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March 2, 2017

Digital Transformation Explained

Digital Transformation - not a day goes by without the buzzword being used in some form across news, reports and surveys. But what does it actually mean? Answering that question and more, Interoute CTO Matthew Finnie explains digital transformation.

By Ellie Burns

Digital Transformation ExplainedCBR: What is digital transformation?

MF: Whether looking at the business consultants’ web sites, reading analyst reports or attending events – the term ‘digital transformation’ is everywhere. There’s all kinds of explanations for what it is, but what’s the actual objective? Ultimately, digital transformation is about exploiting digital technologies to maximise business efficiency. From your go-to-market strategy through to your supply chain and all points in between, digital transformation is the drive to find better ways to engage with customers and gain competitive advantage.


CBR: Why has digital transformation become such a buzz word in tech?

MF: Years ago, IT was a support function. Today tech has to be the enabler. Digital transformation just can’t happen unless you put tech in the driving seat. Take a look at Uber and Deliveroo, they use the same technology but have just applied it across different industries. That’s completely changed the ways businesses operate. It means that the very barriers preventing new market players from attacking the most lucrative parts of your business, have now largely been eliminated by that same technology and are forcing you to rethink your strategy.


CBR: What does a business need to do to digitally transform?
Digital Transfromation Explained

Matthew Finnie, CTO at Interoute.

MF: First, leadership. Have someone take charge. IT by committee is a disaster and you need to have a strong focus on what really matters. Avoid the distraction of technology and convoluted requirement analysis. The question for many organisations is do you have the people and the skills to deliver competitive advantage?

Second, adopt a digital development model. This means being prepared to develop your capabilities in an iterative, agile release cycle. All customer requirements are stale the moment they are captured, so develop by increments, check and repeat.

Third, become bimodal. Most enterprise infrastructure was not designed with the internet economy in mind, so it lacks the agility required. For real digital transformation, you need to bind together all your IT assets, uniting digital and cloud with legacy IT. You can then make sensible strategic decisions that are not constrained by a form, factor or technology.

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CBR: What is a business risking if they do not digitally transform?

MF: There is a huge amount of industrial convergence happening right now, which means that no business is safe anymore.

Getting a proof of concept up and running can now be done in a matter of weeks using software, rather than relying on servers and building platforms. The pace at which brands are delivering new features and updates means that to keep up with demand, organisations have an excruciatingly short time to react. If you cannot react and compete, you risk becoming obsolete. Established businesses are under threat and must adapt or face decline.


CBR: What would be your top tips for a company looking to digitally transform?

MF: First, understand your value to customers and what expertise you can own in house to deliver that value. That will help you to identify which areas of the business you can outsource.

Next, look at what your ambitions are and identify the areas that are blocking those ambitions. Those blocks are your projects. Finally, and critically, be prepared to change. The old world and the new world are not the same. All-digital companies have taken lots of risks and were built on a culture where change is continuous.


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