We’re hearing — on an almost nonstop basis — that to survive in the coming months and years, organizations need to go digital. But what does this mean? Does it mean buying more technology? Does it mean doing more with data analytics? Does it mean bringing in new skill sets?
The answers are yes to all the above — and more. Going digital isn’t just doing new things with technology and data, it means fundamentally shifting the way organizations are managed. It even means re-examining what kind of business you are in. I recently explored the implications of moving to digital mode with some leading proponents across the vendor community. I asked people what to expect in the year — or years — ahead in the way they manage their systems and data. One thing is crystal clear: there is no longer a divide between what the technology department does and what the rest of the business needs. Technology is the business, and the business is technology — no matter what industry you happen to be in.
Over the past year, “the digital economy grew six times more than the growth of the total economy,” as Couchbase CEO Bob Wiederhold, CEO of Couchbase, put it. “If we look at the companies that grew in 2016, in nearly every industry, digital economy businesses are leading the way. E-commerce, travel, gaming, and financial services, for example, are experiencing dramatic shifts in how they conduct business.”
The following are three impactful changes digital technology is bringing to the way we manage:
Technology decisions are no longer the exclusive domain of technologists. The shift to digital self-service culture is changing the very essence of what makes an IT department. Matthew Magne, global product marketing manager for data management at SAS, observes that he is seeing IT departments gradually “let go” of control, and is seeing a shift in “decision gravity” away from IT and towards the business.
As a result, there is “unprecedented pressure on IT to be more agile, more responsive to the business, more flexible, and more cost efficient,” says Bernd Harzog, CEO at OpsDataStore. He adds that “internal IT organizations have had to learn to both compete with public clouds and take advantage of public clouds.” This pressure will only continue, as the trend to digitize as much of the operations of companies as possible continues unabated, “touching how you market, how you sell, how you take orders, how you interface with customers, partners, suppliers and employees, and how you run the entire business.”
Every company not just a software company, but data company as well. Increasingly, we’re seeing a drive toward employing data as a product itself. Every company is now accumulating vast stores of data. Companies are evolving into software companies, then data companies. “For businesses, in this new world where data is everywhere, your product is not only the product, but your data as well,” says Scott Gnau, CTO of Hortonworks. Having a pile of data isn’t valuable in itself — but being able to offer insights is of tremendous value — “the analysis that comes from your data—about your company, customers and your ecosystem,” he adds. “Whether you are a manufacturer of moving metal or a selling a service, I predict your data will become a product with value to buy, sell, or lose. Why? Software and hardware can be upgraded and replaced but data is one of a kind and irreplaceable. It has intrinsic value that can be bought and sold. Guarding data is no longer just about private information, but about defining and holding on to value.”
The value of information as a product is not lost on today’s generation of startups, Gnau observes. “New companies with new business models are looking at how to monetize data assets, particularly as a service to customers. This will lead to an exchange and marketplace for data,” he predicts. “For example, companies that sell heavy equipment to farmers aren’t just selling the equipment. but the data it provides. The average tractor now has three dozen sensors, collecting information to help them maximize crop yields and control costs, right down the seeds planting patterns planted and the turn radius of the combine to grow more with the least amount of fuel. Data is already a product transforming something as non-industrial as farms.”
With the rise of data as a product comes the rise of the chief data officer as well. “With the realization that data is a strategic asset and needs to be managed and governed at the executive level,” says Magne. This results in an “increasing focus on measuring quality of data and relating that to a monetary value. Linked to data monetization – Valuing data processes in new ways: for example, metrics on monetary impact of data storage on-prem and in-cloud.
We have greater collaboration — beyond enterprise walls. Going digital means looking at the entire world as an on-demand resource. Organizations ”are just now skimming the surface of what’s possible when aggregating data from outside their company – pooling information from suppliers, for example – to make real time operational adjustments,” says Steve Woodgate, general manager of the SAP Practice at TriCore Solutions. You can thank the rise of cloud computing for making this possible, he observes. “Previously, these techniques have only been used by bigger names – such as Walmart, NFL, Under Armor. Now the benefits of running on cloud will be increasingly accessible to small- and especially mid-market companies.” Today’s generation of cloud-based platforms makes this possible, enabling companies “to use predictive analytics and analyze business operations more closely.”
The changes digitization is bringing about mean new ways of thinking are required, well beyond implementing technologies. “Any enterprise that wants to succeed in 2017 must have a strategy based on digital innovation and modernization,” says Weiderhold. “Those that don’t make these shifts simply won’t see 2018.”
This article was written by Joe McKendrick from Forbes and was legally licensed through the NewsCred publisher network.