Technology startups continue to disrupt industries with new digital business models. ‘Uberisation’ – the new catchphrase for this form of digital disruption – strikes fear in the hearts of executives across industries.
Of course, Uber didn’t just introduce a shinier fleet of taxis. It used software to rethink processes and create a new digital business model that revolutionised the personal transportation industry.
Airbnb, Amazon, Nest, Netflix, Square and Tesla are other examples of companies that have ‘Uberised’ their industry by creating innovative applications and putting software at the core of their business.
No industry appears immune to digital disruption, and research shows that ignoring the consequences could be debilitating, if not fatal. According to MIT’s Center for Information Systems, 32% of revenue is at risk by 2020 due to digital disruption.
To survive and thrive today, every company must become a software company. This means harnessing the power of modern application software to differentiate; creating new products or channels that weren’t accessible before; and engaging customers, partners and employees in new ways. Perhaps most critical of all, it means releasing applications early and often in order to continuously innovate.
CIOs and their teams are uniquely positioned to take a strategic role in driving business innovation. However, they cannot just decide to make their existing IT infrastructure ‘go fast’.
The reality is that existing IT teams spend a majority of their resources maintaining the organisation’s existing systems. And this is as it should be: these core systems of record took years to build, and are critical to business function.
However, the need to deliver and maintain core applications should not constrain the need to create innovative new applications that promise to redefine the business.
Instead, IT must find new ways of addressing the innovation challenge. Simply adding more resources or developers isn’t the solution. They need to think differently.
Everyone is trying to figure out the formula for successful digital transformation. But many are doing digital a disservice by making it sound too big and scary, as if multi-year programmes and massive cultural change were the only way forward.
In reality, delivering new applications and digital products just requires embracing the mentality of a fast-moving startup. For larger companies, this mindset is typically achieved by creating an innovation fast lane as part of a two-speed (or bimodal) IT approach.
The first mode is the existing IT, which leverages traditional development teams and techniques to deliver and maintain core systems in a reliable, predictable and safe way. The second mode is all about innovating at the pace of business, delivering applications quickly and iterating constantly in response to changing business and market needs.
What’s important to recognise, though, is that creating a mode two fast lane to deliver a portfolio of innovative digital applications requires a different mix of people, processes and platform from existing IT.
Fundamentally, it’s important to recognise that there’s a class of applications – systems of innovation – that require a different approach given their uniqueness, their digital nature and the need for them to be delivered quickly and changed frequently.
Create a small, cross-functional team that’s focused exclusively on those innovative digital applications. Typically, team members are tech-savvy business people or business-savvy tech people – the point being that they’re able to bridge the gap between business needs and technical possibilities to quickly transform ideas into applications.
Because requirements for digital solutions are often fuzzy, teams should work in short, iterative cycles in close collaboration with end users. The key is to break an application into small components, creating functionality, releasing it, and iterating continually based on user feedback. This process should continue for as long as the application lives.
Modern cloud application platforms eliminate constraints associated with traditional development tools. The use of visual models to define an application’s data model, UI and logic creates a common language for business and IT to collaborate, while delivering big productivity gains over hand-coding. In addition, these platforms further shorten time to market through reusable components, one-click cloud deployment, and more.
With the pace of innovation accelerating, demand for new digital applications will only grow. The key to meeting this demand and digitising a business is to make software-thinking a defining characteristic of the entire organisation, not a separate department. Bringing business and IT together makes every employee part of the innovation process.
A bimodal IT approach allows businesses to embark upon their digital journey without completely changing everything. Mode two fast lanes sit alongside and augment existing IT, allowing each to focus on what they do best. In the process, the business can start small and get some quick wins under its belt, giving the confidence and proof required to scale an innovation programme.
Interestingly, businesses will find that they’re able to deliver disruptive innovation without disrupting the whole organisation. They can build a culture of innovation that spreads organically throughout the company, without forcing the massive organisational change that stops most initiatives dead in their tracks.
Ultimately, harnessing the organisation’s full innovation potential hinges upon IT’s ability to enable the business with tools, frameworks and best practices to quickly turn their ideas into applications. This is where IT really gets the leverage to expand its capacity to innovate.
Once embracing this notion, an organisation will be in a much better position to continually reinvent itself through software. It’s the key to being Uber, not Uberised.
Sourced from Derek Roos, CEO, Mendix