by: Bhaskar Ghosh
Transforming into a software-driven business is not easy, as many companies are trying to compete with applications that are better suited to the last century.
The pace of technological change is fundamentally disrupting the way we live and work, pushing companies to rethink and reinvent the way they do business through software. In every industry, companies use software to establish new competitive frontiers, expand into new markets, create seamless customer experiences and generate new sources of revenue.
Transforming into a software-driven business, however, is not an easy task for most companies, especially since IT is showing its age. Many companies are trying to compete in the 21st century with applications that are better suited to the previous century.
In fact, about 70 percent of today’s business transactions are processed in COBOL. Businesses still rely on monolithic applications that take a long time to build and a long time to change.
IT resource allocation is currently heavily weighted toward running the business, which consumes 60 to 80 percent of IT spending. The pace of change and increasing complexity are also daunting to many IT departments. Some estimates predict that more than 50 billion “things” will be connected to the Internet by 2020, and the number of partners and providers with which companies must interact continues to expand.
The following three new application strategies can help companies accelerate IT to the pace of business—not only to sustain a business advantage, but also to gain ground on the competition:
Strategy 1: Liquid Applications
In a high-velocity, software-driven world, there is less time for complex, lengthy and expensive coding of applications, or massive, multiyear system implementations. What is needed is a fundamentally new way to build software—faster, flexible and more “liquid”—by rapidly assembling reusable components to meet the needs of a perpetually changing business environment.
Liquid applications apply modular architectures, next-generation integration techniques and a cloud-first, mobile-first mindset. When combined with engineering innovations such as agile and DevOps, these elements can enable continuously delivered software that evolves as business needs change. This represents a shift from monolithic applications to a world of smaller components and service modules.
Liquid applications require enterprises to create application architectures that are modular and feature reusable components that can be sourced internally or externally. Emerging software platforms, including platforms as a service (PaaS), provide well-defined technical architectures, as well as standards, governance and reusable code—facilitating more rapid creation and assembly of business solutions.
A cloud-first, mobile-first mindset will ensure that applications are engineered to operate and scale in the cloud and are designed based on how customers and employees interact with them.
Strategy 2: Intelligent Applications
To manage a growing volume, velocity and complexity—and to maximize the business value of internal and external data—companies need to embed software intelligence everywhere. Advances in data science, increased processing power, and innovations in natural-language processing, machine learning and cognitive computing lead to software intelligence. Thanks to these breakthroughs, software can be taught to automate decision making through rule-based algorithms and to evolve and innovate on its own through advanced learning techniques.
Intelligent applications offer three critical capabilities. The first is intelligent automation. By automating routine tasks, intelligent applications offload complexity and supplement human effort through technologies such as auto-correction and robotics. Intelligent automation improves productivity by doing more work in a fraction of the time with greater accuracy.
The second capability is integrated analytics, which creates systems that can sense and comprehend, embedding intelligence into the IT and business processes to radically improve performance. The third capability is self-governance. Intelligent applications can be taught to act, in the form of digital agents, and to learn and govern themselves. This can revolutionize customer service, infrastructure management and business innovation.
Strategy 3: Connected Applications
To grow revenue and defend their market position, companies will need to create new competitive frontiers using software. Doing so requires opening multiple dimensions of application connectivity.
Connected applications offer companies the technical means to dynamically interface with the Internet of things and with business partner and customer ecosystems. As the IoT matures, connected applications will run everywhere—not just on traditional hardware such as phones, tablets and PCs, but also in manufacturing, pipelines, industrial equipment, cars, wearables and more—to convert products into connected product-service hybrids.
These applications can change the way companies operate by opening up their manufacturing operations, production facilities, products and services to new technologies. Connected applications are also required to dynamically interface with business partner and customer ecosystems in today’s highly networked, digital business environment.
When properly designed and managed, an ecosystem multiplies the power of all the participants, leading to combinations of functionality—and revenue opportunities—that previously would have been difficult to achieve.
These three new application strategies also depend on embracing an entirely new operating model for software development, encompassing custom, ERP and software as a service (SaaS). For many companies, the existing operating model for IT delivery is not suitable for today’s high-velocity business environment. Going forward, IT must be prepared to define and execute business strategy through software.
The business must also strive to gain more technology insight and vision as it assumes a bigger role in building software. Innovations must be driven jointly and tied to new strategic planning processes that span both the business and IT.
This also entails an understanding—by the business and IT—of what it means to be a software-driven business. Both groups need to understand how software can spur growth, shape new markets and reach new customers.
In addition, business and IT must work together closely to orchestrate new business solutions. When long-term competitive advantage depends on software, being a “fast follower” may not be fast enough.
Are you ready to take the lead?
About the Author
Bhaskar Ghosh is the group chief executive of Accenture Technology Delivery.
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