Do we have to remind the positive impact on both productivity and profitability of Custom Software Development and digital technologies? Not really. Nevertheless, it might be interesting to understand its nature, how this impact comes into play, at which levels.
A 2015 study from Deloitte & MIT Sloan shows that digitally mature enterprises are very much focused on globally integrating digital technologies such as Integrated Systems, Social Media, Mobility, Analytics and Cloud to transform their business process while enterprises digitally less mature are concentrating on solving specific problems with specific technologies.
The key words here being « globally integrating » ; it’s by integrating globally digital technologies that enterprises transform their business process and their way of doing business, therefore, there must be a global integration strategy of digital technologies and Custom Software Development into play.
The study also tells us (nothing new though…) no digital strategy will be successful unless it is supported by a culture and a leadership to guide the transformation. Let’s recall the huge number of failures among enterprises which have put into place ERP and BI systems thinking it would transform their process and business culture by themselves.
Everybody wants to benefit from the digital era; clients of course, partners, suppliers and more than everybody else, the new generation of talents. The ability to digitally transform an enterprise calls upon a digital strategy that, beyond technologies, will implement a culture of change, innovation and risk; that’s what your clients will buy and so will your future employees.
Another key discovery of the study is that with digital transformation, taking risks (in the spirit of Startups: Dream big. Start small. Fail fast. Re-Iterate.) becomes the norm among digitally mature enterprises which are constantly looking for a competitive advantage to increase profitability and maintain growth.
Custom Software Development is the technological manifestation of Strategy
Technologies have evolved very rapidly over the last five years or so giving birth to a new socio-economical environment centered around digital marketing, engagement and real-time interaction. And within this new socio-economical environment, it is clients & consumers that dictate the terms of client relationship, distribution channels, payment modes, product types and most of all, of what has value.
Just as for generations, there are also « digitally native enterprises », and they are flexible, adaptive and innovative. Other enterprises have invested heavily over the years into systems and technologies that are today archaic and hardly evolutive, they are stuck with contractual obligations and high maintenance fees. But most enterprises are in between, trying as fast as they can to integrate the most recent digital marketing technologies to their trust and credibility capital, afraid to lose their market share and clientele to the « digitally natives ».
There is a gap in the degree of digital use among enterprises. The level of digital engagement between the leaders (mostly from Technology, Professional Services and Media fields of activities) and their consumers is five times higher than other enterprises. The gap is even larger when it comes to digitizing the work environment.
In short, digital marketing is a good channel through which accelerating towards digital maturity.
IT doesn’t matter…
Nevertheless, even though you do a superb job in terms of digital marketing, it should not be confused with client needs and innovation which are the left field, potential source of disruption, from which a curve ball may come to question your business model and process.
What really makes a resource strategic, is its scarcity; especially if it enables you to do things your competitors can’t.
For many enterprises, most of their IT systems and technologies have become production commodities, available to their competitors as well; a recurring expense with little or no competitive advantage.
THEREFORE, Three QUESTIONS come to mind:
- Have your process automation & standardization killed by the same token all differentiation?
- Does your operation and maintenance software costs kill most profits?
- Where is the innovation in your enterprise; in your process and / or offer?
Which are the good technologies and what happen to my actual systems?
Peter Drucker said: « the goal of any enterprise is to create a (paying) client and it knows only two functions: marketing and innovation ».
Client Needs and Innovation should always be on top of mind of every CMO / CTO / CIO; there lies the source of inspiration which will allow you to question and review your process, your offer, your systems and technologies. Custom Software Development should become a privileged mean by which you materialize your Strategy to meet Client Needs and create Innovation.
Even digital marketing and client experience when executed without inspiration and strategic thinking can feel the same as the vendor constantly strolling around you in store, likewise for IT legacy systems.
You have to look at which functionalities or what unique architecture or technology will help you differentiate yourself in your field of activities and provide you with a competitive advantage in terms of client needs.
Executing different digital marketing tactics on different digital channels does not necessarily mean creating a genuine digital innovation.
Find yourself an IT supplier which will understand your strategy and help you define a Custom Software Development Strategy including Technologies and Applications providing competitive advantages and supporting your Strategy.
In short, find yourself an IT Consultant with a sense of innovation, who can design a perfectly Customized Software Development… for you.
Evidently, the proposal will be much more sound if the IT Consultant has no product or system or technology to sell, in the first place.
Denis Paul & Michel
P.S. Also, put into place very rapidly digital leaders that will defend and promote your Strategy instead of Technologies and IT legacy systems.