• May 29, 2015

The Age of Enterprise Transformation

By Sudeep Gautam, Vice President & General Manager, Global Enterprise Mobility Services, Advisory & Transformation, Enterprise Services, Hewlett Packard Enterprise; Fiona McHugh, Global Mobility Offering Manager, Enterprise Services, Hewlett Packard Enterprise; and Rikin Patel, Strategist & Account Chief Technologist, Enterprise Services, Hewlett Packard Enterprise

Thrive or Survive in the New Style of Business

It’s nothing short of a 21st-century industrial revolution. Every job, every enterprise, every life is evolving and transforming at an ever-accelerating pace.

The shift is fueled by the abundance of computing capacity available at our fingertips. The contours are shaped by user expectations that alter and pivot with the same rapidity.

This new revolution is driven by a confluence of events. The web, once a hub of simple communications channels, has morphed into a pervasive network of data-rich exchanges driven by mobile, social, and transactional interactions. Each interaction is embedded with predictive potential.

Underlying this disruption is a dramatic platform displacement. The networked ecosystem has shifted from desktop and client-server computing to the “smack stack,” comprising social, mobile, analytics, and cloud. And each stack element has the potential to re-engineer existing processes anywhere in the world.

We’re forging ahead into an information age never experienced before, where consumers drive dramatic transitions. The success of technology-driven interactions is defined not by the individuals or organizations creating solutions, but by the people consuming them. And customers are changing behaviors faster than enterprises can transform their operational processes and business models to develop new solutions.

Innovation is bubbling up from consumers and members of the enterprise rank and file. Each is equipped with a mobile device encapsulating the computational power of a 1970s-era supercomputer. Faced with the collective force of this digital power, it’s a matter of thrive or survive. Organizations that want to remain successful will have no choice but to transform. They will have to re-engineer their cultures, policies, assets, operations, and processes—or be crumpled by the crush of those that do. Welcome to the age of enterprise transformation.

What Is Enterprise Transformation?

It’s bigger than any single task, role, or discipline—much bigger. Executives often equate enterprise transformation with a shift in technology investment and deployment. Yet it goes far beyond technology. It’s most successful when it reaches deep into the organizational infrastructure, culture, and leadership to generate a reinvigorated focus on the entire customer/client experience. But while enterprise transformation does not emphasize digital alone, it does mean thinking digital first.

The digital component means leveraging social, mobile, analytics, and computerization of business processes to accelerate time to value of enterprise goals. It means creating new systems of engagement to enrich customer and employee experiences.

The Age of Enterprise Transformation | HP Enterprise ForwardThese systems of engagement focus on people, not processes. They draw on mobile, social, cloud, and Big Data directly in a customer context. You want customers and clients to relate directly to your enterprise at the moment of decision. You want your partners and vendors to employ your tools in the context of their daily work flows. And you want your employees to collaborate and make decisions anywhere on any device.

This represents a massive shift in how we approach and engage with IT. Traditionally, it was a technology-driven back end focused on single platform standardization. Transformation meant moving from version X of a platform to digital Y.

Now IT and the digital domain are virtually all user-driven or business-line driven. Transformation means facilitating seamless integration of enterprise digital resources with the user experience. Generating these conditions entails an alignment of new technologies and business models focused on engaging users at each touch point along the customer-experience life cycle.Think of it as a formal effort to renovate business vision, models, and investments for a digitally engaged economy.

The key is to integrate the physical context from, for example, a mobile device with the digital intelligence embedded in systems of record. This enables the enterprise to build whole new applications and services for customers, partners, and employees. Applications that successfully empower individuals to take the next, most likely action are precisely what will drive explosive growth in engagement, and the enterprise itself.

Enterprises know this is a critical juncture: They must embrace transformation. But they often don’t know how to begin. It starts with having a clear strategy that puts the customer at the center.

How to Begin

Change is at the heart of transformation. Without change, transformation is just a series of motions and postures. So how can organizations embark on the difficult work of change and transformation? Identifies alignment requirements and an execution strategy to actualize the vision. Enterprise leaders play a crucial role in defining and communicating the vision and objectives.

First, enterprise leaders need to recognize that the transformation process is not vanilla. Strategies and outcomes will—by necessity—be different for every industry and every enterprise. To succeed, leaders must undertake the challenging task of articulating the enterprise position in the digital space.

1. A good first step is to develop a matrix of strategic imperatives. As an assessment, the matrix charts strategic objectives, key processes, stakeholder values, and metrics.

2. From there, develop a transformation road map that articulates the case for transformation, clearly conveys its urgency, and highlights processes to leverage transformation gains. The road map should include an audit of the current state of the enterprise, a vision of the desired future enterprise state, and an analysis of the gap separating these two conditions. It also identifies alignment requirements and an execution strategy to actualize the vision. Enterprise leaders play a crucial role in defining and communicating the vision and objectives.

3. What will you enable? What will you enhance? What will you innovate? A key to maintaining transformation momentum is to develop an ongoing strategy of adopting disruptive business models. Disruption literally uproots and shifts enterprise values, culture, and the way individuals within the organization learn, interact, and execute. Disruption can displace existing processes, products, services, markets, industries, or technologies, creating something entirely new, more efficient, and valuable.

How do you develop disruptive business models? First, identify and assess the strengths, weaknesses, opportunities, and threats to your existing models. Then analyze the value proposition, customer segments, channels, revenue streams, cost structures, key activities, and resources inherent in each model. What can you eliminate? What factors can you reduce below and elevate far above industry standards? What can you create that has never before been offered?

4. To better understand and improve the customer/client experience, customer journey maps are crucial. An effective journey map documents your customer experience through your customer’s own eyes. These maps help break logjams by clearly documenting where traditional enterprise processes and systems work against customer needs and expectations. They create a better understanding of how customers interact with the enterprise today, and they also identify improvement opportunities to heighten the experience in the future.

Successful transformation is no longer driven by siloed IT and business teams making separate sets of decisions pertinent to their realms in expectation that the results will serve an effective overall enterprise strategy. It’s become a collaborative process where thought leadership groups, technology teams, line-of-business people, finance, vendors, and customers drive transformation and strategy together. If a single entity within an organization is making all these decisions, the results will be disastrous.

Don’t mistake enterprise transformation for a strategy embracing a singular focus on the digital realm.

Rise of Mobility

Few innovations have revolutionized organizational and market dynamics like mobility. It’s the very thing that is changing customer behavior and preferences, the dynamic that is forcing the enterprise to adapt.

Mobility pries open a vein of opportunity to deliver compelling, context-rich experiences. It offers the capability to gather information, including location, direction, identity, external conditions, and preferences. It can do everything from collecting personal health information via wearables (inspiring companies like Apple and Google to attempt to disrupt the pharmaceutical industry) to providing insurance companies with the capability to set auto insurance rates based on detailed information about personal driving habits.

Mobility has also changed the way consumers make decisions on product and service purchases. In the past, consumers interacted with brands and reached purchasing decisions in very linear ways. They started with many options and reduced choices based on traditional marketing engagement and basic research. The advent of digital and mobility has transformed this process into a nonlinear path.

The Age of Enterprise Transformation | HP Enterprise ForwardConsumers are always on, always connected. They have instant access to multiple options to navigate and engage with brands. They’re influenced by social advocacy, user reviews, corporate reputation, and price comparison content accessible at any time to the point of purchase.

Proficient enterprise systems collect this data for predictive analytics. The resultant intelligence allows them to pivot by creating optimized choices and data-driven offers, tracking customer buying trends with unpredicted granularity, and adjusting supply-chain capacity. The engine of predictive analytics fueled by mobility produces context-rich experiences, real-time business intelligence, and the opportunity to create customized services. As mobility takes off, enterprises need to prepare for the next coming wave. Mobility has wrung tremendous value from technology by making it highly flexible and personalized. Other modes of engagement within the IT ecosystem will certainly follow. Visionary enterprises that quickly capitalize on this emerging trend will do very well.

Yet mobility is not a bolt-on fix tacked to existing enterprise processes and programs. Simply adding new mobile and social channels belies the internal transformation necessary to meet rapidly changing customer demands shaped and expressed through the mobility channel.

Culture Shock

Don’t mistake enterprise transformation for a strategy embracing a singular focus on the digital realm. Emphasis on the structural elements of the enterprise is just as important. Enterprise transformation requires new ways of thinking about organizational reporting structures, skill sets, culture, training, and measurement systems. The process won’t work if nondigital efforts aren’t subjected to the same rigorous analysis and re-engineering processes.

Things like rules, HR policies, and cost controls will have to be renovated to accommodate the transformation process. Leaders need to identify and clear outdated procedures that can become barriers to getting relevant data into the hands of those who need it. If left in place, outmoded rules and procedures can keep you from moving forward.

For example, accelerating the product development life cycle can boost the top line by minimizing time to market while increasing market penetration. At the same time, it reduces costs by shaving off the required human work hours between conception and launch. Yet to achieve these cost savings, organizational policies and procedures designed to control costs must often be bypassed. Cost-control approval processes can ultimately be more costly in terms of time and missed opportunities. These conditions are often not taken into account during the transformation process.

Think of the transforming enterprise as an experimental operation where learning on the fly is the norm. Success means creating a culture comfortable with continuous course corrections. The transformed enterprise pulls together cloud, mobile, and agile development processes to drive rapid product development across multiple groups, each of which is accountable for its own continuous delivery. This orchestration often creates chaotic environments, and—on your way to thriving—that’s a good thing. Attempts to rein in the chaos with traditional processes and procedures will slow the enterprise down, thwarting innovation.

Employee engagement is another critical component to enterprise transformation. If users think a new process or system is too complicated, they simply will not use it. It has to be simple, easy for internal users to consume, and have a value proposition that is highly visible and comprehensible. Communication is critical. Employees must understand the benefits this new process or system can bring to their work flows and the enterprise itself. (See here for more on a culture of innovation.)

Lock and Key

The rise of mobility and the digitization of the enterprise fuel a concomitant expansion of vulnerabilities. Users are driving so much transformative change. And the proliferation of shadow IT, or IT components such as cloud services and applications operating under the enterprise radar, has never been greater.

Between 2013 and 2014, cyber attacks increased by more than 100 percent. As organizations drive to transform digitally by adopting social, mobility, analytics, cloud, and the Internet of Things, they become juicier targets for hackers. Publicized cyber-security breaches can undo in an instant all of the consumer goodwill an enterprise has earned through savvy digital engagement.

The fact is, security always lags slightly behind shifting IT paradigms. Enterprise security teams need to be acutely aware of how innovation impacts organizational vulnerabilities, and anticipate and prepare for incoming challenges. They also need to keep in mind that enterprise transformation strategies should have security at their core. Organizational risk appetite should be clearly assessed and reflected in the design of these security controls.

Security is already moving away from fortress-style defenses (e.g., firewalls). It’s becoming more granular, with security components in everything, right where users are. It’s device security. Data security. Applications security. Cloud security. Safeguarding the engagement experience of your customers through identity protections and access management can be used to competitive advantage.

Reaping Rewards

The successfully transformed enterprise will exhibit operational excellence with processes that are seamless. Disruptions in your products or services are not visible; they’re shrouded by a dynamic layer of self-healing or self-correcting solutions. In this sense, solutions are always up and running, and disruptions are never experienced by end users.

The Age of Enterprise Transformation | HP Enterprise ForwardWith traditional IT, disruptive events were addressed with highly resilient architecture and redundancy. But new processes deliver self-correcting solutions and automation.

Operational excellence also drives an increase in employee productivity, reductions in operational costs, and a boost in overall business performance. Leveraging technology to generate these business benefits is at the heart of enterprise transformation.

When new processes, systems, and applications converge, the enterprise can intelligently leverage technology to harness data and put it into context. The enterprise can then deliver solutions and compelling experiences when it’s needed, where it’s needed, and in a personalized manner. On-demand IT will further this service-centric approach. Browse a vast catalog of ready-made business solutions in an online marketplace and begin using immediately with a simple point and click. (See On-Demand Solutions below)

Get these elements right, and the enterprise will realize three valuable benefits: a maximized top line, increases in organizational effectiveness and worker productivity, and the agility to create and implement new business models to enable continuous enterprise transformation.

Lurking on the horizon is the power of thinking machines, wearable devices, 3-D printing, additive manufacturing, and robotics.

The Time Starts Now

Now more than ever, the enterprise is an interconnected ecosystem with deep links to partners and customers. This hyperconnectivity brings a tide of rising expectations, with partners and customers now directly involved in the innovation and transformation process.

The Age of Enterprise Transformation | HP Enterprise ForwardEnterprise transformation is endless. The re-engineered organization has flexible processes, enabled employees, and engaged customers. It moves faster and with greater agility. And when the market recognizes the high-level capabilities that compelling engagement delivers, the transformed enterprise will enjoy a boost in reputation from both consumers and market observers alike.

But that’s just the beginning. The nexus of forces—mobile, cloud, social, and analytics—that just a few short years ago seemed exotic are now mainstream. Lurking on the horizon is the power of thinking machines, wearable devices, 3-D printing, additive manufacturing, and robotics. Enterprise transformation is just beginning.

Successful enterprise transformation reaches deep into the organizational infrastructure, culture, and leadership to generate a reinvigorated focus on the entire customer/client experience.

On-Demand Solutions: The Cure for the Legacy Systems Dilemma

Imagine a flexible marketplace where you browse and select from a vast catalog of ready-made digital business solutions. Visualize a forum where your enterprise can begin using these solutions immediately with just a simple point and click. These purpose-built solutions—such as aviation flight operations, healthcare digital hospital, retail analytics, and corporate accounts payable—are tailor-made for your industry and corporate functions. Each is easily customizable and adapted to meet specific enterprise requirements.

This is the world of on-demand solutions. Enterprises hunger for strategies to quickly and reliably keep pace with rapidly shifting conditions and gain and maintain competitive edge. To compete in today’s turbulent environment, technology solutions must be easily added, subtracted, and modified. It starts with securely integrating cloud, mobile, and social channel resources with Big Data, transactional systems, and legacy environments. The goal: to deliver what the business demands precisely where and when it is needed.

This requires juggling. Old-style IT systems must be maintained and managed while transitioning to agile systems and processes irrigated with a variety of digital channels. With the increasing shift to cloud solutions comes faster applications delivery, new markets opportunities, and the ability to adopt new technologies faster.

Too many enterprises are bogged down by aging technologies, redundant systems that perform the same functions (often between different business units), and nonstandard process and technology sprawl. They’re encumbered by two powerful but opposing forces: the need to run legacy IT environments that “keep the lights on,” and the imperative to drive continuous transformation to quickly adapt to market shifts.

On-demand solutions allow the enterprise to easily focus on the transformative nature of cloud and digital engagement channels, elements that impact both the supply side and the demand side. With the flexibility of “as-a-service” consumption providing measurable business outcomes, transforming the enterprise into a digital organization with continuous business delivery and life-cycle management is eased.

Imagine a massively simplified, highly flexible ecosystem built with “sense and respond” self-healing systems to ensure continuous and uninterrupted delivery. Envision an online consumption model that is highly flexible and provides a seamless way to drive enterprise transformation—and digital success. The New Style of Business on demand.