Digitization is a great opportunity for IT
Digitization, automation, and other technology advances are transforming industries, markets, and the global economy. By the year 2020, an entire generation, Generation C (for “connected”), will have grown up in a primarily digital world.
Thanks to digitization, companies across industries are racing to migrate “analog” approaches to customers, products, services, and operating models to an always-on, real-time, and information rich marketplace. Some business managers are already redesigning their capabilities and operating models to take full advantage of digital technologies and keep up with the connected consumer. Others are creating qualitatively new business models around disruptive digital opportunities.
At the same time, digitization changes the demands on IT. First, digitization requires increasingly sophisticated technology. Netflix’s recommendation system, for example, analyzes terabytes of data to successfully recommend 70 percent of customer choices. Booking.com’s proprietary search and caching system allowed it to become the world’s largest hotel site, searching more than 450,000 properties for consumers.
Second, greater IT-delivery performance is needed for a competing market. While efficiency was previously the most important performance measure for many companies, now everything matters – time to market, reliability, security.
Reinventing the IT function to deliver digital can provide a new competitive advantage for businesses, so here are some critical elements you should consider to achieve the IT performance improvements required to adapt to the digital world:
- Excellent IT talent – Reinvention often requires an influx of new IT talent to bring in leading technology practices. However, one common complaint among traditional companies is that top talent is attracted to leading technology players and start-ups. That may well be true, but it doesn’t mean organizations can’t build a strong talent value proposition to compete effectively.
- Agile development and rapid releases – Delivering high-quality end products quickly requires new ways of working, including agile development, rapid release cycles, automated testing and deployment, and a “test and learn” approach to changes. Often time, the greatest challenge here is not within IT but in persuading the business to adopt this approach.
- Scalable cloud-based infrastructure – Rapid time to market and scaling to meet increased consumer demand requires lean infrastructure operations and an elastic, cloud-based infrastructure.
- Make IT a top business priority – The CEO and entire executive team have to make reinventing IT a top business priority. The benefits of digital and the potential risks of failure make it essential that they shape and oversee the program. Most important, CIOs must gain the early support of business leaders by laying out a road map that delivers value quickly.
Businesses competing in the digital world often place unprecedented demands on their IT functions, which struggle to keep pace. However, the rewards are clear for those who do: traditional companies will be better placed to compete with large digital organizations, and they will have kick-started the process of reinventing IT.
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