How 100-year-old companies are rebuilding for digital

What do McDonald’s, John Lewis and Amazon have in common? They’re all companies that were created to take advantage of change – whether it’s societal change, supply chain advances or the arrival of e-commerce. Their founders built visionary businesses that disrupted their respective industries and the established players that had created those industries.

Much like the agile tech start-ups of today, these businesses were built to capitalise on change. But taking advantage of digital technology and the new expectations of consumers isn’t just the realm of companies founded since the advent of the smartphone. It’s about re-modelling, too.

Companies – many of them over 100 years old – are rebuilding their businesses around digital technology. They have to, and every business has to be ‘digitally remastered’, as Gartner analyst Mark Raskino puts it. Those that don’t become irrelevant.

>See also: 5 fundamental elements of digital disruption

Take Pearson, which was founded in 1844. Over the past five years, it transformed itself from the world’s largest educational book publisher to a successful digital learning platform.

And then there’s Ordnance Survey, which was founded in 1791. It has transformed itself from the world’s largest producer of maps to a digital business that opens up its data to help governments, companies and individuals be more effective around the world.

Companies like Pearson and Ordnance Survey are doing this by becoming digital platforms. But how?

Bridging the gap

Most Global 2000 companies that were founded 50 to 100 years ago still operate with a product-based value chain. They spent decades investing to deliver products that generate profits in the pre-digital world.

Sure, they invested in technology – backend systems, websites and maybe even a web sales channel. But most of this investment and optimisation happened in a different world.

Now, smartphones are ubiquitous – they’ve become the dominant digital experience. The cloud has become the norm and the Internet of Things is taking off. Customers expect services to move at ‘app store pace’ – they want new features quickly, and updates every two weeks.

This has created a tremendous mismatch between what everyone wants and what enterprises can deliver. Companies that try to repurpose their systems of record to create connected experiences for customers find it is a very painful process and mostly a losing proposition.

The only way to enable the enterprise to deliver apps and experiences at the speed of the app store and at enterprise scale while enabling existing backend systems to keep running reliably and securely is to engage ‘two-speed IT’.

Old technology doesn’t work for this new approach. It requires new technology in the enterprise stack. It requires building a system of engagement to bridge the systems of record and the interaction layer. This is an application programming interface (API) platform, and it sits on top of systems of record.

Software is eating the world’ is a statement in danger of becoming a cliché, and yet it remains a prescient observation of the way in which every business is becoming a software business. A more important observation is how critical developers are to this transformation for every business function.

Apps have now become the way consumers discover and use services. If the app is poor, the product is poor. Similarly, APIs are the defacto way that both apps and third party companies integrate. If APIs are poor, the product is poor.

Developers build on platforms – on the layers that sit on top of backend systems – and enable secure access to the data that powers apps. They’ve conquered the phone, building on iOS, Android and Windows platforms, and are well on their way to conquering the car, the factory, wearables, healthcare, and pretty much everything else.

To move at app store speed, these developers need to be served. Every business has to have a vibrant developer ecosystem, whether it’s a team of developers inside the corporate firewall, or thousands of developers ‘in the wild’.

>See also: The three mega-trends that define businesses leading the 'digital economy'

The platform business equation

What’s the lifeblood of connected and intelligent apps and experiences? Data. And data is something that long-established companies have a lot of.

All of this data is stored in systems of record, and it’s all got to be liberated for developers. That’s how they build the experiences that drive a company’s interaction with customers who are holding connected devices – or wearing them, or driving them, or controlling the temperature of their homes with them.

By bringing data that is liberated from long-standing systems of record together with a vibrant developer ecosystem and platform technology, 100-year-old companies can remake themselves into platform businesses and, ultimately, remain relevant.


Sourced from Denis Dorval, VP EMEA, Apigee

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...