Traditional IT is at the beginning of its end, and next-generation digital transformation requires the destruction of existing entropy. This is not unique to technology, as IKEA as proven. Get insight in how to disrupt your traditional market and break out from the "it´s always been done that way" mindset.
Pro-active change is for the brave. Yet, ironically, it turns out to be the safest strategy in times of market disruption.
Undisciplined and reactive change repeats the failings of yesterday. Organizational structures drive architectural result and vice versa. Both can drive less than optimal results. Technical architectures implicitly mirror the engineering organizations that architect them. Operational teams implicitly mirror the silos. Procurement teams implicitly buy according to the silos. Vendors thus bid and sell the silos. And it all exists under the authority of “It’s always been done that way” – “A story about 5 monkeys”, Slideshare [ref].
IKEA and the digital transformation process
Next-generation digital transformation requires the destruction of this existing entropy. This is not unique to technology. IKEA did not become a global success because it changed furniture. Instead it changed how furniture was put together. Our technical equivalent is the shattering of the physical concept of the computer into its barest elements and then enabling the re-creation of the “software defined” computer when requested.
From a business-model perspective, companies are moving from a focus on product, to product and services, to pro-active customer support, to completely new outcomes - “B4B and the future of ‘outcomes-based’ business”, J. B. Wood [ref].
Outcome-based business models disrupt the market
This journey is powered by the distance effects of connecting everything and the possible real time insights that can be generated from the resulting data. Successful outcome-based business models completely disrupt any traditional marketplace. Successful outcome-based business happens because there is no guesswork, only data-driven analysis that guarantees and de-risks future results.
In this process, even when only moving to a pro-active customer support scenario, the business transforms implicitly or explicitly to being a service provider that is always present (zero distance) at the time of customer need.
The definition of superior competition is when another company knows more about your customer and can action faster; to secure the wanted outcome.
Companies that succeeded at digital transformation
Examples of companies that have made this transition.
- Maersk – From operating ships to securing delivery – “Smart containers listen and talk”, Maersk [ref]
- John Deere – From selling tractors to enabling farming solutions – “Remote, but still in control”, John Deere [ref]
- Volvo Cars – From selling cars to protecting life – “Vision 2020”, Volvo Cars [ref]
For more examples read “Internet of Things Drives Outcome-Based Business Models”, The Wall Street Journal [ref].
A public cloud infrastructure approach
Every day is a day before. All we can see is what we have and we attempt to make iterative improvements, to deliver exponential changes. Traditional IT, 2u servers, ad-hoc architectures, manual processes. Disruption has arrived to the traditional IT space through the appearance of Amazon Web Services (AWS) and similar public cloud offerings.
Certain wanted characteristics are clearly visible in the public cloud infrastructure approach, which enable the delivery of a transformative experience to the end user and the operating entity.
- Homogeneous supply chain
- Total automated operations
- Highly accessible
- On-demand provisioning for any business
The new emerging applications focusing on data-centric processing, data governance, response times, scalability, and resilience also require:
- Distributed rather than centralized execution
- Auditable transparency per evolving and fragmented juristiction to cope with developing next generation governance
- Proximity to end point to ensure wanted performance
- Predictable networking behavior over radio and fixed axes
- Tamper-free guarantees
- Historical attribution of data
- Policy-driven workload governance
- From scale up to scale out to scale across.
Future digital transformation processes will require precision control from the edge to the core and from private to public.
Traditional IT is at the beginning of the end
Traditional IT is at the beginning of its end – “Dell, EMC, HP, Cisco. These Tech Giants Are the Walking Dead”, Wired [ref]. The future solution shall be a combination of multiple public and private sites where all are used appropriately and automatically, workloads are distributed to many locations depending on each of their business requirements. At any point a full history of what has happened is available for independent and none trusting validation.
This shall look and work more like the combination of a mobile radio cloud plus a hyperscale public cloud combined – “Winning the Game: A whole set of networks”, Ericsson [ref].
Full distribution can be achieved while still maintaining the same ever improving industrialized unit costs due to the adoption of common standards, processes and the ability to software define specific needs on demand then release the underlying resources when finished.
If this post caught your attention, then please read the fourth paper I've written with Jason Hoffman, Head of Product Area Cloud Systems. (And get introduced to the first three)
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