This Digital Transformation is Not the One You’re Looking For

I was sorting through some browser tabs that had been open for a couple of weeks on my laptop and rediscovered a press release that had caught my attention earlier. After rereading it, I realized that I had left the release up in my browser because it could be the poster child for the inane manner in which technology vendors and IT consulting firms are talking about and selling what they very much want to be the next big thing – Digital Transformation.
CA Technologies’ press release was a horrific example right from the start. It’s title, “CA Technologies Study Reveals Widespread Adoption of Digital Transformation”, nearly made me spit coffee all over my laptop. Really? Is Digital Transformation (DT) something that can be adopted? Hardly. After all, DT is not a discrete technology. Rather, it’s a never-ending journey that organizations undertake to better the efficiency and effectiveness of their operations.
DT involves making changes to business objectives, strategies, models, cultures, processes and so many other elements. Many of those changes can be supported by the deployment and adoption of enabling technologies, but DT isn’t about the technology itself. It’s a mindset, a way of thinking and acting as an organization that spans across all of its planning and execution.
In that regard, DT is very much like the discipline known as Knowledge Management (KM) that was similarly a darling of technology vendors and their consulting partners nearly 20 years ago. Most large enterprises at least considered implementing KM practices and technologies. In fact, many did, although the majority of those ‘efforts’ failed to survive an initial pilot program. In the end, only a few big companies, the ones that treated KM as something more than a technology set to be adopted, whole-heartedly embraced the discipline and successfully wove it into nearly every aspect of their businesses.
We’ve seen the same phenomenon play out with Social Business. McKinsey & Company has been tracking the deployment and impact of social constructs, behaviors and tools in a cohort of roughly 1,500 enterprises for nearly 10 years now. Earlier this month, in a teaser to its complete report of annual survey results, McKinsey published these related and telling findings:

“…35 percent of the companies had adopted social technologies in response to their adoption by competitors. Copycat behavior was also responsible for their diffusion within organizations, though at a slightly lower rate: 25 percent of all employee usage. Roughly a fifth of the companies we studied will account for an estimated 50 percent of all social-technology usage in 2015.”

Most organizations and individuals tried to ‘adopt’ social technologies because they felt competitive pressure to do so (thanks, in part, to vendors and consultants), not because they had investigated and understood how ‘being social’ at work could change how well their organization actually performed relative to both its current state and its competitors. On the other hand, a minority of organizations (20% in McKinsey’s survey) have made the dedicated, all-in commitment needed to succeed with Social Business.
Today, we are beginning this cycle all over again, this time under the moniker of Digital Transformation. Consider these findings from CA’s study:

“Digital Transformation is being driven as a coordinated strategy across a majority of organizations (55 percent)…  As a result, 45 percent of respondents have already seen measurable increases in customer retention and acquisition from their digital transformation initiatives and 44 percent have seen an overall increase in revenue.”

In other words, if you aren’t “adopting” DT already, you’re toast. At least that’s what CA and other technology vendors and consultants want you to believe in a fresh state of panic. Hence these findings from CA’s study:

Digital Disrupters have two times higher revenue growth than mainstream organizations. They report two and a half times higher profit growth than the mainstream organizations.”

That may be accurate, but surely those “Digital Disrupters” did not achieve the reported results merely by adopting technology, whether it be from CA or another vendor. They’re the ones who have taken a comprehensive view of DT and, as CA itself puts it, have “…many projects underway in multiple areas of the company, including customer services, sales and marketing, and product/service development.” It’s not a coincidence that CA was only able to include 14% of the organizations surveyed in the group it labeled “Digital Disrupters”. That matches up pretty well with McKinsey’s finding of just 20% of organizations surveyed making more than a token effort at becoming a social business.
All of this is to say beware of vendors and consultants selling technology as the cornerstone of DT initiatives. Yes, technology is an invaluable piece of the puzzle, but it’s not the only or most important one. DT can’t simply be adopted; every aspect of it must be considered and actively embraced by the entire organization.

5 things that prepare the CIO for innovation

Last week, Amazon (NASDAQ: AMZN) held their annual re:Invent conference in Las Vegas. Gigaom’s Barb Darrow summarized her Top-5 lessons learned from the conference here. Specifically for CIO’s, there were a number of things coming from the conference that every CIO should take note of. One of those is to prepare for innovation. It is not a matter of if; it is a matter of when.

Innovation is not a destination, but rather a journey. The path is not always rosy and presents a number of challenges along the way. The upside is an outcome that positions the CIO, the IT organization and ultimately the company in a unique position among their competitors.

There are a number of core items that prepare the CIO for advancing down the innovation path:

  1. Keep it simple: The world of Information Technology (IT) is getting complex, far more complex, and not simpler. Yet, the importance to become agile and responsive to changing business demands is ever-present. The IT organization must find ways to streamline their processes across-the-board. We all know the KISS principle.
  2. Create innovative culture: Innovation is not innate for most. Current culture may actually inhibit innovation within the organization. Understand that culture must change. A good friend and CIO, Jag Randhawa wrote the book “The Bright Idea Box: A Proven System to Drive Employee Engagement and Innovation.” Jag outlines a process that he found to be successful and applicable to many different types of organizations.
  3. Avoid constraints: It is easy to find ways to avoid problems. Preparing for innovation can cause disruption. However, questioning the status quo may be exactly what the organization needs. Look for ways to address constraints whether from technology or from conventional thinking.
  4. Find leverage: IT is not able to do everything. In the past, it was necessary for IT to do everything (relatively) since there really was no other alternative. Fast-forward to today and there are many more options available. Identify what is strategic and should be a focus for IT. Find leverage for the other points to avoid distraction and paralysis.
  5. Seek difference: Being different is often a scary proposition. Many see differentiation as a sign of risk. The thinking that there is safety in numbers. But the thinking must change. Differentiation is something not just to be cherished, but sought out! Look for opportunities to change and provide differentiation.

The combination of these mantras set the stage for a different perspective and line of thinking. Are these the end-all, be-all list of steps? No. But they present a good short-list to start with. Start small and do not expect the changes to happen overnight. It will take time and reinforcement.

Many of the discussions taking place last week at AWS re:Invent spoke of innovation and new ways of thinking. They spoke of a future state for IT. Consequently, traditional thinking had a hard time gaining a platform for discussion.

Connecting the dots

Yet, much of the challenge traditional enterprises have is around connecting the dots between current state and future state. For the CIO, setting the stage, cadence and direction is much of the challenge. It is a lot of work, but still needs to be done.

The first step is in setting a vision that aligns with the business strategy. Understand the core business of how the company makes and spends money. Seek out ways to provide innovative solutions. Start out small, learn from the experience and grow. Look for ways to streamline how IT operates and continually improve IT’s position to become more innovative.

Innovation is about the journey, not the destination. Innovation is an opportunity for differentiation that must be accepted and celebrated. Innovation presents a significant opportunity for companies from all industries. And IT plays a key role in driving today’s innovative processes.

8 Reasons Not to Move to Cloud

Cloud-based solutions present the largest opportunity today for the enterprise, business, IT and the Chief Information Officer (CIO). Recent conversations have posed the question about cloud adoption in the enterprise. On the whole, just about every enterprise today is leveraging cloud in some form. It may be a simple application or a complex ERP system. Overall, however, the adoption is fairly anemic. With all of the reasons that drive enterprises to leverage cloud-based solutions, there are a number of reasons that may offer the CIO a moment of pause.

The moment of pause may be temporary or it may be a longer-term situation. In either case, it is important to understand the reasons why in order to respect the decisions. Disclaimer: Not all decisions may make sense to an outsider and some may be a bit irrational. Here are a few of the top reasons organizations may not move an application or workload to a cloud-based alternative.

  1. Application Readiness: The vast majority of applications in use today were never architected with cloud in mind. Sure, the application may have been virtualized, but is it really ready for cloud and offer the same SLA to customers? In one example, a major enterprise firm runs a business-critical app (non-virtualized) running on Windows NT on a tower Compaq Proliant server in their data center. The application cannot be virtualized, let alone migrated to cloud. Are there existing risks to how the application? Yes. But this example is not unique or rare.
  2. Security: The application or more importantly, the data is sensitive and a data breach would present a significant risk to the organization. An extreme example might be secure missions for the government or business-critical Intellectual Property (IP). That is not to say that cloud-based solutions are not secure. But the cloud-based offering that best suits the application may present a challenge (real or perceived).
  3. Cost/ ROI: Yes, cloud is not just about cost savings. However, the all-in cost to migrate and operate an application using cloud-based solutions may not outweigh the option of ‘do nothing.’ For example, if it costs $50k to provide $10k of value, why should it move? Do the other benefits of cloud provide the value? Maybe not.
  4. Priorities: There are risks to moving to cloud and activity required to do so. Does the priority of moving a specific application to cloud overvalue that of other requests coming from Line of Business (LOB) teams? For most IT organizations, their plate is already overflowing and cloud migration creates a conflict in priorities.
  5. Culture: Culture is a hard thing to change. It requires changing many moving parts including the CIO, IT organization, executive team and fellow business units. Bottom line: It does not change overnight. It requires strong leadership, vision and tenacity.
  6. Organization Capability: Is the IT organization cloud-ready? Meaning, how well has the organization truly prepared to consider a cloud-first methodology? As an example, have they adopted a DevOps methodology? Or does the organization look at cloud as simply a different form of virtualization? There are many aspects to consider about the team, their skills and processes before making the move.
  7. Market Maturity: Even if all of the pieces are in place and an application is a good candidate for cloud, the market offerings may not offer the level of maturity required. In tech terms, cloud is just entering it’s teenage years and still rough around the edges. Are there mature solutions in the mix? Yes. But also a number of rambunctious alternatives too.
  8. FUD: Fear, Uncertainty and Doubt. Yes, it is 2014, and it is well and alive in the CIO and IT organization. Is cloud a fad? It is easy to point the finger at FUD and most really despise this issue, but that does not change the fact that it is a reality in some organizations today.

With all of the negativity, there are a number of very valid reasons to hold off on cloud. Timing is everything. Three months from now, the landscape can change to present a different decision.

For those CIOs that see the promise that cloud provides, they will address many of these issues. Some issues may present a challenge for some time to come. Key is to consider the holistic view of cloud, and what it represents in terms of opportunities and challenges. In the end, business leaders do not care how an application is delivered. They just want it delivered. Aside from the reasons above, cloud still provides significant opportunities too.

San Francisco will charge tech shuttles for using public stops

In a move designed to ease the growing tensions between deep-pocketed Silicon Valley workers and activists on behalf of lower-income communities forced out of their homes, San Francisco mayor Ed Lee announced Monday that tech shuttle buses will now be subject to a fee based on the number of public stops they frequent, according to SF Gate. The tech shuttle buses have borne the brunt of the struggle over the income disparity within the city, and some have been vandalized during protests. The move may take some of the heat off of tech workers’ transportation choices, but it’s unlikely that tensions will dissipate completely.

Fandom rules: Netflix’s war on mass culture

http://www.newrepublic.com/article/115687/netflixs-war-mass-culture

Netflix may call itself a next-generation TV network, but it’s fundamentally changing how we watch television, and in turn define ourselves as a nation, argues Tim Wu in a piece for the New Republic. Wu retells some of Netflix’s earlier original content efforts, and argues that the company’s recent shows aren’t about mass culture but about intense niche fandom. Definitely worth a read.

The decline of Wikipedia

http://www.technologyreview.com/featuredstory/520446/the-decline-of-wikipedia/

It’s no secret that the community behind Wikipedia is insular, methodical and bureaucratic. But the high barriers of entry that Wikipedians have established to keep the website’s millions of pages under control are now coming back to haunt them, according to an in-depth feature by MIT Technology Review. There simply aren’t enough people to regulate and edit the firehose of information — both correct and incorrect — to keep to the high standard the community sets for itself, much less be a reliable encyclopedia. That insular group is going to need to open up, or risk collapsing under the weight of its own system.