Digital: The Emperor’s New Clothes?
Digital seems to be the word on the street – everyone has a digital strategy, and layered on to digital these days is analytics, with a whole IT service industry seemingly huddling around this golden goose. Traditional systems integrators are also shifting their messages to align, with each declaring unsurpassed digital capabilities and experience.
Boards are also at fault – having read something, heard something or spoken to someone about a new widget, it can quickly become a business imperative and new badge to have. They want to ensure that the ‘new clothes’ are something they can parade, but in many cases it’s often outside of core strategy and can end up being some token (but costly) implementation delivered by an equally uniformed supplier.
So does this mean that there is no relevance for organisations around digital and analytics? My view is no, and far from it. The issue is not about relevance but more to do with implementation and what ‘digital’ really means.
I speak to various board members from a diverse group of companies, many of which have done the digital equivalent of “lipstick on a pig” which appears to constitute their digital agenda and ‘box tick’ mentality. Typically, it’s where an organisation builds a new user interface servicing mobile (mobile apps) and a new web portal, and digital begins and ends with enabling the user journey through new formats to engage with the organisation – and mobile apps become the common denominator in the new world of digital. And for me this misses the point.
To me digital is about the evolution of a business that extends not only from the user front-end but all the way through the organisation. It’s about automating manual processes, connecting and leveraging legacy platforms and creating an innovative capability to support the rapid delivery of new services. But when most large businesses spend upwards of 80% (and in many cases over 90%) of IT spend on maintaining legacy – it becomes the elephant in the room, and layering on new user journeys becomes just another level of complication to deal with.
In the current market we are moving in only one direction, irrespective of the huge transformation and decommissioning projects underway, and it’s towards more legacy – as organisations decommission they begin to build the next bit of legacy that will eventually need to be decommissioned. It seems an endless cycle. Many senior management teams congratulate themselves on the resulting reduction of IT legacy costs, but in my experience this is always a temporary cost respite for organisations, and the spending will increase again well above the levels of original cost saving.
There are some simpler ways of addressing this scenario and to start to drive real and sustained transformation from digitalisation – that not only drives change on the surface but also delivers true deeper organisational value, enables faster innovation and reduces both cost and the continual build of ‘new’ legacy systems ad infinitum.