The IT modernization movement is moving beyond the initial euphoria around the potential of digital technologies. Companies taking steps to modernize their IT are recognizing that it’s a very substantial endeavor and will take years to accomplish. In committing to the long haul of the modernization journey, several situations are becoming apparent, causing companies to take a more mature, measured approach in how they evolve their technology.
The Infosys board of directors recently received a whistleblower’s letter making a set of claims. The substantive claim is that Infosys may be inappropriately recognizing revenue in some of its large deals. The whistleblower’s accusation is causing a fair amount of excitement in the press. I want to put this situation in context and explain the implications for Infosys’ customers, employees, and shareholders.
It’s getting harder and harder to do business with third parties because of complications arising from security, data privacy, GDPR, and other regulations. The complications are running headlong into the need to be agile and operate at high velocity. To do that, companies need to be able to move quickly and make things simple. But these regulatory requirements are making that complicated; they take time, thus creating real friction in trying to conduct transactions. This is particularly the case with trying to do business with third-party services. The consequences create a formidable barrier in trying to select the best providers/vendors.
The story we tell ourselves as executives is that we make decisions based on facts, on data. We want our organizations to be data-driven organizations with decisions based on “institutional conviction.” In reality, making well-informed decisions and getting others to support those decisions is a factor of how deep and well supported the convictions are and leaders’ ability to persuade others of those convictions. However, without data and facts, people typically believe the executives’ underlying assumptions are wrong or incomplete.
“Software is eating the world,” wrote Marc Andreessen, co-founder and general partner of venture capital firm Andreessen Horowitz, in an essay published in The Wall Street Journal in 2011. But today, it’s clear that services are eating software. The implications of this trend are very significant for companies. The advantages are clear, but it’s also clear that there are challenges. Most companies today are not set up to deal with a services world. I believe they need a new set of management and operating models that allow companies to get clarity on what they are doing with services and allow them to stay in control.
Change can be painful for companies and individuals. But if you are undergoing a digital transformation, there’s simply no getting around it. In fact, the degree of change is greater, and there is a cascading set of consequences for these deep changes, which each require their own change management.
At Everest Group, executives often ask us, “What is the most effective change-management tool or method for driving the necessary change in transformation?” Answering that question, I first point out two hard truths:
Executives cause their own problems with change management – often in three key areas – that make their efforts to drive change ineffective. As a result, they encounter big, expensive problems and passive-aggressive behaviors that delay achieving the objectives or even cause the transformation initiative to fail.
People don’t change unless they want to.
There is a “changing of the guard” at DXC Technology. Mike Salvino is now President and Chief Executive Officer and succeeds Mike Lawrie, who served as DXC’s Chairman, President and CEO. The change in leadership is happening at one of the last US national champions of the services industry. This move will be viewed with interest in many of the largest US and global firms, as DXC is a strategic partner to many of the Fortune Global 500 companies. Here’s what you need to know about the challenges and opportunities DXC and Salvino now face.
Companies widely recognize the potential power of artificial intelligence (AI). They instinctively understand that it feels like we’re on the cusp of something that will change our lives and our businesses in a profound way. Yet, many struggle with where to apply it. Executives can’t shake the feeling that they should have use cases for AI and use it productively today, even recognizing that AI is not mature yet and will be far more powerful tomorrow and in the future. If you’re looking for how and where your company should use AI, let me give you a perspective on a great application of AI today: your digital platforms.
In today’s ultra-competitive marketplace, every company whether they realize it or not, is creating multiple digital platforms. Why? Because platforms transcend traditional value chains and enable companies to create new business value. What this really means is companies are moving away from processes to platforms to create competitive advantages. The top 10 Fortune 500 companies are platform companies (Apple, Facebook, Google and Salesforce, for example). Moving forward, companies that master platform thinking and design will be the champions. Such is the power of this new way of thinking that most if not all firms are in the process of assembling and refining., If you and your company are to fully benefit from them, you need to understand why this is happening and how you can take advantage of it.
A whopping 73 percent of enterprises failed to provide any business value whatsoever from their digital transformation efforts, according to an Everest Group study last year. Furthermore, 78 percent failed to meet their business objectives. Put another way, only 22 percent achieved their desired business results. This is horrific. Why does this happen?
While there are many causes of failure or underdelivering expected value in digital transformation, one that can be avoided is digital transformation exhaustion – the fatigue that happens due to continuous change.
Read more in my blog on Enterprisers Project