Category: Digital Transformation

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?”.

 

Applying technology for better business outcomes.
Apply Technology to Improve Business Outcomes for 2021

 

Mastering emerging technologies has always made the difference between companies remaining competitive or falling behind. Digital transformation applies IT and technologies to improve business outcomes. Becoming digital is the main ingredient for sustained success.

Every enterprise, including yours, faces a choice between innovation or extinction. Your customers, your channels, and probably most, if not all, of your competitors have all gone digital.

As technology continues to evolve at exponential rates, digital transformations will accelerate. Social, Mobile, Analytics, Cloud, and the Internet of Things (SMACIT) all contribute to the accumulation of data. Consumer data has become more available and more useable than ever before.

Becoming a truly digital company is a process of redefining your business strategy and even your organization’s culture. The digital strategy leverages an engaged intuitive work culture to create, experiment, and respond to data with increased agility and speed.

Digital transformation is a great democratizer of business: it levels the playing field. It provides low-cost tools and enables strategies that give small and mid-sized businesses a fighting chance to compete at the same levels as enterprise companies.

The most successful digital transformed companies have used real-time data as a roadmap to change their business processes and have developed models for improved customer experiences. Using ubiquitous data, unlimited connectivity, and massive processing power, companies no longer have to guess what their customers want. They only have to collect the data and learn the answer. Unlimited connectivity means responding immediately, even proactively to customer needs.

Data is an essential ingredient for making all of this work.

Designing for digital means collecting the data, having it protected, analyzing it properly, and applying the findings.

Businesses can no longer rely solely on offering a portfolio of products or services. They have to solve customer problems and be anticipatory.

Digital technologies can enhance the customer experience, and even provide new digital value propositions. Digital companies build, buy, configure business, data, and technology components. Working with these components, people can quickly assemble solutions from parts that already exist. A digital platform keeps track of all the components, so you have the one you need when you need it. The foundation for building such a digital platform is cloud technology.

Since not all clouds are the same, you’ll want to shop for the cloud service provider that will fit your business strategy for the long term.

IronOrbit specializes in customizing comprehensive cloud services that fit and support long term strategy. We’re here to help you begin the journey of digital transformation on the right foot.

IronOrbit’s INFINITY Workspaces offer Infinite Upgrades, Infinite Computing, Unmetered Bandwidth, Cybersecurity, Backup & Disaster Recovery, and 24/7 US-based Support, all for one predictable monthly fee.

 

Please contact one of our consultants at 1-800–753- 5060

Migrating to the cloud, moving to the right cloud, Choose the right cloud service provider
AEC Firms Should Choose the Cloud That’s Right for Them

 

There has never been a time in business computing history when companies like yours have been more dependent upon the cloud. But what cloud? What kind of cloud?

Those questions matter.

Gartner’s October 28, 2020 report entitled, “Choose the Best Cloud Operations Delivery Model for Your Organization’s Needs,” highlighted an existing problem among cloud-dependent companies.

“Through 2023, 80% of large enterprise organizations that attempt to scale up cloud operations using traditional I&O (Infrastructure & Operations) silos will fail to meet customer expectations of cloud agility.”

What is at Stake for AEC Organizations?

Gartner points to four “negative impacts” that can result from cloud operations using traditional I&O.

·         Slow addition of capabilities

·         Challenge of managing costs

·         Lower reliability

·         Lesser stability

What Course Does the Gartner Report in Addressing This Potential Business Growth Harm?

As you dig into Gartner’s report, two main concepts become clear for the business owner.

1.      Cloud operations must evolve on-pace with your organization

2.      Speedy cloud implementation must be balanced with its ability to scale with your company.

Let’s take each of these concepts and break them down.

Your Cloud Operations Must Evolve On-pace With Your Organization

One of the irreversible changes that the COVID-19 pandemic has brought to the business world is a new enthusiasm for cloud-based workflow. Although MSPs and Cloud providers had been proclaiming the cloud’s business continuity benefits for years, many had not seen it in action until they had to send their workforce to work from home.

Some had to scramble and make use of less-than-ideal cloud solutions – just to survive the past year.

Others had invested in private cloud infrastructure to handle GPU-heavy workloads and facilitate remote work situations with ease.

Although details of our data centers and cloud designs are beyond the scope of this post, it’s important to know that not all “clouds” are created equal. The IronOrbit private cloud has been built with security baked into the process, using cutting-edge models that provide optimal performance for the heaviest of AEC workloads.

You Must Balance Speedy Cloud Implementation with the Cloud’s Ability to Scale with Your Company

Lightning-fast cloud adoption was one of the business technology decisions that had to be made by many companies under duress of the pandemic.

While not all businesses wanted to – or were able to – move all their processes to a cloud environment during the first COVID wave, the forced cloud adoption required on-the-spot cloud choices that may not have been the best fit for the company’s long-term strategy.

But it’s still happening.

Businesses without high-level IT guidance or a well-defined IT roadmap are jumping into cloud-hosted applications and public cloud solutions before realizing it’s not going to work with a long- term strategy. Use a cloud design not for where your company is at today, but for where your company wants to be tomorrow.

Unfortunately, many AEC companies have made a “giant leap” into cloud environments that were not designed to support the GPU work their firms do every day. Or it’s a cloud solution that doesn’t align with the long-term strategy. As a result, those companies experience frustrations. They don’t have the control they expected, or their remote work is hobbled because their applications are too slow.

The good news is that this leap into the wrong cloud is not irreversible. AEC firms can shift gears and partner with IronOrbit. Our GPU-Accelerated INFINITY Workspaces are purpose-built for the kind of data-heavy resource-hungry apps AEC firms work with daily.

The Cloud is Here to Stay

Gartner predicts that “by 2025, 80 percent of enterprises will migrate entirely away from on-premises data centers with the current trend of moving workloads to colocation, hosting and the cloud leading them to shut down their traditional data center.”

The pandemic put their prediction on fast-forward.

Experts assert that in many areas of society the pandemic has forced us to embrace 10 years of progress (for good or bad) in just one year. The “giant leap” into the cloud by many businesses that were not considering it in January 2020, is not going to be reversed. Nobody’s going back to on-premise servers.

Now that the end of COVID is in sight, your AEC firm can turn its attention to moving to the cloud infrastructure that best supports your work-from-anywhere, graphics-heavy workflow.

 

Want to know more about IronOrbit’s GPU-Accelerated INFINITY Workspaces? We’d welcome the opportunity to demonstrate its tremendous capabilities.

Discover for yourself why more and more AEC firms are choosing IronOrbit.  

Call 1-888-753-5060 now.

 

Family Furniture Store
Digital Transformation of a Family Furniture Store

 

 

There’s a family ran furniture store operated by a third-generation owner named Daniel. She’s bright, educated, and highly experienced; after all, she grew up around the business. As the story about her business unfolds, imagine what you would do in her position.

The Family Furniture Store has grown to 7 brick-and-mortar stores and most of their business comes from surrounding residents and business in the urban areas. They have built a strong foundation for the business but lately profits are declining.

THE FAMILY FURNITURE BRAND AT A GLANCE • Good Business Processes • On-Trend Purchasing • Centralized Warehousing • Good Marketing Talent • Invested Heavily in Technology • Coast of Advertising Began to Outweigh the Acquisition of Customers

The Business isn’t performing the way it once did? Why?

Sales overall have been less than previous years, but their E-Commerce stores is the greatest source of lost sales. This is at a time when you’d think online sales would increase. Daniel wonders what to do about it. What would you do about it?

At first, Daniel was overwhelmed with how to come up with solutions for this problem. The more she thought about, the more questions arose. One day she came across a structured way to diagnose her business, determine where she was, and where she wanted to go.

She assessed the situation. Retail costs are higher, and E-commerce margins are shrinking. Bigger brands are taking over. She discovered during this process of self-analysis that there were missed opportunities. Her inventory didn’t offer the wide variety that some of the other stores did. The urban areas had a combination of rental apartments and new single-family homes.

She also took a few weeks to articulate her strategic ambition and her unique competitive advantage. Many businesses trying to refine their strategic advantage by starting with technology. While technology can be a source of inspiration, everyone has access to the same technology. That’s not where most businesses create their competitive advantage. Strategy is where creating a competitive advantage happens. The people and culture of innovation will sustain it. Technology and communications deliver the strategy.

A Good Strategy Has 3 Component

Problems arise when one of these components are missing.

Daniel realized, after having gone through a detailed self-analysis and review of what customers want (including the number of customers, etc.,..),  that the role of the company had to change, and to do that, she had to change the business. Her next decision was bold and courageous. Courageous because there was no guarantee of success. She was only certain she couldn’t stay where she was. Her strategy was to innovate her services and the entire business model itself.

Daniel’s Preparation for Transformation

 

The resource requirements for Family Furniture had to change if Daniel’s plan for transforming her business stood a chance of success. She was moving from being one of many furniture sellers to a more exclusive pioneer inventing some new way of doing business. So that required a shift of resources from the time-intensive retail model to the absolute focus and attention of senior leaders. Senior leaders must dedicate the time required to innovate their business model. This is the only way a strategy can be developed.

 

STRATEGY LEADS TECHNOLOGY

As Daniel’s business picked up, her technology needs changed dramatically. She had to build specific apps to enable tenants to take pictures that was due to be returned. AI had to identify the furniture as being part of the Family Furniture inventory. More often than not, rental furniture due to returned to the warehouse, were sold off the website before it could even leave the house.

As Daniel’s business grew into a second-hand and furniture rental market. She had to gain new knowledge and make a new network of connections in order to make this transformation happen. By going through a structured process, she was able to gain enough insight to begin having the right conversations and instruct the technologist what she needed. It was not having the technologist show up at dictate to her what she needed.

Daniel took the time and energy necessary to develop a strategic plan based on evidence, educated guessing, and determination to see how to add value to her community of customers.

We’d welcome the opportunity to have a conversation with you about how technology can implement your strategy in ways you never thought possible.

Please call us at (888) 753-5060.

 

 

Digitally Transforming Your Business in the Midst of a Crisis

 

 

Digital technologies are revealing what works inside your company and what doesn’t. Companies can no longer survive on just hard work and hoping things will work out. Leaders will have to put the mental work into designing a company that learns and responds to constantly changing customer demands.

The global pandemic has accelerated growth for some companies and demise in others. Taking advantage of the opportunities offered by digital technologies has become a matter of life and death for organizations. Digital technologies have, and continue, to raise the bar. There are two aspects of repositioning your company for success.

Think of Technology as an Enabler for Your Business Strategy

Just because your employees are working from home does not make your organization digital. It’s not the same as being a digital company. There are two key areas of being a digital company: the first is digitizing your operations and the second is being digital.

Digitizing is having operational excellence by having end-to-end delivery that works flawlessly. Your customers can call you on the phone, connect with you online, or do things for themselves using an app on their cellphone. In an instant your able to anticipate your customer’s needs and address them in the moment they arise. You deliver better on what you’ve always done.

Being digital is about doing things for your customer that you could have never done before. Digital companies are positioned to deliver new customer value propositions. This a move beyond what you have offered in the past. What problems can you solve now for your customers that were never considered part of your mandate before.

Digitizing Involves Cleaning Inefficient Processes
As Information technologies have been supporting business processes for decades, it has created silos that address specific needs. After digitizing, the corporate networks and infrastructure services form the basis for the operational backbone of the entire organization. (Source: Jeanne W. Ross, Designed for Digital: How to Architect Your Business for Sustained Success)

Digitizing builds an operation core that allows seamlessness and visibility to your customers.

 

While becoming “digital” is still a challenge, Nordstrom’s digitizing efforts have really paid off (they were the first department store to start using apps in 2011). Nordstrom’s “digitizing” efforts put them in a stronger position, more than any other department store, to deal with uncertainties when the pandemic struck.

 

When developing your digital offering, the challenge is to solve the customer’s problem so completely that they can’t imagine life without it.

 

A good example of this is Amazon Prime. Customer’s sign-up for it. They pay for it every month, make use of some its benefits, and probably don’t think twice about it. Although Amazon wasn’t born digital (it started as an online bookseller), it has continuously been inspired by technology. They invented the online shopping cart. When Amazon saw what was possible with robotics it became so effective with warehouse management, they no longer restricted themselves to books. When they looked at what was happening with Social Media, they moved away from a few paid-for book reviews to everybody reviewing all the products and let people cherry pick the reviews they find most valuable.

Schneider Electric has provided electrical equipment for over a hundred years

It’s new, digitally-inspired offering, is an intelligent energy management solution called Eco-Struxure™ — an IoT-enabled, plug and play, open, interoperable platform that helps customers optimize their use of electric power all from a central dashboard on their computer screen. In addition to helping companies save money, the digital platform also delivers enhanced values around security, safety, and predictability (it can even predict and take actions to avoid brownouts).

Notice how both of these digital products provide new solutions based on customer insight. The digital offering is a response to your understanding of what’s possible and what your customer’s want.

Digital Offerings are Built on Digital Platforms

 

Two technology environments are necessary for full digital transformations. It starts with building onto a digital platform where reusable components are created to build your solution. They allow for rapid research and development. This is technology that invites trial and error. You can get rid of things quickly. It’s about experiments not major launches. But this digital platform is built on the cloud and is foundational to everything else. You gain customer insights, optimize processes, and manage your supply chain. This is the operational backbone of a digitized company. The second environment involves learning what your customer wants and being inspired enough by digital technology to offer new ways to deliver information-enriched customer solutions that are highly personalized. These two pipelines rely on one another for data in order to deliver the digital offering.

A digital offering represents the intersection between what's possible and what customers want.
A digital offering represents the intersection between what’s possible and what customers want. [Source: J.W. Ross, “Let Your Digital Strategy Evolve,” MIT CISR Research Briefing)
Mission Not Structure/Collaboration Not Hierarchy

Traditionally, to get something done, you turned to structure. The problem with structure is that it stabilizes in an environment where offerings are unpredictable. We have to identify and respond to emerging customer needs as they happen. It can’t be done effectively with matrixed hierarchal organization. It’s too slow.

Digital Transformation is a huge topic. We barely scraped the surface with this micro-blog. Business environments change rapidly and organizations have to position themselves as much as possible to change quickly as well. Being “adaptable” will be the most important quality for a company to develop. You learn something. You adapt. Your customer needs something different now, you adapt. The question of how to design your company is slippery because it is constantly evolving. It’s learning process of figure out what works.

 

All of these things can be challenging. IronOrbit can at least set you up on firm reliable ground so that you can reach higher, experiment, and take risks all without losing your balance.

 

Give us a call at (888) 753-5060.
Know When to Pivot Your Strategy

 

 

Launching an ambitious endeavor requires enormous support. But sometimes innovators realize they’ve made a mistake, or the situation has changed somehow…giving rise to something new being needed. In such moments, they need to pivot. Roald Amundsen had worked too hard. He thought of all the effort that went into attracting funding and recruiting the crew he needed. There was no way he was going to give up.

It’s important to keep the big picture in mind and avoid holding onto specific solutions that leave narrow wiggle room to maneuver. The decisions you make will have a direct impact on your ability to endure. It’s not about making a 180-degree change. It’s about revisiting what you’re doing and broadening your view. Ask yourself, “What is the larger aim?”

The explorer Roald Amundsen recognized that the main ambition was about pioneering achievement…accomplishing something that hadn’t been done before. It was not about it taking a specific route. Upon hearing that other explorers had beaten him to the North Pole, he made a bold move. He changed course, proclaiming that the mission from the start was about scientific discovery. He stayed true to his aim and went on to become a national hero as the first person ever to reach the South Pole.

Roald Amundsen and his crew raise the flag of Norway at the South Pole.
On December 14, 1911, Roald Amundsen and his crew raised the Norway flag as the first explorers to reach the South Pole.

Changing course is sometimes a necessity. For business, it can mean all the difference between success and failure. The path to success is rarely a straight line. Consider some of the most dramatic pivots in business history.

William Wrigley dropped his soap and baking powder product lines when he realized gum, which he was giving away as a kind of incentive to remember the brand, was more popular. Odeo began as a network where people could find and subscribe to podcasts, but then iTunes began taking over the podcast market. The company decided to run with the idea of a status-updating micro-blogging platform. That company became Twitter. Yelp began as an automated email service, and YouTube started as a dating service.

Research shows that new ventures that reinvent their businesses increase their probability of success. Perhaps the active ingredient to this kind of progress has much to do with learning more about their customer’s preferences, business partners, and a new-found openness to adopt new technologies.

Developing the ability to justify shifts away from specific objectives to ones that more effectively address the current situation is an important blend of skills.  Many businesses that were on a growth trajectory before the pandemic, but are now experiencing loss, are considering new business models and strategies. They have to.

To the extent companies can adapt with agility, they will continue to endure as 2021 unfolds. Those that have adopted digital processes by then will be most nimble and less likely to be stuck on a course they can’t change so easily.

 

Are you considering a direction change or a strategy re-orientation? We’re interested in learning more about how you are coping with the shifting landscape. Please give us a call at 888-753-5060. Or learn more from our extensive library of blogs and information by clicking below.