- Digital transformation requires digital technology.
That makes sense, but how easy are these to implement?
In some cases, there may be impediments
to progress in the way.
Let me give you a case example from FedEx.
From the company's founding in the 1970s,
technology was one of its key differentiating factors.
Founder Fred Smith, who is now in his mid-70s,
was one of the most progressive leaders
when it came to technology.
He famously said, "Information about the package
"is more important than the package itself."
Being able to know where a package was in transit
was a key differentiator as it gave a customer
greater confidence in knowing
where the package was at all times.
He was one of the first to hire a Chief Information Officer,
and everyone to hold that title
has reported directly to him.
In 2000, he hired Rob Carter as CIO.
Almost two decades later, Rob is still in that role.
I caught up with him a couple of years ago
and he said something to me that was particularly memorable.
He noted that the technology his team ran,
though reliable, was becoming antiquated.
He told me, "It dawned on me that the technology
"that was the source of our success
"would be the source of our downfall if we did not change."
What a stunning revelation, right?
Though the technology was running reliably,
it was cobbled together and some of the most critical data
flowed through systems that were becoming obsolete.
Does this sound at all like your organization?
If so, I'd suggest you follow the path
that Rob did in order to create the mandate for change.
He created a diagram that highlighted
how the different technologies
that the company employed fit together.
It was such a swirling mess of a picture
that the board dubbed it Hurricane Rob.
That reaction was just what he wanted.
By contrast, he then showed the future vision
which would focus on simplicity, standardization,
and a cloud-first mentality.
These are hallmarks that every company should follow.
Older companies tend to have older technology,
and that technology also tends to be woven together
in a complex web.
This means that even minor changes to one technology
may have unintended consequences on other technologies.
This can become more complicated and more expensive.
Here are a few thoughts on how to turn this around.
First, create a mandate for change as Rob Carter did.
Highlight the current status of technology,
the risks of not modernizing,
and then paint the future picture
with relevant advantages noted.
Second, develop more loosely coupled technologies
so that changes to one platform
can be made independent of others.
This includes using microservices
and container technologies.
Third, develop a cloud-first strategy.
Cloud technology tends to be more flexible,
scaling up and back as needed.
It also tends to be more variablized from a cost structure,
which means paying for the technology you use
rather than buying more than you need.
Fourth, leverage enterprise architecture,
applying architecture principles and practices
to document and refine the business information,
process, and technology changes
necessary to execute strategy.
With each technical change that you make,
enterprise architecture helps ensure
that the full implications of the change are known.
Fifth, retire old technology.
Many companies are great at introducing the new,
and they're often poor at eliminating the old and redundant.
An example is an over-reliance on mainframe computing
in the digital age.
This provides a long shelf life for the old technology
and often means that data resides in too many places
to be used effectively.
And it creates a variety of security risks.
Lastly, standardize as much technology as possible.
You may have multiple operating companies
or business units in your enterprise,
and they may be different enough
to justify different technology.
But remember the FedEx operates as an airline,
a trucking company, an office services company
among other parts of the business.
Even a business as diverse as that
developed a common core technology to be used throughout.
The pace of change in the digital age
requires rethinking the technology footprint.
Following these steps are a recipe for success.