How Every Company Can Become a Tech Company

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Pinak Kiran Vedalankar

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Fifteen years ago, the Harvard Business Review wrote “IT doesn’t matter”, calling it a commodity input and an overhead to be cost-managed. That’s hard to believe considering how IT (and software, specifically) has moved from a back-office function to a primary customer interface. Digitally native companies continue to spring up and no industry is off limits. Today, IT or digital technology is not only a major enabler of disruption across whole industries, but fundamental to a company’s survival and success.

Transforming legacy organizations

Companies are often expected to behave like tech companies, but transforming into a digital leader is easier said than done. Rapid change is difficult in enterprises that are hundreds of years old, with established processes and deep-rooted cultures. Established firms in industries like financial services, government, resources or manufacturing often face challenges like extensive legacy systems, the need to consolidate systems as a result of mergers and increasing customer expectations. Add to that digital adoption, market-driven technological innovation, financial innovation and the emergence of new digital business models—and it is not surprising many businesses don’t know where to start.

Many organizations report digital transformation initiatives taking 18 months from problem to solution. In today’s fast-moving environment, the solution is likely to be out of date by launch. In order to get time back on their side, enterprises need to change how they engineer technology by injecting an engineering mindset. Specifically, established companies need to:

Create an engineering culture that drives autonomy and shared consciousness.
Where necessary, recruit top talent in addition to building the capabilities of the existing team.
Establish an engineering leadership group that sets and drives direction.

In their “Five Building Blocks of Digital Transformation” MIT CISR talk about having an Accountability Framework, which gives clear ownership of and coordination among a growing set of digital offerings and components.

Change mindsets, methods, tools and delivery.
Consider the change management needed to support this undertaking. It is essential to build effective communication to celebrate successes and share failures and lessons learned.

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Test and learn to transform business and culture

Most importantly, enterprises need to do what successful organizations like Amazon do: instill agile principles whereby you test and learn—constantly. Again – easier said than done. Everyone understands the need to implement effective change, but few enterprises know how to actually achieve it. Here are a few common pitfalls:

Starting from scratch, rather than learning from others. There are many published case studies and best practices available.
Not having a clear, data-driven approach—which harks back to the idea to instill an engineering approach.
Focusing too much on tools and technology and neglecting the importance of communication, culture and customers.

A framework for engineering transformation

The framework Publicis Sapient helped to develop for one of the UK’s biggest banks is based on lean methods, agile principles and value stream analysis, which maps and visualizes the current state of the workflow to find waste in the system and highlight improvements that can be made. From here, an ‘intervention catalogue’ can flag 52 opportunities for change focusing on four key measures: productivity, people, quality and value. This mapping helps companies better understand their systems and where digital technology can lead to greater value.

Proven results include:

Twenty to 30 percent reduction in time from backlog to production, resulting in faster speed-to market
Ten to 20 percent reduction in the effort to make a change in architecture and operating model, resulting in cost savings and faster speed-to-market
Thirty percent improvement in quality by reducing defects
Improvement in the people happiness index

Using this approach, many organizations can accurately estimate the expected value at the start of the project and prove the impact of digital transformation on the core business. Successful engineering transformation goes beyond IT; it’s fundamental to a company’s future and its resilience in the changing marketplace.

Read the rest of the series:

Article 1: Surprise: Your Corporation Can Be Both Big and Agile
Article 2: 5 Qualities of a Successful Engineering Culture
Article 3: 12 Habits of Agile Enterprise Start-up Teams

Pinak Kiran Vedalankar

GVP Technology

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