The Secret to Digital Natives’ Success
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Digital natives have a knack for adopting more modular architectures, next-generation integration techniques and a cloud-first, mobile-first mindset.
By Bhaskar Ghosh
Software used to be an enabler of business operations, but now, more and more often, software is the business. Uber, the world’s largest taxi company; Facebook, the largest social media company; Alibaba, the world’s biggest retailer; and Airbnb, the largest accommodations provider, are all built on software.
These and other digital natives—lean, flexible, software-based organizations—are using software to monetize data and to create hybrid product/service offerings that lengthen and strengthen the relationship with the customer. They are able to change software code hundreds of times per day, innovating rapidly to personalize the customer experience based on near-instant recognition of changing needs. Rather than build their own IT infrastructures, digital natives use relatively inexpensive platforms like cloud, crowdsourcing and public microservice ecosystems to provide customers with seamless, personalized experiences, gaining market share—or creating entirely new markets—in the process.
In this landscape, it can be a challenge for CIOs and CTOs of large traditional organizations to develop and deliver software quickly enough to satisfy the needs of their businesses. In order to compete effectively, they have to operate in a multi-speed environment, separating legacy systems from access channels. This means running at one speed in the legacy system of record but moving much more quickly in the access channels, introducing new applications and making changes on a daily basis to meet customer needs.
To accomplish this, organizations need to “go liquid,” operating in a world of smaller components that can be rapidly assembled using new development approaches to continuously deliver software in support of dynamic business needs. Going liquid calls for companies to adopt more modular architectures, next-generation integration techniques and a cloud-first, mobile-first mindset.
Companies seeking to go liquid should consider putting the following three key elements in place:
*Liquid architectures. Applications today need to be more dynamic and agile. Companies can take advantage of micro-service-based architectures from within their own organization and from the broader ecosystem. These architectures should be built upon lightweight and virtualized platforms.
Such application architectures are modular, featuring reusable components. One of the key components is emerging software platforms, including platforms as-a-service, which provide well-defined technical architectures along with standards, governance and reusable code. Platforms facilitate more rapid creation and assembly of liquid business solutions, as applications are increasingly assembled from pre-built components.
* Lean practices and automation. Delivery processes should become much more industrialized, applying DevOps, automation and Agile practices to roll out functionality incrementally, rather than through the six- to 12-month projects which are the norm at many large companies.
DevOps uses automation techniques for deployment, environment set-up, and configuration and monitoring. This streamlines and accelerates the interaction between development teams, which focus on assembling liquid applications, and operations teams, which are responsible for releasing such applications for live service availability.
Testing, much of which is manual today, should become automated to facilitate a continuous and instantaneously deployable pipeline of change. Even applications themselves should become more autonomous—from knowing how to recover from failures, to knowing how and when to scale.
*Operating model. The operating model should evolve to move at speed. An end-to-end concept links ideation, design, prototyping, development, testing and even operations into one function. With this model, there are no more hand-offs, no blaming upstream, and no downstream quality issues; one team owns the product from idea through to experience. This requires a whole new culture and a collaborative environment that not all companies have in place today. This change often encounters resistance as existing organizational models are broken down and accountability changes.
nnovations should be driven jointly, tied to new strategic planning processes that span both business and technology. In this operating model, software becomes a revenue-generating product of the company. The business relies on IT to ensure the company’s software products are market relevant, and IT relies on the business to identify new markets where they can introduce these software products.
With these three elements in place, the mechanics of delivery become less of an issue and teams can focus on innovation, working to achieve operating efficiencies, bring desired new products to market and personalize and improve the customer experience.
Embracing new architectures, tools and ways of working will enable businesses to innovate and deliver new customer experiences for their constituents, including employees, citizens and customers. The need for speed in business is the new norm and it demands new mindsets and ways of working. Companies that take steps now to increase their speed, agility and overall liquidity in software delivery will have an important competitive advantage over their slower-moving peers.
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