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|In: Architecture|Last Updated:

“Digital” has replaced “Cloud” as the hot synonym for “Everything.”

No matter what a company plans to do and how it plans to do it, it’s now officially Digital.

Not that I’m a Digital skeptic. I’d just like, when we talk about “Digital,” to be confident we’re talking about the same thing.

Google a bit and you’ll find quite a few different accounts of why Digital is so important, along with several definitions, some of which, reprehensibly, make it a noun.

My favorite: Digital enables new business models. Examples include Uber, AirBNB, and Zipcar, all of whose “new” business models amount to being brokers — companies that bring buyers and sellers together in exchange for a cut of the action.

It’s a very new business model, certainly no older than the Phoenicians.

For whatever it’s worth (probably what you pay to receive KJR) here’s my take on why business leaders not only can’t ignore matters Digital, but have to embrace the subject. Truly Digital companies:

  • Observe: Constantly scan the technology landscape for the new and interesting.
  • Orient: Spend serious time and energy, at the executive level supported by staff analysis and modeling, investigating whether and how each new technology might turn into an opportunity if their company gets there first, or might turn into a threat if a competitor gets there first.
  • Decide: Far too many business executives and managers, and therefore whole businesses run away from the decisions that matter most as if they were rabid weasels (the decisions, that is, not the executives, managers and businesses). Digital businesses have to become adept at making fast, well-informed decisions.

And remember, it isn’t a decision unless it commits or denies the time, staff and budget needed to effectively …

  • Act: It isn’t enough to make the right decision and then either flail away at it or not actually do anything to make it real. Successful Digital businesses must execute their decisions, and with high levels of competence.

It’s OODA again. Digital businesses are built on OODA loops focused on the potential impact of new technologies. Not static list of specific technologies. New and interesting technologies as they arise and mature.

For Digital businesses the Orient stage has outsized significance, because many of us humans have a strong tendency to reject the new as either wrong or no different from the same old same old.

Digital businesses can no more afford to fall into that trap than the opposite extreme — dying from the shiny ball syndrome of chasing the next huge thing before giving the current huge thing a chance to succeed.

So Digital business have to establish methods, and not just methods but a supporting enterprise-wide culture, that let them go beyond the lip service of “that’s what we’ve been doing all along” to accurately recognize what really are familiar old concepts hiding behind shiny new buzz-phrases and what are truly new and important possibilities.

And none of this will matter if the company’s IT organization hasn’t figured out just how different the Digital world is from the standard collection of “best practices” followed by old-school industrial-age IT.

Recent history — how IT responded to two past transformational technologies, the personal computer, and the world wide web — illustrates the challenge. In both cases, IT ignored them completely until long after they’d become entrenched elsewhere in the business.

Why was that? Boil everything down and it came to this: When they first appeared, and for several years afterward, neither the PC nor the world wide web fit what IT did. They were out-of-scope, and outside IT’s current areas of expertise. CIOs didn’t know what to do with or about them, so it was safer and easier to declare them Someone Else’s Problem.

In the Digital era this attitude just won’t cut it because new technologies that can have an impact on your business are emerging faster than ever. Digital businesses need IT that provides technology leadership to the business, at all levels of the business, and at all levels of IT.

Technology leadership means more than just (for example) the CIO explaining to the other members of the executive suite how the Internet of Things represents a threat to the company’s current product line.

It means the IT organization knows how to recognize, research, pilot, and incubate new technologies. And, for those that succeed, how to integrate them into both the company’s technical architecture and IT’s organizational architecture.

All levels of the business and IT means the conversations between a help desk analyst and a workgroup manager about collaboration technologies are just as Digital as the CIO’s executive-suite conversations about the Internet of Things.

And are just as important.

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|In: Architecture|Last Updated:

Guess what’s now “best practice.”

A few years back it meant locking PCs down tight, preventing anyone outside IT from doing anything creative with information technology unless they could get it done with Excel.

“Shadow IT” … business departments implementing information technology without any IT involvement? An information security nightmare!

Nightmare? Look at the number of recent, massive data breaches whose targets have been … what shall we call the opposite of shadow IT … sunlit IT?

The actual evidence seems to show that shadow IT is, at worst, no less secure than sunlit IT.

The exact same cast of characters that advocated tight lockdown just a few years ago are now, without even a trace of contrition, writing favorably about how smart CIOs are supporting and leveraging shadow IT rather than trying to stamp it out.

Research current thinking on this and you’ll find the IT punditocracy has discovered IT has to handle some tasks more quickly than others. McKinsey, for example, calls it the “two-speed IT architecture.”

Welcome to the party, folks. You’re late. Did you at least bring some decent champagne?

To be fair: Just because these folks are latecomers, it doesn’t mean their insights are worthless. The McKinsey piece, while long on what the outcomes should look like and light on how to achieve them, is a fairly decent analysis.

Decent, that is, other than ignoring the significant role shadow IT will and should play in most two-speed IT architectures.

And, decent with this possible exception: “… companies need to improve their capabilities in automating operations and digitizing business processes. This is important because it enables quicker response times to customers while cutting operating waste and costs.”

If, by “quicker,” McKinsey’s analysts mean reducing cycle times for fulfilling orders, then fair enough. While the notion that information technology can be helpful in reducing process cycle times is hardly a fresh one, it’s no less valid today than it was when first introduced in the mid-1970s or thereabouts.

But “quicker” might also mean implementing new strategies or responding to marketplace changes. If that’s what McKinsey means by “quicker,” it’s way off, because optimized processes are one of the biggest impediments to rapid change. That’s because optimized processes need supporting infrastructure, and infrastructure encourages stasis, with “infrastructure” including:

  • Business process design. As these things go, this is the easy one. Designing an efficient process just isn’t all that difficult compared to what it takes to implement one. Visio is the most adaptive component of process infrastructure.
  • Design of business process controls. Beyond the process itself are management practices and process metrics. Designing them isn’t all that hard. Designing them so they don’t do more harm by getting in the way than they provide in benefits? Trickier. A lot trickier.
  • Design and build-out of the physical plant needed to support the business process. This could be as trivial as setting up a new cube farm, or as complex and expensive as designing and building a factory. Ignoring all other aspects of this task, whatever gets built will have to last long enough to be relevant until the company has paid off the design and build-out costs.
  • Design (or selection), implementation, and integration of supporting information technology. Presumably, KJR’s audience knows a thing or three about this topic. To make sure it doesn’t get lost: The integration part is, in most situations, the most expensive and difficult technical dimension of the task.
  • Employee training. The need to train employees is obvious. That their education is part of your business infrastructure is less obvious.
  • Investment in continuous improvement cycles until process optimization has reached the point of diminishing returns. No matter what the new process, it’s the organizational equivalent of a skill. Skills take time, and money, and effort to acquire and perfect.

There’s one more factor to take into account to understand why investments in business infrastructure put the brakes on business agility, and that’s the project failure rate.In most companies, more projects fail than succeed. That being the case, once a company has a process and its supporting infrastructure up, running, and optimized, the fear that implementing its replacement will fail isn’t merely very real. It’s realistic.

And when the odds of success are low, it’s perfectly natural for a company’s decision-makers to take what looks like the safer bet — sticking with that has worked, even if, in the long run, the result will be an obsolete company that sells and delivers obsolete products and services.

Especially because, in so many cases, by the time it’s impossible to ignore their obsolescence, it will be someone else’s problem.

* * *

Next week: Shadow IT’s role in a two-speed business (not just IT) architecture.

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