What Is Happening?
As we get ready for the 2017 Digital Business Summit events in London and Dallas, it is easy to be reminded that Digital transformation, for enterprises and for IT providers, is increasingly about the re-invention of at least some of every aspect of the business. This includes the company’s technologies, its organization, its functional areas, and its culture, as the boundaries and barriers that have grown from each of these begin to shift and even disappear.
That’s not to say that everything needs to get blown up and rebuilt. But when long-standing business barriers and boundaries shift or disappear, everything that works now should be reconsidered or re-invented to work better in a boundary-less, or even boundary-free, business environment.
Why Is It Happening?
Our Boundary-free Enterprise™ (BfE) concept provides a useful model for identifying and understanding how and why each aspect of the business is changing and will change. The BfE model identifies and explains four areas where boundaries and barriers have traditionally developed and been maintained within and between enterprises – and which today limit and inhibit the ability of enterprises to compete in the new digital business environment. We briefly examine below how each is changing, and why.
Technology. Most technology barriers that inhibit an enterprise’s digital growth have arisen from its business software. Widespread use of open, agile, and Cloud-based development approaches, along with more reliance on and innovation in APIs, have helped reduce or eliminate the OS/platform-enforced technological boundaries between many enterprise IT stacks and systems. Meanwhile, increasingly flexible business models have been enabled by, and driven by, the resulting flexible approaches to development and integration/interoperability. This in turn brings increasing expectations of faster times-to-market, which in turn engender even shorter development and release cycles, which in turn both require and promote faster and more efficient development approaches.
Results: Traditional enterprise technological barriers are much more readily overcome today. Disparate business systems are more likely to be linked more effectively. Traditional OS-based or architecture-based technological barriers are fading. This enables reduction of boundaries elsewhere that inhibit digital growth within and between enterprises. Meanwhile, business expectations of what IT can do are rising – with expected shorter timeframes for results.
Culture. Cultural barriers within the enterprise tend to arise based on organization, function, and technologies used. The technological changes noted above reduce many of the most restrictive and inhibitive boundaries built up by and around cultural structures. Interconnectivity and integration from technology layers up through business processes, and across functional siloes, reduce cultural barriers. In such environments, positive and useful aspects of different cultures are more likely to be shared between organizations, helping to improve communication, collaboration, and the creation of new types of business.
Results: Cultural boundaries within enterprises (e.g., between IT and Marketing) are fading – especially as digital shifts push firms to add, or change to, a service focus versus a product focus. Widespread use of cloud has helped catalyze a rethinking of most organizational roles and responsibilities, while enabling and requiring IT and business leaders to work more and more closely. Note that cultural change strongly affects how, and why, the enterprise engages with other businesses.
Functional. Well-defined sets of data, systems, responsibilities, and functions are increasingly blended, typically by implementing Cloud-based systems that enable vastly improved sharing of information and functionality in more standardized ways. We also see more blending of data and functionality across formerly defined lines of responsibility and function. Leaders and users have access to more and better business data from all areas of the enterprise than ever before. Barriers based on worker and technology function fade as a result.
Results: The extent of inter-enterprise functionality and data sharing is unprecedented, and increasingly widely adopted and adapted. We will see more and better communication between those groups, enabling more and better cooperation, and, if adequately managed, improved sales effectiveness.
Organizational. There are still (and always will be) important departmental boundaries regarding responsibility, reporting, compliance, and function, but communications boundaries are fading fairly quickly. This enables greatly improved operating efficiencies, with much more business and technological innovation at a faster pace with wider reach.
Easier, more secure, and less expensive sharing of data and access makes it more natural to share tasks and functions. Tasks, functions, and workflows increasingly become intertwined, leading to rethinking and redefining business operations into more flexible and efficient constructs.
Results: Important and significant distinctions between businesses and groups within businesses will always exist. But the reduction of technological, cultural, and functional barriers enables the dissolution of many formerly strict boundaries that separated work groups, workflows, and workers.
Net Impact
All of the above changes are occurring everywhere. Practically every business enterprise can and will be transformed to some extent into a boundary-free enterprise. We spend quite a bit of time and effort helping our clients – enterprise and IT provider alike – understand the scope and impact of these changes on their own business, and on their customers, partners, channels and competitors. While every situation is somewhat unique, seven aspects always surface, and must be understood and addressed. These are as follows:
- Business strategies need to be reviewed and rethought in the context of more highly-interactive, boundary-free environments.
- Success in many markets will require multiple-path, simultaneous approaches that vary based on relative availability and adoption of different enabling technologies.
- Speed to market, and speed of response, will become more variable and more critical in many industries. The value of „agility“ will be judged based on a relative ability to reach and match differing business velocities in different relationships and markets.
- Business structures, organization, and management need to adapt, and become more flexible, or they will disintegrate. Note: Hierarchical and centralized organizational models cannot be effectively applied where worker autonomy is expected and partner/provider/customer relationships are increasingly dynamic.
- Provider and partner relationships must be re-examined and rebuilt, because we are increasingly likely to rely on new and different types of technologies and providers. Enterprises will establish and rely more on new relationships with new providers.
- Procurement, security, compliance, and other aspects will need to be re-examined as a result. Software/SaaS providers that excel in this area will be more and more important and valued partners.
Security, especially data security, needs ongoing and continuous reexamination and re-engineering. There are more than adequate security technologies available, but these will need to be adapted in new ways. For example: worker /user security and compliance training and management will have to be rethought and rebuilt for “free-range” worker/user business models in a dynamic IT-as-a-service environment.