The numbers are staggering. Depending on the source, millions or even several hundred million jobs will be destroyed and created in the coming years, requiring governments, companies, employees and parents to rethink their employment-related belief sets. Microsoft, Amazon, IBM, Salesforce.com, Oracle, SAP and Google generated an estimated 76 billion in cloud revenue in 2017. In the same year, e-commerce sales fell between $427 billion and $443 billion for the United States according to the National Retail Federation (NRF) while Statista predicts global e-commerce sales to hit $2.8 trillion in 2018 and $4.5 trillion by 2021.
If riding this technology-enabled transformative wave was as easy as investing in Agile, DevOps, serverless computing or another hyped concept, the failure rate of upstart tech companies would be well below the going rate of 70%. Nor would the retail industry have lost 8,053 physical stores in 2017.
Leveraging on the potential value of emerging technologies is hard.
It starts with embracing the fact that there is only one company asset which is truly scarce: open minded, smart, curious and proactive leaders and employees. Capital is superabundant, as is technology and access to all but the most exotic natural resources. Only people possess the capability to create new business models, value propositions, and attractive product designs. Access to the money required to scale a successful idea is no longer an issue with billions of dollars from investors seeking a return. Warren Buffet alone entered 2018 with $80 billion dollar for acquisitions.
Combine the democratization and consumerization of technology with the ability to automate increasingly complex tasks (e.g. software-defined data center) and the convergence of business and technology; and IT as a separate function is at risk. . Only if the internal IT department is able to convince the business of its added value in pursuing business opportunities in digital and hybrid markets, it will not go the way of the dodo.
In other words, the IT leadership team has to invest in the attitude and skills required to lead in digital markets.
Leading is very different from executing, IT’s traditional sweet spot. The ability to field a development team trained in Agile Scrum is part of the latter, as are containerization and the ability to offer daily deploys in AWS or Azure. They are all part of the HOW, while leaders deal with the WHY and WHAT.
According to Simon Sinek, writer of Start with Why, the essential difference between the “Apples” of the world and the rest is that they start with WHY. The why can cover the core belief set of the company (e.g. original mission statement of Google was: “to organize the world’s information and make it universally accessible and useful”) and/or the need or want of a customer segment (“I am willing to pay a premium for delivery within 12 hours”). The why shapes individual value propositions and even the business model as a whole. It also shapes the WHAT.
What physical product, service or experience is required to address the need or want of the customer? What is an acceptable price point and thus maximum cost level of the solution? What are the functional and non-functional requirements? A traditional IT team would ask the business for a Product Owner and expect her/him to provide all the answers. In contrast, an IT team that adds value asks critical questions about the WHY, has a strong opinion and list of suggestions regarding the WHAT, and presents the HOW in a condensed and business-oriented presentation of five slides instead of fifty techno-speak riddled slides.
The business does no longer needs the internal IT department to develop an app or website, there are thousands of external partners with that capability. The ability to develop and support IT solutions effectively and efficiently is a dissatisfier. Only if IT combines these non-differentiating activities with company-specific technology capabilities that allows the business to make a difference in digital and hybrid markets, the outsource-able faithful servant becomes a cherished business partner.
For established companies, the first step is an IT leadership team able and willing to reframe its believe set. Quoting an article from McKinsey:
“Every industry is built around long-standing, often implicit, beliefs about how to make money. […] These governing beliefs reflect widely shared notions about customer preferences, the role of technology, regulation, cost drivers, and the basis of competition and differentiation. They are often considered inviolable—until someone comes along to violate them.”
Well, the consumerization of IT, automation of increasingly complex operational IT tasks and the Cloud did just that with the monopoly position of the internal IT department.
Up to IT leadership team to either move from DevOps, to NoOps and finally NoIT or redefine their raison d’être, reinvent their IT business model and join the business in their hunt for market success.