Editor’s note: Technology Business Research offers insight into how to win in digital transformation: Embracing a process-led approach. This is the second of a two-part report.
HAMPTON, N.H. – Defining and segmenting DT will facilitate better partnerships and more targeted offerings.
To better define where enterprise adopters are in the DT continuum, and what is truly transformational, we look at three distinct categories that capture the majority of disruptive technology-focused adoption initiatives:
Substitution represents fairly basic IT modernization, such as leveraging new consumption models (e.g., cloud, “as a Service”) to directly replace functions that have always existed in an enterprise. Shifting from on premises to cloud can generate tangible benefits for an organization in burst capability or scalability; however, it does not have a large impact on how an end user goes to market. Substitution is the most commoditized of the three areas and is often the client’s first step toward more mature digital initiatives.
Extension is where disruptive technology is folded into an environment to provide an organization with capabilities possibly not available otherwise. For example, analytics frameworks are folded into existing data sets to enhance the velocity and visibility of data to managers, allowing for increasingly rapid and defensible decision making. Due to the additional complexity of layering new disruptive technology over the top of existing ecosystems, along with understanding how to best leverage increased visibility to drive business decisions, extension is an area where a blend of consultants and technologists generates ideal outcomes. This is not fully transformative; however, it can often operate as a proof of concept or iterative step toward full-scale process transformation.
Transformation is the Holy Grail, hence the inclusion of it in the overarching concept of DT. Truly transforming one or more business processes is generally a complex effort folding in a broad range of disruptive technologies such as analytics, artificial intelligence, the Internet of Things, robotic process automation and/or blockchain. Significant front-end strategy work is required to conceive and road map the desired impact of disruptive technology adoption on the business, determine the capital needed to invest in enterprise-wide implementation efforts and establish organization & change advisory requirements to ensure new capabilities and processes stick. Additionally, a broad partner network, inclusive of consulting, product, services and software providers able to share one vision for the client, is needed.
It is also important to note, as IT environments are modernized, security encompasses all touchpoints given the proliferation of multiple device endpoints from internal and external consumers; an increase in companies’ leverage of remote employees; the adoption of off-premises infrastructure solutions such as public cloud; and the related organizational concerns around governance, risk and compliance.
Leading vendors will identify opportunities to articulate specific value propositions to the market, transforming hype to monetization
Vendors best able to understand and articulate where, specifically, they play within the value stack will be able to better target opportunities with their clients while concurrently identifying partners that fill portfolio gaps, minimizing the need for capital-intensive investments while enabling vendors to capture market opportunity.
A great deal of this work revolves around appropriately messaging capabilities within their portfolio ecosystem, such as analytics or cloud, or previously not associated with the legacy IT stack, such as organization and change or risk and compliance consulting.
We expect the next 12 to 18 months will be critical in establishing leaders and laggards in the market, with successful vendors defining their value proposition by transitioning the conversation from an ideological discussion to a targeted road map outlining specific benefits to transforming a given business process.
TBR’s DT research program will contrast client demand and purchasing behaviors with vendors’ activities in the space, ultimately identifying which vendors’ go-to-market strategies are best positioned to capture emerging digital opportunities.