What does digital transformation look like?
by John Browne, on Apr 30, 2020 10:27:31 AM
Note: this is part 2 of an on-going series about digital transformation in the time of pandemics. You can read part 1 here.
Whenever something huge and horrid and dreadful happens, it's natural to ask, "Is this the right time to be talking about anything else?"
It's a fair question.
The news right now (April 28, 2020) is consumed with the global pandemic that has, among other things, brought the economy if not to a stand still at a minimum to a major downturn. In order to prevent infection rates from climbing like an anti-aircraft missile, people all over the world are currently "sheltering in place" i.e., working from home or just staying home. Staying away from other people, including friends, families, and co-workers. Keeping from spreading the disease until we can get things under control.
Of course, lots and lots of jobs can't be done from home, and daily people are applauding those whose responsibilities--both large and seemingly trivial--require them to show up so that the rest of us don't have to. And before I get into the subject of this post, I'd like to add my thanks to the mail carriers, garbage collectors, truck drivers, grocery store clerks and shelf-stockers, fire fighters, cops, EMTs, doctors, nurses, and, sadly, undertakers.
How the pandemic showcased the problems with legacy code
One of our customers--a mid-size ISV--was in the process of migrating their core desktop apps (written in VB.NET and Windows Forms) to the web using WebMAP when the pandemic lock down orders happened.
Their customers had to scramble to figure out some kind of remote access solution literally over night. One day they were working in the office, doing important tasks on Windows desktops running Windows applications. The next day they were told they couldn't come into the office, but the work has to keep going.
So what happened?
According to multiple sources, including industry analysts, customers, and the blogosphere, the only fast solution was to host those apps on remote desktops using some kind of virtualization or VPN software. It's no coincidence that Citrix's stock price soared right after states imposed shelter in place orders.
What did our customer say? He (the CEO) said HIS customers want his web native version of those applications sooner rather than later. While those employees are able to function--mostly--using whatever jury-rigged methods they have worked out, true web native clients are what they want and need.
Here's what one analyst told me: "Boards are telling management to get off this old stuff immediately. They see the problem and they see the on-going costs and issues that hosting desktops create." He added, "The CEO tells IT 'When I wake up tomorrow I want everything to be in the cloud.'" With a mandate like that, the only feasible response (other than "you're kidding, right?") is to throw everything onto remote desktops.
As a short term solution, it's not terrible. As a long term solution, it's not great. And it's not digital transformation--it's a cul-de-sac.
What does digital transformation look like?
Googling this topic gets lots of results, but closer examination shows that like the three blind men discovering an elephant, the answer depends on the explorer. The customer and revenue-facing sides of a company will see DX as improving lead generation, customer acquisition, up-selling, cross-selling, and sales efficiency. The product side of the company might focus on improved customer experience and better new product ideation and development.
Operations, manufacturing, HR, finance, and legal can all find equally narrow-focused benefits to DX depending on how it’s implemented.
So to think about benefits of DX, consider that poster-child for the digital world, Amazon.com.
Jeff Bezos began Amazon to sell books online, in spite of a natural reaction that customers wanted to be able to thumb through prospective purchases before deciding. Bezos was far-sighted enough to realize that unlike a bricks and mortar bookstore—which had to be selective on which titles their limited retail space could present—an online bookstore could sell any book in the world that was available from a publisher, existing bookstore, or private owner. Amazon, of course, rapidly expanded into other product lines until today there is very little that one cannot find on Amazon.com.
Let’s briefly consider a few aspects of Amazon’s business that might suggest some benefits of DX.
For starters, imagine a customer who searches in Amazon for some small purchase, say a solar-powered LED flood light. Once logged on to Amazon, the customer’s search history will be added to existing history in order to make purchase recommendations later. The customer narrows her search to a few similar items, and Amazon— drawing on its enormous product database—offers similar items and shows a dynamically constructed web page comparing all her choices and others as well. The customer can look at product information provided not by Amazon but via RESTful APIs connecting the Amazon website to its supply chain. The customer can read product reviews created, stored, and displayed from Amazon’s vast storage capacity on its own AWS public cloud services.
Once the customer makes a choice, the Amazon platform calculates the price including shipping (or free if Prime), sales tax, and—where appropriate—offers an extended buyer protection plan from another 3rd party provider connected via API services. Payment completion uses more secure API services to validate credit card information. On finalization not only is the order confirmed via an automatically- generated email to the customer, but more back-end services kick into play. We can imagine something like this happening:
An inventory management system determines whether the SKU is available from an Amazon are house or has to be drop-shipped from a 3rd party In this case, this popular item is carried in multiple Amazon fulfillment centers.
- An algorithm determines which warehouse is optmal for this particu- lar order, taking into account location, current order volume, weather forecasts, real-time shipper status, and HR information about current staffing levels.
- Serverless processes in the AWS cloud send B2B JSON messages to a fulfillment center, which then sends an item location and pick order to a queue for the warehouse robots. The robot which gets the order goes to the appropriate bin and grabs the package which is then dropped into the shipping
- The shipping queue packs the item and puts the shipping label on it, which itself was generated from the RFI data on the pick bin, again retrieving the specifics from Amazon’s public cloud
- An automated conveyor system reads the shipping label and diverts the package to the correct loading dock for the chosen
- The shipper picks up the package, scanning it and sending the tracking number back to
- Amazon takes the shipping information, including the expected delivery date, and creates an email for the customer to confirm that the shipment has taken
- Amazon’s connected systems perform follow on activities, like re-ordering the item when inventories drop to an appropriate level (based on real-time order volumes and fulfillment time historical data); the customer’s order history is updated, her preferences profile is up- dated, and the marketing engine prepares new suggestions based on this latest And so on.
These processes may or may not be accurate with respect to precisely how Amazon.com does business, but all are perfectly reasonable based on today’s technology.
Short version: DX is certain to bring benefits, but only you can predict—based on your implementation plans, your industry, and capabilities—what those might be in your specific cases. As you consider your own situation, ask yourself how these kinds of capabilities—made possible via digital transformation—could revolutionize your organization.
Stay tuned for the next installment in this series on digital transformation.