Cultural change vital for the success of digital transformation projects

26-Jul-2017

Successful digital transformation projects require more than investments in new technologies and processes and must also include fundamental changes to organisational culture, according to business experts.

Many organisations are investing significant amounts in new IT tools and services. Indeed, MuleSoft’s 2017 Connectivity Benchmark Report revealed that 95 percent of Australian companies have made “some” or “significant” progress towards their company's digital transformation goals. However, senior management teams often remain locked in outmoded ways of thinking.

Participants at a business roundtable discussion held in Sydney today and hosted by MuleSoft, provider of the leading platform for building application networks, agreed that creating a culture of change and experimentation is just as important as selecting the right technologies when it comes to undertaking an effective digital transformation project. Only through a changed mindset can the benefits offered by digital technologies be fully realised.

"Technology is not the difficult part of the equation," said Deloitte Australia Principal, Saul Caganoff. "What's more challenging is moving on from traditional thinking and approaches that have been in place for many years."

Mr Caganoff said that, as part of any digital transformation project, an organisation needs to consider its approach to risk and whether that is impeding progress towards business goals.

"Often, the approach many organisations take to managing risk is simply to avoid it or outsource it. However, with new agile competitors appearing in the market, this is no longer an option. Instead, there needs to be a 'learn fast/fail fast' culture where incremental changes are constantly made as circumstances change."

IT department pressures

As well as requiring a shift in culture, a digital transformation project is also likely to put increasing pressure on an organisation's IT department. In many cases a new approach will be required to ensure the project succeeds.

"With businesses needing to evolve much more quickly than has previously been the case, IT teams can struggle to keep up with the pace," said Brad Drysdale, Client Architect, Office of the Chief Technology Officer, APAC, MuleSoft. "In today's business environment it's no longer the big eating the small but the fast eating the slow. Either you do nothing and you die, or you start the journey to digital transformation."

Mr Drysdale said traditional IT operational models were not designed for this new environment and many are falling behind what their businesses expect from them. "What's needed from IT is not a big-bang approach but a strategy of rapid, smaller changes over time. One of the most important is to enable business-wide reuse and discovery by using an API-led approach that unlocks the value of existing systems, thereby allowing for rapid innovation without compromising the security and control of critical data and infrastructure. The end result is building an application network, from the bottom up, which connects every application, every device and every source of data. Every node that is added to the network adds value to every other node."

NSW Health Pathology’s Enterprise Architect Tim Eckersley said changing demands on his IT department are causing a two-speed model to emerge. One team remains focused on core applications and services while a second focuses on developing and delivering innovative digital services.

"Our core IT services are moving at an incremental pace while digital services are moving much more quickly," he said. "For us, this has required a cultural shift that encompasses not just changing our processes, but also our approach to management and supporting capabilities. Embracing this shift will help us continue to deliver smarter, better statewide services."

New approach to data management

Mr Eckersley said NSW Health Pathology is also helping manage rapidly increasing volumes of data in the healthcare sector. "We are looking at having to manage data stores of more than a petabyte by 2020 as a result of advances in genomics alone. This requires new approaches and the secure adoption of cloud-based resources, which we’re already working towards."

Round-table participants also discussed how digital transformation is having an impact on the ways in which data is shared between different organisations. Rather than remaining in siloed applications, it is increasingly being opened up for wider use.

James Skurray, General Manager IT at logistics management specialist, 1-Stop Connections, said his company is focused on finding new ways in which technology can help to drive business process improvements.

"For example, we are developing methods to improve the way in which data is shared between multiple parties in a supply chain," he said. "By adopting an API-based approach, we can enable parties to access information in the way that best suits them. That could be anything from using a simple web page to linking their systems directly with ours using APIs."

A third wave of disruption

The roundtable participants discussed how ongoing digital transformation programs would continue to open new opportunities for those organisations best placed to take advantage of them. All agreed that maintaining a business-as-usual approach was no longer a viable option.

Frost & Sullivan Managing Director, Mark Dougan, said organisations throughout the world are experiencing a "third wave" of digital disruption that is as significant as those that preceded it.

"The first wave occurred in the early 2000s when the internet became widely used, changing the way people sourced information and undertook transactions," he said. "The second occurred when smartphones became popular in 2007, creating the app economy."

Mr Dougan said the third wave, taking place now, involves deployment of artificial intelligence technologies that will undertake tasks that would previously have required a human.

"Many organisations don't fully understand the implications of this third wave but it is going to have as much disruptive impact as the two that preceded it," he said.

The roundtable concluded with participants recommending organisations deepen their understanding of emerging technologies and how they could be harnessed to deliver business value.

"The digital disruption wave still has a long way to travel," said Mr Drysdale. "By gaining a complete understanding now of how technology is evolving and how it can add value, organisations can ensure they are ready to put it to work in the most effective way. Application networks can help an organisation be more agile and better respond to market, business, and consumer demands by seamlessly connecting applications, data and devices."

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