Article was originally published in Euro 26-27, Mlada fronta, Czech Republic.
Interview with Petr Mýtina from Ness Digital Engineering on how businesses must change if they want to succeed.
› What is your perspective on digitalization today?
The digitalization that took place in the second half of the last century was quite straightforward. Clock hands and cogwheels disappeared, while batteries were added. When movies started to be digitalized, everybody understood that film material is not eternal and keeping data on storage media is a great way to save the movies and work with them.
Today, a far greater digitalization is taking place. Every day we hear about the digital revolution, yet few people truly know where and how it is actually taking place.
› Do you agree with comparing ongoing digitalization to the next industrial revolution?
No doubt technologies bring major changes to the lives of companies and the whole of society. They change entire industries and the lives of each and every one of us. I recently read about a global financial group which refers to itself as a “technological company operating in the financial services industry”. That is so very true! And, not just for banks and insurance companies. However, I understand the word “revolution” as a dramatic and one-off change. Although technological innovations bring revolutionary changes, I’d rather call it a never-ending digital transformation.
› What is its specific content?
This is a very broad topic, which varies for each industry and individual company. For us it is essential to understand the customer’s situation in the context of its scope, strategy, and individual needs. Only then can we design an appropriate solution. Offering technological innovations just because they’re trendy and everyone talks about them is nonsense.
We can afford such a comprehensive and individual approach because we not only have experts with knowledge of these innovative technologies, but also the years of experience with the systems and businesses of our customers. In the context of digital transformation, we are talking about new customer-oriented technologies, new products and services generating additional sources of revenue, and the use of data and data analysis for decision-making. That is right and logical. Together with our customers, we are also building new portals and self-service zones, and we unite and modernize their business channels and customer platforms. But, you need to see further.
In the field of digitalization of products and services, I find the story of our customer who produces very complex, industrial machines both amazing and iconic. They have gradually added sensors, electronics, regulating and autonomous control systems. But, then they came up with a really transformative idea to sell not only mechanical devices, but also a completely new concept of “machine as a service”.
Together, we have developed and expanded a platform that gathers all of the real-time data from control systems, and monitors, analyzes and compares everything with hundreds of similar devices. Over this platform, we have created a variety of applications that provide invaluable and previously unthinkable information and services. These are applied to improving the planning, management and optimization of the operation of the entire device, data analyses, and predictive maintenance. Here, it is not just about the technology used, but above all, a whole new competitive advantage, as well as a new source of revenue for the company from these services: a new business model.
Customer orientation and digitalization of products and services is just the tip of the iceberg. It is only the surface and often viewed as the priority part of transformation – the front-end part of the business. However, even the best customer application, new service, or product fails to reach its true potential if the company doesn’t manage to handle it properly within its internal organization and information systems – the back-end.
More and more of our customers realize this, and the leading industry analyst firms confirm it. For example, Gartner has come up with a multi-speed IT model, which highlights the conflict between the agility of modern, front-end applications and the stability of robust internal information systems. These internal IT systems often cannot be adapted quickly enough to the new changes due to their nature and technical obsolescence.
› Does this mean that businesses will have to get rid of these older technologies?
All technologies used today have their place. Our customers have invested vast resources and effort into their core systems. Though they are less flexible, large companies could not work without these systems’ stability and reliability. Their replacement is usually an expensive, risky and lengthy process. And, even such a modernized system will not really be agile, because it will once again have to be robust and reliable to meet security and regulatory requirements.
› How do you deal with this dilemma?
There is no single answer. The really outdated and unprofitable systems must be replaced. A significant increase in the flexibility and speed of changes can also be achieved by improving the engineering process support and development of these platforms and by automating testing or deployment of changes into operation. We have several global and local competence centers that are intensely dedicated to these topics.
Yet the fundamental answer is a comprehensive, holistic approach: take advantage of these platforms for their stability, robustness and safety; simplify them where possible; or, migrate functions which are subject to frequent change to the process integration layer. Therefore, we want to be a strategic “end-to-end” partner that helps businesses in linking the world of technological innovation and fast-changing requirements with the permanently necessary and needed world of stable and reliable internal systems.
› In your solutions and services, you put obvious emphasis on the employee experience with technology. Why?
Employees also want to have a good experience with their work and to take advantage of technological innovations, so their work is effective and enjoyable. If employees like what they are doing, this will be reflected positively in their engagement with customers. Motivated, efficient employees and digitalized internal processes are an equally-important part of digital transformation relative to customer orientation. This is also confirmed by Forrester, which has previously predicted needed investment in the digitalization of internal processes and systems, in addition to the digitalization of customer technologies that has already been a focus of organizations.
› Continuing our discussion on processes: what would you recommend to the companies that are holding back?
Companies operate through processes. Process flexibility is key for digital transformation, especially so companies can flexibly respond to changing market situations, customer requirements and new technological possibilities. And, as described earlier, there are ways to modernize stable processes with newer technology options such as automation and internet robots (“bots”).
We build our portfolio on a new generation of agile process platforms, such as ServiceNow, that allow companies to get the necessary part of the logic of their processes from those big transactional systems into separate, flexible layers. Within it, the processes can be changed quickly, while being fully integrated. That is, I believe, a good approach.
› How do technologies affect business strategies?
Technologies release the potential to do things better. They are the trigger or means of changes. But by far, digital transformation is not just about technologies. Whole industries are changing, new companies and business models emerging, and traditional products and services are being digitalized.
› How do you see the development of digital transformation?
Digital transformation will continue, and further innovations will come at an even faster pace. Businesses will have to adapt and become agile by nature. The transformation will involve the entire company making permanent changes to its thinking, approach, culture and management. We call it “end-to-end transformation” and perceive it as an opportunity.
Source: Euro, Mladá fronta, a.s.