These are businesses with lightning-fast internal operations and customer services; businesses which are able to exploit all of their organization’s assets in real-time to create maximum value for customers, employees and partners.
For established businesses used to a slower pace of change, the race is now on to understand how digital transformation can apply to their organizations – a task that can seem complex and daunting.
However, when reduced to its fundamentals it becomes clear that digital transformation is to a large degree based on a relatively simple premise and one that all businesses can get to grips with: the ability to facilitate better business interactions by connecting people, places and things.
The connected enterprise
To explain just how critically important ‘digital connect’ is for organizations, it is important to frame the debate in business, rather than technology terms.
This is because digital transformation is not only, or even primarily, a technology issue: it is, for most businesses, an existential one.
As any digital leader can testify: the ability to fully connect enterprise services and data is integral to everything from product innovation and customer experience, to operational effectiveness and agility.
The connected enterprise is one in which everything that can be automated is automated; where leadership is based on mastering the customer experience; and where industrial mass production is replaced by tailoring on an individual scale.
These are businesses where the three ‘legs’ of business operations: people (customers, employees, partners, etc.), places (stores, factories, offices, warehouses, etc.) and things (plant equipment, products, trucking fleets, infrastructure, etc.) are connected, and the competitive race for success is not merely about launching new products or getting services to market faster; it is one that centres on the ability to deliver entirely new business models.
In the connected enterprise therefore, not only are business processes made infinitely better (sales reps, for instance, can immediately access rich customer data when out in the field; while customers can easily access and modify the status of their orders through a brand’s portal); but wholly new business models are launched, as companies from Netflix and Uber to Amazon to Airbnb can testify.
The digital difference
A digitally connected business is by nature agile – it can seamlessly connect all its customer and business applications across the various types of enterprise IT infrastructure in use today: public and private cloud, and on-premise, as well as with mobile and other connected devices.
In the connected enterprise, all services can communicate seamlessly and in real-time; regardless of where they are housed, which channel they serve and which data sources they rely upon.
This is important because the connectivity in place in the digital enterprise in turn enables innovation and operational efficiencies.
As a result, business services perform better, are faster and are more convenient than anything we have seen to date.
The challenge businesses must tackle when looking at digital transformation is therefore clear: to find a way to bring widely distributed and heterogeneous assets and services together to create digital interactions between consumers and businesses.
Companies that are adept at rapidly connecting their own IT systems, processes and data and also connecting virtually anything externally are the ones pulling away from the pack.
Take, for example, Japan Exchange Group, Asia’s largest financial-instrument market infrastructure provider.
Its new margin-simulation system provides real-time interest rate and trading position information and enables customers to offer more accurate derivatives pricing to investors, whilst reducing warranty-deposit payments.
Through this digitally connected system, it has gained a competitive edge in the international stock-exchange market by increasing margin-simulation accuracy and attracting more customers to use the system for OTC settlement.
Crucially, by seamlessly linking the core system with external applications, Japan Exchange Group removed the need to rebuild the entire simulation system.
And it’s not just private businesses that are benefitting from digital connections; the public sector is too.
Argentina’s Ministerio de Seguridad, for example has established a new Unified Control Center, which consolidates the operations of the country’s four police forces; optimizing decision-making at the administrative and executive levels.
The new, connected systems have enabled the force to do everything from create new and more effective patrol plans, decrease waiting times for emergency response and better forecast criminal trends with the creation of detailed dashboards—providing insight into precinct maps, pattern structures and situational statistics.
Enabling the connected enterprise
In the connected enterprise integration is critical, but it can still provide a challenge for businesses.
The integration challenges that businesses are used to from on-premise systems remain, but in addition businesses must also integrate the range of new applications, deployment strategies, interfaces, and business rules fundamental to creating a truly connected business.
No two integration challenges are the same, and depending on what the integration is for and who is executing it the integration will require vastly different tools and processes.
Integration is rarely a simple process and traditionally a great deal of time and effort goes into provisioning, configuration, and administration.
In an environment where businesses are under pressure to be more flexible and agile than ever, this is far from ideal.
The cloud provides a clear solution to this challenge; enabling the rapid and seamless integration of enterprise applications and data across cloud, on-premise, mobile and intelligent devices.
In the cloud, product-development cycle times are shorter, customer trends can be spotted more quickly and top performers can more easily drive innovative ideas.
This is because the cloud automates much of the manual processes that were associated with integration.
It also provides highly intuitive user interfaces so that almost anyone in the enterprise is capable running integration programmes, even those from a non-technical background.
Take the integration of services as an example.
Through the cloud, line of business managers can take control of their applications and customize them to better suit their business requirement.
One customer of ours reduced customizations for its partner management application by 80 percent as a result of implementing this approach, which also brought about a 30 percent reduction in associated costs.
Another example comes from the Internet of Things (IoT).
The market today offers a multitude of increasingly powerful, connected devices at low cost.
By using the cloud to integrate these devices with customer applications, line of business managers can create new and transformative applications and services that add to the bottom line.
Cloud-enabled integration also ensures businesses can exploit fully their data capital.
Leveraging technology for real-time and bulk data movement and data management services, the cloud ensures that business data is accurate and available wherever it is required: be that for an on-premise business application or a cloud-based customer web service.
The cloud also makes it easier than ever to connect enterprise applications with those of third parties by simplifying the process for making and sharing APIs (application programming interfaces – the code that allows different pieces of software to communicate with each other).
This allows businesses to expand their relationships with partners and accelerate business growth.
Finally, the cloud helps businesses manage capital expenditure by offering integration as a service.
The cloud can help free CIOs of their number one budgetary challenge: the fact that historically 80 percent of IT spend is consumed by low value maintenance and integration , rather than on value-add innovation that drives customer engagement and growth.
In short, the cloud makes all of a company’s apps, data and processes available as services and able to communicate seamlessly and in real-time.
This is the key to digital integration and, by extension, digital transformation.
Total digital connectivity
Looking ahead over the next ten years, it seems clear the market leaders will be businesses that understand the need for digital integration and prepare accordingly.
The ability to easily integrate applications and data sources across on-premises, cloud, mobile and a growing set of intelligent devices will be vital to driving innovation and taking customer service to new heights.
Such is the essence of digital connectivity: the ability of a business to bring together all its digital interactions in a way that delivers the best possible experience for employees, partners and, of course, customers.
Through the cloud this innovative agility can be enabled today, the only question that remains is which businesses are going to be the first to take full advantage of their digital estate.