2019 IT trend: Enterprises will pursue more bet-the-company digital initiatives

“Bimodal” IT has been one of the biggest obstacles holding businesses back in the last decade. Having two IT strategies — one traditional, one digital — not only creates competition for valuable resources (chiefly talent and investment capital) but also runs the company at two paces. One is slow and out of sync; the other is fast and responsive. Bimodal drives up technical debt and anchors the business to a margin of safety that does not allow it to take risks to achieve the exponential growth of “moonshot” digital initiatives.

If traditional companies want to capture growth, they must commit to a single, unifying digital strategy. In 2019, enterprises will make more of these bet-the-company moonshot decisions on digital business.

Digital exploration

Just like the space race, we can expect to see a tsunami of innovation: new businesses, innovative business models, and even more innovative technologies — all built from digital. But just like the early days of the space race, there will be failures along the way. Because the economy operates as a complex adaptive system, the infrastructure may not be ready to support the digital pioneers. Some may be too early, which can be the same as being wrong.

We’ve already witnessed what some are calling a catastrophic collapse of industrial giant General Electric. But this wasn’t a failure of digital technologies per se; it was about finding the right recipe and market timing, working out the kinks and understanding the limits of digital technologies, testing new business models and bringing crucial business factors for success — the right talent, capital, leadership, execution, culture and expectations.

These are conditions that traditional enterprises have never faced at such an extreme level before.  This sets up a dichotomy businesses will struggle with: What is the appropriate margin of safety to take such a large risk without catastrophic exposure? Is it even possible?

Certainly not with conventional thinking — not with bimodal thinking. It will be all or nothing. We will see more bet-the-company moments.

Take the long view

One of these moments comes from Pitney Bowes. Long associated with postage meters, Pitney Bowes made the leap to becoming a “global technology company” in 2012 when Marc Lautenbach came in as CEO. Although the tansformation process has been challenging (net income has risen but revenues have fallen), Lautenbach told Insigniam Quarterly that he is committed to an e-commerce transformation: “We have continually decided to choose the alternative that creates the most long-term value, even if it creates short-term disruptions.”

What Pitney Bowes exemplifies is how to adapt to a changing world. The company built upon its core business, adding digital tools and services that now deliver over $1 billion of e-commerce business annually. Lautenbach credits the success to communication and storytelling. “To a degree, decision-making and strategies are the easiest part of the process. How you communicate the decisions, how you manage the change, how you drive those decisions, is the difficult part.”

Become a learning organization

A major factor in managing change is to be a learning organization. In the past, large enterprises were not designed to be learning organizations, but in the current economy — with an accelerating rate of interconnectedness, blurring of national borders, global competition and the rising impact of feedback — enterprises don’t have a choice.

They must learn what digital means for their business, their industry and their customers. This new rocket fuel for the business is not likely to work with old business models. Enterprises will have to beat back the resistance of bimodal strategies and internally competing business unit strategies, and unify the entire business around a common digital approach. They must be willing to experiment and learn from failure.

Once the business is in full digital unity, it can commit to its chosen moonshot and plan to get there.  There will be explosions and malfunctions, but the only losers will be those that abandon their digital journey and stop learning.  As the business landscape rapidly shifts to more digitally-driven business, the choice remains clear: all in or fade away.

This post is a deeper dive into the first trend of our 2019 Digital Trends. Check out all six trends at 2019 Digital Trends.

Also see the 2019 Digital Trends blog post.


Simon Alexander is senior business strategist for DXC Technology with over 15 years’ experience in strategic new business development, competitive intelligence and program management. @scalxndr 

 

 

 

Martin Lee is a principal research analyst for DXC Technology with over 25 years’ experience in strategic market, competitive and customer intelligence in the IT services industry. He currently serves as the banking and capital markets SME, as well as supports DXC’s global industries and regions. @martin3lee

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