Digitally modernizing legacy businesses with your eyes wide open: Hatch a plan to do it profitably


We live in times where there is a lot of perceived fast-moving change, but what’s the reality for most traditional businesses? Let’s be honest, technology is changing a lot faster than humans, so how can we be more realistic and practical about looking ahead?

Much focus has been placed on shiny new clean sheet, ‘born digital’ companies such as Uber, AirBnB and Tesla – well funded ‘full stack’ architecture business entities, which have a major marketing messaging advantage in being new, futuristic and being seen to challenge the status quo of how things have been done.

On it's way in or being sunsetted?

Is this behemoth being installed or removed…?

These firms are a tiny fraction of the ‘real’ business world, but take up a disproportionate amount of mindshare as we struggle to grasp new ways of doing things. Sub-Saharan Africa has never had copper telephony, so that part of the world went straight to 4G mobile networks. Mobile currencies and payments, medical monitoring and other digital attributes quickly became the way of life for residents there, because there was nothing there before. The ‘western’ world has layer upon layer of legacy technologies, amortizations of sunk capital costs, dependencies and established ways of doing things that are hard to change.

Modernizing mature companies is hugely challenging. Moving from known revenue producing business models to new “disruptive” market offerings, business relationships and the design and implementation of the change management required to reinvent is ‘teaching an old dog new tricks’ on multiple levels. Even incremental change is hard for staff who are run ragged keeping the existing plumbing and lighting running, yet the pace of technology evolution is plain for all to see. We are rapidly leaving the IT era, but the next generation of technology is understandably not well understood and highly contextual to business vertical business opportunities and challenges.

Jobs are being automated away in large numbers as part of the sweeping societal change we are going through, raising questions around who the ‘consumers’ of future products will be and where they will find income to pay for things. QWERTY PCs are in the rear view mirror, with mobility and IoT dominating the immediate horizon. Old services models to assist mature enterprise business models are increasingly commoditized while there is arguably a vacuum as to who can provide effective As-a-Service partnerships with business entities which are struggling to modernize. Firms grappling to look good every ninety days in the equity markets cannot afford the investment to rip and replace large parts of their in-flight business infrastructures, but there is much angst and tire kicking to see which partners and suppliers have ‘the right stuff’ to assist in next generation business evolutions.

As I wrote in my previous post, ‘digital’ business conceptualizing has been dominated and overshadowed by marketing activities across online, mobile and other relevant channels. Listening, conversation, selling and support are vital aspects of business, but ‘core digital’ has not been adequately funded or evolved, leaving the ‘traditional’ enterprise services industries awkwardly stuck between old and new. Much focus has been placed on cost savings, including lift and shift of vast amounts of ‘stuff’ from on-premise to cloud without much thought about business opportunities (and challenges) enabled by moving everything online. Services providers have to keep their lights on and cash flowing like any other business – the better ones are chaffing at the bit to provide modern digital services to clients and prospects that are forward-looking, evolutionary, even revolutionary.

Innovation sessions to help ‘set in their ways’ clients find new revenue stream opportunities (and in some cases escape the burning platforms they find themselves on) are essential offerings from services vendors to remain relevant and brand their modern world credibility. Design Thinking is a great way to encourage business process oriented staff to ‘think differently’ about the place of old and new technologies in the evolving world. Ultimately ‘digital’ is the modern tool set available to businesses to evolve to greater efficiencies and revenue streams. However technology changes, people don’t and the challenge for the old guard is in moving with the times, whether on the buy side or the services side.

The Bottom-line: The future is all about data and human collaboration

Today the change challenge is evolving from old to new ways of doing things. Today legacy IT spend still dwarfs next generation spend, but it’s not hard to see the old ways of doing things drying up. What next generation services looks like in a world of AI, cognitive, robotics and IoT at all levels, superb supply chain and Amazon style global retail channels will primarily be focused on orchestration and automation to enable data and human collaborative flows.

The critical factor will be in who does what and when. Blindingly obvious maybe, but timing is everything to keep momentum, revenue streams and evolution unfolding and not stagnating….

Posted in : Digital Transformation, IT Outsourcing / IT Services, Mobility, OneOffice


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