Disrupt or be disrupted, that is the question

Uber disrupted the taxi industry, AirBNB the hotel market and tesla the automotive industry. What is happening in your sector and what approach are you planning in response? How does that influences your IT department? And are they ready to take on the challenge? After having asked ourselves whether we’re going to cloud for the right reasons and whether cloud can help IT respond to the business let’s now look at what the business requires.

But before going into details let me address one point. Why did I add Tesla to the list of disruptors? Sure Tesla makes electric cars, but isn’t it a car company like another? Well not really. One of my friends pointed me to an article titled “All the new features of Tesla’s latest Software Update”. Have you ever owned a car whose features keep growing over time? That is precisely what Tesla does. It builds a platform, and in that it is not different from other car companies, and then keeps updating the software to increase the utilization of the features available in the platform. That is new and different. In doing so Tesla disrupt the market.

What role do you want to play in the market?

clip_image002Do you want to be an industry disruptor, a company that reinvents its market segments by creating new business models, eventually even competing against itself?

Do you want to retain your place in the market by becoming highly innovative and evolve your existing products and services at a fast pace to retain your customer base? Or do you want to become a “service broker” and complement your existing product and services offering with external business capabilities to quickly expand your offer and compete better in the market. Or are you optimizing your current operations to compete with a lower price? If we look at the examples given above, Uber and AirBNB are definitely Industry Disruptors, isn’t Tesla rather an Agile Defender, at least at the moment?

What changes for IT?

If you want to become an industry disruptor, IT will have to give you the flexibility you require to test out new business models very quickly. Separating business processes and elementary transactions are a must. This implies your existing applications should be transformed in SOA compliant components that can be called upon by a business process management system enabling the business to quickly change business models and keep experimenting. IT needs to become fully service focused and focus on the transformation of its existing applications and the development of new cloud native ones. This implies the utilization of cloud technologies. IT works hand in hand with the business to experiment the new approaches.

IT in an agile defender needs to focus on the fast delivery of innovation. Agile and DevOps should be at the core of the transformation of IT. Responsiveness to the demands of the business is critical. This will obviously have implications on existing applications and infrastructure and cloud enables the fast provisioning of the required infrastructure and platforms required. The main elements are teamwork through the use of scrum teams involving the business owners, and automation at testing and deployment level. Microservice architectures may be used to enable seamless deployments as well as re-use.

The focus of IT in an industry composer is different again. Here the key is API management. How does IT enables third parties to create additional services being presented to the clients through the enterprise? IT will have to build close links with external developers and support them in the creation of those services. IT’s own systems will have to be adapted to the new reality and that includes the development of a brokering platform including the capability to measure consumption of partner services. The service desk for example now needs to manage calls that may refer to problems with partner components. If the business not only leverages the partner business capabilities but also combines them to deliver composite services, IT may have to put aggregation capabilities in play to enable the integration of services from multiple partners.

In a business optimizer, cost is of the essence. So, IT will need to become lean, reducing its costs to the bare minimum. That will lead to outsourcing and cloud utilization. Here IT best looks at process frameworks such as IT4IT to streamline operations.

Don’t wait, start today.

When reviewing the changes IT might be confronted with, we talked about technologies such as DevOps, automation, cloud and API management as well as architectural changes (Microservices and SOA) needing to be implemented. That’s the easy bit. Yes, implementation of DevOps will take some time, but with proper help, implementing it is not a surmountable task.

These technologies and architectural changes on their own will not enable IT to be the strong partner the business requires. Achieving this status will require a fundamental change in the culture of the IT department. Implementing agile capabilities can help but again, on their own they are not enough. Let’s analyze the key elements of that cultural change in our next blog entry.

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