Once again cloud thought leader Joe McKendrick wrote an article that caught my attention. In his, "Many cloud business cases need more depth, AWS executive advises," published on Forbes, citing AWS' John Enoch, he summarizes his thought as, "People need to focus on how cloud will help the business, and nothing more," and concludes, "Typically, many business cases for cloud focus on implementation issues and the numbers involved."
That's exactly what have been my message for six years!
What you must understand is, the rise of digital business requires a radical change in the way your company does business. That’s something you should constantly have in mind if you don't want it to suffer the same fate as Toys R Us. The former leading toy retailer filed for bankruptcy a couple of months ago.
Chances are, like many IT leaders, you’re busy changing your IT infrastructure with the recent technology innovations e.g., DevOps toolchain, Artificial Intelligence (AI), Internet of Things (IoT), Blockchain, Big Data.
The question you must ask yourself is, "Will I deliver the business profits business lines have been expecting?" Not sure! The reason is, you pay little attention to the ongoing changes in your industry, they make your business vulnerable to Amazon, they make it unable to keep up with the crazy innovation pace imposed by the many tech startups out there, and maybe they’re slowly but surely taking it to bankruptcy.
Nine West Holdings, The Bon-Ton Stores, Toys R Us, Remington, Southeastern Grocers, and Tops Markets, all went bankrupt this year. Here is what Business Insider’s Hailey Peterson said about it in a recent article, Retail defaults are at an all-time high—here are all the bankruptcies and liquidations so far in 2018.
These companies have in common that, they successfully invested in the recent technology innovations particularly cloud, but were nevertheless kicked out of business. The other question you should ask yourself is, why investing in technology didn’t help?
The other thing to understand is, winning in today's competitive environments demands more than just changing IT. It requires a deep transformation of your business model, I insist, not only your IT. That’s where these unfortunate companies failed.
Make no mistake about it, the stake is not the implementation of the recent technologies as your favorite IT vendors argue, the challenge is to transform your IT in a way that optimizes your business model.
"Transforming IT in ways that optimize business models! Wow! What a big idea!" you might be ironically thinking. It's not, it's just common sense.
That's a vision, an approach, a skill no IT tool will ever give you. It's about changing your mindset, it's about admitting that alone technology has never created business value, and finally it's about acknowledging that business value is a complex combination of people, interactions, processes, practices, values, behaviors, and technology contributions.
The solution is a new business transformation thinking that crystallizes relevant industry analysis, business model development, and technology implementation skills into an integrated and actionable digital transformation thinking system.
Let me share with you the benefits of a service that'll make you the visionary IT leader your business lines have been desperately hoping to work with: The Digital Transformation Thinking System.
The terrible truth about business value and how to create it
With all due respect to IT tool vendors, equipping your staff with Big Data, AI, Cloud, IoT, and DevOps tools isn't enough to yield business benefits. That's a myth that's been around in the IT community for so long. If things were that simple, many of us would have become billionaires.
Let me try to convince you that the slogan, "The more IT tools, the more business benefits" is definitely simplistic.
Simply put, business benefit refers to the revenue generated from the money spent by your customers to buy your company's products and services.
The reality of business value creation is:
It starts with spotting and controlling profitable market segments
Then moves on with identifying customer core needs and translating these needs into profitable innovation ideas
Then moves forward with designing, testing, and implementing the profitable innovation ideas
Finally, it ends with rolling out innovations and continuously improving customer experience
Amazon, Google, Apple, Walmart, Facebook, they all rigorously and successfully follow that ignored value creation process; Harvard strategist Michael Porter calls it, the Value Chain, it's known in the Lean Manufacturing world as the Value Stream.
Why would you put your job and business at risk by hanging on slogans like, "The more IT tools, the more business benefits?" McKendrick in, "Don't Face the Technology Onslaught With Technology Alone" alerts about the dangers of simplistic IT slogans.
Changing your mindset to the Digital Transformation Thinking System
Resisting change and refusing to get out of comfort zones are the primary failure factors in today's disrupted markets. John Enoch warns, "In a disrupted market, competitors are coming up with innovative ways to improve service reduce price come up with a way of attracting customers faster and better than their competition." Deliver more applications, faster, and cheaper isn't enough anymore.
What's industry disruption? How does it affect the business? Why solution vendors ignore it? How to deal with it? What's digital transformation? How to develop a digital transformation strategy? What's innovation culture? Why does it matter? How to implement it? What's a business operational model? Why does it matter? How to optimize it? Why agile and lean practices matter? How to implement them? What's a continuous delivery infrastructure (CDI)? How to define a CDI architecture? How to implement it? How does it boost the business operational model? What's enterprise cloud? How does it differ from cloud computing? How can it improve revenue streams? are some of the many questions you might have.
That's where the digital transformation thinking system helps! Concretely, it's a collection of principles, concepts, and practices that lay out the fundamentals of business transformation in today's disrupting industries context.
The thinking system is based on four principles that guide the CIO's and her digital transformation team's actions. These principles are:
Innovation, optimized IT value chain, and smart technology implementation are the determinants of value
Understanding industry disruptions and ability to get organizational changes adopted are the foundations of transformational leadership
DevOps is primarily an agile business operational model, neither a CDI platform, nor a software development methodology
Cloud computing should be part of Enterprise Cloud which is primarily a business operational model, and not only a technology platform
The Key Takeaways
The thinking system provides a complete framework that guides your digital transformation effort from industry analysis and digital transformation strategy development to operational model optimization, CDI or cloud implementation, and organizational changes adoption.
The framework is a systematic method that structures your thoughts, decisions, and actions for making revenue generation the primary concern of your IT capability.