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Winning Digital

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Ed Nair
New Update

74

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We have been hearing that the ‘nexus of forces’ comprising social, cloud, analytics, and mobility is a major force that is disrupting traditional IT. Its impact is much more and beyond. These are a clutch of forces manifest in technology, they combine to create a new order of things in business. We are currently calling this phenomenon by the name of digital transformation.

This has happened before. In the early 1900s, when electric power was commercialized, companies started weighing the consequences and then identifying the justification for investments into this new source of energy. The assumption was that a new option was available, but the old thing (steam-powered factories) is just as good. The reading was dead wrong; the steam power advocates never survived.

We are at the cusp of a similar shift in power. The four technologies are disrupting business and rewriting the rules for success. The evidence is visible on many fronts. The beacon of technology shining on marketing and upsetting the relationship between the IT organization and the marketing organization is one example of the shift of power. The demolition of traditional silos of IT and the emergence of converged infrastructure is another example of the impact of these technologies. Entirely new business models like Uber taxi service are emerging.

What does it take to win here? The key is not in aligning these technologies to the business—that is old style. The new approach is to create business models built upon these technologies. It is also about using these technologies in combination and not in isolation. A 2014 study of 537 IT and business decision makers by Harvard Business Review Analytic Services found that by adopting cloud, mobile, big data, and social media technologies together, companies were more likely to reap the transformational benefits of them all.

There are three clear implications that also serve as essential mandates for business and IT leaders. First, business and technology have to work collaboratively like never before. They have to co-create business models and execute around these business models. Second, the IT organization has to recast itself to be a provider of business services and shed its traditional role of being the custodian of IT assets. Third, the organization as a whole will have to build up new capabilities and skills to manage the transformation. A McKinsey survey found out that the top five most pressing talent shortages are in analytics and data science, joint business and IT expertise, mobile and online development, enterprise application architecture, and cloud and distributed computing. All of these areas are critical to executing a digital transformation.

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