8 key markers in the journey to 'digital enterprise'

Digital enterprises aren't born overnight, they're the result of an ongoing evolution. Here are some tangible changes seen as the process unfolds.
Written by Joe McKendrick, Contributing Writer

There has been a lot of discussion lately about the "digital enterprise" being the "in" thing (yours truly is guilty of such talk as well). But what exactly does it take to be a digital enterprise? What does a digital enterprise look like? Are any organizations there yet?

National Gallery of Art-photo by Joe McKendrick
Photo: Joe McKendrick

In a new book, titled -- appropriately enough -- The Digital Enterprise, Software AG's Karl-Heinz Streibich, joined by independent thought leader Vinnie Mirchandani, talk about what it takes to become a digital enterprise.  To get to this realm, Streibich and Mirchandani urge enterprises to first look at the developing a digital platform, built on top of existing IT application environments. A digital platform should include an "integration bus as a backbone, business process management platform visualization/analytics, and the big data management layer," the explain. Focus on rolling out digital capabilities on a department-by-department basis.

Based on conversations with various organizations, Streibich and Mirchandani identified a number of tangible outcomes from the gradual transition to a digital enterprise -- here are eight notables:

Create smarter products: These are "digitally enabled products that are often equipped with sensors to measure, transmitters to communicate, and energy-efficient usage patterns," they explain. "The mass of the products' intelligence typically lies in central cloud-based systems that process the data delivered by millions of smart products or services." Implication: IT gets more deeply and directly involved in product design and development.

Make services agile: "Smarter services are based on the aggregation, combination and analysis of data generated by a single sensor of hundreds, thousands or even millions of sensors located within a targeted serviceable environment." Examples include jet engines delivering data on potentially hazardous situations, or logistics systems enabling companies to reduce energy consumption. Again, IT gets right next to the customer.

Invent new go-to-market models: The tech industry has been a heavy influencer in this regard. Now, non-tech businesses are looking at the new business models the tech industry has spawned -- such as "as-a-service, fremium, and so on. Mobile, analytical and other technologies are helping industries to transition to insight, subscription, and other pricing models." The rise of digitization is also enabling new approaches and channels to reach markets. The tail wags the dog, the enterprise begins to operate more like IT.

Rethink speed: "The digital enterprise thrives on its speed -- in product release cycles, in the velocity of supply chains, and in other operational areas -- as a competitive asset." It's a lot faster to change software than to reconfigure physical things, and this means faster time to market.

Reconsider physical assets: "Companies have a love-hate relationship with their physical assets," they write. "These assets tend to be capital intensive, they frequently break down, and they become obsolete too quickly. Today, technology and emerging business models are helping digital enterprises to address many of those issues, thereby changing physical assets back to what they were supposed to be -- assets to an enterprise. Because a product's software component is easier to update them its hardware component, shifting the balance in favor of software can help to keep the product up to date." This especially applies to IT infrastructure.

Provide for more intuitive interfaces: "Though keyboards continue to dominate computing, digital enterprises are exploring a wide variety of interfaces that communicate with all of our senses.. such as voice recognition, gesture-based control, eye tracking, and any other form of human interpersonal communication."

Scrutinize analytics: "Big data technology and a growing base of primary data, both structured and unstructured, are empowering the digital enterprise to move to more fact-based decisions and away from our 'gut calls.'" Digital enterprises learn to master the art and science of competing on analytics.

Think over constraints, think about sharing: "A major theme in the history of IT has been to rethink expensive or insufficient storage, memory, bandwidth, and other resources. In the past few years, the digital revolution  has succeeded in removing many of these constraints." Especially commodization, distributed computing, BYOD and cloud.

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