Agile Business – How IT Needs to Stay on Top in the Digital Age

LOWERING THE COST OF CHANGE

You might expect that if something becomes cheaper, you will spend less on it. What actually happens though is the complete opposite. A good example of this is how both governments and environmentalists assume that gains in energy efficiency will lower overall consumption. What we see in reality is that as the cost of a resource falls, we find more uses for it because it becomes easier to deploy and more cost effective. In other words, lower costs lead to increased demand, usually in brand new areas where the previous expense formed a barrier to entry. This observation is called Jevons Paradox – first seen with the consumption of coal in the 19th century, it is also true of computing power today.

Technology is the relentless march of increased efficiency. As the cost of computing decreases to the beat of Moore’s Law, the question is not how much money businesses will save from the use of new technology, but what new goods and services will arise from that freed up capital.

It is frequently observed that AirBnB is disrupting hospitality, Netflix video delivery, Uber how we take a taxi. All these services are underpinned by the Cloud. Those who are adopting the Cloud as a cost-saving exercise are missing the point; the Cloud is about innovation, transformation and a new way of delivering services that was never previously possible.

SPEED NOT SIZE

When we look at current mobile and cloud technologies, none of the above tech “start-ups” could have existed 10 years ago; technological deflation is an essential catalyst for new invention. If you decrease the cost of change, you increase the rate of change. People are trying to run their businesses faster; today business value is being driven by a need for of automation and continuous iteration. It now makes less sense to ask whether a company is big or small, but whether they are fast or slow. In 1935 an incumbent could expect be in the S&P 500 for 90 years, in 2015 that average was only 17. The benefits of being an incumbent are declining and the ability to be agile can mean life or death for a business, or even an entire industry. In order to stay on top, corporations must orient internal structures to reflect external realities. The tools available to consumers through services provided via Google or Facebook frequently exceed the capabilities of the tools available internally in the workplace.

Top developers are choosing their cloud services due to quick and easy deployment, elastic capacity and a breath of capabilities that match their skill-sets and objectives; they are not choosing the Cloud because it was approved, recommended and provided by IT or because it was compatible with existing IT assets or investments.

CLOUD – MAKING I.T. ABOUT INNVOTION AND TRANSFORMATION

Today IT needs to be less about Information Technology and more about Innovation and Transformation. DevOps is a new structure for IT and software development teams that enables agility, speed and competitive edge. It brings the power of web-giants to enterprise environments. Rather than being an unapproved development project, cloud technology is enhanced and encouraged by an IT skill-set. It is not enough to simply have digital technology in business; businesses must be ready, able and properly structured to take advantage of new tools that are available to them or risk being beaten by those that do.