THE DIGITAL BUSINESS INFLECTION POINT

1.3 - Technology

July 2020

Traditionally, businesses have viewed technology as a cost, a poor cousin. Thankfully we have all matured enough now to understand that technology is an enabler, a leverage point and a differentiator in our business. The days of the traditional IT department are rapidly coming to an end. They are being replaced with a technology consulting team who use utility cloud computing services like IaaS, PaaS to SaaS and with a sprinkling of bespoke, true intellectual property built in leveraging microservices and data analytics.

Back in the days of the IT department there was always a core system. Often several. Sometimes many. These monolithic systems supported a plethora of functions for the business but in a complex, user manual required way. They were designed and built to be rigid as the vendor owned the system and leased it out on a per user basis. If you needed to change the colour of a button from red to amber the vendor would initiate a project on your behalf and ask your finance team to sign a blank cheque while they beavered away making the change. At some point in the distant future they would announce a new patch version which contained your button colour change was ready, all they needed was 4 days to shutdown the system, install the update and restart. While the system was down your staff would have to use paper and pens and highlighters, but luckily when the system was back up they would then be able to input the data from the paper back into the system – please turn off all fans! Eager to see the new amber colour there was often a rush in the morning as your people login, as the system ground to a crawl with all this abnormal excitement several people who were lucky enough to get in would come to the realisation the shade of amber used was not aligned to the brand – it was the wrong colour. Never mind, the vendor will make a change and hopefully before the year is out we will get what we need.

It took a lot of people to support and make changes to a system. In the continual cycle of changes, refreshes and upgrades there was little time left to innovate, and like turning a cruise ship, there was no ability to pivot with the business needs without months or years of planning and approvals.

For technology to be a driver of innovation and growth, it needs to reorganize itself around flexible and independent platforms which leverage commodity, utility cloud services. Technology that is built using modular services. Each service consists of a series of functions that deliver on a specific business requirement, this microservice design exposes an entry point for other applications or services to use all while packed up in a way that enables utility. The services are managed independently, can be swapped in and out, may or may not be in-house and, when brought together form the backbone of a technology platform. Often these services will leverage the operating system of the internet to perform commodity tasks. This service architecture is what enables a digital business to accelerate and innovate at scale. A digital business can experiment and fail or learn, so products get to market many times faster than before.

The architecture enables infinite scale, no longer do you get the Monday morning crawl as the server capacity runs at 100% while your teams login, because cloud provides almost infinite capacity, services simply just scale up in the background. No longer do you ask everyone to hop off the system for the afternoon at month end so you can run the numbers, because cloud provides almost infinite capacity, services simply just scale up in the background – on a platform some features might be down or unavailable at times but in general the this has minimal impact on the overall operations.

By breaking down the once mighty monolithic system a digital business will see three distinct layers where a technology strategy works with other parts of the business to provide a platform. Experience is the top layer, the one that everyone sees and interacts with. The business layer provides data, analytics, rules and payments. A digital business has customers and products all managed in the business layer. The foundation of a digital business is the core layer where things that should just work reside. Email, word processing, servers and file stores typically reside in the core. In years gone by we had names like networks, infrastructure and applications teams to keep the wheels in motion, a digital business leverages cloud services providing Infrastructure as a service, platforms as a service and software as a service. These services are procured and funded out of operational expenses and paid on a monthly or annual basis. This drastically reduces your capital demands and enables the technology to scale as the digital business grows, and equally turned off when no longer required or fit for purpose.

The operating system of the internet has not just broken traditional barriers to entry for technology but completely smashed them apart. No other time in history has access to technology at so little cost been available at scale. The operating system of the internet is an eclectic mix of every imaginable service or function dispersed on a global scale which a digital business can consume. There are three central pillars to the operating system of the internet, Iaas (infrastructure as a service), PaaS (platform as a service) and SaaS (software as a service).

Each of these pillars logically tears down and reinvents a cornerstone of traditional IT. IaaS is the foundation of cloud computing services. Pay-per-use access to basic computing resources like servers, virtual machines (VMs), storage, networks. PaaS is a method of delivering computing services, including serverless that supply an on-demand environment for developing, testing, delivering, and managing software applications. PaaS is designed to remove the overhead of managing the underlying infrastructure of servers, storage, network, and databases. SaaS is a way for delivering services, software and applications over the Internet. With SaaS, the software is built, maintained and upgraded by the provider – no more weekend long upgrades!

By leveraging the operating system of the internet and cloud services we shift the IT team into a technology team, one where the balance of support and maintenance which was so dominant in the past is moved to innovation and enhancement. When your suppliers handle support and maintenance you free up humans to focus on valuable work. This is standing on the shoulders of giants thinking. Your suppliers are constantly optimising their service offering, adding data driven value added services as well as keeping the lights on – at a global scale. Your technology team's modus operandi is to work with business product owners (the ones who understand the end-to-end experience for your customers) to ensure they are aligned on the strategy, and then guarantee the technology components are fit for purpose. Technology now sits in the confluence of business and your customers. This is a digital business.

As technology plays an increasing active part in the business operations like sales, marketing and finance we start to see a culture of collaboration as trust increases. This culture shift from siloed teams to virtual teams is vital in ensuring a digital business becomes nimble and has the ability to respond to the environment. New business models will emerge, what was once a dream of trading products and services in an ecosystem of like minded or complementary business is now possible as connecting and trading digitally is no longer a barrier and the costs to deliver these services is drastically reduced. Welcome to the digital business world.

Every company will be a software company was changed to every company will be a tech company, but now it’s how fast will we become a tech company.