Fracture of IT and LOB

Digital Transformation: The Fracture of LOB and IT

In 2014, I read a whitepaper about one of the fastest growing trends affecting IT today.  It put me on the path I am on right now…and opened my eyes to the enormous opportunity and threat facing business today.  “The 2014 State of Digital Transformation” white paper by Brian Solis (available for free download here), defines Digital Transformation as the “The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.

The public was experiencing this in a major way.  Immediate engagement, social media explosion, access to information and commerce instantaneously.

At least the appearance of it.

The problem I saw was at the business level.  Established companies – old school businesses – were scrambling to become relevant in the digital space and were/still are throwing massive dollars to retain customers.  This represents opportunity…and threat.

Digital Transformation is forcing Digital Business Transformation

Companies that are investing in Digital Business Transformation are looking for their businesses to become:

  1. Aware – this is all about IoT
  2. Predictive – this is all about Big Data and Analytics
  3. Agile – this is all about Customer Experience and Business Process

The Current Reality – Massive Fracture

I see the current reality everyday.  Market forces are driving discussions around the desired state, and businesses are trying to address the issue.  The problem is that what they are becoming aware of is what they are being TOLD…and not necessarily by their customers.  Social Media, online articles, market research reports…all are making companies aware of trends that are impacting business.  Unfortunately, most are sweeping generalizations.   Generally…yes, the market is going in a direction…but specific to a particular business?  There is no context.

In order for individual companies to see context, they need a digital transformation of:

  • Activities: Think…marketing, operations, HR, sales, service, etc…
  • Process: Connected departments, activities (marketing/sales/operations), the ability to manage the process, optimize it and ultimately automate it.
  • Strategy: How they go to market, how they make money, how to optimize it.
  • Partners: How does their transformation impact yours? What do regulations require and is it disrupting the business?  Are there new partners to consider and how do they get evaluated?  Is the channel evolving or is the business evolving away from the channel?
  • Business Assets: No longer just tangible assets…what about the information? How can it be monetized?

The Big Opportunity

Abel Pacheco, Senior Director – Strategic Accounts and Partnerships, at Hostway Services, Inc., sums up his view of opportunity in today’s market.

I feel it’s all about services…managed services. Usually meaning application management, data management, DR, failover, replication, DB Administration, Infrastructure as a Service, Application infrastructure support, etc. That is what I believe it is today.  I believe that it will shift to greater levels of managed services/support.

For example – as commercial end users go home to their personal lives they experience greater levels of service delivery as consumers.  Think…Dominos pizza app, delivered boxed healthy meals, Uber, Air BnB, Lyft, etc.

Commercial End Users are wondering why they can get an amazing service delivery experience by ordering a $15 pizza pie; where the order was quality checked, tracked in the oven, tracked on delivery, and able to report the 5 stages of the delivery the pie is in.  Amazing…but then they go to work and  the tools & systems they use to run their business are horrible.

The opportunity  is matching the digital experience of our personal lives with the digital experience in our business lives.

The Fracture of LOB and IT

Abel’s view articulates the fracture that has already occurred between LOB (Lines of Business) and IT.  The fact is, companies have already shifted IT product/service spend from IT controlled budgets to line of business controlled budgets.

This severely impacts vendors who have been selling into IT for years.  The lake they fish in is getting smaller and smaller.  All the time and investment cultivating relationships with the iron grip of IT is not providing the return they are accustomed to, and large IT vendors in particular are struggling.  As the shift moves from the lumpiness of on-prem purchases every 3 years to a smoother cloud ARR model, their forecast becomes murky, and the bluebird saviors at the end of the quarter or year…disappear.

Additionally, commercial end users are increasingly looking at self-service to solve their departmental needs – which is opening an pandoras box of problems for the entire company…and IT is often left holding the bag.

Boutique providers of solutions are cropping up everywhere – these departmental solutions creep up on IT.  All of a sudden, ungoverned solutions and “solving”:

  • Data Visualization
  • Lead Management
  • CRM
  • Customer Service
  • You Name It

The sheer volume of these offerings requires a cloud model.  No IT department can handle the management of these point solutions, nor the integration required in order to extract context from them. Sure, these solutions solve individual end user pain points…but what other pain points are they creating for the business?

This is why IT is struggling.  This is why Sales Reps in Large IT organizations are always late to the game when a customer contacts them – The LOB has already decided on a solution, and IT is busy patching up the holes that are opening up in:

  • Information Security
  • Information Chaos
  • Service Delivery
  • Mobility

Taking Advantage of Chaos

All is not lost.  For a large IT Vendor like Oracle, this is a fantastic time to take advantage of chaos.  As I write this, businesses are shifting away from “Best of Breed” products in favor of a more manageable number of strategic technology suppliers that can help them navigate the Digital Business Transformation they are undertaking.

I have witnessed CXO’s complain of complexity of the business they are managing, and their inability to share information and processes across departments.  They are tired of not having a team that can govern the process, secure access and secure the information that is generated.

And yes…it’s the information that is driving this.  Big Data.  Analytics. Data Visualization.

Data is growing at an insane pace – IBM states that 90% of data in the history of the world has been created in the last two years alone!

Gartner predicts that there will be 6.4 billion connected devices in 2016…and double that by 2020.

Large IT Vendors Need to Change the Discussion

Big Data and Analytic tools are going to be essential to managing the explosive amount of data growth…and it needs to be integrated throughout the organization so the business can act on it quickly.

Break the cycle of selling to IT.  Train the sales team to understand Business Value Selling.  Focus on these 3 areas:

  1. Customer Experience
    • Do they know the customer?
    • Customer engagement – Simple, Complex, Automated?
    • Business Growth
      1. Current State / Future View
      2. Can they predict sales, or who will buy
  2. Operations
    • Employees Happy/Satisfied with Tools?
      1. BYOD
      2. Sharing info – Collaboration
    • Performance Management
      1. What do they do with their data?
      2. Do Departments share data – for context in decision making?
  3. The Digital Business
    • Can they monetize their data?
    • Are their products ready for digital transformation – IoT?

This will help you add value to LOB.  Your entire goal is to identify a pain point they are currently experiencing based on the direction that the company or department is heading.  A byproduct of this is you learn more about the company you are calling on.  You expand your network within the organization, and you learn more about why they are having problems in the first place.  You can’t do this in one meeting.  Find a reason to keep showing up.

Often times, the reason IT isn’t providing what the LOB needs…is because they simply aren’t talking to each other…or worse…they are fighting.

There is a ton more to write about on this…I’ll save it for the next post.

Shift your view.

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Shift Your View

Shift your View…

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