How To Disrupt Without Being Disrupted

Pamela Dunn

Digital transformation affects culture, workforce, and technology. Managing these changes is especially challenging for large companies that have spent decades building centralized controls and processes.

In the past, hierarchy promoted stability, increased quality, and mitigated risk. Today, this same structure often makes it difficult to respond to volatile markets and new competitive threats.

Established companies must become more agile to avoid being disrupted. The challenge is finding ways to be less centralized and more flexible without undermining the practices that contribute to current business success.

Use intelligent technologies to target problems

“Companies are wary of possibly going too far out on a limb,” comments Sebastian Foppema, chief executive officer at SmartShift Technologies, which delivers highly engineered systems for enterprise transformation and management.” But he believes they can mitigate risk by focusing on intelligent technologies.

Analytics, artificial intelligence, machine learning, and cognitive computing provide tools for targeting specific problems, such as the bloated legacy code that creates roadblocks on the way to becoming an intelligent enterprise. Foppema says the selective use of intelligent technologies provides opportunities to empower the workforce, improve the IT landscape, and make corporate culture more flexible.

Targeting problems and streamlining processes in this way enables established companies to behave more like young and nimble startups. Put enough of these improvements together, and established companies can begin to keep up with changes in the external environment. Such incremental agility can even help disrupt competitors if they attempt to enter an incumbent’s market.

Avoid the greenfield siren song

Established companies usually have invested significant resources in acquiring and maintaining existing technologies. Because of these sunk costs, they sometimes want to approach digital transformation by tweaking existing IT ecosystems.

“The fact of the matter is it is nearly impossible,” says Michael Harding, senior director of portfolio strategy and management at Virtustream, an enterprise-class cloud company and a Dell Technologies Business.

Established companies may have multiple systems from multiple vendors. Each system may host millions of lines of poorly documented and highly customized legacy code that is used to drive critical business processes. When faced with the costs and complexities of integrating these old environments with modern solutions, Harding says executives can become frustrated, abandon their plans for tweaking legacy systems, and start to explore “rip-and-replace” to accelerate digital transformation.

“Some customers look at complete greenfield-type deployments,” Harding says. “However, that comes at a very significant cost.”

Greenfield efforts are usually expensive and time-consuming. They also can distract the workforce from its core mission of supporting existing customers.

Intelligent technologies, again, may provide options for improving functionality with less cost and faster results. For example, it is often possible to refactor legacy code to make it portable and compatible with modern cloud solutions.

Build digital transformation on a foundation of multiple clouds

The cloud makes it much easier for established companies to migrate from proprietary IT to state-of-the-art infrastructure. The Cloud Industry Forum reports that 85% of businesses plan to use this type of delivery model to create competitive advantage.

But few of these companies are relying on a single cloud to meet all their enterprise needs. Instead, they are adopting multiple clouds and buying the best solutions for each business or processing requirement.

“The entire industry is shifting one solution or one product at a time to the cloud,” says Uddhav Gupta, global vice president at SAP and general manager for the SAP App Center. “Cloud vendors are starting to choose areas of expertise, and that is driving this multiple cloud culture with enterprises.”

Because these solutions are available in the public domain and in the public space, they are designed to integrate with many different types of ecosystems. Established companies can shop cloud farms for the best tools and terms and then make informed decisions about which processes to keep in-house.

“Ultimately, the cloud drives not only a level of cost for these customers but efficiency in how they actually develop their software assets, maintain their software assets, and deliver the best set of capabilities,” Harding says.

For more details on what is driving the need for a multi-cloud strategy, read the Forrester study.

Want to learn more? Listen to the “Disrupting With Purpose Through Intelligent Technologies” and check out @SAPradio on Twitter.