What Does Digital Transformation Mean?

Transcript

Everybody's trying to figure out how to get better at building software applications. We talked about software eating the world, but what it really means is every organization on the planet's trying to figure out how to build net-new systems of engagement to engage their customers, employees, and their users.

That is a different world than the world we've come from, where we built our competitive advantages around our supply chain and our distribution. Now, every company's having to figure out how to build essentially direct-to-consumer engagement models, whether you're a bank, whether you're a car company, whether you are a manufacturing company.

The implications are pretty profound, and we spend a lot of time talking about the infrastructure aspect of that, but I think of it as: number one, you have to get really good at delivering new applications in order to survive, and number two, those new applications you build have to be able to scale securely, and infinitely, because some of those applications you build will become popular.

Examples include Pokémon Go or Fortnite. The scale of these digital applications have become hard to fathom, but those are the kinds of applications you could be building, and you may not know until they hit. What that requires is a couple of things underpinned by the shift in how you think about infrastructure.

Those applications are going to be built on cloud infrastructure whether you like it or not, and for two reasons. Number one, cloud has an infinite scale capacity that those applications require, and number two, it's a shift in how you deliver applications rather than having a linear model of something that may take 6 or 12-weeks delivering an application.

You're moving to the self-service model for infrastructure where I want to empower my development teams to build these applications quickly, but at the same time be confident that those applications they're building can scale to become the underpinnings of my business.

Digital transformation is a sound-bite that most management consultants might use. For us, we tend to think much more practically about it. That means software's eating everything. That means you need to get good at building and delivering applications. And lastly, those applications may become the underpinnings of how you engage all your customers. So, when you're building them, you need to think hard about the operating model through which you're building and running those infrastructures and those applications.