*This is a three-part series written by NTT i³’s President and CEO,
The 21st century has seen the emergence of a hyper-competitive marketplace characterized by innovative business models, better informed customers, nimble and smarter competitors and a rapidly changing regulatory and threat environment. Competitive advantage, market valuations and reputations that used to take decades to build and develop are created and destroyed in a matter of weeks and months.
The key to success for businesses in all industries in this exciting (and sometimes chaotic) digitalized environment is Business Agility — the ability to sense changes in the marketplace and respond quickly and efficiently by adapting products, services and operations to capitalize on opportunities and overcome challenges. These businesses are on a journey to becoming Digital Businesses. They are highly adaptive in their abilities to shift market dynamics, adopt new technologies and meet evolving regulatory environments. They have technology in their DNA. With the organizational capability to use technology as a source of competitive advantage — to experiment with options, prototype potential solutions by rewiring systems and processes, gain insights from internal and external data — digital businesses are able to quickly execute in order to drive meaningful business outcomes.
• Digital Businesses truly understand how they deliver value to their customers by going beyond traditional measures of delivering existing products and services faster, better and cheaper. In many cases, they re-imagine products and services by making the customer a co-creator in the product development process. In other instances, they create services that cater to and influence a significant change in customer behavior.
• Digital Businesses deliver services to their customers through well-designed, secure, context sensitive and highly differentiated experiences that take advantage of the rapid changes in technology. They understand their value chain and have made strategic choices around owning those core capabilities that provide them a sustainable competitive advantage and partnering across a tightly knit ecosystem for other capabilities.
• Digital Businesses succeed by thinking smarter, acting faster and streamlining functionalities to enable companies to practice bendable operations to take advantage of emerging opportunities in the marketplace.
Today’s Digital Businesses require a radically different approach to managing Information Technology (IT) within the organization. This approach should deliver better outcomes by making Business Agility a core competency to deliver innovation, adaptability, flexibility, and a continuously improving value proposition. Approaching digitization in an agile way saves organizations a great deal of stress and money, thereby bringing greater value to the business. Additionally, agility increases the resiliency of the company so that they can adapt quickly and are less likely to become obsolete.
As established enterprises in all industries begin to evolve into the successful digital companies of the future, they must begin the journey through their IT functions. Yet, many of these incumbents are saddled with IT which has organizational structures, management models, operational processes, workforces and systems built to solve “turn of the century” problems of the past.
With the ready availability of cloud enabled services (such as CRM, HR, Marketing micro-sites, etc.), organizations are choosing to bypass their internal IT teams and engage these services on their own. This has caused a perceptible rift between IT departments and business units. As technology permeates and becomes indispensable to all aspects of today’s businesses, this problem is going to continue to grow unless IT organizations recognize the limitations of the model that helped them succeed in the past and retrofit it quickly to adapt to the needs of today. Agile IT is first step in the digital business journey.
Many analysts and industry experts have recognized the need for a new model to manage IT in their businesses and have proposed approaches to understand and manage a hybrid IT environment that includes slower legacy applications and infrastructure in combination with today’s rapidly evolving digital-first, mobile-first and analytics-enabled applications.
Digital Business, whether a startup or an operating group in an existing enterprise, is all about a new business model based on frequent change to make the most of opportunistic circumstance. The ability of a digital business to respond to a changing marketplace is critical to its future success. Faced with this change, agility is a key competitive advantage. Not only can an agile business react to change in a timely manner, it can also be innovative and disruptive.
How fast an enterprise is able to react to changing market conditions, its ability to introduce new business models and to follow mandatory rules and regulations are vital for continuous success. The majority of today’s IT landscapes are not designed for change. Rather, they are designed for cost efficiency and standardization, and are missing the required agility and adaptability so vital to the core of a digital enterprise. The speed of change, with agility as the driver, decides who makes the journey effectively and profitably.