While global enterprise businesses are perpetually challenged to grow revenues while improving their margins, the current generation is also wrestling with the threat of industry-wide disruption driven by new, “digital first” entrants.
Consider how entire industry verticals – media, payments, shopping, travel, hospitality, to name but a few – have been up-ended by new entrants successfully leveraging digital technologies. The results are new products and services that delight customers with unexpected experiences, surprising convenience and radically lower prices. And while industry vertical enterprise incumbents possess undeniable assets – customer base, brand loyalty, global reach, capital resources – the previous two decades have provided irrefutable evidence that such assets, by themselves, are insufficient barriers to disruptive “digital first” challengers.
In response, enterprise incumbents have the opportunity to not just defend their businesses but to lead their industries. To do so, they must transform into digital enterprises. These organizations embrace digital technologies across the entire enterprise value chain, from products to customer retention to supply chain integration to organizational agility. In doing so, they unleash their assets to serve their customers with the innovation and agility of a “digital first” new entrant.
The enterprise IT organization, historically often a back office function in many industry verticals, has a leadership role to play in this digital transformation. In working the past few years with more than 450 enterprise IT organizations on their container platform strategy, my employer Docker has consistently seen the following as five keys to digital transformation success.
- Pick a North Star
- Start with existing applications
- Optimize for choice
- Automate application security
- Take an evolutionary approach to revolutionary innovation
1. Pick a North Star
Digital transformations do not happen overnight, and they rarely progress in a consistently smooth, linear fashion. The successful ones, however, are guided by a “North Star” – target outcomes or objectives – that everyone participating in the transformation is aware of and can refer to when prioritizing resource allocations and untangling dependencies.
Importantly, the North Stars of successful digital transformations are business outcomes, e.g., “be able to respond to customer issues in 24 hours or less.” Useful North Stars are not technology implementations, e.g., “move to the cloud.” The North Stars of successful digital transformations avoid confusing the desired business outcomes with technical implementations.
2. Start with existing applications
North Stars and technology visions describe an exciting future state and should be motivating to organizations embarking on digital transformations. We have often seen transformations stall, when organizations attempt too large a jump – in technology, architecture and skills – toward the end state.
In contrast, successful organizations begin their digital transformation journey with what they already know, their existing applications. These applications and infrastructure typically consume around 80 percent of the IT spend and, as a result, modernizing them as part of the digital transformation journey delivers significant ROI, while establishing these apps as foundations for new applications and services. This transforms legacy application and data assets – often seen as “anchors” or “drags” on the business – into sources of competitive advantage against new digital entrants. For example, MetLife, a 149-year-old insurance company and No. 42 in the Fortune 500, used Docker’s container platform to leverage its existing mainframe apps to create a new mobile experience for its customers.
3. Optimize for choice
The rate of technological change at every layer in the stack is only accelerating. Of course, everyone from technology vendors to enterprise IT organizations try and take advantage of this in their products and services in a never-ending game of leapfrog versus their competitors. However, organizations pursuing digital transformations can, often unknowingly, find themselves locked in to a particular vendor’s stack, worldview and pricing. And when the organization’s market landscape suddenly shifts or their chosen technology vendor doesn’t support their objectives, they’re stuck.
Aware of the quickly-changing environment, IT organizations driving successful digital transformations optimize for choice at every layer in the stack. Choice of clouds, choice of app technologies, choice of infrastructure, choice of vendors – and this gives them the flexibility to quickly respond to market and technology changes with as little friction and risk as possible.
4. Automate application security
With faster release cycles and empowered development organizations, traditional InfoSec checks-and-balances processes can slow and frustrate an IT organization hungry to impact the business. Yet in a world rife with security risks and ever-increasing compliance requirements, short-cutting security is not an option. What can IT do?
Successful digital transformations integrate security from the very beginning of the application lifecycle. Moreover, they invest in platforms that enable them to automatically secure apps from the very first commit and then automate the enforcement of security policies throughout the lifecycle. Doing so allows the organization to move fast and empower developers without compromising security.
5. Take an evolutionary approach to revolutionary innovation
Docker is often brought in to enterprise organizations struggling with digital transformations. The pivotal moment is when, after investing years of effort and tens of millions of dollars, the enterprise collectively steps back and realizes the transformation efforts thus far delivered very little. Such failures are typically characterized by attempts to rebuild and rewrite the entire stack in one go, retrain the entire labor force and completely reengineer all the lifecycle processes.
In contrast, successful digital transformations take a “crawl, walk, run” approach in which each phase of the digital transformation journey has clear, measurable objectives coupled with transparent and frequent feedback. Such an evolutionary approach enables the organization to adapt to changes, quickly learn from and correct the inevitable setbacks, and bank early “wins” that serve to align internal resources and secure support for the next, expanded phase of the journey. For example, Finnish Railway leveraged Docker’s container platform initially to create new microservices-based apps for its existing commuter services. After refining their containerization strategy, Finnish Railway then decided to move over some of their existing applications to the Docker container platform.
The five keys to digital transformation are ones that we have learned over the past few years by working with our more than 450 enterprise customers on their container platform strategies. Digital transformation initiatives are not without risks, but non-stop demands from customers and competitive threats from new digital entrants make such transformations an imperative. As you and your organization consider your own journey, we hope the keys above trigger conversations to help you succeed.