the top tier to comprehend the threats of competition and adequately connecting with their ecosystem to understand changes.
  
• Legacy drag – Compulsion to sustain archaic IT systems and processes that are high on maintenance and demand more management attention.
  
• Lack of champions – Dearth of brave hearts in the second line of leadership who can challenge the top tier/ Board on their outdated strategy and showcase the path to recovery.
  
• Siloed structures – Very functional and siloed organization structure that operating towards conflicting objectives thus preventing collaboration amongst the employees.
  

These negative forces weigh them down to be laggards in digital adoption and they tend to scramble to keep pace with the leaders. Instead of giving up, they can still recover and reap rewards of credible performance- if not superlative - if only they can adopt a smart follower strategy. However, this comes with a rider that they need to be FAST at that. Once they establish a momentum as a fast-follower, they can accelerate their digital quest and aspire to be among the leaders.

This article presents some actions companies can practice as a fast follower. Any business wanting to gather pace of digitization needs to strengthen one or more of the fundamental building blocks; a digital strategy that aligns with the overall direction of the company, market and customer orientation to understand and influence customer decisions, a collaborative culture among the workforce and an understanding of the applicability of digital technologies such as Cloud, Analytics, IoT etc. However, there are certain specific considerations fast followers should focus on to accelerate their digital pursuits.

Galvanize Support

The success of a fast follower strategy depends on, without doubt, the conviction of the CEO who is best placed to lead a digital transformation by setting direction and fixing responsibilities for actions. If the CEO is not on board, the battle is lost even before it has begun. He/she may, however, wish to appoint the CMO, CIO or any influencer to be the ‘chef de mission’ to take charge of execution. The first step is to build a small team –may be just 3 to 4 – of likeminded influences across functions that can together impress upon the leadership and peers to act. The team will be involved in all aspects of digital programs and involve their colleagues and subject matter experts as per need.

A blunder companies commit is to expect an individual such as a CIO or a management executive who may not have the authority within the organisation to spearhead the digitization. By appointing a small set of cross-functional influencers, the chances of furthering an idea to execution is much higher.  The team could make the right interventions and support each other to promote the ideas for organization buy-in.

Listen to the Environment 

Fast followers‘s strategy should be built on learnings from diverse sources.  Engaging with customers, connecting frequently with employees, observing competitors’ actions - not just traditional but also non-traditional, enlisting the industry experts, assessing the outcomes of digital ventures of leaders are crucial to constructing their own digital programs. These actions require one fundamental quality to be perfected – listening, a deep listening that goes beyond mere understanding but results in constructive ideas and plans.  Participating in industry events, focus groups and other platforms that bring leaders and experts together can be useful sources of inspiration.  The learnings will have to be contextualized to company’s needs and translated into actionable programs that feed into the Learning Lab.  

Institute a Learning Lab

Establishing a lab that actions on the learnings from the industry should be the next focus area for Fast Followers. The lab can develop prototypes of solutions or test third-party solutions to evaluate the fitment to the organization’s context. The lab can also be used to demonstrate to relevant stakeholders to get their feedback. It should be made to work with minimum resources to avoid high outlays. A common approach that can be considered is to run pilots using open source tools where relevant and move to enterprise specific products when proven.

Keep it Simple

Digital leaders tend to take high risks in improving existing solutions or deploying new ones in a ‘fail-fast’ mode and continuously augment their digital offerings. Followers may not have the organisation backing to take such risks. Instead they should execute short projects that are built and executed in multi stages than as a big-bang. Drawing from the labs, the team should cherry pick small bets that can leverage on the traditional strengths of the organization but brings in a digital swap.  They should showcase wins to gain more support from the management and the organisation.

Engage with the People

The success of digital programs hinges on acceptance of the employees and their buy-in can hardly be overemphasized. The senior management should be on-board at every stage. Towards this, the team should continuously engage with the key stakeholders; the management and the employees to enhance awareness, seek ideas and suggestions and encourage participation in the on-going programs.  The team may do well to consider deploying platforms that bring the employees together for collaboration and also bring in a sense of competitiveness among the functions. They should evaluate leveraging social influence and gamification tools to drive change in attitudes and behaviours by integrating such principles into the collaborative platforms.

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By continuously studying the digital successes of the leaders and contextualizing them for their businesses, fast followers can still achieve gains and be in a position to thwart competition reasonably well. The success lies in the perseverance of the fast-follower strategy and bringing changes that are in line with the organisation capacity.

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Businesses may need to rethink on the suitability of Run, Grow and Transform approach to IT management in the digital era.

Run, Grow, Transform (RGT) is a classic model of managing IT in an enterprise.  This approach would align with the way businesses have been traditionally managed and guide IT investments accordingly.

Gartner offers the following definitions of the three categories:

• Run-the-business and hence Run-the-IT is about cutting costs, improving price-performance ration and lessening the risk.  IT Initiatives are aimed at essential business processes and more importantly ‘to keep the lights on’.
• Grow is about improvements in operations largely within current business models. IT initiatives are looked at in the areas of sales improvements, customer service and product development.
• Transform refers to reaching new horizons for the company that may include new markets, products and business models.  These are large bets in business terms and IT initiatives will strongly align with the strategic direction of the company and transcend multiple areas of operations.
  

Businesses attempting to move up the digital value may have to rethink the suitability of this model, more specifically the IT management and cost allocation. IT organizations’ effort and budgets are typically split across these three categories.  A classic problem of this model has been the disproportionate focus on Run as  CIOs spend more time in running the legacy systems and tend to allocate upto 60% (if not more) of the annual budget on maintenance due to business demands and other legacy reasons.   ‘Grow’ and ‘Transform’ are treated casually thus constraining the ability organisation to be ‘future-ready’ and competitive.

Digital requires businesses to constantly innovate on their business models, make real-time changes to products and processes and place bets that are risk prone. In this refresh, technology becomes the driver to bring in new capabilities into the business operations. The continuous tweaking when pursued relentlessly can result in transformative outcomes and even being disruptive.  The risk of failure is equally high and in such cases the companies would need to quickly pick themselves up, dust off the setbacks and continue the quest. 

When companies acquire digital capabilities pursuing a larger goal to become customer-centric and achieve revenue enhancement, no longer will they be able to clearly distinguish the changes as Run or Grow or Transform as their attempts could straddle these three areas. This has implications for business functions and IT and more specifically, CIOs need to identify themselves with such pursuits and bring appropriate changes to their working methods, team structure and more importantly not constrained by pre-determined cost allocations. Companies need to allocate their budgets that should result in acquiring or enhancing capabilities for the organization.

Analytics – With the  volume of available data growing exponentially,  organizations hitherto relying on mostly structured data coming out of their enterprise systems for decision making, can now build sophisticated analytics that can help them take more impactful and real-time decisions using technologies such as big data. To build traction, organizations have to acquire data management skills, enhance existing data marts, build prototypes and continuously look for potential data sources. These require launching and managing multiple initiatives across functions and level s and integrating them for management dashboards.

Mid-level Managers in traditional organizations need to prepare themselves to operate successfully in the digital makeover. There are atleast 5 fundamental shifts they need to consider to safeguard their positions.

Traditional organizations in their pursuit to become digital businesses oversee a significant level of automation that transforms manual tasks forming part of their long legacy operations.  Automation inevitably leads to shifts in people’s roles and responsibilities forcing companies to redraw their competency maps.  Employees across levels need to become tech savvy, assume new responsibilities and work in tandem with systems and machines that will increasingly take over some of their tasks. 

While digital implementations touch many parts of the organization, the degree and nature of impact generally vary across levels and functions - from C-suite to shop floor and from operations to sales. The functional managers, comprising the middle layer, are no exception to the onslaught of these changes. In fact, they are impacted in more unique ways than one when compared to their colleagues in rest of the organization or counterparts in new-age organizations. This article turns the spotlight on them and discusses the shifts they need to consider if they wish to travel along with their organizations’ digital journey.

A Short Profile of Mid-Level Managers

Let us look at a typical profile of mid-level managers say in a mid-sized traditional organization consisting of 1000+ employees. They are largely ‘Gen X’ population in the age group of 35 to 45 or 50. They look for stability in the workplace, consider savings crucial to building families, make long term investments like housing and value work-life balance seriously. 

 In the organization hierarchy, they are first and second line managers reporting to department heads and supervising a sizeable number of workforce. They typically hold designations such as Mangers, Deputy Managers or Supervisors.  C-suite expects them to deliver results on a daily basis as per corporate mandate and plans. Thus they are extremely execution focused with no role in shaping strategy or contributing to the plans they get to follow.  

Digital Impact and Implications

As their organizations go Digital middle-level managers need to go through a transition that is rooted in a mindset change and transcends multiple areas; newer responsibilities, working methods, technology and business skills etc. However, not all managers are primed to absorb such changes.  To successfully operate in a digital landscape, they need to consider at least 5 fundamental shifts, when practiced consistently can help them safeguard their positions, assume higher responsibilities and contribute meaningfully to the demands of their organization.

From Functional to Process Focus (or Business Model Focus)

Existing Role– Mid-level managers are highly functional oriented and perform pre-defined tasks related to their departments such as Sales, Finance or HR.  They work more closely within their operating groups and normally have an arms-length relationship with other departments.

Digital Impact – Digital leaders tend to move their businesses from rigid functional structures to dynamic and flexible structures as they reinvent their customer engagement processes and establish new business models.  The constructs are never permanent and strengthened continuously to gain the crucial competitive advantage

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Shift – Managers need to move away from the comfort zone of their functional focus (‘head down’) to a broader process or business model focus (‘head up’). They should be more tuned to handling cross-functional responsibilities and need to learn the broader contours of other functions if not the nuances and contribute to effective execution of the end-to-end processes than parts of them.

From Controlling to Enabling

Existing Role – Mid-level managers mostly operate in the tactical and transactional levels with ‘controlling’ as a key responsibility that gains significance where manual operations are high.  As controllers, they ensure that the pre-set business processes are followed all the time and people reporting to them perform their assigned tasks in time, without errors and as per standards. Managers periodically assess deviations and recommend changes to the processes that may sometimes implement a higher level of controls.

Digital Impact – Controlling can be a major casualty in digitization. Automation brings in inherent benefits such as improved output, quality and speed and reduced data errors all enabled by technologies that cover not just processes but also extend to functioning of machines and physical movement of materials.  For example, an IoT implementation in manufacturing would considerably reduce the supervisory tasks of a maintenance manager overseeing the performance of shop-floor machines and a Robotics Process Automation in a customer service centre would reduce the supervisory tasks of a service manager.

Shift – As technology takes over the ‘controlling’ tasks, managers need to move away from a controlling mindset to a more analytical mindset.  They should learn to read different levels of analysis and align details to outcomes to assess the performance of the processes or business models. They should also actively engage with leadership to recommend improvements contribute to planning.

From Individual to Team Players

Existing Role – Traditional organizations take pains to define detailed job descriptions for each and every role so that the individuals performing the roles have clarity and operate within the scope of the role. The boundaries are clearly drawn and the managers are trained to perform their specific role and not encouraged to intervene in other areas.

Digital Impact – Digital organizations expect employees to work more in a collaborative environment and engage with each other to solve business problems and reshape business processes continuously. They value team work more than the individual contribution.  

Shift – As teams, managers need to work closely with other members of the organization across functions, provide inputs in their respective areas of expertise,  consider other inputs and work towards a process of collective decision making.  Managers also need to build professional networks outside of their operating spheres to learn from multiple sources.  

From Risk Avoidance to Risk Taking

Existing Role – Managers are mandated to avoid or minimize risks at any costs and hence asked to stick to defined processes and not engineer new methods themselves. At most, they are encouraged to submit their suggestions for improvements that go through an evaluation process and implemented if beneficial.  

Digital Impact – Digital companies follow a ‘fail-fast’ approach to bringing new practices and this can be effective only if managers are encouraged to take risks.

Shift – Managers need to learn to take risks as they will be increasingly expected to implement changes to business practices on the go and try new methods of working that can potentially yield business benefits. Towards this, they need to assess competing approaches to business actions, compute trade-offs and be decisive in their selections without the fear of failures. More importantly they need to continuously learn from the hits and misses to improve their results. 

From Change Agents to Change Makers

Existing Role – Managers are the go-between the leadership and the workers and more often called to perform the role of change agents. Towards this, they need to understand the change - be it in business plans, structure or processes, convince the people at lower levels to accept the change and manage resistance.

Digital Impact – Organization structures and positions may be redrawn continuously leading to job changes or loss at times across levels. Further, due to automation, workers such as shop-floor personnel may need to learn new tasks and work with machines that can take away their routine tasks.

Shift – Mangers need to step up to design the changes that affect their groups than merely accepting orders for changes. They need to work with their superiors to influence the change design as they are in close touch with the workers and know their reactions. They need to communicate even more with their ward, identify skilling needs and protect top performers of their teams through appropriate interventions.

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Digital forays of incumbent organizations are bound to affect the roles and responsibilities, working methods and metrics significantly.  Middle-level managers should no longer expect to work in a stable environment with a clearly defined job specs. They need consider the changes that can prepare them to become an integral part of the emerging organization and contribute to the growth. 

An IT-OO can help a CIO take up a more strategic role in the company by taking over and running the IT operations much as the same way a COO would run the operations at a company level. 

A major consequence of the digitization journey is the changing role of a CIO – a subject that is often discussed among the CIO fraternity, in the management forums and even in the Board rooms. A variety of perspectives can be seen in thought leadership articles and debates.  If we have to summarise the substance of such discussions it could run as follows: CEOs expect CIOs to play a more strategic role and contribute towards setting the direction for the company, a CIO has to step up as an advisor to the business and even seek a position in the Board and he/she should get away from operations mindset and devote more time towards enabling new business propositions.

One of the approaches suggested as part the IT re-organization and the role of CIO is for companies to implement a two-speed IT architecture that brings in the capability to develop customer facing processes rapidly and at the same time follow the regular possibly slower speed for the back-end systems management.  As we see the focus shifting to futuristic IT structure and CIO and recommendations on achieving them, a key aspect that is not deliberated much in this debate is continuity that is required for core back-end systems that support the existing operations of the companies. Several companies have implemented ERP solutions or equivalent investing heavily in software, infrastructure and training with the expectation that they will serve the company for several more years. Moreover, such investments require adequate maintenance so as to get the best out of them.  Hence, this article is not about the changing role of CIO, instead is on creating a leadership role for managing the back-end core systems. The role can be compared to that of a Chief Operating Officer (COO) that oversees the operations of the company and hence can be called as IT Operating Officer (IT-OO).

Explaining IT-OO

The need for an IT-OO can looked at from the following lines of argument:

a.  to give due importance to existing operations of the company

b.  to avoid possible dilution of the emerging role of a CIO

c.  to align the IT operations and changes to the strategy of the company

The mandate for the IT-OO could be:

• Provide necessary support to running the business on a day-to-day basis
  
• Keep the costs as low as possible
  
• Assemble and manage a team with the requisite expertise and provide the ample opportunities for career growth
  
• Adopt leading practices in the areas of governance, risk management and security
  

IT-OO will work under the overall direction of the CIO but will be empowered in matters related to legacy systems.  We propose three major work areas of an IT-OO.  There could be areas bordering existing and emerging businesses which need not be construed as conflicts but balanced as deemed right by the CIO.

Business Partnership

The business partnership requires an ‘external’ focus. Key responsibilities will include effectively engaging with businesses (internal customers and through them possibly external customers) on one side and vendors / service providers on the other side.  IT-OO would work closely with the business to understand and fulfill on-going requirements, provide the required support and bring about improvements where necessary. On the other side, he/she would work with the vendors supporting the legacy systems to get the best value from them.

A key aspect of the business partnership is to manage the expectation of the customers and to moderate their demands that require investments beyond the plan. This may be crucial when improvements that are brought in at the customer facing front-end processes that are work-in-process conflict with the back-end demands. To achieve this, an IT-OO will have adopt a more pro-active approach to engaging with the business and learn the art of stakeholder management.

IT Operations

IT Operations demand an ‘internal’ focus. The operations cover primarily application and data centre maintenance, data management, governance and team management. In addition to regular maintenance tasks, IT-OO should be in a position to take up projects that bring about improvements towards on-going maintenance. The governance may include adopting industry leading practices for systems maintenance and upgrades that cover areas like security, risk mitigation, regulatory compliance management and quality audits.

A key aspect of IT operations will be budgeting and control. Studies show that in most of the companies more than 70% IT costs is incurred towards upkeep of the legacy systems leaving very little share for investing in emerging areas.  IT OO would be tasked with preparing and controlling a budget that could be clearly distinguished from the budget for emerging areas. Deviations, if any could be allowed only with a support of a strong business case.

Another key aspect of IT-OO’s responsibilities will be to direct and oversee the performance of the team associated with the legacy systems. This assumes greater significance if there is a parallel team working on emerging areas leading comparisons such as new Vs old.  IT-OO could work out methods like job rotation that would give the team chances to work on new technologies and experience new ways of solving company’s problems.  

Alignment to two-speed architecture

The alignment decisions will cover transitioning new technologies that are rolled-out into maintenance portfolio after a settling time, sun setting legacy applications and adopting a continuous process to re-organize the legacy portfolio for better upkeep.

A key aspect of the alignment is to synchronise the legacy back-end with the emerging front-end and take care of the integration demands. This assumes greater significance when the alignment has to consider a number smaller scope services being rolled out in the front-end sometimes may be quickly discarded or revamped based on customer feedback. Overall, IT-OO has to ensure the ‘business-as-usual’ is not disturbed and at the same time ensure the two-speed approach works efficiently. 

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As Companies are testing out two-speed IT, a CIO may have to spread his/ her efforts really thin if he/she has to manage the two-speed structure. By bringing in an IT-OO, CIO can focus more on strategic aspects leaving the running of the operations to IT-OO. The success of this position would depend on the autonomy provided to the role and not a subservient one to the CIO.

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Digital’s progress is signified by six trends we have witnessed in the recent times. Digital initiatives in turn influences these trends to become mainstream.

The terms ‘Digital’ and ‘Disruption’, either independently or combined with each other or combined with other terms (‘Digital Economy’, ‘Digital Quotient’,  or ‘Disruptive Models’) can be found in the top  bracket of the business lexicon now-a-days and so much so that if the usage trend continues these will possibly stake claim for the ‘word(s) of the year’.  In the recent times, there have been many definitions, point-of-views and scholarly discussions on ‘what’ and ‘how’ of Digital. We also see some early actions as service providers rush to their clients with their digital offerings and claim break-throughs in deals and CIOs indicate digital as their top priority justifying the hype.  However,  there is still a lot of mystery surrounds these concepts and the fact remains that the businesses are still unsure of what is in it for them though there are making attempts to explore and learn from the early forays of the peers.

If we read through some thought leadership articles,  hear what CIOs have to say or go through the service offerings of vendors, Digital seems to mean different things to different people. More content gets added every passing day. In such a situation, adding more substance may possibly add to more confusion; alternately if we think positive such content may also help get more clarity. Hence, here is a stab at unpacking Digital and the impact it may have on the businesses.

This perspective is influenced by six trends we have witnessed in the technology domain in the recent times. These trends have caused considerable shifts in the way technology is perceived and used and may have played a role in shaping the advancement of Digital either independently or collectively.  Before we look at these trends, it may be worthwhile to share what we consider as the basic tenets of digital. There seems some agreement on these tenets in the industry albeit at a high level. One, digital is not a technology or a set of technologies but ways of running the operations efficiently with technology at its core; two, it is not a pre-defined template that is applied to business problems but an approach to anticipate and avoid problems; three, it is not just automation of customer processes but ways of converging the organisation towards better customer engagement and experience and finally it is not a goal or a destination but a journey to achieve sustained growth.

Working from this premise, we can see how these trends have influenced the advancement of Digital which in turn is transforming these trends into mainstream and thus the evolution becomes iterative.  There is nothing like a project or a method when completed would make a company Digital. However, riding on these six trends may make an organisation become more digital. 

2. IT in the Board

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The business environment is getting more complex and volatile and companies have come around to accept the ‘new normal’ in their respective domains.  Technology can play a crucial role in managing the complexities by helping companies become Digital.  These trends signify the shift to become Digital is multi-dimensional and as the adoption rate in these dimensions increases, we will see more developments resulting in strong technology driven organizations of the future.

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Organizations need to shift to Digital Strategy from IT Strategy to create greater impact on their businesses through technology. The shift involves changes in traditional methods of IT investment planning.

There were a number of implicit assumptions that went into the such an exercise; that the business environment would be more or less stable, technology advancements would be predictable and organizations would benefit from a longer term investment plan. Cut to today’s times – businesses operate in an increasingly volatile and complex environment; the role of technology is changing and in certain cases driving the business models.

In such a situation, how should organizations approach their technology strategy? Can we hold on to these assumptions of stability? Can we still follow a hardcoded 2-3 year approach when the pace of change outside is drastic?  

Digital disruptions we see suggest that organizations need to follow a radically different approach to formulating their technology strategy. Disruptive technologies have brought in new business models with the likes of Uber or Airbnb.  Convergence of devices, connectivity and information availability have greatly enhanced the way we see and use technology. These developments have far reaching impact on the role of IT in the organization and thus the approach to IT Strategy.

To navigate through the complex and dynamic environment, businesses would gain by shifting from developing an IT strategy to promoting a Digital Strategy. An important aspect of this shift is the recognition of the potential of technology in determining business direction, a radical change from viewing IT as a mere function of the organization. 

Key Considerations for Moving from IT Strategy to Digital Strategy

Not business strategy driving IT but IT driving business strategy

In the traditional sense, IT was always considered as a business enabler which implicitly meant it would require business clarity that comes from business strategy. In other words, IT would trail business specifications. Well-defined processes and associated business rules were considered as pre-requisites for large IT investments such as ERP and CRM. A time delay in bringing appropriate IT was inevitable had its share of issues.

Digital strategy premise is that the boundaries between business and IT strategies have blurred.  They go in tandem and think of Uber or Airbnb,  technology may define the business strategy. Business specifications are not mandatory to select IT. Organizations may choose to follow processes defined by a business application or depend on a cloud service provider who provides business services built on strong technology.

Not long term hard coded but short cycle and dynamic

IT strategy would typically cover a 2-3 year plan providing a roadmap for IT investments with a provision to review on a frequent basis and re-word the strategy where required. It was easier for the CIOs to follow the plan, make suitable budget provisions and go through a justification and approval process. To a large extent, the plan remained static and execution would have the plan as the basis.

In the changing circumstances, a long term plan that is hard coded will have no meaning to organizations. While the planning will still have a multi-year visibility, CIOs need to be pro-active or react with agility to unforeseen business situations. Towards this, they may need to plan and execute for the short term and ensure that such plans all tie-up to provide long-term benefits.  Such situations would correspond more to market actions – either providing an additional service to customers or quelling a competitor’s actions and may span tactical and transaction levels. For instance, a bank may completely overhaul customer on-boarding process not envisaged initially,  taking care that such unplanned programs tie-up to the overall customer engagement process. 

Not comprehensive bulky but focused lean

Traditional IT strategy would cover all aspects of IT – applications, hardware, other infrastructure like networks and IT teams – that would be required to enable all areas of businesses, tied up vertically and horizontally to present a comprehensive plan. The dependencies would be laid out and hence investment decisions would cover all the dependencies.

Digital strategy is aimed at focused aspects of business such as customer services or backend logistics or regulatory compliance. These business areas can be seen as independent components and decisions taken as per the demands of these business components.

Not CIO centric but business centric

The custodian of an IT strategy would be the CIO in most organizations. He would own the plan and initiate changes when required. The requirements from the business would queue up in the CIO’s office and prioritized as per the plan document.

The digital strategy need to follow a more inclusive approach where the plans would be drawn up in close coordination with business and even customers or vendors. In progressive organizations, the involvement of business would also extend to execution where they may be allowed to take investment decisions (operating under an overall governance structure)  that may span selection  of applications, infrastructure and service providers. We see this change already in effect. In a survey conducted by McKinsey on IT strategy, more than 83% of IT executives indicated that their company’s IT strategy was developed collaboratively between IT and business.

Conclusion

A shift from older methods of IT strategy to a radically different approach of Digital is vital to the organizations operating in the ever changing markets to take full advantage of the advancements in IT. The change impacts all areas of organizations and need to be initiated at the top. CIOs need to work towards getting the buy-in of the businesses through their close involvement and ownership in key IT decisions. 

System Integrators need to follow a radically different approach if they want to engage with the emerging Digital Enterprises. There are atleast 6 characteristics shifts they need to explore. 

System Integrators (SI) specialize in connecting disparate computer systems  of their clients to make them work efficiently. Their forte is managing large and complex projects such as ERP or Core Banking implementations that are generally difficult, time consuming and resource demanding. They bring in technical expertise, right tools and techniques, trained resources and can co-ordinate with multiple vendors to deliver such complex solutions. 

System Integration is one of the key offerings of many Information Technology (IT) service providers and for many this is the mainstay of their business.  Due to complex nature of the projects, the SI’s spend considerable time bringing clarity to the scope, pinning down the effort and planning for the resources. The contracts are made comprehensive, reviewed at multiple levels and agreed with the client before commencement of work.  

The time tested methods of SI may be under threat if we position them in the context of Digital Enterprises that are emerging in the various sectors of the business. These enterprises go beyond the obvious and see IT as core to their existence. They deploy multitude of technologies that can help them understand their customers better, provide an edge over competition and navigate through ever dynamic and uncertain market conditions.  They look to assimilate these technologies rapidly and in most cases in short bursts as demanded by their business situations.  These are organizations in hurry and not risk averse and look for similar characteristics when they procure IT Services. If SI wish to play an active role in helping these Digital Enterprises, their watertight and pre-determined approach to providing technology services require a complete makeover.

There are a number of digital technologies that are on offer. Among these, strong business oriented applications such as such as Analytics, Big Data and mobility and infrastructure platforms such as cloud have increasingly become strategic priorities of organizations. There are others such as Internet of Things and Social Media integration equally vie for the digital investments.  While the adoption of these technologies show an increase,  they pose certain challenges in deployment.  A key among them, cited by the organizations, is the lack of talent within their resource pool and even among their collaborators.  This brings the spotlight on the SI and the role they can play in helping their clients become truly digital enterprises.

There are a number of implications for SI as they attempt to help their clients go Digital. Due to the purpose these technologies serve, they demand a good understanding of the business, different sets of skills among the team and faster pace of realization. The projects are not large-scale or necessarily complex.  Hence, SI need to follow a radically different approach from those practiced earlier for programs such as ERP implementations while retaining the strong technology expertise.   Six characteristics shifts that are interrelated can help the SI’s to effectively participate in their clients’ digital journey. 

Project Focus to Process Focus

SI’s structure their work around ‘projects’ that are characterized by defined scope and timelines.  Digital initiatives tend to be ambiguous. These projects may not have a clear scope to start with and may require iterative approach to realize the objectives. Timelines may not be estimated accurately. Hence, SI’s should manage such ‘projects’ differently.  To start with, they should move away from attempting to clearly define the project with the usual elements of scope, roles and timelines to a more process oriented approach.  This however, does not mean that getting caught into an endless engagement. A process focus means that the SI’s establish a delivery process of interweaving the identified business process and appropriate technology solution, obtain feedback, deploy for use and move onto a next identified process.

Outside-In to Inside-Out

Digital programs need to be planned in an ‘inside-out’ manner, implying that the organizations need to evaluate technologies that are right for their businesses than what others are doing. The traditional services expect SI’s to bring their learnings from other clients for project execution to avoid re-inventing the wheel.  Towards this, SI’s would develop standard methodologies – which in turn would be refined by their industry experience – and bring them for a new project. While this approach has its merits, SI’s should realize that they cannot manage Digital programs with ‘one size fits all’ outlook or in other words follow an ‘outside-in’ approach.  They need to see the requirements from their clients’ perspective and only align those elements in their repository that will make a good fit.  In order to achieve the ‘inside-out’ model, SI’s need to integrate themselves with their clients’ teams  and look at the issues from clients’ perspective.

Reactive Approach to Pro-active Approach

The solutions SI’s provide are generally towards solving certain existing problems – such as redundant or unused applications, duplicate or insufficient data, incompatible infrastructure etc.  The solutions thus tend to be reactive in nature and try to solve past issues.  The digital enterprise will require a pro-active approach, defining and implementing solutions for future needs, even if the current needs are adequately supported by the existing systems.  SI’s need to anticipate the future requirements even while being engaged in current projects and attempt to convert those requirements into future projects.  This again brings the focus to skills of the team members who need to follow a consulting-led approach to their client engagements.  

Complex Solutions to Simple Niche Applications

A key agenda for Digital Enterprises is to continuously improve the ways of managing customers and rallying the entire organization towards that goal. This may require deploying applications that can instantaneously bring improvements in customer management or any service related operations. For instance, it could relate to an easier way of processing customer orders or personalizing the offerings to customer specifications. Such applications could integrate with back-end enterprise applications for execution. SI’s need to cater to such requirements by being more agile and responsive. 

Conclusion

The competition to SI’s is not from other SI’s but from specialists and smaller firms.  These firms are more focused and can respond to requirements quickly. They may not have the fineness of the processes SI’s have, but are more result oriented. Hence, in such a changing competitive landscape, SI’s need to bring about these shifts as early as they can while making sustained investments over a period of time in structure, people and processes.