The hype cycle around digital transformation doesn’t seem to be dying down any time soon. In fact, as the ‘Age of the Customer’ continues, digital transformation has become table stakes for any organization wanting to remain relevant in the next decade, or even the next 12 months.
As a consultant, I hear about real pain points and cross-organizational challenges to digitally transforming every day. What’s interesting, is that regardless of the industry vertical or the product or service in question, most of these pain points are the same. What I learned from this experience is that a formal assessment process for IT leaders to evaluate technical capabilities for digital transformation is by and large missing in the market.
To help my clients move forward in a systematic way, I developed my own digital transformation framework – 20x20n – to help organizations sustain accelerated, agile operations throughout digital transformation efforts while working through formal, repeatable and measurable processes.
Data-driven assessment and planning are critical digital transformation principles. Here's a look at how to execute on these processes to ensure your digital transformation plans don't get stuck after a few initial forays into innovation.
Begin Digital Transformation with Application Portfolio Analysis
Application portfolio analysis is the starting point to better understanding business drivers. Most digital transformation strategies stem not from a desire for IT change, but rather from demand created by shifting customer expectations or market trends. It’s tempting to simply chase after whatever customer experience trend happens to be exciting at a given time. Instead, organizations should bring leadership from across lines of business together to gather data, analyze it and make strategic decisions about how the company needs to adjust in today's digital landscape.
Once you have these focal points in place, it is vital to analyze your application portfolio in light of each business driver. This will let you see:
- Which applications support different goals.
- Which drivers lack sufficient applications support to progress.
- Which systems may need modernization or integration to support the business driver in question.
Performing this analysis begins with taking a high-level look at your application portfolio. By the time you're finished analyzing each app alongside its relevant business drivers, you should be able to pin down which apps are roadblocks to achieving your goals and where there might be inherent software risk.
For example, if during digital transformation, an organization finds that many of its apps are written in COBOL and the vast majority of the team is, therefore, spending its time simply on maintaining the app ecosystem, then you know you have a problem. In this situation, you're dealing with innovation barriers because your staff won't have bandwidth to handle new demands, limited integration with modern apps and the potential for significant bottlenecks as you work to roll out new solutions that must interact with the existing systems.
By identifying this gap between what the business wants to achieve moving forward and how the current app environment is functioning, you can establish cohesive, practical strategies to modernize this part of your app environment or port data from those apps into a platform that simplifies integration.
Is Your Organization Really Ready for Digital Transformation?
Human resources, internal knowledge and digital-focused tools all have an impact on your organizational readiness to support a transformed operational climate. To analyze your organizational capabilities, you should:
- Evaluate your application portfolio based on the programming languages used throughout to figure out the distribution of development skills needed to maintain systems.
- Establish a technology dashboard to provide actionable data on technical debt, adaptability issues and complexity among your applications.
- Analyze your skill set relative to your application goals.
- Identify which apps have disproportionate software maintenance requirements.
- Rank your business drivers in light of your ability to delivery on them and the resources you expect to need to devote to supporting their demands.
- Assess your current use of project management, business analytics and similar tools and identify where more resources will be needed.
Taking an objective view of your application portfolio from the lens of what your business can actually do to meet the demands set forth as you aligned your app portfolio to your business goals represents a huge step forward in helping you manage digital transformation projects.
Don't Forget About Infrastructure
Applications are understandably a focal point of digital transformation strategies, but you can't afford to neglect your infrastructure along the way. Identify if you have immediate platform issues that need to be resolved. Work with the IT staff in the trenches to figure out if there are any obstacles to cloud readiness pointing to future problems. These tasks help you develop contingency plans and better inform your decision-making.
It is also essential that you understand how you're using the public cloud and how much your infrastructure can be standardized and virtualized, so you can simplify maintenance and management tasks.
As you perform this analysis, you'll also want to make sure you're taking note of scalability barriers and identifying legacy technologies that may present challenges when it's time for an upgrade.
Never Settle for Anecdotal Analysis Alone
Listening to your staff and observing operations is essential throughout assessment, but don't stop there. The 20x20n framework advocates for data-driven decisions that allow you to make more intelligent choices and gain a deeper understanding of app and infrastructure performance.
CAST can be your digital transformation or IT modernization partner, as they provide Software Intelligence for gathering meaningful data about your core systems and legacy applications, helping you make smarter decisions to get the job done faster and on budget.
Erik Oltmans, an Associate Partner from EY, Netherlands, spoke at the Software Intelligence Forum on how the consulting behemoth uses Software Intelligence in its Transaction Advisory services.
Erik describes the changing landscape of M & A. Besides the financial and commercial aspects, PE firms now equally value technical assessments, especially for targets with significant software assets. He goes on to detail how CAST Highlight makes these assessments possible with limited access to the targetâ€™s systems, customized quality metrics, and liability implications of open source components - all three that are critical for an M&A due diligence.