On Italy’s Amalfi Coast is the spectacular “Sentiero Degli Dei”, the path of the gods. It makes for a stunning scene. I was lucky enough to stand there and take it in. I remember, however, that there was a steep slope several hundred yards to the sea to my left – with nothing in between.
Why am I telling you about my trip to Italy? Because it made me realize that yes, sometimes it’s great to go free, with no restrictions or help and get a spectacular view, but crash barriers can help keep you on the right track.
In a business context, transformation principles provide guardrails that help the organization make decisions and behaviors, especially in VUCA times like these. These principles give a certain direction to the reasoning and execution of all activities of a company towards data-first. Data first because everything, be it a human, a machine or a thing, is constantly generating data in an age where computers and connectivity are ubiquitous. And the right leverage of this data enables insights that unlock real business value and the full potential of organizations.
Digital is now a permanent but dynamic part of our world, and IDC predicts that direct investment in digital transformation will grow to 55% of all ICT investment by the end of 2024 2† Organizations can expect increased investment to deliver greater value to the business and ultimately to their customers.
Many customers have expressed their ambition to become data-first digital enterprises, by using the right guardrails to help their organization mark their journey and avoid wandering off the path.
Let me give a real-life example from a recent meeting with a customer in the telecommunications (telco) industry. You could argue that the telco industry is already an “online” industry compared to many other vertical markets where digitization has just taken off with the pandemic. According to the World Economic Forum, the amount of data created every day is estimated to be equivalent to 200 million DVDs per day (what are DVDs?!). With this amount of data being activated across connected objects, territories and individuals, we are seeing telecom providers make significant shifts in their business models towards ubiquitous communication and entertainment platforms alongside connected telecom services.
With this client, we have identified the following three transformation principles that inform all of their digital outcomes and guide the realization of their initiatives:
Nearly every HPE customer must contribute to their organization’s Sustainable Development Goals. Indeed, the current wave of transformation is recognized and driven as a double evolution to become a more digital and at the same time more sustainable company. In this example, the customer formulated three key components of their key sustainability goals: reduction of CO2 emissions from the production and use of products, a green network and ESG reporting.
The emission reduction effort ranges from scope 1 (eg production of network components) to scope 3 (use of products) emissions according to the GHG protocol. In fact, this principle also directly encompasses the data-first aspiration: how and where is what data stored and analyzed to drive insights and business and ultimately customer value? Embracing data truths provides strong information on how to deliver on this ambition, while reducing emissions and reporting responsibly. While data centers continue to play a role in customers’ understanding that the future will be hybrid, data centers – connected through a green network – are gaining in importance.
While sovereignty can also be seen as part of this principle, its use as a transformation principle in itself has compelling implications. Digital sovereignty means having state-of-the-art capabilities in key technologies, services and platforms, while having the ability to freely and responsibly choose between the proprietary solutions and sustainable options of trusted global partners to act autonomously in an ecosystem. It thus describes the intersection between dependence and autarky; neither anyone else determines the future path, nor does the organization do everything itself. In this exemplary case, the client aims on the one hand to scale and expand its own platform business without unilateral control, while evolving as openly as possible and providing sovereignty to its ecosystem. On the other hand, this client also seeks collaboration and involvement in the European sovereign cloud initiative Gaia-X given the ubiquitous collaborations with one or more hyperscalers and their strong services – which also brings considerable power in the field of data.
The transition to service delivery
Servicizing – or servitization – presents the shift from offering products to providing services. By swapping the words “offer” and “prohibit” for “consume,” we shift the focus from the selling to the buying cycle, while keeping the core definition the same. This can include both the complete replacement of old products by services (eg DVDs vs. Netflix) and the enrichment of products through the integration of services (eg receiver or smart TV).
As an advanced enterprise offering a variety of telecommunications and entertainment products and services, the client was eager to further develop its service business models and delivery methods to become a provider of platform and ecosystem services, and potentially data-driven services in the future. With additional offerings such as asset lifecycle services (similar to HPE’s service offering for IT assets), service also drives circularity and ultimately sustainability.
In short, digital technologies can:
- progressive innovation for sustainability,
- ensure optimal consumption
- and support in protecting and gaining insights from your data to drive intelligence and trust as the organization uses barriers effectively for a data-first business. At the same time, we see that those effective barriers, such as sustainability, sovereignty and service delivery, also improve profitability in general in organizational transformation.
Of course, these three principles are not exclusive in guiding a data-first transformation and keeping the organization’s journey – and investments – on track. Other clients have emphasized various barriers to their transformation, such as ethics, resilience and ecosystem thinking. Undoubtedly, these guardrails and their prominence can vary and change depending on an organization’s digital ambition and its maturity in realizing a digital business.
Learn how to better address your principles in your digital execution and how to frame them in ongoing activities and planned initiatives. Contact an HPE digital advisor to get started.
2https://www.idc.com/getdoc.jsp?containerId=US47115521 https://itbrief.co.nz/story/idc-over-half-of-all-ict-investment-will-be-linked-to -digital-transformation
About Yara-Yasemin Schuetz
Yara-Yasemin Schuetz is a digital advisor at HPE. She supports organizations in their digital transformation journey, from devising a strategy to realizing the full value of using digital technologies to improve the way people live and work. She is fluent in four languages and puts those language skills to good use to create a common language between business results and IT requirements. Her advisory approach to enable organizations to unlock their full digital ambition means that participants step out of their comfort zone for more collaboration. She has an MSc in Digital Business Management from the University of Reutlingen and recently led an empirical study on digital strategy patterns.