One of the biggest and most challenging questions that established businesses must address on the path to digitization is how to effectively update legacy IT systems. Far too many companies are burdened by IT functions that were not developed to cope with the unprecedented demands of a world in which automated processes, connected consumers, and refined analytics are business-as-usual. The haphazard fixes and updates that most businesses have been tacking on to their existing IT operations for years are no longer capable of adequately bridging the digital gap.
According to a recent McKinsey article, what’s really required in order for companies to achieve digitization is a complete reinvention of IT. It’s a tricky proposition, certainly, but a reinvented IT function is more and more clearly becoming an imperative, rather than an option, for established businesses wanting to stay competitive in the digital age.
While acknowledging that digital transformation will look and happen differently for every company, the article identifies seven key elements that are critical in implementing the full-scale IT overhaul and achieving the IT performance standard necessary for proper digital support.
Strong, Unified Leadership on Digital Vision and Strategy
Outlining a clear digital vision and setting top priorities for digital strategy is a vital first step in setting the course for IT reinvention. Without unified strategic priorities, IT functions will have no direction or benchmark against which to set and measure their performance improvements, and much of the value of a comprehensive update will be lost. In addition, centralized leadership is important to ensure proper cohesiveness for those digital IT assets, like web platforms and customer data, which are typically shared across multiple markets and business units.
High-Level IT Talent
Replacing legacy IT systems with leading technology practices typically requires an influx of elite IT talent, since in-house IT employees do not always have the skills or the capacity to completely reinvent their organization’s IT functions. However, given that such talent is more often attracted to startups or leading tech companies, businesses do need to be strategic in creating an environment that fosters elite talent over the long-term.
Rapid Workforce Scaling Arrangements
A digitized business must have the ability to quickly scale up its workforce on short notice in order to be able to reliably deliver against unforeseen demand. Some of the typical strategies that companies use to build this ability include revising vendor contracts to include options for increasing development volume without needing to launch protracted bidding processes, as well as fostering relationships with niche vendors that can support the company with select particular skills.
Nimble Growth and Fast Launches
Companies embarking on IT reinvention and digitization must learn to embrace a “test and learn” attitude when it comes to changes and new initiatives. Traditional businesses may be reluctant to adopt this approach, but it is essential for the quick delivery of an end product. New ways of working that companies must adapt to include programmed testing and distribution, quick release cycles, and responsive development.
Proper IT-Architecture Enablers
Several reliable services are necessary to properly support and enable the IT architecture that is needed to ensure rapid delivery on unpredictable requirements. The first is the creation of “building blocks” consisting of established, consistent services like pricing and customer data. The second is the combination of these building blocks into advanced components designed for use and reuse across web and mobile channels, as with product recommendations, for example. Finally, a web and mobile-deployment platform that is cohesive and enterprise-wide allows successful innovations to be rolled out quickly and seamlessly across all markets, brands, and devices.
Infrastructure That Is Cloud-based and Easily Scalable
A major element of IT reinvention is making on-the-ground infrastructure operations leaner and focusing on the development of a flexible, cloud-based infrastructure. This better enables companies to speed up their time-to-market and to scale their activities on an as-needed basis, depending on unpredictable increases in consumer demand.
High-quality integrated data.
Many companies are not only relying too heavily on outdated IT systems, they are also frequently relying on polluted legacy data sources. Therefore, an IT reinvention also means a comprehensive cleaning of the data that new IT systems will be using.
Recommendation systems and other sophisticated technologies will only function optimally with clean, high-quality data that is integrated into a cohesive data set and properly maintained by the business. To help achieve this objective, some companies are launching initiatives like joint business-IT programs, which provide a helpful framework for pinpointing priority data, assessing data quality, and establishing corrective actions to help clean and standardize data.