Mastering the art of digital transformation.
CHALLENGE 2: RAPID TECHNOLOGICAL CHANGES

CHALLENGE 2: RAPID TECHNOLOGICAL CHANGES - 21st CENTURY PHENOMENON

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We are living in an era defined by accelerating technological change, transforming every facet of life through rapid innovation. Stemming from Moore's Law, which demonstrated the quick progression of computing power, this acceleration now touches diverse sectors such as biotechnology, renewable energy, and artificial intelligence (AI), with AI significantly fueling this acceleration and shortening innovation intervals. While these developments provide answers to crucial global issues, they also pose significant challenges for businesses. Understanding and adapting to these changes is crucial for leveraging their benefits and mitigating potential risks. Simply put, businesses must establish frameworks that allow them to effectively absorb these risks.

Those who proactively engage with and shape the future of technology can outpace and outperform their competitors. Conversely, those who fail to adapt may find themselves ensnared by the innovator's dilemma.

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SOLUTION: UNDERSTAND TECHNOLOGICAL LANDSCAPE AND POSSIBILITIES AND ADOPT/INTEFRATE SYSTEMATICALLY

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So, understanding the technological landscape and possibilities and adopting/integrating systematically is key. The question is, what are the key ingrediencies to tackle and get along with rapid technological changes?

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IDENTIFY STATUS QUO/TECHNICAL LANDSCAPE

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First, corporates need to understand the status quo of their technical landscape. This applies not only to core products and services, but also to supporting (back/front-end) systems and related organizational structures.

This can be done by simply analyzing current technological standards and trends systematically and comparing them to the own technological setup (e.g., using a technology canvas). Such gap-analysis can indicate significant shortcomings but also shed light and give confidence in the current technological direction.

Industry leaders, however, will not only look at technology trends only, but also at underlying support systems and organizational structures. This helps to adequately identify needs and a sustainable and realistic approach for each technological adoption.

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IDENTIFY NEEDS SYSTEMATICALLY (STOP-THE-BLEEDING, MUST, NICE-TO)

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However, not every trend or state-of-the-art technology will prove useful for one’s purpose. So, corporates need to be careful in selecting the right technology and putting it into implementation in an appropriate order. By prioritizing technology based on a clear set of rules, one can systematically decide on horizontal and vertical integration.

Such rules or selection criteria encompass a variety of factors including strategic fit, enterprise architecture approach, need for change, dependencies, and integration complexity, along with viability, cost-related criteria, sustainability, and other relevant factors. These criteria span a broad spectrum to ensure a comprehensive evaluation. Depending on the organization’s preferences, criteria might differ in composition and weighting.

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ALIGN WITH OVERALL DIGITALIZATION STRATEGY

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To not lose track and decide for the right technological approach, understanding the technological pathway will come with an overall strategic alignment, based on one’s digital transformation approach. If a clear digital strategy is defined, technological decisions can be taken much easier, allowing to focus on what truly matters for a corporate vision and strategy to come true. This is particularly evident at product and service level (incl. sales), where the strategic focus is mostly determined by external factors (e.g., customer/market view). Here, finding the right path will turn out to be backed up more easily by looking at competitors and relevant benchmarks. However, this strategic alignment will also be true for back office and supportive departments that do not directly depend on customer feedback. Here the key lies especially in distinguishing what is needed and what is not.

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BUILD A FLEXIBLE ENTERPRISE ARCHITECTURE AND TECHNICAL INFRASTRUCTURE

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One part that is often missing, especially in SMEs but also partly in large-scale companies, is a comprehensive enterprise architecture. However, keeping up with technology and taking the right strategic decisions requires a more holistic view, one that covers a companywide IT architecture spreading across all relevant business domains. At the end it is the interaction between the roles of enterprise architect, domain or directly solution architect and technical architect that makes the difference. Setting up such a structure is key, both in technical terms but also from a process and governance perspective.