In and of themselves, technologies like social, mobile and analytics are incremental advancements that offer organizations some interesting, but not game-changing, business opportunities, says Jeanne Ross, research director at MIT’s Center for Information Systems Research.
None of those technologies can single-handedly transform a company for the digital economy, Ross asserts. Companies set themselves up for failure by developing individual business strategies for social, mobile and analytics, as well as cloud and the Internet of Things (IoT), collectively known as SMACIT.
Instead, the opportunity lies in integrating across SMACIT systems to enrich customer engagement and deliver connected digital services that can span internal and partner ecosystems, Ross contends.
“Your advantage is going to be from using these technologies better than anyone else — and that quite frankly is about integration,” Ross said during an MITSloan Executive Education webinar, “Transform Your Company for the Digital Economy.” “In the digital economy, what we need to do is design for agility. That’s about empower, collaborate, synchronize, partner — in a word, integrate.”
Ross is not alone in her appreciation of the role that integration plays in our age of digital disruption. A recent survey of 900 IT decision-makers around the world conducted for Dell Boomi by research firm Vanson Bourne found that integration is a top priority for a majority of businesses.
For instance, 88 percent of respondents believe that becoming more connected as a business will help them grow revenue in the next 12 months, according to the Vanson Bourne study. The survey also found that the level of connectivity across respondent organizations will reach 78 percent by 2020, up from 41 percent in 2014.
Integration platform as a service (iPaaS) is the tool of choice. Forty-three percent of organizations surveyed have an iPaaS platform in place today, with another 43 percent in the process of adopting iPaaS, and another 8 percent planning to deploy iPaaS within the next year.
With integration at the center, Ross said that companies aiming to excel amid digital disruption should focus on one of two business strategies: Customer engagement or digitized solutions.
Customer engagement is about waking up everyday trying to figure out what you can do next to make customers love you. A great example of this, Ross said, is Nordstrom. The clothing retailer responded to disruption in the industry by creating a personalized omnichannel shopping experience and delivering superior customer service.
To excel at customer engagement, Nordstrom combined its capabilities around a transparent shopping experience and a transparent supply chain, backed up by predictive analytics to deliver what customers need regardless of channel.
Meanwhile, GE is an example of an organization that excels with a digitized products and service strategy. GE has moved from simply selling assets such as turbines, jet engines and medical equipment to providing asset management and analytic services around those products “so customers are constantly aware of how they can get the most value out of an asset,” Ross said.
To accomplish that, GE consolidates sensor-based IoT data for analytics that show how a customer can improve efficiency or prepare for upcoming maintenance. GE is taking that a step further by building an ecosystem of partners that support asset management and analytics for end-customers.
Both customer engagement and digitized products require an “operational backbone” with robust integration capabilities, Ross said, adding that such operational backbones are quickly becoming table stakes to compete in the digital economy.
“Your digital strategy needs to be integrated — it has to look across your enterprise at all the capabilities you have in a way that makes you special,” Ross said. “Competitive advantage will come from taking capabilities that others may or may not have and integrating them in ways that make something extraordinarily powerful.”
To gain another perspective on Ross’s thinking, I asked participants on #CIOChat, a Twitter group that I facilitate, to comment on Ross’s point that legacy organizations can win at digital disruption by integrating their businesses.
Mark Thiele, CIO at Apcera, started this conversation by saying that integrating the business should be a given for all businesses. However, he suggested succeeding here requires a C-suite that supports innovation and business agility. Andrew Nebus, Digital Architect for the United States Federal Communications Commission, agreed but suggested integration needs to be a key outcome versus just modernizing old business practices.
Like Thiele, Nebus says that this requires leaders and architects with the emotional intelligence to rebalance things continually. Stephen diFilipo, CIO for the University of Texas, agreed with him by suggesting that “EQ” is the key to succeeding at creating a connected business.
Meanwhile, Mike Kail, former CIO of Yahoo, agreed but suggested that CIOs need to do even more. They must disrupt their organization’s legacy thinking while integrating and collaborating with the business, he said. Peter Salvitti, CTO of Boston College, agreed with Kail’s thinking here and said his organization is adopting this approach.
Clearly, creating a connected business is critical if for an organization to execute against its business strategies. A key goal should be to create, as Jeanne Ross says, “something extraordinarily powerful.”
Digital disruption will continue to challenge organizations in every industry. It’s time that legacy companies, in particular, recognize that success depends on becoming a connected business. With integration at the center of that effort, your organization can deliver products and services that win the day against your digital competition.
About the Author Myles Suer is Dell Boomi’s industry solutions marketing manager.