Customers across sectors demand a digital approach from businesses, and it falls on enterprise technology leaders stepping up transformation to prepare.
Companies executing a future-ready plan for transformation will be well-equipped to compete in the digital economy, according to Stephanie Woerner, research scientist at MIT Sloan Center for Information Systems Research, speaking at the MIT Sloan CIO Symposium on Tuesday. But a lack of resources, risk-averse culture and a weak commitment from leadership slow down efforts to meet digital demand.
"A future-ready company is one that adapts and succeeds in any environment," Woerner said. It's built on agility, resilience, standardization and leveraging partnerships to create the solutions that anticipate business and customer needs.
Future-ready enterprises undergo a digital business transformation to create the digital experience customers expect. They are prepared for disruptions — such as the shift to remote work organizations faced last year.
Technology executives lead the charge in equipping businesses to adapt to the digital economy, overcoming transformation hurdles. Leading digital transformation efforts falls on the CIO office for over half (58%) of companies, according to a survey of 1,010 CIOs conducted by Tata Consultancy Services released in July.
Woerner — alongside George Corbin, board director at Edgewell Personal Care and former chief digital officer at Mars, and Beth T. O'Rorke, CIO and digital transformation executive consultant at BTO Executive Consulting — identified five foundational characteristics of a future-ready enterprise. Here's how technology leaders can help businesses prepare:
1. Center the customer experience
Building a technology strategy around the customer can help businesses conquer tech debt and anticipate future digital needs.
Centering the customers requires a mindset shift within the business. Rather than focusing on product development, the company considers what the customer aims to accomplish through interactions with the business, according to Corbin.
Consider where a customer may become frustrated or areas where innovation would help the company compete with other members of the enterprise, Corbin said. Digital economy preparedness stems from displacing the incumbents by removing customers' negative barriers.
"Look for those points of struggle, and then build your product and your business strategy and your business model around those," Corbin said.
2. Build a digital workforce
Top talent may be difficult to successfully recruit and retain, but the workforce is foundational to a company's future preparedness.
To start, O'Rorke recommends optimizing the existing systems. Find the talent that can be upskilled, fill in capacity with automation where possible and try to draw in core tech talent to fill any gaps.
"Partnering with HR is critical," O'Rorke said. HR will help the business scout diverse, talented employees with digital knowledge. Internships, apprenticeships and other strategic partnerships can also help businesses keep up with talent needs, according to O'Rorke.
Where hiring new talent may strain the business, executives can also consider renting, according to Corbin. Outsourcing certain skill sets can prove the business value before deciding to permanently hire.
3. Rethink dated processes
Legacy processes can prevent innovation and stop a business from meeting its future-ready goals, according to Corbin.
Processes built to scale are perfect "if your focus is efficiency and to squeeze out variants and to squeeze out costs," Corbin said. But it prevents a company's ability to adapt to change.
Consider the budgeting process. Annual budgets anticipate predictable outcomes throughout the year and can lock departments into certain spending models. Through partnership with the financial department, O'Rorke introduced rolling budgets evaluated quarterly "to make sure we're getting the right outcomes and progressing with the right velocity."
Changing processes frequently relies on partnerships across business units as many of the underlying, outdated structures cross departments.
4. Update technology and clean up data
Future-ready technology adoption doesn't just aim for the latest innovation, but it integrates with the business strategy and supports forward thinking on business needs.
"Data is everything," said O'Rorke. But "exposing the data to actually take action for creating the business outcome you want" relies on technical support, such as getting into the cloud or creating digital platforms.
Companies seeing the most success integrate foundational tech, such as data management, into larger goals, according to Corbin.
"The companies that are getting all the valuation and all the growth are those who have stepped back and said, 'Actually, it's not about data,'" Corbin said. "What we're doing is we're trying to build an intelligence factory."
5. Lead a cultural shift
Future-proofing is a mindset, not a technical goal. The core efforts rely on a culture shift to sustain them, starting with accepting risk.
"Fear of risk is used as an excuse to not take action and that becomes the biggest risk of all because that's what leads to obsolescence," Corbin said. "The companies that win are those that do a better job of taking risk, not those who do a better job of avoiding risk."
Corbin recommends a "captain" leading the transformations to dissuade some of the fears around taking risks and commit to future proofing.
Communication, collaboration and openness solidify tangible cultural shifts, according to O'Rorke. Leaders can help maintain these values, but "if you think you only can go top down, I encourage bottom up as well to hopefully meet in the middle to move it forward."