Businesses are increasingly being challenged from all sides to digitally enable products, services, and experiences in the quest to create immersive, engaging offerings that are capable of driving revenue growth, customer loyalty, and competitive advantage.
But simply building a plethora of digitally enabled products using IT services that are created or procured on the fly is unlikely to lead to success and will eventually lead to a brittle, poorly connected set of products that don’t scale and don’t engage customers.
In short, the full potential of the third platform (cloud, mobility, social business, and big data analytics) is unlikely to be achieved without the significant transformation of IT services.
To this end, many organisations are working to create customer-facing services, but the more forward-thinking enterprises are also striving to create services that connect their businesses with the ecosystems in which they operate.
Going beyond the provisioning of digitally enabled products to create interlocking families of synergistic offerings can be a powerful force for growing and sustaining businesses. But what exactly should these offerings comprise of?
Customer-facing IT typically encompasses IT services that drive or play a significant role in the digital transformation of products, services, and experiences consumed by a business’s external customers.
This includes fully digital products and services, ranging from educational and entertainment to business intelligence and advice, as well as digitally enhanced offerings that combine physical products with digital enhancements to enrich their capabilities and the experiences they provide.
But there is also growing demand to develop digitally derived products and services that use big data and analytics to transform machine-generated data into useful intelligence. And beyond that, we have omni-channel marketing and customer experience management geared towards the creation of seamless and engaging experiences across all channels and devices.
When it comes to ecosystem-facing IT, this is made up of services that enable connectivity and interaction with the business ecosystems of customers, partners, and other stakeholders; for example, enabling external developers to create next-generation applications that extend or otherwise add value to the business’s offerings.
Further to this, there are opportunities to create innovation harvesting tools that leverage external innovation and talent from partners, customers, crowdsourcing, freelancers, and on-demand workers, as well as services that facilitate intra- and extra-enterprise collaboration connecting with partners that supply content, analytics, and services that help create “whole products”.
And further still, there is scope for ecosystem integration solutions that enable the organisation to sense and respond to external ecosystem changes, all while interacting with — and ultimately influencing — the broader ecosystem’s stakeholders.
In order for the development of such services to flourish, organisations must look to break with tradition and run their IT departments as businesses. Business is about making money for a company’s stakeholders, or satisfying the needs of a nonprofit’s constituents, and IT should no longer be immune to the laws of supply and demand.
IT must either compete or partner with a powerful contingent of 3rd Platform providers in the multiple layers of ecosystem-facing, customer-facing, and enterprise business services. Responding to these challenges requires organisations to redefine the IT business model, break away from running IT as an overhead technology cost centre, and restart the IT business as a competitive service business.
The rapid acceptance and deployment of the third platform as the gateway to digital transformation is now driving an urgency in better understanding how IT is or is not succeeding. IT’s line-of-business customers are demanding the high visibility and behavioural change within IT needed to target critical business outcomes that drive sustained competitive advantage by the enterprise.
Critical to this new IT business model is empowering a new consumption-based financial model that can best determine how to spend on technology. Digital transformation weeds out weaknesses in central IT organisations.
Management teams that demonstrate strong entrepreneurial leadership to redefine IT as a service business — with a strong emphasis on IT financial management — will be able to create competitive advantage for their internal customers.
While customer- and ecosystem-facing IT both comprise IT services that enable and support the digital transformation of products, services, and business ecosystems, the IT department itself will usually not “own” the full scope of digital transformation initiatives.
Instead, customer-facing digital transformation is an enterprise-wide strategy that leverages the talent and competencies across the organisation and from top to bottom, including IT. IT services must therefore be conceived and created in the context of an overarching enterprise vision for digital transformation.
In this regard, IT departments are facing formidable challenges; but they are also presented with unprecedented opportunities to enable and shape their enterprises’ customer- and ecosystem-facing digital transformation initiatives.
In all, it can look like a big ball of uncertainty, with failure being a real possibility. But what is certain is that IT teams that step up to the challenges and create the necessary IT services will have an opportunity to become strategic enablers of the business and a key component of success. Those that do not attempt to provide these services will be supplanted by cloud and other third-party providers, ultimately finding themselves marginalised as the organisation marches on ahead without them.
— The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC) He can be contacted via Twitter @JyotiIDC
