Untangling Transformation: IT vs. Digital vs. Business
Transformation is a popular buzzword in corporate circles these days. C-suite executives use the term in strategy meetings and shareholder reports as they try to quantify ways to manage the unrelenting pressures of a competitive marketplace and shifting technologies. The word transformation is unfortunately weak in its ability to encapsulate the realities of change and business growth, which is why people sometimes reference three different but related aspects of transformation interchangeably: Business transformation encompasses the cultural shift and business processes driven by changing market demands; i.e., the company’s culture of change and business drivers. Digital transformation encompasses the tools and processes implemented to support business transformation; i.e., applications. IT transformation is the reassessment and overhaul of information technology to support digital transformation; i.e., infrastructure. A recent Forbes Insights/KPMG report, Business Transformation and the Corporate Agenda, noted that 93 percent of survey respondents were planning, had recently completed or were in the midst of a business transformation project. In today’s market environment, it’s disrupt or be disrupted. The burdens of globalization, regulatory compliance and ever-changing technology platforms pose continual challenges to business leaders. They know that transformation is necessary, but are sometimes uncertain about the type of transformation they need, what to transform and how.
The pivot point
From manufacturing to medicine, meaningful transformation involves a convergence of strategies that leverage information technology in new and innovative ways. Whereas business transformation may seek to change the go-to-market model and digital transformation efforts center around technology-driven solutions to the operational problems impeding that goal, IT transformation creates a framework for the organization to do business differently in every regard. Netflix went from sending DVDs through the mail to streaming video content online, and later, developing its own content based on analytics concerning customer tastes. Walgreens reinvented the retail pharmacy model by setting up in-store clinics that diagnose, treat and monitor patients with chronic conditions. Petroleum companies shifted from conventional drilling methods to hydraulic technologies and horizontal drilling systems to extract natural gas deposits from layers of shale. In every case, the logistical and operational changes are informed by the use of data and advances in technology to elicit core transformation of both the business and the industry in which it operates. We are entering a multi-cloud world in which organizations large and small have the opportunity to leverage both public and private cloud platforms to expand at an enterprise level and promote change in support of their business strategy. On a macro scale, effective IT transformation can:
- Impact workflow, business rules and automation
- Extend capabilities and foster innovation
- Move an IT department from a reactive, inflexible state to a more proactive, agile role
- Solve mounting business challenges
- Shape the corporate culture
IT transformation also forms the foundation of the business and digital strategies that companies employ to achieve a competitive advantage. Business transformation is driven through a productive partnership with IT to meet new market demands, while digital transformation happens through the application of tools and processes that support these efforts. Both strategies often hinge on the reassessment and overhaul of the infrastructure layer and the implementation of architecture, hardware, software or storage solutions that promote fresh ways of thinking and solve roadblocks with technology.
A plan of action
For IT transformation to be successful, your business must first define the scope of its vision. What internal and external forces are at play, and what resources are needed to recruit the right talent, develop products that meet demand or implement new systems? Does your business model need to be completely overhauled, or should energies be spent modifying specific processes or functions? Many companies limit their growth potential by focusing on ways to do the same thing more efficiently, rather than exploring opportunities to reinvent the very nature of delivering technology to the business. Although using technology to solve operational challenges may improve customer satisfaction or reduce costs, such modifications are rarely enough to catapult a business ahead of its competitors for the long term. More than simply “going digital,” IT transformation empowers you to build technologies that keep you from being left behind, and more importantly, take your organization to the next level. Stakeholders also need to unite behind the IT transformation vision for the initiative to gain traction. Does your organization have the buy-in of leadership, or do you first need to initiate a cultural shift that values the role of IT in driving positive change? Have you specifically allocated budget share to increase the speed, resources and scale available to execute IT projects? When IT and business work in unison, the support of stakeholders and external partners can deliver significant advantages, including:
- Bringing new tools and technologies to users faster.
- Mitigating unnecessary complexity, effort and risk.
- Accomplishing more strategic goals by reducing time spent on operations.
- Boosting ROI and reducing TCO by doing more with less.
- Leveraging multi-cloud options to drive innovation.
- Exploring ways to join new products to legacy systems or connect enterprise assets to external services.
- Harnessing data to maximize business insights and support AI, social and digital initiatives.
Despite the many benefits, organizations often fail at achieving effective IT transformation because they try to go it alone. Partnering with an experienced and trusted advisor to develop and guide new initiatives can ensure that IT efforts align with business strategy, and set your organization on a path to continual growth. Drawing on our years of experience in private, public, hybrid and multi-cloud solutions, Rackspace experts can help determine the readiness of your organization to implement change, uncover operational obstacles that slow innovation and enable capabilities faster to let you scale without barriers. We act as a neutral third-party to help you choose the right vendors for your needs and evaluate the costs and hurdles of reconfiguring your operations, or reinventing your business model from top to bottom. Rackspace engineers also deliver specialized expertise, easy-to-use tools and Fanatical Support for leading technologies developed by AWS, Google, Microsoft, OpenStack, VMware and others. IT transformation is a continuous process and an evolving journey. New technologies and shifting market conditions will always create a demand for innovative strategies that anticipate and meet customer needs. By exploring opportunities to deliver meaningful solutions for stakeholders and improve operational efficiencies with the cloud, you can foster a culture of continuous change that drives the growth of your business. To learn more about how to implement IT transformation in your organization, download our free CIO Survival Guide, or reach out to one of our IT transformation specialists to discuss your objectives and chart your path forward.
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