The Home Depot Experience
Walking into a building construction store like Home Depot can be overwhelming. There are so many items to choose from and if you are like me you often don't know what you are looking for. If you are a builder or contractor most of the items will make sense and be familiar to you. However, what is more important, you will know what to do with them when you take them home.
Digital Transformation – The Home Depot of Computing
This experience is similar to companies who are deciding what to do with digital technologies. It can be just as overwhelming as walking into Home Depot. What is important to realize is that this experience is not a new one.
When I first started consulting over 25 years ago a popular trope was this:
Let’s say you can have ERP for free and have it installed today (back in the day this would take 12 -18 months) then what will you do with all that technology? The answer given was usually, "We don't really know. Everyone is using ERP and we thought we should get one too." Well then, why are you focusing on technology when you don’t know what it is you want to accomplish?"
It is remarkable that we find ourselves now able to access instantly and usually for free (to start) any software you might need for your business. But this still leaves us with the same question, "what are you going to do with all that technology?"
This is where many companies find themselves with respect to digital transformation. Based on what you read you might conclude that everyone is doing digital transformation and you should too. If you find yourself thinking this you are in good company.
More Items for Your Shopping Cart
Everything as a Service (XAAS) is a gaining mind share among the digital community. This is a progression of what has been going on for a while manifested in the form of:
Software as a Service (SAAS)
Platform as a Service (PAAS)
Infrastructure as a Service (IAAS)
And many others.
The concept has been invented by computer and business architects alike to turn delivery of everything into a service. In fact, digital components are themselves delivered as a micro-services constituting what some are calling the programmable business framework.
For those that remember the days of CORBA (common object request broker architecture) for the enterprise this is the same idea but for everyone. The premise is that you can build whatever you want by accessing ready-made capabilities available in real-time, on-demand, and almost for free.
The hope is that someone will use these services to build something great. The question is who and what is this going to be?
The Loss of Strategic Computing and Information Services
When Computing and Information Technology came on the scene each system needed to be championed and sponsored by a business function that needed the capability. Funding for such an endeavor required justification based on achieving a ROI against specific business outcomes. Sound familiar?
However, over time, the connection between the business and IT was severed. This happened as computing switched from mainframes to minis to servers and finally to personal computers. Today you would add mobile devices to this progression.
The transition of ownership changed along with these advances from the company, to departments, and to individual users. Computing did not all move to the end users as a significant amount computing still resides in back end data servers and today in the cloud. However, what did happen was the removal of the middle layer of management both in terms of managerial accountability and IT resources that supported them. This part of the organization is where sponsors, champions and the resources to build out projects once resided.
During the time of this transition, IT also became more standardized which made it easier for it to be supplied as a commodity by external vendors instead of by internal resources. The role of IT soon turned into one that selects and manages suppliers of commodity components: networks, hardware, software, and systems. Today, it is not uncommon for companies to prefer pre-built application suites rather than individual applications or capabilities. However, when you consider IT as a commodity you are no longer considering it as strategic to your mission.
With the loss of champions, sponsors, and resources, IT is left with a mandate to provide only company-wide systems (platforms) served now by the cloud. The remainder is left, not to functional groups as it once had, but to individual users. Without middle management there is very little capacity left to support strategic or competitive differentiation in terms of the use of computing and information services. This lack of strategic intent is a significant obstacle for digital transformation and creates the greatest risk to companies wanting to survive digital disruption.
The Return of Strategic Computing and Information Services?
Eli Goldrattt, the creator of Theory of Constraints, suggests that for technology to deliver benefits it must remove a limitation that you have that is holding you back from achieving your outcomes. Your limitations are unique to your business although they may be shared by others at some level.
The business has always been the ones to build out new capabilities that were needed to meet their objectives. In earlier days you would buy separate hardware, commercial of the shelf software (COTS), and integrate them together. This was done in the context of a business function that needed new capabilities that in turn would generate improved outcomes. This did result in more silos than we wanted, but that is what enterprise architecture frameworks were supposed to solve and in most cases never did.
Today we find ourselves with a shopping cart full of commodity capabilities at every level of the computing and information stack available as micro services all the way to application suites. As an aside, the only way that vendors can distinguish themselves is by creating a new way to do something that we already could. Sure it is shinier, perhaps faster, maybe better in some marginal way, but none of it is tied to your specific requirements or problems you need to solve, unless your requirements are so low as to match only basic functional levels. If you want something that meets your higher standards then you need to build it yourself.
You will never find your solution in the cloud because there is not enough demand for your specific set of requirements. What you will find instead are the components and capabilities that you need to build your solutions. Think power tools, drywall, lumber, nails and screws, if that helps. If you are like most people these sit in your garage or basement and collect dust.
And this brings us to the crux of digital transformation – it is about building a future not just buying technology.
But who will do this? Who in your organization will champion the cause? And who will answer the question, what will we do with all that technology?
A Call for Leadership
We need to see the return of strategic computing and information services. Leadership at the middle level has been removed and replaced in most companies by technologies in the form of management systems and applications. No wonder we find many management functions calling out for more leadership. Technology is necessary but not a sufficient condition for success.
Leadership needs to point the way forward and champion the cause. Leaders need to aim at something higher if they want more than basic improvements driven by cost reduction. This will require that top level management stand in the gap where middle management once stood.
Without this kind of leadership, companies end up with users heading to their favorite Digital Depot and doing their own DIY projects. Some of that is already happening, and some of this is good. However, where this leads to is even more silos of computing at the individual level using software they can get for free that will run out in 90 days. If you thought aligning functional groups to strategic initiatives was challenging doing this at the individual level is even more.
Whether you have a flattened organization or not, you still need leadership. You need it more than ever if you want to build your future rather than accepting the disruption that is coming your way. Digital technologies offer possibilities that did not exist before. However, you will need to answer the same question that we asked 25 years ago and is as relevant today:
What will you do with all that technology?