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Chart showing Scalability
Engage Technology to Scale at Unprecedented Speed
How can organizations unlock the full potential of IT to accelerate?

Can you scale while keeping all the plates spinning? Your current employee base may be doing an excellent job of keeping all their plates from crashing to the floor with the current technology in use, but adding many more employees and ramping up operations with that same technology stack results in pieces and shards of plates smashed all over the floor.

Business scalability is all about efficiency and growth. To be genuinely scalable in the modern sense of the word, an organization must:

  • accommodate increased demand
  • stay on top of trends
  • anticipate needs
  • be agile enough to handle disruption

The punch line is that all this has to be accomplished quickly. The need for speed requires companies to be highly efficient. That’s where the advantages of cloud environments come into play.

Scaling within the cloud helps you avoid the crash-resume-crash-resume cycle that companies are faced with when trying to scale with an on-site IT infrastructure. Modernizing operations is the “end game” of the digitization phase, which is foundational to the digital transformation journey—establishing an operational backbone is the objective many forward-leaning companies have pursued diligently in the past few years.

Operational excellence is now the minimum requirement for being competitive in the digital age. Let’s explore.

The Old Models of Scaling Won’t Work Anymore

For many, digitization has been the goal for years. The pandemic lockdowns were a coercive force pushing companies to send their employees home to work; thus, digitizing many aspects of their operations. Correctly digitizing operations move the organization further to become a digital company. That is being able to offer digital-value propositions to its customers.

Scalability used to be strictly about increasing profitability and improving efficiency when workload increases. It is also about adding new value propositions (digitization) at speeds that can keep up.

Older ways of doing things will work for a short while, but it won’t take long for businesses to fall too far behind.

Companies have used a siloed way of doing business since day one. Managers would create systems, data, and processes within business silos. Leaders often fail to consider how their systems and processes might eventually need to coordinate with other parts of the business. Once they recognized integration requirements, they’d tweak the systems and processes to achieve their objective, again within their given silo. Managers would address the need for linking systems and processes. The operational environment was complex, hierarchical, and too slow to be effective in today’s digital business world.

The New Dynamic in Scaling Operations – Digital Transformation

According to a December 11, 2020 article by McKinsey & Company, companies worldwide are hard at work evolving their operating models at unprecedented speed.

The hurdles go far beyond shifting back and forth between remote, in-office, and hybrid work models or simply adding or subtracting work-from-home talent as needed.

Digitization enhances operational excellence.

We’re talking about creating a coherent set of enterprise systems, data, and processes supporting core operations. Becoming digital enhances the customer value proposition.

Don’t confuse digitization (doing things we’ve always done only better) with digital transformation (doing things differently than we’ve done before). Being digital enhances the customer value proposition.

Business leaders who think they’re leveraging digital transformation strategy when, in fact, they’re just digitizing some aspect of their operations may achieve operational excellence on an outdated value proposition. For example, you are a taxi company that’s just perfected its operations (digitization). Suddenly Uber and Lyft arrive (digital companies). How’s that going to impact your business? Or consider the impact Amazon has on traditional retailers.

 

The Next Generation Model of Scaling

This operational backbone, or next-generation operating model, is a new way of running an organization. Next-generation operating models replace messy legacy systems, processes, and data generated by siloed business units. The new design is more open and non-linear. Systems, data, and processes become like the building blocks of a lego kit. that can reallocate resources and develop new digital capabilities in a matter of weeks. Now that’s a challenge.

No wonder, despite Herculean efforts and substantial investment, few companies can move to a modern, digitally-enabled way of working across the entirety of their operations.

Chart based on McKinsey survey showing that only one-third of 1,000 companies successfully established an operational backbone, or next-generation operating system.
A McKinsey survey of more than 1,000 companies indicates about one-third successfully roll out a new operating model.

 

Einstein is Never Wrong and Why Scaling in the Cloud is the Right Call Now

In their book “Scaling Up: How a Few Companies Make it and Why the Rest Don’t,” Verne Harnish and the team at Gazelles explain scaling all aspects of an organization (including the technology) by quoting Albert Einstein: “Everything should be made as simple as possible, but not simpler.” Harnish goes on to say, “Scaling a business is a complex endeavor and requires robust – yet simple enough – tools and techniques to get the job done.”

Author Verne Harnish
Author of the book “Scaling Up: How a Few Companies Make it While the Rest Don’t,” Verne Harnish speaks to an audience of entrepreneurs.

That’s why companies worldwide are attracted to cloud-based applications and workflow as they try to scale. It’s robust enough to handle their “complex endeavor” but with tools simple enough to be implemented and utilized by a fast-growing internal team of employees.

Verne Harnish also helps us envision the stages of scaling infrastructure when he writes, “When you go from two employees to 10, you need better phone systems and more structured space. When your company reaches 50 employees, you still need space and phones. You suddenly also require an accounting system that shows precisely which projects, customers, or products make money. Between 50 and 360 employees, your information-technology systems need to be upgraded and integrated. And above that, you must revamp them again….”

The Two Pizza Rule – Everyone Needs Access, but Not Everyone Needs Their Own Pizza

Amazon has the “two pizza rule.” By it, they mean that no team should be any bigger than can be fed with two pizzas. While that works for physical teams, it doesn’t work for your IT. If you’re going to scale your personnel, you have to scale up your IT – applications, cloud assets, infrastructure, etc. You can’t scale with a “two pizza” rule for your IT infrastructure. Sure, everybody needs access to the “pizza,” but not all your employees are going to need the same key or even access to the same kind of “pizza” as other employees. Scaling technology isn’t simple and requires a partner who understands how the organization’s goals, people, and roles all funnel into the need for tech access as the company scales.

Harness Cloud-based Data Power to Inform Your Scaling Strategy

Your data for your KPIs has to scale – and evolve – with you. Big data, IoT, and AI can help your business leverage more granular data than ever before. Today, under the direction of Reed Hastings, Netflix is a prime example of how scaling a company’s IT can result in game-changing data usage. As Netflix tracks every action of its 213 million-plus subscribers, it can accurately predict what shows, and movies from its production wing will be successful. With this visibility into customers comes the ability to be nimble and agile with their service delivery.

 

Alfred Chandler, Jr, Professor
Alfred DuPont Chandler, Jr, recipient of the Pulitzer Prize for his 1977 book, “The Visible Hand: Managerial Revolution in American Business,” wrote extensively about modern corporations’ scale and management structures.
Where Did Outdated Scaling Models Originate? – The Industrial Revolution

Alfred Chandler, Jr is one of the most respected figures in business history. His work redefined industrialization’s business and economic history and gave us a fresh perspective on how the modern digital firm differs from the industrial-age model.

Managerial firms, according to Chandler, evolved to take advantage of productive techniques available after the establishment of rail networks. More profits came from higher productivity and lower costs. America’s “managerial class” arose from this operating model where managers coordinate increasingly complex and interdependent systems.

The New Kind of Firm & a New Way to Scale

Marco Iansiti and Karim R. Lakhani’s HBR article of Winter 2021, “Competing in the Age of AI,” describes how Chandler’s model focuses on the benefits for those companies that successfully achieve greater production scope, and/or variety. On-going efforts to improve added learning as a key characteristic of successful scaling.

“Scale, scope, and learning have come to be considered the essential drivers of a firm’s operating performance. And for a long time, they’ve been enabled by carefully defined business processes that rely on labor and management to deliver products and services to customers, and that are reinforced by traditional IT systems. After hundreds of years of incremental improvements to the industrial model, the digital firm is now radically changing the scale, scope, and learning paradigm.

AI-driven processes can be scaled up much more rapidly than traditional processes can, allow for much greater scope because they can easily be connected with other digitalized businesses, and create incredibly powerful opportunities for learning and improvement, like the ability to produce ever more accurate and sophisticated customer-behavior models and then tailor services accordingly.”

The Foundation of Operational Excellence

Becoming digital is an essential watershed for any modern company.. Leveraging SMACIT, digital expands and accelerates innovation. However, companies cannot afford to neglect the pursuit of operational excellence.

Executing a business strategy that is consistent, reliable, and cost-effective is foundational to sustained business health. Operational excellence is also the mindset that embraces constant and never-ending improvement. Continuous attention to pursuing operational excellence means every employee can see, deliver, and enhance the flow of value to customers.

The constant pressure for all companies is a perfect storm of demands that include the speed of delivery, technology, and communication acceleration. Every employee from the top down is busy making decisions and exploring ideas. They don’t have the time to waste on broken operational processes. Information technology that encompasses systems, processes, and data must make things easier for employees and customers alike.

Perfecting the business model via digital transformation has been key to the expansion and domination of household brands today.

 

Prague, Czech Republic - August 28, 2018: Range of iPods inside Apple Museum in Prague, the largest private collection of Apple products around the world.
The iPod is a line of portable media players and multi-purpose mobile devices designed and marketed by Apple Inc. The first version, released on October 23, 2001, about eight and a half months after the Macintosh version of iTunes.

Apple began its journey in 1976 and slowly climbed, but its rocket ship of success didn’t go into orbit until 2001 – 25 years later – when the iPod was released. Their launch into this new realm was only made possible with the scalable technologies needed to supply and service the massive demand for the iPod, and its succeeding generations of small devices for the mass market.

 

 

 

 

 

 

 

 

Starbucks employees prepare coffee.
Our story begins in 1971 along the cobblestone streets of Seattle’s historic Pike Place Market. Here, Starbucks opened its first store, offering fresh-roasted coffee beans, tea, and spices from around the world for our customers to take home. They started by selling coffee beans roasted by Peet’s, a gourmet coffee company in Berkeley, California, then began roasting their own. A year later, Howard Schultz came on board as CEO, urging Starbucks opened its first espresso bar in 1984.

Starbucks also had its learning curve. The company took 20 years from 1971 to perfect its business model and underlying corporate technologies to scale from 100 locations in 1991 to 18,000 locations in 62 countries today.

 

But that was then, back before the availability of cloud resources. Now, the cloud, and cloud-based technologies, can propel companies, big and small, into a new stratosphere of capability within a short amount of time.

 

 

 

 

 

 

 

 

 

Investing in Scaling Tech Capability Pays Off

While you expect a company like JP Morgan Chase to be investing heavily in technology, what may not quickly come to mind is that they have been investing in tech all along the way as they scaled the business. They are investing in IT-based workflow advancements because that investment pays off. JP Morgan Chase has more than 50,000 technology professionals and invests eleven billion per year in its digital development.

But JP Morgan chase isn’t the only big-name company where we see investment in tech as a part of a scaling strategy. In 2018, Walmart chose to bring on an additional 1,700 IT staffers. To quote USA Today, they “beefed up” their “omnichannel presence to better compete with Amazon, Costco, and other peers.”

The result?

Walmart’s stock rose by 17% over the next two years.

While neither JP Morgan Chase nor Walmart took on massive “scaling” projects over the past two years (not many did), we can guess that the industry leaders see technology as the business expansion enabler that it is.

In Conclusion

Scalability is a necessary ingredient to future-proofing your network. Businesses have survived without a scalable network, but that won’t be true as we move into this decade.

Business leaders must liberate their companies from legacy systems, safeguard their data, and continuously conserve costs by implementing technology that fits where they’re at and where they’re going strategically. Scaling a business with agility and resiliency can only be achieved by embracing new technology, and that begins by designing an IT environment built for the digital age.

Success in 2022 is going to be about flexibility and scalability. If you’re going to compete and win, the cloud environment will be critical to your success.

Choose options that allow enough elasticity for you to reimagine what optimal scalability means to you.

Lay the groundwork so that there’s a solid foundation. That way, your digital journey will move forward with incredible, even inspiring, momentum.

Chess strategy Can Apply to Business
Principles in Chess Strategy CEOs can Apply to Business
There are many examples from business literature comparing decisions made during the chess game to decisions made living life and running a business.

On March 22, 2021, Fast Company article, author Alan Tefler shares some of the lessons he learned as a chess master and, later, the CEO of Pegasystems. The lessons he learned while playing chess helped him become a better leader of a multinational company.

Many of the principles involved in developing a chess strategy apply to making business decisions. Chess is an ancient game of unparalleled depth and complexity. As in business and life, advantages come and go with each player’s move. After one move, you might be at a disadvantage. After another move, you may suddenly take the lead and be in a stronger position.

Garry Kasparov, world chess champion and Founder of the United Civil Front, frequently draws parallels between developing chess strategies and making business decisions. Leaders have to make decisions constantly, sometimes armed with little more than a hunch. That’s why experience can be such a prized commodity. Building experience is an ongoing endeavor. The way to improve is to look back and analyze decisions, particularly those that didn’t turn out so well. There’s a tendency to assume if something worked yesterday and is still working today, it will work tomorrow.

In John Moore’s Brand Autopsy Marketing blog, Kasparov is quoted,“There’s a massive amount of uncertainty and almost endless variety in terms of the moves you can make in both chess and business. Think about it: After just three opening moves by a chess player, more than 9 million positions are possible. And that’s when only two players are involved in the game. Now imagine all the possibilities companies face with a whole host of corporations responding to their new strategies, pricing, and products. The unpredictability is almost unimaginable.”

Make Good Use of Your Resources

In a Chess game, each player has 15 pieces. There are eight pawns, two rooks, two knights, two bishops, a queen, and a king. Each piece has its particular strength. The object of the game is to checkmate your opponent’s king. Beginning chess players tend to see their pieces as individual components. They’ll immediately take their first moves to get their most powerful pieces out into the open. As chess players become more experienced, they learn how to use their pieces in combination to create a series of threats to their opponent.

The more you understand chess, the more you realize the interrelation between each piece and the importance of each piece, from the pawn to the king.

It’s the same way in business. An effective leader knows how to get the right person into the right seat. Take the time to get to know the strengths and weaknesses of each member of your team. Take steps to ensure they realize the expectation and what they can do to help. The more effective teams learn how to help each other by working together and helping to cover any blind spots.

Reexamine Your Reasoning and Learn from Mistakes

Making mistakes is an essential part of learning. It is a vital step to becoming a success at anything.

Playing chess can better acquaint you with your nature. For example, you learn how persistent you are. Are you aggressive or defensive? How determined are you to overcome obstacles to achieve a larger objective?

Kasparov said in an interview, “Your nature is your nature. So whether you play chess, run a business, or deal with family affairs, you should understand that when you face challenges, your reactions will come from your nature. That’s why you have to work it out. You have to do regular research on your strengths and weaknesses. You have to be open-minded and relentless with yourself. I learned these things from playing chess.”

This process of self-discovery can be productive in self-realization, which is essential to becoming a leader. Personal strengths and weaknesses must be recognized and acknowledged before improving leadership skills.

Take time to reexamine the decisions made in the past and the ones made today. Pausing to reflect is essential for processing information retaining lessons learned.

Never Underestimate Your Opponent

Look at the world through your opponent’s eyes to better understand their perspective. Apply this practice to see your brand through the lens of your customers. Working to see the brand through customers’ lens can also help better understand the competition.

When playing against another chess player or a business competitor, don’t let amateur moves lull you into complacency. Doing so will only take attention away from considering the whole board – especially the other side.

In business, this underestimation happens most often with startups. McDonald’s didn’t think that Burger King could take away market share initially, nor was Coca-Cola concerned about Pepsi when it first appeared on the market. Ignoring the up-and-coming because they lack resources, processes, or leadership can be a fatal strategic error.

Keep a Psychological Edge

Yury Markushin, in an article for thechessworld.com, tackles the topic of deploying psychology in a game that’s all about strategy. In it, it quotes 27-year world champion chess player Dr. Emanual Lasker who famously wrote, “It’s the players who fight over the board, not the wooden pieces.”

Your psychological edge isn’t just about your psychological health and strength – although that’s important, it’s also about knowing the psychological makeup of your opponent.

In the book Chess for Tigers, the author, Simon Webb, says, “before a World Championship Match, each player may spend months making an in-depth study of his opponent’s game. The study looks for weaknesses in opening strategies, identifying the types of positions in which he is at home or ill-at-ease, assessing the tendency to over-optimism or pessimism, and so on.”

If you’re going to prevail over business competitors, you must spend the time, energy, and resources to understand not only what they are doing but WHY.

This research into the psychological disposition of your opponent will help you have the upper hand when you match wits with them, vying for dominance in the market.

Be Comfortable in Enemy Territory

In a Harvard Business Review article titled “Strategic Intensity,” writer Diane Coutu says, “If you can convince your enemy that you’re comfortable on their ground, then you can often trick them into moving into your territory.”

In many business settings, your opponent will be playing their “own game.” In some ways, it may look like their game isn’t going to affect your business – that is, until it does. Playing on their turf with confidence (even taking the battle to them) forces them to change their strategy. No longer are they alone on the field of battle, but now they must adapt their formerly unchallenged trajectory to your presence on their side of the chessboard.

Eventually, this dynamic can create a shift that forces opponents to play where they are uncomfortable.

 

Garry Kasparov, left, is contemplating his next move against Deep Blue, IBM's chess playing computer Sunday, May 4, 1997, in New York, during game two of their six-game rematch. It was Man 1, Machine 0, as world chess champion Kasparov won the first game of his rematch on Saturday. Deep Blue can examine an average of 200 million positions per second. The man at right is unidentified.
Garry Kasparov, left, is contemplating his next move against Deep Blue, IBM’s chess-playing computer Sunday, May 4, 1997, in New York, during game two of their six-game rematch. (AP Photo/Adam Nadel)
Get a Worthy Adversary

Leadership will probably never rise to its potential if the adversary isn’t big enough, smart enough, and cunning enough. Kasparov reminds us that “Great champions need great enemies.” After all, what is a victory over a lesser prepared, ill-equipped, underfunded company? This same principle applies to the efforts required to overcome significant challenges. “What doesn’t kill you makes you stronger.”

In that same 2005 HBR interview, Kasparov eradicates the sentimental idea of chess when he says, “There is nothing cute or charming about chess; it is a violent sport, and when you confront opponents, you set out to crush his ego. Over the years, the world chess masters I have competed with share my belief that chess is a battleground on which the enemy has to be vanquished. This is what it means to be a chess player, and I cannot imagine that it is very different from what it takes to be a top-ranked CEO.”

MMA fighter Donald Cerrone echoes Kasparov’s call for engaging worthy opponents when he said, “If you want to be the best, you’ve got to beat the best.”

Who you choose to be your competition will either make you better or allow you to be weak.

Rely on Intuition

Sometimes problems can be complex and have a multitude of possible outcomes. At a high level of complexity and possibilities, relying on logic fails. Learn to trust your imagination and feelings.  But relying on intuition is more than simply acting on a “gut instinct” at the moment.

Chess masters know that intuition develops over time. A chess master develops intuition through playing thousands of games. There’s almost a sixth sense about how the opponent will move and how the game will develop.

In business, instinct should not be a “shot in the dark.” Instead, relying on business instincts is to trust the accumulated years of lessons learned from successes and failures. So, sometimes, using intuition to guide strategy is the best option, even though there’s no convincing reason why one move is better than another.

Plan an Approach in Stages

There are 3 phases of developing a chess game. These are the opening moves, the mid-game, and the endgame. In the opening chess game, pawns may be moved out one or two squares (only when a pawn moves for the first time).

Don’t push your pawns too far out on the open chessboard too early in the game. All moves in chess are essential, and so is their timing.

Making solid moves is especially true during the early part of the game. Don’t waste opening moves by getting several pawns out onto the board or picking off your opponent’s pawns. Key the overall objective, which is to checkmate your opponent’s king, in mind.

In business, like in life, you rarely “get a second chance to make a first impression.” It is critical to carefully consider the opening moves of an expansion, a product launch, or rolling out an initiative.

Move at least one knight and bishop out onto the board early.

The business parallel here is clear. Be cautious with the pieces of your business that are less strong (the pawns) or need more development. Be bolder with those parts that are more powerful, flexible, and agile – knights and bishops. Calibrate the timing of the overall strategy with a mix of caution and forward-leaning action.

 

White strategy board with chess figures on it. Plan of battle
There are many parallels between developing a Chess strategy and a business strategy. Setting up your defense is key to winning. Many failed business ventures can trace their demise back to attacking before establishing a defensive groundwork. Protect your intellectual property, ensure your patents are in place, and put best-practice protocols around your IT systems.

 

Move the Queen off the Backline

The Queen can be the most effective weapon in your arsenal. Since it is the most powerful piece, use it with caution and careful calculation.

People and initiatives are valuable because of their potential impact on business success. Set them up for success by supporting them properly and supplying whatever tools they might need. Utilize these resources so they can be effective.

Castle Early in the game

Castling is a move frequently used to help protect the king and bring the rook (castle) into a position near the center of the board where it can be more helpful. In business, look for win-win moves like castling that help you get closer to your business objectives in more ways than one.

Attack in the Middle Game

Setting up your defense is key to winning. Many failed business ventures can trace their demise back to attacking before establishing a defensive groundwork. Protect your intellectual property, make sure your patents are in place, and put best-practice protocols around your IT systems to ensure that cybercrime – like ransomware – doesn’t derail you in the middle of your attack strategy.

Use your pieces in combination to protect each other and capture control of the center of the board. Like many other endeavors, business is a team sport. Choreograph the moving parts carefully, utilizing each individual’s strengths and protecting them (and the company) from blindspots and vulnerabilities.

Think Three Moves Ahead

Always think before you move. Don’t jump at the first thing that looks good. Envision the consequences in your mind before making a move. Consider all possibilities. First, consider moves to capture your opponent’s piece or threaten your king. Continually ask, “What was my opponent’s next move? What is his plan?” Do the moves under consideration leave pieces unprotected or fully supported?”

See the whole board – your staff, your customers, your family, your competitors, the market – and take a beat to consider the impact of the move you are considering upon all those spheres. The advantage you have in business that the chess master doesn’t is that you can call in trusted advisors to help you see the forest for the trees and make the best move.

Don’t Take Your Finger Off the Piece Until You’re Certain

The touch-move rule in chess requires you to move a piece if you touch it during your move. It also states that if you don’t take your finger off the piece, you have moved, you can move it to a different spot. Once you let go of the piece, your move is complete.

Some business leaders feel committed to a move when they mention it to their senior leadership. Their egos won’t consider a different move with the same piece of business mid-stream. They “take their finger off the piece” too quickly, cementing their action in the game.

When considering a move in business, sometimes you have to adjust based on new information. By keeping your options open until the decision is finalized (instead of stubbornly insisting on your move), you gain the trust of your employees and senior staff.

In Conclusion:

Maybe more than any game in history, chess has captured the imagination of strategists – from kings and emperors to the guy hustling speed chess games in a local park. The good news is that the leadership and strategy lessons embedded in chess aren’t a secret. They are easily accessible and applicable to many business scenarios. All you have to do is apply them.

Until next time – protect your king.

2022 Tech Trends to Increase Business Growth & Resilience

 

2022 will continue to see the digitization and virtualization of society and business. The need for sustainability, increasing data volumes, and computer network speeds will drive digital transformation as companies move from a survival strategy to one of thriving.

As promised by Moore’s Law several decades ago, technology advancements continue to accelerate, but the speed at which these accelerations are occurring far outpaced earlier projections. The World Economic Forum’s Future of Jobs report says, “Developments in previously disjointed fields such as artificial intelligence and machine learning, robotics, nanotechnology, 3D printing, and genetics and biotechnology are all building on and amplifying one another. More than a third of the desired core skill sets of most occupations will be comprised of skills that at not yet considered crucial to the job today.”

When you think about what technologies might be game-changing for your company in 2022, you aren’t thinking about nanotechnology, quantum computing, or neural interfaces. As much as the tech giants may want to forecast a utopian future based on these technologies, what your company needs right now is technologies that will help you get more done with less, work from anywhere, and support your organizational objectives.

Let’s dive into some “right now” technologies that can be disruptive in a good way to your workflow and organization as a whole in 2022.

 

Digitization and Virtual Environments

The trend toward leveraging big data and the digitization of workflow within organizations makes virtual work environments possible. During the pandemic, everybody scrambled to set up home offices. The organizations that already had a virtual IT infrastructure had a much smoother transition. Employees just had to grab their computers from the office and take them home. Others had to work through it and make adjustments along the way. Most of those that didn’t transition went out of business.

It’s interesting to note that many business leaders are still grappling with the employee question of when (or if) they’ll be returning to an office environment. Sharyn Leaver writing for Forrester, predicts only 10% of companies will remain fully remote. Of the 60% planning to shift to some sort of hybrid model, one-third of those firms will fail in their first attempt at anywhere work.

New technologies are emerging in every area. Cloud computing continues to be at the forefront of every discussion because it is foundational to everything else. All IT services, applications, and cybersecurity protocols are delivered through the cloud.

Last October, at Gartner’s IT Symposium in Stamford, Connecticut, analysts reported that enterprises must move away from “lift and shift” migration and toward Cloud-Native Platforms (CNPs). The power of cloud computing provides scalable and elastic IT-related capabilities “as a service” to technology creators using internet technologies, delivering fast time to value and reduced costs.  For this reason, Gartner predicts CNPs will serve as the foundation for more than 85% of new digital initiatives by 2025, up from less than 40% in 2021.

 

Aamer Baig writes in an article for McKinsey, “Most companies we know are well into their cloud journeys and understand notionally that the cloud offers a big opportunity. But many are struggling to capture the full value cloud offers. As in the adoption of any new technology, of course, hiccups are inevitable. But the fundamental issue is that companies are looking at the cloud as a source of IT productivity improvements rather than as a source of transformative value—which is more than $1 trillion, by our calculations.

Improvements in productivity and efficiency gains through cloud-migration programs can generate significant cost savings, but they essentially represent better ways of doing what IT already does. CIOs have a crucial role in getting the business to focus on the far bigger prize: the new businesses, innovative practices, and new sources of revenue that cloud either enables or accelerates.

One pharma company built its GxP-compliant IT environment on the cloud and uses an ecosystem of cloud services that connect with manufacturing instruments, robotics, and other systems. It has been using a combination of scaling, instance management, storage, workload processing, and data-warehousing services to accelerate vaccine development.

A large agriculture company put into the cloud the vast amounts of data it had accumulated on improving equipment maintenance and used advanced analytics to generate insights that became the basis for a new business offering to growers.

CIOs need to master cloud economics and target business areas that can benefit from the cloud’s advantages of speed, flexibility, and scale. As importantly, they need to consider how to make the large-scale changes to IT’s operating model that are needed to build the capabilities to generate new value. Fewer than 10 percent of technology leaders, however, say they are most focused on hiring cloud talent, placing it at the bottom of hiring priorities. That’s a red flag, especially considering that almost 50 percent of CIOs plan to migrate more than three-quarters of all workloads to the cloud in the next two years.”

 

The term artificial intelligence was coined by Dartmouth math professor John McCarthy in 1955.

 

AI will continue to improve and become ubiquitous in the year 2022. Even the most rudimentary of businesses are utilizing AI devices connected to nearly everything and using AI in:

  • Voice Assistants
  • Smart TVs
  • Smart Whiteboards
  • Language Translation
  • Mobile Devices
  • Robotic Process Automation

Companies using AI devices accumulate tremendous amounts of customer data. This well of information just then needs to be categorized and analyzed for pro-growth decisions based on real-time data. 2022 will see a dramatic jump in the utilization of AI due to the higher speeds available through the widespread adoption of the 5G network.

Before rushing out to buy the latest and greatest in AI technology, it’s a good idea to do some research or delegate an IT innovation team to do some preliminary homework. Become familiar with the capabilities of the technology and ensure it aligns with the mid-range and long-term strategy of your organization.

In a Harvard Business Review (HBR) article first published in 2018, Thomas Davenport and Rajeev Ronanki wrote about the importance of understanding which technologies perform what types of tasks, and the strengths and limitations of each. They write, “we encountered several organizations that wasted time and money pursuing the wrong technology for the job at hand.”

Since many organizations, even large enterprise companies, can lack the necessary in-house expertise to evaluate new and emerging technologies, it’s necessary for business leaders to work closely with IT to identify the right consultants to advise on high-priority projects.

Davenpot and Ronanki found that nearly a majority of cognitive technology projects had to do with robotics and automation. Business leaders have two schools of thought when it comes to automation. Some see automation as a way to eliminate full-time employees while others see it as a way to automate menial tasks in order to make better use of its people.  Amazon for instance has been looking at ways for its people to devote more time to building new products. The Hands Off the Wheel program began in the retail management division to develop ways for machine learning to handle repetitive mundane work such as keeping its gigantic warehouses stocked with products to sell.

When companies make it clear that they are using AI to help people rather than replace them, they significantly outperform companies that don’t set that objective (HBR).

Alex Kantrowitz, author of ALWAYS DAY ONE: HOW THE TECH TITANS PLAN TO STAY ON TOP FOREVER (Portfolio, 2020), writes in an article for Harvard Business Review, that Amazon’s transition to Hands Off the Wheel took years to roll out and a great deal of training. “The retail-division employees were despondent at first, recognizing that their jobs were transforming. Yet in time, many saw the logic. ‘When we heard that ordering was going to be automated by algorithms, its like, ‘OK, what’s happening to my job?’”

According to Kantrowitz, Amazon didn’t implement this program to reduce headcount but rather free up personnel to invent and oversee new product development.  Kantrowitz makes an essential point: “Had Amazon eliminated those jobs, it would have made its flagship business more profitable but would have missed the next new business opportunity.

Amazon has about 350,000 mobile drive unit robots working alongside hundreds of thousands of humans employed at fulfillment centers.

 

Entrepreneurship and seizing opportunities through leverage are at the heart of Amazon’s raison d’être. At no other time in history has it been as easy, fast, and inexpensive to start a new business. Amazon’s view is that it is a facilitator of entrepreneurship, providing the investment, platform, and resources to help build new businesses.

Amazon first opened its online shelves to small businesses in 2000. In 2018, the company created an internal Small Business Empowerment team. In a press announcement, CEO Dave Clark said, “We made the decision to open our store’s virtual shelves to third-party sellers. At the time, big-box retailers had been pushing small businesses out of the retail market. We bet that bringing selling partners into our store would not only be a win for customers who want vast product selection, low prices, and fast delivery, but it would also be a win for small businesses wanting to reach more customers, increase revenue and profits, and create good jobs.”

The number of US sellers who surpassed $1 million in sales grew another 15%. Kantrowitz concludes, “If Amazon is any indication, businesses that reassign employees after automating their work will thrive.”

A recent Forrester study shows that technology leaders will focus on human-centered technology transformations. Indicating that less than 15% of firms nominated digital transformation as a priority in 2022, the report suggests leading firms will use emerging technology to unlock the creativity of their employees and drive innovation that focuses on outcomes, not just financial results.

Subscription-Based Technologies

The trend of “______ as a Service” technologies has exploded in the past few years. 2022 will see more of this trend – for several good reasons.

Subscription-based business technologies:

  • don’t force you to buy more than you are using
  • are cost-effective
  • are easily scalable up or down
  • are flexible to match market fluctuations
  • can be deployed easily and quickly

Maybe the best part about subscription-based technologies is the zero-coding needed to utilize them. You don’t have to have an in-house IT team. These technologies come pre-built and can integrate easily with other technologies in use within your business. In addition, because the technologies are virtual (in a cloud environment), your business has less exposure to cyber risk and a higher level of business continuity readiness.

Compliance Technologies

The more data that a company creates and gathers from the public, the greater their social responsibility becomes for the protection and use of that data. Whether your company needs to have transparency, governance, and accountability regarding data to protect your brand or you have legislative and industry-standard compliance mandates to adhere to, the technologies revolving around compliance are here to stay and will be growing throughout 2022. These new compliance technologies will help streamline your compliance efforts, minimizing the effort and money expended on compliance concerns.

 

Employee Wellness and Retention Technologies

The pandemic has brought a wave of resignations and shuffling of employees from one company to another. Business leaders are looking to technology to make employment at their organization more attractive to prospective – and current – employees. This desire to improve working conditions for employee retention has resulted in the utilization of many technologies. These advancements range from wearables that help employees monitor wellness for a work/life balance to new features built into ergonomic forms that reduce stress and improve employees’ workday in repetitive motion tasks.

Other considerations regarding employee wellness and retention technologies are tech that improves communication and collaboration on tasks and incorporates that “water cooler” chat function lost in the social distancing and work-from-home exodus of 2020.

By using tech to reincorporate that human connection into the virtual workplace, companies are helping to give their employees more of a sense of camaraderie and belonging – rather than isolation.

 

In Conclusion:

Your business, like many others, is reliant upon technology to maintain your competitive edge. It’s important to know what technologies other companies are leveraging – both within your industry and the broader marketplace. But knowing that other companies are having success with or planning on implementing game-changing tech within their organizations isn’t enough. Companies that take decisive action will face the fast-paced challenges of the next few years much better than those that are more cautious. Combine strategic planning with bold decision-making as you prioritize your technology objectives for the next 12 months. You must have a trusted IT partner to vet those technologies and advise you about their potential ROI within your particular business.

2022 is shaping up to be a year of both promise and uncertainty, but one thing is sure: companies that build a platform to embrace new tech within their workflow will have an advantage out of the starting gate.

 

The Challenge of Future-Proofing is trying to predict the unexpected
The How & Why of Future-Proofing Your Company

 

Future-proofing is the process of preparing for anticipated (and unanticipated) business disruptions. It has always been problematic but is now even more of a challenge.

In this article, we’ll explore the “why” and “how” of future-proofing your business and provide actionable steps to take.

The Future-Proof Challenge of Quickly Evolving Technologies

The rapid acceleration of technology has made future-proofing a business exponentially tricky.

Jimmy Rotella, Sr Solutions Architect at Nvidia, said in a recent episode of “What’s Up AEC?!” that 2020 accelerated a work-from-home movement that was inevitably going to happen in 5 to 10 years.

In an October 2021 Harvard Business Review article, authors Michael Mankins, Eric Garton, and Dan Schwartz write, “technology was already changing the nature of work before Covid-19 took hold. Innovations were redefining the basis of competition in most industries and, consequently, the talent companies need to win over the long term.”

Companies held on by their fingernails for economic survival. The article points out that the businesses that took the lead in the aftermath were the ones who seized the opportunity to remake their organizations and adapt to the new environment.

Disruptors in the Marketplace

Business leaders are worried about what’s going to happen to their companies moving forward. KPMG reports that 74% of CEOs are afraid of some new company disrupting their business model.

knocking down a large portion of their corporate park….managing decline
Eastman Kodak, a 120-year-old company, declared bankruptcy. If business leaders do not manage ongoing innovation, they’ll be presiding over decline and collapse.

Companies look for indicators of possible future disruptions. Things could be going perfectly today, and the next thing you know, someone does it better than you, faster than you, and cheaper. Focus on solving specific problems for your customers. What will the market share be for a product or service in Q4 next year? How about the year after that? Part of this inquiry requires discovering where the weaknesses are in an organization. Spending more time on future-proofing an organization increases your chances of being more proactive instead of putting out fires as they happen.

The Statistics Aren’t on Your Side

Forty thousand companies out of one million will last over ten years. That means that 960,000 go out of business before their first ten years, and only 45 companies out of a million last 100 years.

Why are these figures so grim? What is it that makes preparing a business for future needs such a daunting task? To understand the background of the problem, let’s look at a parenting metaphor.

Parents spend nearly twenty years preparing their children to enter the adult world. In essence, those parents are “future-proofing their children. After all, Mom and Dad don’t know what the world will be like when the children reach adulthood, what kind of people they will encounter, what troubles will come their way, and what dangers they will face. The children will have to be self-sufficient, capable, and adaptable to the inevitable change that will take place during their lifetime.

Your business is no different.

It must be prepped for any eventuality. Every variable is considered.

As we have experienced over the past few years, the future is uncertain. But, with the right preparations, your business can move confidently into the future. The right technologies and strategies can put a forward-leaning company ahead of the competition that hasn’t invested in preparedness.

Let’s explore future-proofing your business, so you can outpace your competition when the next market fluctuation takes them by surprise.

The Connection Between Future-Proofing and Your Company’s Lifecycle
Innovative thought leader and author Tendayi Viki.
Tendayi Viki, an author, and corporate innovation expert gave an insightful keynote address at the 2019 Solita Meeting Point, where he drew direct connections between future-proofing companies and their lifecycle.

Tendayi Viki, an author, and corporate innovation expert, gave an insightful keynote address at the 2019 Solita Meeting Point. He said all business models have a life cycle, and the problem many companies make is taking the life cycle of a business model and making it the same thing as the life cycle of the company. These cannot be the same thing if you want to future-proof an organization because it chains the two life cycles together. Future-proofing should develop a portfolio of business models (not to be confused with a portfolio of products) that balance risk and return.

McKinsey reports that only 6% of executives are satisfied with their company’s innovation.

A Portfolio of different business models. Some are high risk, low reward, while others are low risk and high rewards.
Implementing multiple business models is a strategy to gain a durable advantage and strengthen resiliency against disruptive forces.

Coming up with ideas isn’t so much a problem as shaping those ideas into new value propositions that resonate with customers. Combine those value propositions into sustainably profitable business models. New value propositions require innovation. The objective is to build a portfolio of rising and fall business models to strengthen resiliency.

Reduce uncertainty by experimenting with ideas so that they become sources of revenue.

Innovation Readiness – Embedding Flexibility Into the Future of Your Business

As work and customer transactions continue to grow in a virtual environment, the need to experiment with ideas and business models in the digital realm will grow. Experimentation requires a purposeful engagement between leadership, employees, and technology.

According to the previously mentioned Harvard Business Review article, few business leaders “manage engagement with technology in a coordinated way, so employees become suspicious of it, and the technology underperforms management expectations. That’s a pity because when people and tech work together, everyone benefits.”

The article tells how USAA Insurance uses an integrated approach to developing and deploying AI-enabled tools. The use of next-generation technology frees up people on the claims team to focus on helping customers. “This kind of work is more satisfying for the people and better leverages their capabilities.”

The Future with Your Customers

One aspect of preparedness that makes becoming digital a competitive necessity comes from the customer engagement side.
As Deloitte reports, in nearly every industry across the globe today, customer expectations continue to rise. An explosion of device types and data means that most consumers now expect personalized experiences and increased access to increased amounts of information, when and where they need it. As the number of touchpoints grows, the customer wants “same customer” recognition at every point of interaction. Customer service is more than easy engagement. Today’s customer wants to be necessary each step of the way.

Customers expect products and services tailored to them in personalized, contextual interactions. Customers also wish to read reviews from other customers. The days of siloed IT systems and business functions are behind us, and those who do not realize this will soon be out of business. There is genuine pressure today, much more than a couple of years ago, to digitize operations and become digital companies. There is no time to lose.

Four interrelated forces culminating to unwind old rules of management.
These are the four interrelated trends culminating in unraveling the old management rules and the traditional structure of organizations. (source: McKinsey Reports)
Future-Proofing Your Profitability

A recent McKinsey report found that the top 20 percent of companies earn 95 percent of economic profit. Any organization that isn’t seeking new approaches is on borrowed time. By leveraging current technologies and embracing experimentation, organizations can discover new ways of doing things that are not as fragile and vulnerable to unpredictability.

Companies must define data, business, and infrastructure components and design them for reuse to succeed digitally. Reconsider customer offerings in terms of individual components (see the Lego analogy in Part 2 of Why is Digital Transformation So Important to Sustained Success?). One of the powerful benefits of being digital is the repository of reusable business, data, and infrastructure components.

The “How” of Future-Proofing – Operational Backbone and the Digital Platform

The operational backbone supports core business processes and relates to operational excellence. This set of systems is the cost of entry for doing business digitally into the future. In Designed for Digital, Jeanne Ross explains that companies with an adequate operational backbone are 2.5 times as agile and 44% more innovative than companies without an operational backbone. The digital platform, built on a foundation of cloud services, delivers new sources of revenue, leveraging the capabilities of digital technology to enhance customer engagement and solve customer problems. Digitizing operations is a much easier and shorter journey. Most companies experienced a certain amount of it during the pandemic when they had to, under duress, move to remote work environments. Full-on digital transformation is an ongoing process.

Think of it as a journey. New technologies show up on the horizon so frequently that companies have to adapt and adopt almost on the fly. Operating on legacy systems will make this level of agility impossible. Traditional siloed business environments will also prevent progress. It’s far too slow.

The traditional hierarchy of the corporate organizational chart is mechanical by design. Built on antiquated 18th and 19th Century Industrial Revolution ideas, the focus was uniformity, bureaucracy, and control. These are the antithesis of what companies need to focus on today. Now we need creativity, elasticity, and speed.

Protecting Your Data into the Future

From a technology perspective, companies must build ways to capture and store data because even if they don’t know how to make practical use of this gold mine of information now, they will figure it out shortly. An essential aspect of paradigm-shifting towards a future-proof strategy is realizing how important data will become for the long-term success of your business. Think in terms of components and modular applications. These are things that can repurpose for something else. Tap into the power and multiple benefits of accessible scalability-based technologies. Learning to utilize connecting and scaling data will enable companies to develop new products and digital value propositions.

A Future-Proofed IT Environment

In Four Factors to Help You Future-Proof Your IT Environment, Vivek Agarwal writes, “future-proofing means taking steps so you’re able to flex and expand as needed for as-yet-unknown needs and opportunities.” He goes on to explain how the cloud can make companies more agile in meeting customer needs. Moving away from traditional data centers into scalable cloud infrastructure can make enterprises nimbler and more adaptable.

 

A flower is being moved from one environment to another
“When a flower doesn’t bloom, you fix the environment in which it grows, not the flower.” – Alexander Den Heijer

Your core business – the value you deliver to your customers – is the flower that must be protected and nurtured.

With the evolution of technology and fluctuations in the market, the soil that your core business is in may change.

Future-proofing your business means fortifying the core business to thrive in whatever soil conditions it finds itself.

 

 

 

 

 

 

CONCLUSION

As a technology website, we are writing about technology and how digitization impacts all levels of business and the customer experience. But here’s the thing, technology is only a means to an end. Let’s summarize your next steps in the future-proofing your business.

Take advantage of cloud-based tools and digitizing operations to future-proof your business. They are merely ways to grease the rails of adopting new ways of doing things and liberate the most precious of your resources – people – from tedious manual input tasks.

Build easily scalable systems. Scalability will also impact flexibility so that management can focus on inspiring and revitalizing their teams and organizations.

Shift your team’s focus from reacting to the unexpected to one of possibility thinking. Human creativity and resilience work best in flexible environments that nurture growth, reward their strengths, and help compensate for their weaknesses.

Roadblocks to Scaling Up
Scaling Up: 13 Roadblocks to Success
Scaling up is the ability to take on increased workloads in a cost-effective manner and meet the demands of your business without suffering the negative consequences of overreaching.

Scaling up sounds like a fantastic idea. After all, who wouldn’t want to be able to handle more work, delivering more goods and services while leveraging economies of scale for greater profitability?

But the promise of scaling is often like an iceberg. What you see above the water (the work to be done) is nothing compared to the work lurking under the water. These are the challenges faced in scaling a business. Some companies get to a point where it is painful to add another client or bring on more talent. Scaling up seems like piling on more overhead for less reward. Revenue never has a chance to turn into profits.

Here are some barriers many companies may face as they ramp up their operations.

Scaling Up Too Soon

A good question to ask a good business consultant is, Is it too soon to grow the business? Any time before you have all the pieces in place and a strategy to scale is too soon. Is the market is ready to embrace and demand your products or services? Timing is everything. First, to go big into the market is sometimes a good idea, but sometimes not. Companies get eaten alive and never recover.

No Plan to Scale Up

Often the small to mid-size business fails in the efforts to scale for lack of planning. They have an objective and a vague notion of how to get there. Growth-minded companies might partner with that vendor or hire new employees.  But all too often, a structured plan is missing. Having a strategy that guides the requirements, stages, and timeline for scaling is foundational for success. As a result, the timing is off, and the company is missing pieces of the puzzle. Frustration and failure soon follow.

No Understanding of the Difference Between Growth and Scaling

For most successful companies, growth came before scaling up. Taking time to grow allows SOPs to be established and perfected. Taking the time to grow enables hiring key people and building a solid reputation. These things are critical for financial backing to scale. Growth is a time to experiment and approve or discard strategic partners and vendors. Growth helps them understand the management and IT resources required for successful scaling. Multiplying processes and output without a substantial increase in resources is the foundation of scalability. Business leaders need to know if the company is prepared to scale up.

Unnecessary or Untimely Product/Service Additions

As soon as a company begins to have a little bit of success in their efforts to scale, they often become overzealous with their efforts to take over the marketplace.

They may move away from their core business too quickly and begin advertising products and services they are not prepared to deliver. Even if they can make a dollar on those tangential goods and services, they are taking resources away from what is central to their current revenue stream and their ability to scale.

Selecting the Wrong Partners & Vendors

Companies across the planet have learned the wrong partners or vendors can put companies at risk. Long supply chains and unproven vendors can have detrimental consequences on the delivery of goods and services to your customers, as well as injure brand reputations.

Avoid vendors and strategic partners who over promise and under deliver. There is no room for freeloading. Everyone has to do their part.

 

Lack of Internal Communication

Employees need to know the company culture and what is expected. Companies need complete buy-in from their workforce to scale up successfully. There also must be a strategy communicated internally. Along with the nuts and bolts of your well-laid strategy is a minefield of employee concerns, expectations, and emotions that you must address. If employees feel left out of the loop – or worse, insecure in their jobs – they will not be best positioned to support scaling efforts. Internal communication requires more than just a company-wide meeting or a series of internal memos sent out to senior staff. Instead, the business leaders must keep their finger on the pulse of how the staff is acclimating to the proposed and in-progress changes.

 

Internal Communication and Planning
Verne Harnish’s book Scaling Up shows how to improve scalability. Scalability requires putting the right team together and then educating them on the growth strategies of the company. Articulate a clear vision for meeting future goals regularly.

Apple's founder Steve Jobs showcases Apple's latest laptop.

 

The last decision Steve Jobs made was to build Apple University.

He knew that it would be the one legacy he’d leave behind so that his organization would thrive long after he was gone.

Cutting Prices

Once you’ve been able to leverage some economies of scale, there is often a temptation to cut prices to undercut the competition and gain more market share. “After all,” you think, “We’re still making the same amount on our goods/services.” While it’s tempting to cut your prices and try to push the competition out of business, the money you will lose is better saved and utilized within your scaling efforts.

Technology That Can’t (or Can’t Easily) Scale-Up

Whether you’re working with legacy systems that keep your productivity limited, or you’re working with on-site workstations and servers that are expensive and cumbersome to scale, your technology is limiting your potential. This roadblock used to be a nearly insurmountable one for businesses trying to scale on a budget. However, with advances in cloud-based IT infrastructure and Desktop as a Service, the financial hurdle considerations are lowered due to the cloud’s ability to scale with your business expansion. Companies across the planet have factored cloud computing ability into their scaling strategy and are successfully leveraging the flexibility, mobility, and cost-effective nature of cloud workflow assets.

As an IBM fellow, Jason McGee puts it, migrating applications to the cloud can deliver significant business benefits for companies of all sizes.

Failing to Create Long-Term Demand

Business leaders that fundamentally misunderstand the role of advertising and marketing often pin their hopes of scaling on the stop-and-go stutter-step of marketing efforts. While marketing strategy should always be a part of your scaling endeavor, it is not sufficient on its own to supply continuous, qualified customers. Instead, part of any scaling strategy should be a plan to grow market demand for your products/services. After all, you want them knocking on your door for what you provide; you don’t want to be chasing work constantly with ad campaigns.

Cash Flow and Credit

There is no way around it, scaling requires sufficient cash flow. Many organizations with a fantastic plan to scale launch that endeavor, only to find that their efforts are stymied by lack of on-hand cash or credit. In a recent episode of “What’s Up AEC?!” the Immediate Past Board Chair of ACEC National, Charles Gozdziewski warns about the cash flow aspect of scaling up too quickly. “I’ve seen small firms suddenly become part of a big project. They go from 10 people to 25 people and then they go bankrupt. They just don’t have the financing or financial knowledge to handle it.”

Each stage of your scaling strategy will require more financial backing, and that backing must be available at that stage or things begin to unravel. Setting yourself up for success requires ensuring that you will have the backing you need well in advance of your step to the next level of operational expansion.

Yellow Chair amongst rows of blue chairs.
Scaling up starts and ends with individuals. Make sure you have the right people in the right seats.
Quality Employees Instead of Quantity

Scaling starts and ends with individuals. Whether you are in a service industry or manufacture goods, your employees can make or break your scaling prospects. As much as anything else, scaling requires the right beliefs and behavior. Growth-oriented companies need people who are comfortable with change, who can move fast, and take ownership of tasks. In the rush to scale, companies often hire too quickly and find that they experience internal roadblocks to productivity because of the unqualified staff they’ve hired. Unfortunately, companies that are quickly ramping up delivery of goods and services often don’t have time for extensive employee training or the flexibility for employees to learn “on the job.” A resourceful HR team should be among your first hires to help ensure that your business sources and hires employees that can step in and do the work without handholding.

Ignoring Growth Pains and Fixating on Growth Pains

Whether leadership is determined not to let that “one issue” hold things back or fixate on that “one issue” to the detriment of other things that require attention, it still lands the administration in a difficult spot. On the one hand, small issues at one stage of scaling can become mountains of pain in the next stage of expansion. On the other, a fixation with a specific issue can lead to an unhealthy overemphasis on one aspect of the business, throwing everything out of kilter.

To scale, you must be aware of growing pains and be able to handle them appropriately without devoting all your attention and resources to those problems.

Micromanagement

Organizations with micromanagers at the top very often do not do well when it comes to scaling up operations. Delegating responsibility is an essential component of scaling an enterprise. A business leader must know their self well enough to see this tendency in themselves before it becomes an issue that derails the scaling process. Sometimes, it’s necessary to step into a different leadership role and allow someone that has delegation skills to fill that administrative slot. As you scale, so should your management structure. Finding the right role for you to play and bringing in the people you need to bolster your weaknesses is a sign of a good leader.

 

In Conclusion

 

Despite significant roadblocks to developing capacities to scale up quickly, there are multiple benefits for an organization to prepare itself for the likelihood of scaling up.

The challenges of scaling up are complex because scalability isn’t just about growth. It also has to do with its ability to be flexible, agile, and versatile. The same things that position the business for expansion are the same things that prepare them for unknown shifts in the market and unforeseen events like a worldwide pandemic. Preparedness is all about becoming proactive and being strategic with digital technology.

In a Forbes article from March 1, 2021, Paolo Gallo and Giuseppe Stigliano write, “Because of the dizzying speed of change today, fueled by this umpteenth acceleration, companies can’t count on their strengths alone to innovate. The CEO of a mobility services company reminded us how crucial it is at this stage to build eco-systems, resisting the temptation to reduce them to ego-systems. We have to collaborate with third parties to build systems in which the individual parts function as a single entity, in a more or less continual way to provide high-value-added services to final customers. Companies have to see themselves as fluid platforms, capable together of providing a value proposition that is exponentially bigger than what they could offer alone.”

In one of our previous blogs, we stressed the importance of componentization as a key ingredient to offering new digital value propositions. Taking the time to componentize offerings and build a solid digital foundation for your company will also position it for agility, flexibility, and growth.

The in-depth Deloitte Insights article, Putting Digital at the Heart of Strategy, goes beyond pointing out that digital transformation enables new growth opportunities. It indicates that those companies that don’t digitize in the next five years will be doomed.

Digitizing operations, a key benefit of cloud computing, improves an organization’s ability to meet sudden increases (or decreases) in demand.

Desktop-as-a-Service
The Six Key Benefits of Using Desktop-as-a-Service (DaaS)

Back when most of the IT experts of today began in the industry, the only infrastructure that was readily available and dependable was on-site servers and networks that were bulky, expensive, and time-consuming to manage and maintain. The last ten years have witnessed tremendous advancements in information technology. Now, IT engineers can design, develop, and implement a company’s entire IT infrastructure within a cloud environment in a fraction of the time it used to take. This good news isn’t just for the IT experts, but for the everyday business owners as well!

Because cloud infrastructure is readily available, you can take advantage of high-powered cloud computing through Desktop-as-a-Service (DaaS). Although DaaS may sound complicated, it’s not. You can use any internet-connected device to access your operating system, applications, business data, and even your desktop settings.

What does that mean for your business? It means anywhere, anytime secure access to your company’s workflow. But that’s just the beginning of the high-impact benefits for forward-leaning companies that choose to leverage the power of Desktop as a Service.

1
Eliminates Grunt Work

Using a DaaS saves your IT department from having to do mundane grunt work such as application licensing, patching, and troubleshooting.

Outside of the fact that DaaS lowers your IT management cost by shifting that responsibility to the cloud provider is the fact that your organization has to spend less effort on maintaining your IT assets. Even companies that have outsourced their IT maintenance to a 3rd party still have a measure of IT housekeeping that they must do internally. DaaS makes IT maintenance and management hands-free for your staff – allowing them to be more effective and efficient in the tasks they were hired to do.

If you’re tired of employees complaining about their computers – or about the IT support – if you’re sick of doing endless updates, upgrades, patches – all to avoid the blue screen of death – DaaS is where you want to be. Most cloud providers offering DaaS have proven their ability to maintain their promise of 99.99% reliable uptime. That’s good news for your workflow and for your ability to focus on your work – not IT issues.

2
Data Redundancy

DaaS puts your company’s workflow in your hands instead of at the mercy of IT roadblocks, ransomware, or a natural disaster like hurricanes, fires, and tornados.

You don’t have to worry about a local network crashing – because there is none. It’s all in the cloud. You don’t have to think about losing data if your laptop dies – because your actual “computer” is virtual and all your data is stored in the cloud. Instead of having an operational IT system and a Business Continuity strategy backup system, you’re using your Business Continuity system every day in the cloud.

Since your data is stored at a secure facility offsite; or, in the case of IronOrbit, stored at multiple data centers, it is protected against onsite server failure or natural disasters. Having redundant backups provides a safety net. If a natural disaster impacts data center one, data center two kicks in automatically.

3
Increased Security

IT support teams in businesses take reasonable precautions to guard against cybercrime. These security measures cannot compete with the security technologies employed by cloud providers delivering DaaS options for businesses.

Critically DaaS shifts the security burden away from the individual device and places it within a data center infrastructure designed for the highest levels of protection. To put it simply, it would be cost-prohibitive for a small to mid-size business to hire even one IT security professional to protect their in-house systems to the level of a Tiered private cloud hosting partner.

Data is no longer vulnerable on a local device but held – and regularly backed up – in a secure hosted environment; it is also encrypted and can be made accessible only through multi-factor authentication protocols. The addition of a designated managed service provider also has its advantages. Systems are monitored 24/7. For example, a managed service provider can prevent someone from stealing data using a USB. That’s why enterprise-class organizations, the military, and the government are overwhelmingly looking to cloud providers to host their workflow. The security is there.

 

Companies need the speed and agility embodied by Muhammad Ali.
Muhammad Ali’s combination of his heavyweight body, speed, and reflexes was revolutionary and made his boxing style artistic. Ali said he needs to, “Float like a butterfly and sting like a bee.” In order to be resilient, companies need to do the same thing.
4
Enhanced Flexibility, Agility, & Mobility

We’ve already noted that cloud infrastructure along with new virtual desktops for your staff can be deployed in record time in comparison to traditional on-site IT setups. But that’s just a baseline. Consider the fluctuations of the marketplace over the past few years. The companies that survived and thrived were the ones most able to, in the words of Mohammad Ali, “Float like a butterfly and sting like a bee.” Companies need a high level of agility combined with decisive leadership that can act quickly. DaaS allows you to scale up or down easily, add or reduce capacity, and change directions on the fly if needed.

Once you’ve moved your IT system to a DaaS, mobility becomes much easier. Modern companies are flexible enough to have their employees work from anywhere and on any device of their choosing. To thrive in the new cloud ecosystem, companies will need every tool available to be resilient. Teams will have to expand and contract at a moment’s notice, and they will need to respond quickly to opportunities the moment they appear. DaaS is a building block that makes all of that possible.

Being agile and flexible enables organizations to pivot if need be to remain resilient. Mauro F. Guillen writes, in a recent HBR article, that “successful companies often pivot to a business model that’s conducive to short-term survival, and long-term resilience and growth. Pivoting is a lateral move that creates enough value for the customer and the firm to share.”

The focus is now on productivity, elasticity, and value to the customer. These are the main characteristics that will drive the proliferation of DaaS in business.

 

5
Reduces Upfront Costs

DaaS reduces enormous upfront costs. Imagine all the hardware you’d have to invest in just to get started. In-house IT infrastructure and computers have to be purchased and implemented with the next 3-5 years of business operations in mind. Recent events have shown that it is impossible to predict the next year much less project 3 to 5 years out.

Even during times of stability, it is often a challenge to budget for hardware replacement. CFOs have to also account for the depreciation of capital expenditures. From the moment you open the box on a new computer, the value depreciates. With many companies still in recovery mode, many are having to delay refreshes altogether, even at the risk of struggling with outdated technology.

DaaS provides the luxury of keeping IT aligned with workflows no matter how dynamic and volatile they may become.
Since DaaS is subscription-based, you’re renting equipment. This subscription-based model moves expenditures from a capital expenditure (CapEX) to an operational expenditure (OpEx). You’re only going to pay for what you use; therefore, if you use a lot, you’re going to pay more. Correspondingly, if you don’t use very much, you pay a minimum amount. This is a CFO’s dream come true because it streamlines operations in ways that lower overall operational costs.

CFOs love DaaS and other cloud-based solutions because of the budget predictability provided by packaged solutions but the fact that they can move CAPEX expenses into the OPEX column. This provides a range of financial and tax efficiencies. #1 in those efficiencies is that your company doesn’t have to pay a large amount of money for in-house servers and networks to be installed. And when your business grows, you don’t have to factor bigger, better servers (with bigger and better prices) into your budgets. Moving IT expenditures from CAPEX to OPEX gives you the flexibility to utilize your cash reserves for other, pro-growth initiatives. Having a fixed and predictable monthly fee certainly makes budgetary planning and forecasting much easier than the break and fix nature of on-premise servers or even in-house VPNs.

 

6
Energy Conservation Helps the Environment

You’re only one company, but you want to do your part for the environment – and you want your consumers to SEE you doing your part for the environment. Because DaaS allows you to use your devices for longer and to partner with eco-conscious cloud platforms, you can do your part for the planet without it costing you more to do so.

A study conducted by the Carbon Disclosure Project found companies that utilized cloud computing saved a total of $1.3 billion annually and reduced carbon emissions by an equivalent of 200 barrels of oil.

Just imagine the hardware and electrical power needs of even a small-size company. An organization saves tremendous amounts of energy by moving its IT system to a DaaS environment because no onsite servers are gobbling up massive amounts of electrical power. More employees working from home means fewer carbon emissions from vehicles traveling to and from work every day. When you start to consider the number of companies and the number of employees involved, the amount of carbon emissions is significant.

As our lives, work, and thinking turn increasingly towards protecting the climate, conserving energy by leveraging shared data centers will become more attractive and competitive. As this move to remote data centers matures, operators will begin to assess “greener” options for on-site power generation. Data centers are an excellent opportunity to integrate on-site energy generation facilities such as hydrogen applications, solar panels, or a combination of heat and power solutions (CHPs).

 

Marc Garner, VP, Schneider Electric
Marc Garner, VP of Schneider Electric’s Secure Power Division.

Marc Garner, VP of Schneider Electric’s Secure Power Division.The Vice President of Schneider Electric’s Secure Power Division, Marc Garner wrote in Data Center Dynamics, “Technology has become a key enabler for both businesses and consumers alike, and throughout 2020, dependency on digital infrastructure has increased dramatically. In fact by 2035, Schneider Electric estimates that all IT will consume 8.5 percent of global electricity – compared to 5 percent in 2021 – and data centers are expected to take up a large share of this demand. Many of today’s data center operators, from hyperscalers to cloud and colocation service providers, have already led the market by example, and publicly declared ambitious commitments towards Net Zero, adopting more sustainable approaches to digital business.

Microsoft, for example, has started transitioning to using renewable wind energy – a trend that will likely only continue to increase as awareness and demands for renewables from end-users and governments surge.”

 

 

 

 

Conclusion

Your business is moving into the future, whether your IT systems are ready for it or not. Using virtual desktops in a DaaS environment ensures you’re always working on the latest version of your operating system and applications. That in and of itself is a compelling reason to move to DaaS,

but that’s only the beginning. Consider that DaaS also gives you a built-in business continuity system. Because your data and workflow are securely housed in the cloud, you never have to worry about how much time, money, and lost opportunities you’d sacrifice if your company’s on-site server goes down.

As Gartner describes in a recent report, technologies utilized by organizations are increasingly conceptualized and implemented outside of the traditional outsourced IT department. Gartner found that the total business-led IT spend averaged around 36% of the total formal IT budget. Business leaders rightfully see digital transformation as an organization-wide discussion, and no longer the sole purview of the IT department.

This article categorized 6 key benefits for companies moving to DaaS. Depending on what priorities are driving your organization at the moment, you may be drawn to one specific DaaS advantage or another. Think about both short and long-term goals in your choice. You might consider DaaS to make hardware refresh more affordable in the short term but also reap the cost and business benefits delivered by DaaS as it has a deeper impact on the continued growth and success of your business long term.

 

 

Post Pandemic Business Success is About Renewal
Post-Pandemic Business Success is About Renewal
As businesses regain their balance, the leadership must focus on renewal, not recovery, if they want to stay competitive in their market.

If there’s a lesson to be learned about the pandemic, it’s the importance of being adaptable. Another critical quality for survival was speed. There wasn’t much time to deliberate. Companies had to act fast. Acting with speed and agility wasn’t tied to the size of the company. It was less about ability and more about choosing to be quick and adaptable.

Covid-19 changed how we live and work on multiple levels. We’ve seen accelerated changes in consumer and business behaviors that are likely to persist. Strategies meant to restore things as they were before the pandemic will prove frustrating.

Business leaders need to look beyond recovery. As Rebecca Brooks points out in her article for the Forbes Agency Council, the pandemic revealed the flaws in our systems. All of them. Whether they were socio-economic, corporate, or governmental. “That’s why I’m not trying to lead my company back to where it was in December of 2019,” she writes. “That place and time are gone. I want a renewal— not a recovery — so that our people are equipped and prepared to handle the challenges we’ll face today and tomorrow.

Because businesses and consumer behavior will never be the same, business leaders are looking for technology, specifically digital technology, to lead the way. Digitizing operations use the technology to replicate an existing service in a digital form. Becoming digital means using technology to transform the service into something significantly better. Companies can’t afford to drop the value propositions that work, at least not right away. Nor can they afford to settle with running the business as they had before the pandemic. It is a different market now. In this climate of rapid change and delivery, there’s nothing worse than complacency.

Be Inspired by Technology

The whole idea behind digital transformation is to leverage all the potentialities of technology (namely cloud computing, the Internet of Things, and artificial intelligence) to create and deliver better products and services.

Why is the ability to be inspired by technology such a prized commodity? Because now you can conceive an idea, get it funded, bring it to life, and scale it easily, quickly, and more economical than ever before. Andrew Hessel, a distinguished research scientist at Autodesk, said, “The gap between science-fiction and science is getting really narrow now; as soon as someone has the idea and articulates it, it can be manifested in a short time.”

A recent Gartner report on identifying future work trends recommends several methods for creating a future-of-work strategy. The recommendations include using the visionary imaginations of science-fiction writers. Apparently, there are many organizations already employing science-fiction writers to develop bold ideas. Gartner points out that creative thinking is critical for moving past incremental innovation. People often become trapped by cognitive biases (what they know and expect from everyday experiences). They become unable to see potential futures because they are weighed down by the limitations of present conditions.

Market Trends

While the crisis of covid-19 has boosted innovations in technology, it has also created shock waves of uncertainty which are particularly felt by investors and multinational companies. Having witnessed the vulnerability of long-distance supply chains, many business leaders are looking for more local options to replace global manufacturing partners.

ZARA store front in New York city.
ZARA, one of the most known retail companies in the world, has built its success on a solid cloud-based infrastructure.

The Spanish clothing retailer ZARA, founded in 1975, is one company that has been ahead of the trend. While most clothing brands floundered during the pandemic, ZARA was able to keep things moving because they had a shorter supply chain. Not an easy feat to pull off, especially when you have 2,270 stores worldwide. Most western brands use offshore manufacturing in Asia, where labor is much cheaper. The time between design and delivery of the finished product could be months.

Because ZARA used local manufacturers, they moved quickly from design to delivery in a matter of weeks. ZARA also benefited from having no stockpiles of unsold inventory, and they were able to respond to consumer trends promptly. This strategy of using local suppliers turns out to be an effective model. Other companies: in other industries have begun to follow its example.

Job Growth

The clothing industry was one of the markets hit the hardest during the pandemic. The manufacturing of clothing requires the work of many people. Consider that, in Asia alone, the clothing industry employs 43 million people. So, when clothing sales fall 73.5 % in the United States, Bangladesh loses out on $3.2 Billion in canceled clothing exports.

Worldwide, factory jobs will soon be a thing of the past because everything has been automated. Low-skill labor of all kinds will slowly continue to disappear over the next decade. It is anticipated that 1 out of 16 people will have to change occupations between now and 2030. This era of occupational transitions will require the need to train millions of people for new jobs. What benefits, such as sick leave or unemployment, be available for all workers (including gig workers)? The main areas of job growth will be highly skilled occupations: including teachers and training instructors.

Consumer Behavior

According to McKinsey & Company, consumer behavior that shifted in response to Covid-19: such as ordering groceries online and virtual healthcare, will continue at higher levels. E-commerce is booming. The virus also initiated a reversal of some behaviors, such as investing in the home. As the pandemic subsides, some consumer behaviors disrupted by Covid-19, including entertainment, leisure air travel, and remote education, will eventually make their comeback.

Hybrid or Fully Remote Workforce
Pie chart showing remote-work potential by numbers of days per week.
McKinsey and Company assessed over two thousand work activities to evaluate what work can be done without any activity loss in a work-from-home environment. In their research, twenty to twenty-five percent of the workforces in advanced economies were able to operate effectively without losing any of their efficiency. The number of remote workers since the pandemic has increased four to five times. Companies are now devising hybrid remote work plans that enable them to reduce office space saving money and increasing profit margins while giving workers more location flexibility.

During a video roundtable discussion entitled “What’s Up AEC?” Nvidia’s Senior Solutions Architect, Jimmy Rotella, said, “We had always seen a remote workforce coming. Analysts say that the pandemic has actually accelerated the work-from-home movement by 5 to 10 years.”

Now, there is a real focus on employees having options. They can work from home, in the office or both. In fact, the “employee experience” has become equally important as the customer experience.  Providing a great experience to both customers and employees is a defining aspect of a company’s brand.

According to a Fuze survey:

·       83% of workers do not believe they need to be in an office to be productive

·       43% believe they would be more productive working from home

·       70% of those surveyed between the ages of 16–44 want to be more mobile at work

·       88% use smartphones for work daily

·       49% use a tablet minimum of three times per week.

Now that the pandemic is winding down, organizations continue to think about how they want to work moving forward. Most employees now have a taste of what it’s like to work from home, and they want to keep it that way if possible. The trend for most companies has shifted in favor of remote and hybrid working scenarios. Owen Hughes writes, in his attention-grabbing article SPENDING ON TECH IS ABOUT TO ROCKET. BUT IT WON’T BE THE IT DEPARTMENT DOING THE BUYING, that the growth in IT spending will be around companies digitizing operations (moving to the cloud) and becoming digital.

Welcome to 2025

& Tech-Celeration

Zipline is the largest automated on-demand delivery service.
Zipline has made more than 150,000 commercial drone deliveries including blood, medicines, and vaccines. It has transformed national health systems by expanding access to care for millions of people.

The post-pandemic acceleration in the adoption of technologies is pushing us into the future at breakneck speeds.  The new word for this rapid adoption of new technologies is tech-celeration. Experts estimate the acceleration is at least 5 years. Healthcare and higher education are among the industries that have probably seen the greatest push towards tech-celeration. For example, in the United Kingdom, the National Health Service built a telehealth system over a weekend and rolled it out to doctors across the country by the end of the following week. There were similar scenarios in the United States.

Although e-learning has been available to the public since 2000, it has been relatively dormant in university settings until the pandemic. Now, the online education market is expected to quadruple in revenue by 2026. Educational institutions are more open to using computers for distance learning and developing more robust online degree programs.

IT Moves to Center Stage

According to analysts, the surge in IT spending this year won’t come from traditional IT departments, but other areas of the business undergoing digital transformation. These units see IT charged as a cost of revenue or cost of goods sold.

John-David Lovelock, research vice president at Gartner, said: “IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery. Not only does this shift IT from a back-office role to the front of a business, but it also changes the source of funding from an overhead expense that is maintained, monitored, and sometimes cut, to the thing that drives revenue.”

Mark Samuels’ May 22, 2018, article warns readers of the many pitfalls associated with digital transformation even as it acknowledges its importance to business renewal. A few years later, this urgency to transform into digital companies is as intense as ever. Like the acceleration of remote work, the pandemic pushed up the digital transformation agenda for everyone.

For more information please read parts 1 and 2 of WHY IS DIGITAL TRANSFORMATION SO IMPORTANT TO SUSTAINED SUCCESS? These highly informative blogs were based on research by Jeanne W. Ross.

New Crisis. New Opportunities.

Covid-19 created the opportunity for new businesses, as well as new types of businesses to emerge. According to the earlier referenced survey, the number of new business start-ups has doubled in the USA since 2019. During Covid-19, however, many workers in the United States were furloughed, laid off, or simply dropped out of the labor force for other reasons, and thereby embraced the opportunity to create the start-up of their dreams. New job titles have appeared on the horizon. For example, the research company Econsultancy tracked the use of the chief data officer title on LinkedIn for two years. In April 2016, 2,899 people were identified as chief data officers; by February 2018, there were 11,418.

 

IN CONCLUSION

Because of the changes brought upon by the pandemic digitization increased faster than ever thought to be possible and pressured many companies to move faster than they would have liked. It is now an on-demand economy (compliments of the cloud ecosystem). This is a new industrial revolution driven both by fear of digital disruption and the opportunities created by the cloud ecosystem.

The disruption caused by Covid-19 also offers a path to higher productivity and broad-based growth. Digital enterprises like Netflix, Google, and Facebook will only continue to get bigger. The Amazon model of fast and direct delivery will continue to blaze a path through online shopping.

Although the pandemic has contributed to a slowdown of globalization, the world has grown too integrated for globalization to be stopped. According to The Economist magazine, the biggest missing piece of the global puzzle is for business and government leaders to make interdependence work with resilience. Technology, and how people use it, will surely play a critical role.

Even before the pandemic lockdown, social media, mobile, analytics, cloud computing, and the Internet of Things pressured companies to become more digital. Digital technologies deliver ubiquitous data, unlimited connectivity, and massive processing power. Digital technologies enhance both the customer experience as well as employees.

Becoming a digital company means delivering new and improved product features. Too many executives rush into transforming their companies to become digital. Digital business transformation is a long journey. Leaders need to commit to the long haul while sustaining existing business.

Take notice of industry trends and identify which ones will have the biggest impact on your organization. Identify where your company has the greatest competitive advantages. Play to those strengths. Build relationships with providers who are dedicated to your success and whose expertise you can leverage.

 

Why is Digital Transformation So Important to Sustained Success? (Part 2)

 

 

BECOMING DIGITAL IS BUILT ON AN OPERATIONAL BACKBONE

Since the operational backbone is the foundation for everything else that will be developed, built, and offered to your customers, it’s important to get it right from the design stage. That’s why regrouping with your people and process is so fundamental to the process. DESIGNED FOR DIGITAL points out that although companies have been engaged, in one way or another, with digitization (remember: digitizing does not equal digital) transformation since the late 1990s, the majority of them did not have operational backbones to support their digital transformation.

The story of Intel’s dramatic digital transformation presents a good example of starting with the business needs in mind. Use the collective input of the organization to determine where exactly the business is headed. Talk to the people in the company. Talk to your customers. Strive to get an accurate big picture of your company based on facts, insight, and impressions from your customers.

Shesha Krishnapura’s, a chief technology officer at Intel, wrote an article THE ANATOMY OF INTEL’S DIGITAL TRANSFORMATION, where he explains how lines of communication between Intel’s many business units helped shape the new operating business model.

“When we look at new technologies, we investigate what it will take to transition from legacy approaches to the new ones. We look at our affordability targets and determine which one gives us the highest return on investment. One area of technology that is crucial to Intel’s digital transformation is a hybrid cloud. It is the next step in a natural evolution that started with everyone having their workstation and locally stored data. Eventually, virtual clients came along, with applications and data stored centrally (but on-premises). Now hyper-scale computing, or high-performance computing, is the trend, where a lot of computational jobs can be done in a very short amount of time using a significant amount of fungible computing capacity. But on-premises capacity can reach a saturated utilization, and enterprises need burst capacity. The ability to seamlessly move workloads between private and public clouds—i.e., a hybrid cloud—is the answer.”

 

Operational Backbone
An operational backbone is a coherent set of enterprise systems, data, and processes supporting a company’s core operations.

 

Although an operational backbone is a digital building block for becoming a digital company, it is not something that is etched in stone. Far from it. Because a business changes, an operational backbone is never complete. Technology changes, and you may discover through analyzing customer data, that their needs have changed. So your operational backbone has to be designed in such a way that it continuously evolves to meet the situation as it evolves. All the components that make up your operational backbone have to be agile and flexible as well. If any aspect of it has limitations or rigid parameters, it’s going to gum up the works. Like clogging up an artery, it could cause paralysis or worse.

Invest in an Operational Backbone and a Digital Platform to Secure Efficiency & Revenue Growth

Having done the work to assemble an operational backbone, you’ll have set in motion the ways and means to create a digital platform. Properly designed, this platform will enable quick and easy access to data, configure, and reconfigure business processes, and technology components to generate and enhance digital offerings. At the base of this platform is a repository of cloud services. Depending on the specific demands and needs of your company, this might be a public, private, or hybrid cloud environment. Whatever the architecture happens to be, make sure it is flexible enough to adapt as you need the rest of the platform to adapt.

Let’s take a moment to discuss the cloud service component. Cloud services provide the foundation. It is the basis for everything else that follows. Trevor Clohessy, Thomas Acton, and Lorraine Morgan’s 2017 paper THE IMPACT OF CLOUD-BASED DIGITAL TRANSFORMATION ON ICT SERVICE PROVIDERS’ STRATEGIES found that cloud-based digital transformation positively impacted the realization of strategic objectives such as agility and competitive positioning.

DESIGNED FOR DIGITAL (MIT Press) describes a digital platform as 3 repositories built on a base of cloud technologies. The book states that cloud services are “fairly standard across all vendors.” While that statement is true, it’s important to know that not all cloud designs are equal just as not all strategies are equal. The best ones take in the big picture of where the company is at present and where it wants to be in 5 years….in 10 years. In the context of cloud computing, a strategy can be defined as a “set of decisions required to create and deploy a network-based, information service delivery strategy that results in both cost savings and organizational agility.

The Competitive Imperative of Digital Transformation

In a 2018 Forbes article titled “Cloud Computing Comes of Age as the Foundation for Enterprise Digital Transformation” author David Bartoletti makes the following statement:

“Cloud is no longer a place to get some cheap servers or storage. It’s not even a single place. Cloud computing is now shorthand for how companies turn amazing ideas into winning software — faster. Nearly 60% of North American enterprises now rely on public cloud platforms, five times the percentage that did just five years ago.”

It has been two years since that Forbes article was written. What’s happened since then?

COVID-19

Businesses have to utilize cloud technology to keep pace with competing organizations. Some form of digital transformation has become a “must-have” for companies worldwide. But is a public cloud the right platform for your digital transformation efforts?

Today, privacy/security concerns take center stage and have businesses large and small thinking seriously about a move to private cloud.

Private cloud architecture outpaces public cloud offerings in:

  • Migration
  • Management
  • Support
  • Cost
  • RTO/RPO
  • Contracts
  • Availability
  • Monitoring
  • Performance

So why do companies still choose public cloud services for their digital transformation efforts? Perhaps it is name recognition. Everyone knows about Amazon, Microsoft, and Google.

But let’s face it. Not everyone TRUSTS Amazon, Microsoft, and Google. That’s why CEOs and CIOs lean more heavily toward private cloud companies that provide a higher level of service, customization, and privacy.

There are other considerations when looking at the quality of your cloud environment. To find the summum bonum of cloud services, take a holistic approach that involves the answering several questions. What is the quality of the connection like? How good is the security of its data centers? How responsive is its level of customer service? How much control will you have over your ICT environment, and how adaptable will it be to the shifting needs of your company? These are important questions to consider.

Once company leaders grasp the concept of digital for operational and market flexibility, they begin to envision the unlimited possibilities of digital transformation.
Leading Digital Transformation

Often lost in the digital transformation conversation is the “how” of leadership throughout the process. While this may seem rudimentary, those business leaders that choose not to see digital transformation as a completely new game are often taken by surprise as the entire effort crashes and burns like the Hindenburg.

The leadership mindset of digital transformation.

Listening to the Technology Experts – But Not Too Much

IT specialists are in the business because they love what technology can do. They see the potential within technology to help you become more competitive, efficient, and cost-effective. They will have deep, valuable insight into the “how” of the project. But sometimes, because the focus of your IT department is on IT, the process can get mired in the weeds of the technology, resulting in the people and processes being left behind. It’s the task of the leadership to ensure that the strategy embraces the input of all stakeholders and ensures that the technology solves people and process challenges – not just IT issues.

 

Holistic Approach

Many CEOs see digital transformation as “something that the CIO and the tech department does.” Nothing could be further from the truth. The IT organization within your company will play a significant role in the deployment of the strategy, but if there isn’t a comprehensive, “all-of-business” approach in the planning stages, the effort will crumble. Why? Because anything less than a holistic approach to digital transformation results in siloed data and unproductive activity. Simply dropping cloud-based applications or infrastructure into the mix without integrating everything around the digital transformation strategy is like trying to run a NASCAR without a steering rack and transmission. Sure, you’ve got lots of power, but you’re not going anywhere fast.

 

Long-Haul – Iterative Process

If your company is going to be flexible and nimble enough to stay ahead in our current global economy, you’re going to have to embrace the fact that the task of digitization and digital optimization is never complete. New technologies are coming on the market every day. Not all new technologies are good, but if you’re not careful, your competitors will leverage a technology you’ve dismissed and pull the rug out from under you. To avoid this catastrophe, it’s important to view digital transformation as an ongoing activity, just like marketing, sales, and production. As they emerge, new digital technologies will allow you to work smarter, serve your customers better, and meet market challenges head-on.

 

Communications

With the USA still feeling the “outsourcing” effects of NAFTA, there is a continuous worry in the minds of employees about losing their jobs to cheaper labor and better technology. Part of your work as a CEO has to include boosting morale by assuring your employees that the digital transformation process is about securing their jobs into the future. It’s not about replacing them or eliminating their positions.

 

Company Culture

The positive potential impact of digital transformation on company culture cannot be understated. Digitization allows for a higher level of transparency, communications, and collaboration. Digital optimization can make everyone’s workday easier.

However, organizational leadership has to communicate and model the benefits, or the new strategy will be misunderstood and may even be resented by the employees.

Digital transformations are slow because it means changing habits and culture. It takes time and a concerted effort. It should be a slow process. People need the time to adjust to new processes and adopt new technologies. The need time to learn how to think and function as a digital business. Begin the journey by creating an operational backbone. Optimize so that you’re doing the same things you’ve always done, but now only better. Then you can build a digital platform. You’ll discover along the way that you will begin to accumulate a portfolio of components. These components will feed innovation and become useful in future digital offerings.

 

Use components to create new digital value propositions.
If you want to succeed, accumulate lots of components and apply plenty of imagination in using them to create new value propositions.

As Jeanne Ross points out in her book, componentization is key to becoming a fully digital company able to offer new digital value propositions to customers.  To illustrate the point, she uses the plotline from the LEGO movie.

In the LEGO movie, a noble construction worker sets out to save the world from a tyrant who intends to glue in place all of LEGO world. Emmet, the construction worker, prevails, of course, because he teams up with bad guys who apply their combined creativity to outsmart the bad guys. The Key to their success is the ability to reconfigure LEGO components into whatever machine they need to overcome each obstacle they meet.

In the same way, digital companies build and adapt using whatever components they have. It all comes down to how creative and innovative they can be in assembling those solutions from parts that already exist. The challenge is to keep track of all the components so you can grab the one you need when you need it. That’s why you need a digital platform.

 

DIGITAL OFFERING BUILT ON A DIGITAL PLATFORM

A good example of how having a digital platform can facilitate responding to a unique situation is the Toyota Hawaii story. Toyota Motors North America responded to a particular challenge in Honolulu —a city full of condos and people but few parking spots. They came up with a digital offering called Hui—a round-trip, station-based car-sharing program that allows customers to reserve a car by the hour, or by the day, through a mobile app that also locks, unlocks, and starts the vehicle.

IN CONCLUSION

Business leaders are looking for ways to get ahead of the situation. Companies are looking at ways of improving what they already do by digitizing their processes.

The messaging around digitizing operations has to be coherent and consistent throughout all layers of the organization.

Why?

Because people don’t like change.

Digitizing, done correctly, creates a company atmosphere of constant and never-ending improvement, and that can be unsettling for some.

Securing an operational backbone this way makes sense and it should be done.

But long-term sustainable success is dependent on developing digital business capabilities where your value proposition provides a new way to solve your customer’s problem.

Make the time now to start learning how to componentize offerings, as Jeanne Ross puts it, and build a digital platform. Designing, building, and using a digital platform requires a whole new way of thinking. Even if you’re an established company, everyone must abandon old habits and, in many ways, adopt the mindset of a start-up. Companies need to get started on their digital journey now because it is going to take a while. If they wait until they have an urgent need to suddenly offer a digital solution, they won’t be able to. It will be too late.

Cloud services provide the base for a Digital Platform
Why is Digital Transformation So Important to Sustained Success? (Part 1)

True Digital Transformation is a process made from two stages, and the second stage builds on the first. The first stage enhances traditional products and services using digital technologies to become operationally excellent. Digitizing operations means a company does better than what it has always done before. This stage creates operational excellence through incorporating digital technologies and is much a cultural-way-of-thinking change as it is a change of technology. The second stage moves beyond traditional products and services and uses digital platforms to innovate and deliver brand new customer value propositions. Companies know they’ve reached this stage when they begin offering value to their customers that they’ve never offered before.

Why is digital transformation so important? And why is it so important for all companies to get started on the journey on the right foot?

These are unprecedented times and businesses need a powerful elixir to get us through the immediate disruptions and also sustain us through the years ahead. That elixir is a digital transformation. Digital technologies are raising the bar for everyone across the board. Jeanne W. Ross’ important book DESIGNED FOR DIGITAL, explains digital technologies as a game-changer because it delivers ubiquitous data, unlimited connectivity, and massive processing power.

Ubiquitous Data

Businesses no longer have to guess what customers want or how they want it. We can now collect the data and see the answer in front of us.

Unlimited Connectivity

Mobile devices give us access to anything digital and anywhere there’s an internet. Responses to inquiries come immediately, and smartphone apps offer proactive insight into customer problems.

Unlimited Processing Power

We expect massive computing power to crunch all that ubiquitous data and arrive at conclusions human beings cannot readily observe.

Jeann W. Ross, the principal research scientist at MIT Sloan Center for Information Systems Research.
Jeanne W. Ross, the Principal Research Scientist at the MIT Sloan Center for Information Systems Research, paves the way for business leaders who want to retool their organizations for digital success in her book DESIGNED FOR DIGITAL..

Why is digital transformation important? Well, imagine, there you are, with your old company infrastructure, bogged down with the antiquated silos and dysfunctional systems. These things were good enough for yesterday but not good enough for tomorrow. All around you are your competitors and customers swimming in the sea of digital technology. How long will it be before your responses, as fast as they might be, are not fast enough, and your competitors are proactively serving your clients because they have already collected massive amounts of data (compliments of digital technology) and have made sense of it (unlimited processing power in action)?

“Not all companies are digital-born, but all must offer customers new digital value propositions, or risk disruption from those that will.”

                                                                                                                                                                                                                               —   Meg McCarthy, VP, CVS

Customers and competitors aside, a successful digital transformation means that your company will learn and progress more quickly than before. Once in the digital environment, thinking begins to change, you discover new possibilities and new ways to bring value to your customers. What is more, you’ll be able to try it immediately. You can afford to experiment because the company will have greater agility. Most importantly, being digital will establish closer connections with your employees, customers, and suppliers.

Like all journeys, digital transformations begin with taking the first few steps. These first steps are a part of digitizing operations. The way a company takes these first few steps is critically important. Keep this in mind: each step forms a building block for the next, and the one after that. If one of your previously laid building blocks has a crack in it or is unstable in any way, the whole thing could collapse, or you’ll get to the half-way point and realize you can’t build any further. The structure won’t hold.

We’ll point out the key benchmarks for the digitizing process a bit later, but now let’s look closer at the current technology environment and what it means to your business.

A PERFECT STORM

Forces of disruption and upheaval have converged on businesses throughout history, but never quite like this. Many companies, with their back pressed against the wall trying to survive, are feeling the tremendous build-up of pressure. It’s like the rise of air pressure just before a tornado strikes.

The pandemic and its subsequent lockdowns have been a crisis for most companies and an opportunity for others. They have also been an added force behind a group of disrupters that began building up steam a decade earlier. This group of disruptors has been collectively referred to as SMACIT – a term that feels appropriately like a slap in the face. SMACIT refers to Social Media – Mobile Devices – Analytics – Cloud – Internet-of-Things. Like many disruptors, this collection of technologies brings both crisis and opportunity.  Margaret Rouse points out in her Techtarget Network article on SMACIT, that these phenomena form the basis for an ecosystem that enables a business to transition from e-business to a digital business. SMACIT is an enabler. It is also the catalyst paving the way for an incredible multitude of things any one of them having the ability to disrupt your business.

From a consumer perspective, we have become so enmeshed with digital technology that we don’t even think about it. It is just something we expect. Amazon Prime subscribers pay their $15 a month and don’t think about it. They enjoy the convenience of ordering online and receiving their shipment the next day. But remember, Amazon didn’t start as a digital company. They started as an online bookseller.

Gone are the days of the stereotypical socially awkward IT professional hunkered silently over his workspace and not talking to anyone outside of IT. Today’s IT professionals must interface with a variety of people across all departments of an organization because information technology and business goals have become so interwoven. Plus, the technology environment has become too complex and sophisticated that IT teams must become more conversant with business outcomes.

Having your employees work from home doesn’t make you a digital company. Digital companies deliver digital offerings — value propositions that could only exist in the digital realm. The book DESIGNED FOR DIGITAL makes the distinction between digitizing operations and becoming a fully fledged digital company. Digitizing is achieving operational excellence. Doing things that you’ve always done, but now you’re doing them better. Becoming digital means offering brand new value propositions to your customers. What problems can you solve for your customers that you never considered before.

“Business executives who think they are leading a digital transformation when they are digitizing may achieve operational excellence on an outdated value proposition. This may elevate competitiveness in the short term, but it’s not likely to lead to digital success. Consider the limitation of being the best taxi company in town when Uber and Lyft arrived on the scene.”

Siloed systems, processes, and data
Traditionally, business leaders created processes, systems, and data in silos.
These silos slow down the coordination with other parts of the business.

THE FINE ART OF DIGITIZING

What was once just a good idea is now a must-have. Properly digitizing your operations, and I stress the word “properly,” is a prerequisite to digital transformation.  It’s a difficult process. It takes time and requires intercommunication between all departments throughout the company. Consequently, business leaders tend to skip steps, look for quick fixes, and make autonomous decisions that cause problems down the road. Unfortunately, this tends to be the rule and not the exception. Without involving people and processes across the entire organization, there is inevitably a costly disconnect and the digital transformation flies off the rails.

A Harvard Business Review article by Thomas H. Davenport and Thomas C. Redman, May 21, 2020, states that digital transformation is not for the faint of heart and that many such efforts fail. Success requires bringing together and coordinating a far greater range of effort than most leaders appreciate. The article, and the book, postulate the transformational journey has to begin with the people in the company.

It’s important to have leaders with good people skills leading technology, data, and processes. For example, in the area of data, you’ll need the ability to rally people at the front lines to adopt new roles as data creators, ensuring the processes are in place to capture data correctly.

People lead the discussion of rethinking the processes from the top down. Get rid of the silos that have built up over the years and nurture horizontal communication focused on serving the customers. The traditional hierarchical thinking of corporations is a real impediment to making any kind of lasting and substantive transformation.

During this “people and process” alignment, trust is developed between teams and communication opens up more between IT, DevOps, and upper management. Not only do internal technology people need to be great communicators, but they also need a keen understanding of how to balance technology and ROI.

Designing and implementing the right operational backbone is hard to accomplish. That’s why most companies don’t have one. Frequently, they become entangled in the complexities of their old legacy systems. Simplify the business and focus on key customer satisfaction points. Another important point to remember is that the operational backbone is a constant work-in-progress because you’ll be tweaking it as you gain more insights from your collected data. Nothing is etched in stone.

IN CONCLUSION (part 1)

SMACIT (see above) contributes to optimizing processes and operations. These digital technologies are essential to becoming a digital company. The goal of becoming digital is the ability to offer digital value propositions to your customers. Organizational change — the “people” part of the transformation, is the biggest challenge. As we close part one of this blog, we want to leave you with several useful questions raised in the book DESIGNED FOR DIGITAL.

“Is your company’s organizational backbone “good enough” to support your digital transformation? If so, are you continuously adopting new digital technologies, as appropriate, to update key systems and processes? If not, what are you going to do about it?”

 

Virtual Cybersecurity professional
Virtual Cybersecurity Professionals Needed More Than Ever

Data Breaches taught companies hard lessons in 2019. Even back then, Forrester’s VP and group director of security and risk research, Stephanie Balaouras warned that all companies need a chief information security officer.

In a February 24, 2020 MIT Technology Review Business Lab episode, Balaouras makes the case that the world of cyberthreats is becoming more intricate and perilous. Cybersecurity isn’t just stopping the threats you see, but also the ones you can’t see. “Even companies that have a Chief Information Security Officer (CISO) should take a hard look at how high in the organization they report,” Balaouras says. “Do they have the right budget? Do they have enough staff?  Have you given them the right span of control?”

Thanks to technology we are able to carry our office with us, reach out and talk to anyone at anytime, and all at incredible speed.  The mobile devices that make our lives so much easier, also increase the attack surface for cyber criminals. Few corporate functions have had to pivot so quickly or dramatically as cybersecurity operations. CISOs have had to take steps to minimize network threats targeting the legions of work-from-home employees.

According to a McKinsey article by Venky Anant, Jeffrey Caso, and Andreas Schwarz, “The response to the crisis continues to press department budgets and limit resources for other, less essential functions.”

Many companies are freezing their hiring because of the pandemic. Unfortunately, now is a risky, uncertain time to add full-time equivalent (FTE) employees. But companies, most of which don’t have the expertise in-house, need to hire a professional to lead their cybersecurity initiatives. What’s the solution?

VIRTUAL IS THE KEY WORD FOR 2020 & BEYOND

Virtual Cybersecurity Professionals (VSCP). VSCPs are the latest trend in cybersecurity hiring, bringing additional cybersecurity talent at a fraction of the cost, without requiring office-space, benefits, or training. VSCP don’t require on-boarding, and they can hit the ground running.

BUILD SECURITY ON A SOUND FOUNDATION

They are accustomed to handling a wide range of responsibilities geared towards protecting online data from being compromised. Sure, they safeguard organization’s files, networks, install firewalls, and monitor activity, but they should also create security plans that involve all employees of the company. As mentioned in one of our brief articles on phishing attacks, the best technology in the world isn’t going to protect a company’s data if the employees are not educated on the best practices of handling emails. Having mature fundamental processes in place are vital.

VSCP are not traditional employees that require significant investment. Nor are they consultants who are foreign and not part of your team. They are somewhere in between. As such, they tend to have greater access to C level executives. VSCP can be procured by days – you can hire a VSCP for Monday and Tuesday each week, for example – or for a certain number of hours each week. VSCPs typically work remotely, but schedule time on-site at least quarterly, or more often, as your budget and needs require.

In a Forbes article, Jon Younger explains that when a company “lacks the means to hire full time staff,” they can pull together essential skills and keep the business moving forward by combining full-time and freelance professionals together as a flexible, blended workforce. And increasingly, talent marketplaces are able to organize entire engineering or development teams on a “bolt-on” or plug and play basis.

There are downsides to VSCPs. Like all cybersecurity talent, the professionals are in high demand. There is an overall shortage in cybersecurity professionals. A recent Gartner report showed a 65% increase in demand for cybersecurity professionals and an estimated 3.5 million vacancy on the cybersecurity job market. Although they are easier to find than top-quality employees, it still can be difficult to find a quality VSCP. When you find a good VSCP, it’s important to retain them before their schedules become full. And like an employee, personality and team chemistry are important. Although they are remote, it is important that your security consultant fit your organization’s culture and gets along well with the team.

VSCPs are not an entirely new concept. Companies have been hiring Chief Information Security Officers (CISO) for years. Quality CISOs are difficult to find and expensive. A Virtual CISO (vCISO) is an outsourced security practitioner or provider who offers their time and insight to an organization on an ongoing basis, usually part-time. Working remotely, they are usually engaged to design an organization’s security strategy, and some may handle the implementation as well.  vCISOs are less expensive than staff Chief Information Security Officers and with a quick time-to-value.

IN CONCLUSION

The pandemic seems to be expanding this need to a wider range of security tasks. Staff are separated, budgets are tight, but viruses don’t respect deadlines. Projects still need to be completed despite today’s difficult environment. As another Forbes article points out, “Times are challenging, and it’s time to get creative. Organizations must find a way to respond to modern cyber-threats without stretching their financial resources. The vast majority of security budgets are spent on managed services, and that includes consultancy. Because internal security teams need external help, there is a move away from on-premises products towards services.

A virtual chief information security officer (vCISO) could deliver the most bang for your buck.

Here’s why:

Vast Experience and Proven Leadership
No Training Needed
Reduced Overhead
Flexibility
Faster On-boarding

The VSCP concept was reserved mostly for vCISOs, but times have changed and the concept is ready to be deployed for various types of roles.

This might take the shape of a Cybersecurity Compliance Director who ensures the company is aligned with NIST 800-53, FedRAMP, or HITRUST, or prepared for the 2020 CMMC audits. It might be a Privacy Officer who ensures the company is abiding by GDPR, CCPA, or new the privacy laws of Texas or Nevada, ensuring that the company can keep doing business in those states.

Taking a proactive stance on your company’s cybersecurity could mean setting up an incident response program, a SOC or a SIEM, or a disaster plan. Or maybe hire a penetration tester, AI/ML expert, or cryptographer.

The possibilities are numerous, but even if you could hire all the people you could want, you wouldn’t be able to keep up with the vast scale of the cybersecurity threat problem. Phishing scams are on the rise. Smaller companies are being targeted just as much as larger companies because they are known to lack the resources; so, they’re easier to hack. Cybercriminals are sophisticated and they stay informed. They constantly adapt messages to more effectively scam victims. The FTC estimates $100 million dollars in coronavirus stimulus checks have already been lost to fraudulent cyber crimes. The constant threat of cyberattacks presents a huge problem for all industries and guarding against it effectively requires constant attention. That is why IronOrbit has its own division that handles nothing but security and regulatory compliance.

During these difficult times, companies need to ensure they have SOC processes in place, utilize virtual cybersecurity professionals, and incorporate automated security measures. Probably in that order. Whatever you do, as they say at the end of MIT’s Business Lab podcast, get outside help. You don’t want to go it alone. With IronOrbit, you don’t have to. Learn more about how we can protect your company. Check out our Security and Compliance section and then  give us a call at (888) 753-5060.