Large and small enterprises are constantly being told they need to get on the digital transformation train. The simple truth is that to survive in any industry, enterprises will have to implement some sort a technology-based solution if they wish to stay relevant and competitive. Digital is cheaper, faster and provides a foundation where innovation and value differentiation can occur, but it needs to be the right one. Industry and cross-industry changes are occurring quite rapidly and are often influenced by new and emerging technologies like artificial technology (AI) and cloud computing. As the newer technologies are being adopted, they are causing rapid changes in business models constantly pressuring business leaders innovate and transform their operations. These transformative initiatives should enable businesses to become more responsive, adapt to dynamic changes in the market and deliver to customers and others across the value chain, winning propositions.
IT is the instrument
In most business functions you are likely to find one more technology-based solution supporting it. Depending on the industry, IT budget relative to annual revenue varies from 2% in construction to 7% in banking and finance; with an average of 3.25% and increasing. So, when innovation is discussed, it’s technology that get the attention because it can be touted as a competitive advantage, it’s the shiny object, the magic that will address the challenges being faced. Technology is nothing more than a tool to help executes steps in a process that is part of a business function.
So, with the faith placed on technology and backed by the investment, enterprises need to make sure the right technology is selected. I strongly believe in order for the risks to be minimized and maximum potential value realized, the processes must be optimized.
Process then Technology
Processes are nothing more than individual activities that are stitched together to produce some end result. Multiple processes related or unrelated support a business function and these functions drive a business. Technologies are used to make these processes more efficient and without any change to the process that is usually the case. Is the ROI the best it could have been? If the process is not optimized, then it’s highly unlikely that the ROI was maximized.
As an example, a document needs to be edited by multiple people in a co-located space. This document is sent as an attachment in an e-mail where each person has to download the file, make their edits (based on an agreed order) and send the file back via e-mail to the entire group. Fairly reliable but not very efficient. Company invested in a file sharing solution, users now send email to each other with a link to the file once they have completed their edits. To manage versioning the edited order is serial and agreed. This is an improvement over prior solution, but not the most efficient, because the solution was implemented without optimizing the process. If the process was changed so that all user could edit the same document in real time and see the changes of each other the solution options would be different. That is a key step that is missing when investment is being made in technology to drive value in the business.
Prior to any discussion and decision about technology options, there needs to be deep discussions about the current business processes. Has the business changed but processes are still the same? Have they been optimized and aligned to support the current business objectives? If these questions are not being answered before investing in IT, then the wrong solution may be chosen costing the business financially as well as and losing precious time and possibly losing ground to competitors. The other alternative is that the correct solution is selected, but not having an optimized process will not allow the enterprise to realize the maximum ROI.
Conclusion
The only way to compete today is through the use of technology. It is one of the key ingredients that make the cocktail valuable. The other ingredient that is often forgotten is an optimized process. Without optimized process an enterprise will have invested in the wrong technology or invested in the right one, but not fully capitalizing on its capabilities; not realizing maximum ROI. With margins becoming extremely thin, these are areas of opportunities that are easy to capitalize on and will yield results.
Garfield Vaughn
IBM Integration Architect