Organizations adopting technologies simply to achieve greater efficiency and cost savings have a very limited view of the world. The disruptors in today's markets don't see technology as just a way to achieve more efficient processes, they've learned to turn their markets upside down to seize ownership of the customer relationship.
That's the word from Wolfram Jost, CTO of Software AG, who discussed the implications of digital transformation for IT and business leaders at the vendor's recent confab in Madrid. "For many years, CIOs only had one task, to build and run applications," he said. "But these applications were monolithic. They were not easy to change, not the basis for digital transformation, because the architecture was not set up for change. They were set up for standardization and harmonization. The applications required today are not going to last for 30 years. They are maybe only going to be used for maybe two, three years."
The need to move to a highly flexible and adaptable digital apporach is urgent, Jost explained. Those companies embracing digital in a big way understand that there's more than technology change required, it means a radical shift in business models. The companies delivering products may see some profit, but the highest margins will be seen among companies that employ digital know-how to meet customer needs. There is no need to create or maintain assets -- instead, it's a matter of connecting customers with the assets they need. This requires a fast-moving, fast changing, application development and delivery architecture.
There's far more opportunity for the digital disruptor that can take charge of the customer relationship, Jost pointed out. "In the digital world, its all about owning the customer relationship. If you want to sell cars, you have to build cars. If you want to send a bus, you have to have a bus. But today in the digital world, you don't need those assets anymore."
The winners in today's technology-driven economy are willing to take more risks, and are ready and willing to employ technology in new ways to bring them closer to their customers. Emerging approaches such as artificial intelligence, analytics-driven decision-making and leveraging the Internet of Things will deliver more innovation. But organizations often aren't ready for this great rethink. Many are too cautious, and they are missing out on opportunities to innovate, Jost states.
Often, security fears will get in the way of progress, Jost continued. While security is always important, "I do not believe that innovation for the cloud should stop due to security issues. I have learned that if you give customers enough value, they accept even some security issues. Look at the first iPhone. -- from a security point of view, it was a disaster, a complete disaster. But it gave customers so much convenience, so much value, that they accepted it."
A similar analogy can be drawn with the automobile, he added -- the risks were recognized when autos were first rolled out, but the convenience and value customers saw in it far outweighed the fears. ."If you want to get to innovation early, you accept some security challenges," Jost said. "You can't wait five years for security to be addressed while other first movers take market share."
(Disclosure: I was a guest at Software AG's recent meeting.)