Foundational pillars & guidance to build a robust Enterprise Transformation Strategy

Foundations matter.

How can businesses adopt principles to ensure strong alignment between IT and Business to create a robust, scalable, highly available, and fault-tolerant architectures that become the bedrock for innovation and value creation?

This article I have outlined few strategic pillars, lessons learned, and c-suite considerations that could prove helpful to build a firm enterprise transformation strategy. This is not an exhaustive list, rather a high level guidance to help provoke strategic thought and action. The views and experiences shared are my own, and do not represent anyone else.

The only constant in life or business is change. Change requires transition. Change requires to give up the old and embrace the new. Over the years of consulting, I have learned the importance of keeping things simple and easy to understand. Simplicity does not mean lower standard, rather, it means that the strategy and architecture are easy to understand by all stakeholders. Jargon free communication is the key to bring people together on a common platform.

In last 5-6 years, we have witnessed that long product development life cycles have become shorter, and this is due to the urgent needs of the business and the technological advancement of tools-of-the-trade. However, the business strategies are outlined over a 3-5 years time frame. A plan made today for some strategic initiative that gets activated 3-5 years down the road, will not hold up well, because the industry is changing fast, customer preferences and propensity to buy are changing faster, and such external factors necessitate proactive adjustments and updates to the strategic roadmap. Michael Porter rightfully outlined external factors that affect or influence the path to revenue - moreover, the advancement of technology and accessibility of new technologies force change upon the organizations.

Years ago, organizations planned and build a 7-10 year strategy roadmap, during that time it may have seemed appropriate to do so, however, the advancement of technology has accelerated the pace of change. Corporations like Sony Electronics, Sony Music, Sony Pictures and Entertainment, release several products each year, their pace of product development and time-to-market are remarkable and noteworthy. With new cloud based technologies, a 12-18 months of new product launch is not uncommon, consider the rate of new startups, new mergers and acquisitions, joint-innovative-ventures, or the number of new IPs filed, all such advancements necessitate organization to consider building an enterprise transformation strategy that delivers results is a key requirement for existence, forming new s-curves for your business is a necessity, not a nice-to-have feature.

The best plan is to plan for change, and address the issues surrounding the readiness to change. In his book, "Leading Change', John P. Kotter outlines: "To some degree, the downside of change is inevitable. Significant amount of waste and anguish is avoidable." Furthermore, John P. Kotter outlines following reasons that hinder change: 1/Allowing too much complacency; 2/Failure to create a sufficiently powerful guiding coalition; 3/Underestimating the power of vision; 4/Undercommunicating the vision by a factor of 10 or more; 4/Failing to create short-term wins; 5/Neglecting to anchor changes firmly in the corporate culture, etc. Points outlined in this document are meant to help build a robust foundation for enterprise transformation, so that you may realize business benefits in a timely manner.

In 2012/2013 I had the privilege to design, build, and deliver a multi-cloud adoption strategy for a Financial Investment Advisory. This was my first assignment to get a real life hands-on experience to lift and shift ~100 or more applications and 1200 VDI workloads to AWS IaaS based consumption model, and a large portfolio of their financial advisory applications built on the Microsoft .Net framework were migrated to Azure to be consumed in a PaaS model.

I present to you a brief summary of lessons learned, and important considerations to help make your enterprise strategy robust in a multi-cloud operating model.

Pillar # 1: Keep IT simple: I am sure you have heard this adage, but to keep things simple, requires a deeper understanding of the business challenge at hand. A strategy that is lean and focused on building, expanding, accelerating organizational capabilities to act in a manner that provides speed and scale adds to shareholder value. When an organization can do more with less, or go faster than others, or be the first to market, are what matters the most. If a strategy states that the organization will achieve 'X' in three to five years, without taking in to consideration the inherent volatility, uncertainty, complexity, and ambiguity (VUCA) will end up as a failed project or a sunk cost.

At the end of the day, the primary reason IT exists is to balance the equation between consumers and suppliers, balance business strategy with IT strategy and technology change/adoption is what matters most. This is where it is highly important to keep things simple.

Lesson learned: Keeping it simple matters a whole lot. Without the involvement, commitment, and sponsorship of the Senior Executive Leadership, the cloud strategy or cloud adoption will just be a nice-experiment with no measurable results.

Pillar # 2: Gain Leadership Sponsorship and secure early Buy-in. Develop a vision of what good looks like, paint a clear picture that is easy to read and understand. Keep it jargon-free, and state the purpose of investments in IT and what is the desired end state. I like to call it, "Begin with money, and end with money." It does not matter what happens in between. Cash invested today must generate future cash flows against a hurdle rate.

To keep this exercise simple, use the following questions as an aid to think strategically: 1/What is the organization's future? 2/What business results do you want the business to deliver? 3/What role cloud adoption and new technologies will play to accelerate time-to-value?

Lessons learned: Integrate Cloud strategy with your Business strategy as in doing so, you will encourage the business workload owners to take ownership of the needed transformation and discourages a point of view that IT is for free. Most certainly, cloud is not free. Gaining alignment at this level enables the CIO to negotiate ongoing investments in IT to continually modernize and optimize the IT estate.

Pillar # 3: Focus first on optimization and stabilization of current cloud footprint. At surface level this sentence sounds overly simplistic, but it is not. When you move to the cloud, we call it, migration. Well, you migrate, then operate, and optimize and stabilize, and then go on to modernize the estate. Organizations focus on cost savings, but should consider giving focused attention to invest for future cash flows. The problem of technical debt increases at this stage, as newer technologies are sought for new capabilities, while the technology running the current operations is not stabilized or optimized. These are the few complexities of cloud adoption.

Lessons learned: Make stabilization and optimization an important part of your Cloud strategy. Focus on areas of cost optimization and reduction to realize measurable financial benefits, and invest for future cash flows. Else, the problem of technical debt will not go away. Save-to-invest, and Invest-to-grow. Reduce non-discretionary costs, to increase discretionary investments.

Pillar # 4: Courageous leaders view "IT-is-the-business", and "Business-is-IT". These two are inseparable aspects of business growth. Over the many years of advising and consulting various CIOs, I have met few who build strong business relationships and found a seat-at-the-boardroom-table, and few who did not take steps (of course, they are risky steps) to drive breakthrough ideas forward in their organizations. In doing so, many become technology-day-care-centers, just supporting the business, rather than catalyst for change. Organizational formality and culture associated with such formalities, kills creativity and innovation.

Lessons learned: Balance experimentation with true innovation that matters. Too many experiments for modernization or adoption of emerging technologies, takes away the focus from generating future cash-flows. Nothing matters more than generating revenue. ~1-2% growth-impact on the top-line is far greater than ~7-10% reduction-impact on the costs (bottom-line). Someone has rightfully stated: "Organizations must learn to balance formality with flexibility."

Pillar # 5 Measure current Effectiveness-of-current-IT capabilities and finance. May I ask you these two key questions: What does one dollar invested in cloud, accelerates the top-line growth? How does one dollar saved because of cloud, impacts the bottom-line cost-to-serve? Several years ago, while building a enterprise wide transformation strategy, I advise the client team to include a detailed review of their three-year strategic plan, annual operating expenses and projections, and quantify the current capabilities and technologies to support the business. This was an eye-opener for everyone involved. The team reached a scary conclusion that current IT systems, vendors, service providers, etc., had not truly delivered innovation nor accelerated transformation, rather it was accumulation of huge amount of technical debt. Does this sound familiar to you? This is not a unique story, rather a day-to-day reality for many organizations. It is important to measure current effectiveness of IT capabilities.

Lessons learned: Build a two by two matrix, and plot strategic value of cloud and new capabilities versus the attractiveness of desired investment in multi-cloud growth and adoption. List out how many projects failed in the last 18-24 months. Know them well. Using cost analysis, focus on cloud investment with initiatives that have the highest relevance and alignment to the business. This is a simple exercise and is suggested an enabler to strategic thinking. Do not build the strategy just within the IT organization, build it with-the-business and for-the-business, to make it, by-the-business.

Here are some suggested steps that Senior Leaders (C-suite) could consider to help ensure that Enterprise Transformation strategy becomes an integral part of the overall corporate business strategy:

1/Recognize and support that technology is under "continuous improvement, continuous delivery" cycle.

2/Recognize and support the adoption of advancement in technology as a dynamic process, and not view technology as a static, point-in-time event.

3/Recognize the external factors that impact current technology in operations within your organization.

4/Recognize and support the development of enterprise transformation strategy as a subset of overall corporate business strategy.

5/Walk in the shoes of the End-User, and focus on Customer Experience as an integral part of enterprise transformation strategy.

6/Require financial business case for investment or spend justification. Ensure that the entire organization, both business and technology, are focused on creating future cash flows and sustaining current cash flows with lower cost-to-serve and lower cost-acquisition-cost.

7/Open communication, frequency of communication are key aspects to build strong relationships that serve as a bedrock of a robust enterprise transformation strategy.

While it is beyond the scope of this article to cover many other areas in detail, however, I hope that these outlined pillars spark strategic thinking. Feel free to connect with me, I am open to listen to your point of view and for further discussions. Thank you.