Solving Management’s Disruption Dilemma— the Blended IT Strategy
The Professional Executive, who is on the front line of digital disruption, faces a dilemma.
Competitors may be taking market share through;
- lower costs,
- faster time-to-market, and
- superior customer experience.
Such disruption creates an urgent pressure for change within any organisation.
In many firms, customers, competitors, CEOs and boards are looking to the Management for rapid digital transformation and looking for it immediately.
But the Managers are also charged with providing the stable platform that supports ongoing operations. These are the operational systems that process the quotes, book the sales, schedule the staff and equipment, and ensure regulatory compliance. Failure or down-time of these back-office processes, which often rely on old systems, can be disastrous for the firm (and for the continued employment of the Manager).
The dilemma is increased by pressures of risk and time. Accelerated transition to a new software can be high risk—data that does not integrate, systems that go down, and more human error in an uncertain environment. Added to this is the risk factor of an overstretched sales and estimating department trying to make everything happen at once.
Finally, transformation isn’t just about software or machines—it is about the people. You and your team. For example, a Crane hire company may have personnel who are steeped in a culture of risk management, process, and strict regulatory adherence. These people are extremely valuable assets that cannot be morphed into agile, digital-savvy disruptors overnight. These valuable staff need time and quality training to adjust, become proficient in and finally master any new system or software.
How does the thoughtful Manager or Business Owner strike the right balance between demands for transformation and stability? Between speed and risk? Between two very different cultures?
In this article, sponsored by Hewlett Packard Enterprise; The Economist Intelligence Unit & JGID proposes an alternative to an overnight, all-or-nothing approach: blended IT. This is a dual-speed approach that supports a period of coexistence between the old and the new systems—giving Management the time and resources to manage the dilemma of disruptive change.
Not all companies are faced with a clear and immediate disruption scenario. The following are some early warning signs that digital disruption might be coming your way.
- Is venture capital (VC) targeting your industry? VCs love digital challenges to traditional industries. While they may not get it right all the time, a lot of VC money flowing into your industry indicates a collective bet against your business and its technology.
- New pressure on pricing: Many disruptors use technology to compete on price—for example, automated systems are undercutting traditional costs of quoting and compiling tenders by as much as 75%. Are your sales people reporting pressure on prices?
- Loss of younger customers: Surveys show that the younger demographic is more comfortable with technology, and less loyal to established brands, than boomers. An out-migration of this critical customer segment could signal disruptive alternatives.
- Your best administration people are defecting: Is your culture so old-school that you are losing key personnel to the upstarts that are challenging you?
- Legacy system bypass: Are your internal customers going outside the system to get things done? Are they practicing “bring your own app” to get the functionality they need? Your systems for responding to sales enquiries may be making you vulnerable to external disruption.
- A competitor acquires another company in your industry: Some firms are concluding that the best way to beat disruptors is to buy them out. The combination of a promising new tech approach with the customers and deep pocket of an established competitor can present a potent disruptive threat to the old order.