ARN

Defining digital transformation in the channel

Digital is an ambitious and complex term to interpret - but what are the implications within the context of the Australian channel?
Murray Sargant (Informatica); Brad Starr (Informatica); Simon Barlow (Brennan IT); James Henderson (ARN); Dean Robertson (Mexia); Robert Simione (Meridian IT); Chris Farrow (Tech Data); Richard Mitton (AtlasPlato); David Nicol (Citrix); Ed Phillips (Dimension Data); Brent Butchard (Hewlett Packard Enterprise Software) and Jamie Warner (eNerds)

Murray Sargant (Informatica); Brad Starr (Informatica); Simon Barlow (Brennan IT); James Henderson (ARN); Dean Robertson (Mexia); Robert Simione (Meridian IT); Chris Farrow (Tech Data); Richard Mitton (AtlasPlato); David Nicol (Citrix); Ed Phillips (Dimension Data); Brent Butchard (Hewlett Packard Enterprise Software) and Jamie Warner (eNerds)

As digital initiatives move past the piloting phase and into the mainstream, new customer demands are emerging.

Today, end-users are challenged to reinvent the organisation, the process or the business they operate, in the quest to become faster, nimbler and more competitive.

Yet despite a drive to adopt new technologies and practices, one out of three businesses require channel help as digital transformation strategies stutter, with organisations underprepared and ill-equipped.

With digital transformation sitting at the top of the agenda across almost every industry sector in Australia, the disparity between intention and execution subsequently creates new opportunities for partners across a range of verticals. Yet before the channel can embrace these new routes to market, clarity remains as to the true definition of digital transformation.

“There’s a few aspects to digital transformation,” Citrix director of cloud services APJ David Nicol said. “The first aspect looks at the capability of a business to be creative and enter new businesses.

“It’s a measure of what extent their employees have the intellectual capacity but also the social capacity to be creative and create new business opportunities for an organisation, such as entering new markets that will enable the next phase of growth.”

For Nicol, another side to the digital story in business is around user productivity, specifically how organisations continue to improve the productivity levels at which the business and the employees operate at.

“If you look at the profile of organisations today, they are made up of millennials,” Nicol explained. “They just expect things to work and if they don’t, those millennials will place more importance on flexibility of work than they will on pay.

David Nicol (Citrix)
David Nicol (Citrix)

“The productivity and mobility that organisations provide employees will be an important platform from which businesses can be innovative and efficient.”

Alongside the internal benefits of digitalisation, businesses are using new technologies and ways of doing to business to engage outside the boundaries of the organisation, in a bid to drive future growth opportunities.

“This is about helping organisations engage better with parties externally,” Tech Data principal technologist Chris Farrow observed. “There is a real sense that most businesses find that they are not getting a lot of work done when most of their employees are internally focused.

“While we’ve seen in the past IT coming into that space and providing productivity solutions, it hasn’t really changed the nature of process. But now there’s some sense in which digital transformation relates to, in freeing people to not be enslaved as part of the machine, but rather to engage.

“Then there’s a further aspect of the technology helping facilitate that engagement to help unlock core assets in the business, which are people and data.”

Changing competitive landscapes and consumerism are disrupting businesses and creating an imperative to invest in digital transformation, unleashing the power of information and thereby improving the customer experience, operational efficiencies and optimising the workforce.

In 2017, and according to IDC research, global organisations will spend US$1.2 trillion on digital transformation technologies, predominantly from connectivity services, IT services, and application development and deployment.

But while the direction of travel appears clear in terms of customer appetite, challenges remain around converting high-demand into high- growth areas of profitability for partners.

“At the end of the day it’s an electronic medium and we’re trying to do things in real-time,” Informatica senior vice president of APJ Murray Sargant added. “The key area we should concentrate on more is the disruption aspect. What do you mean by disruption?

Simon Barlow (Brennan IT)
Simon Barlow (Brennan IT)

“If you look at digitally disruptive native companies, they don’t have a strategy for digital disruption, it’s just what they are doing. For legacy organisations, it’s about whether you re-engage and disrupt your business to keep up, or you allow someone else to disrupt your market and take your legacy customer base.”

But despite digital sitting high on the agenda of executives in boardrooms across Australia, confusion remains as to what a true digital strategy looks like in 2017.

“Look at digital when it’s disruptive and when it’s an enabler,” Hewlett Packard Enterprise Software country sales manager Brent Butchard said. “A lot of organisations going through digital transformation are running the same business model and the same process, and they are just automating things and creating new channels to market.

“It’s the same but they think that people are taking market share off them but perhaps the bigger question is, is the market still there? Look at Blockbuster versus Netflix.”

Consequently, Butchard believes businesses must assess if they are trying to fundamentally change or trying to eliminate wastage and create efficiencies — because there is a difference.

“But disruption can feel limited because we’re still referencing Uber and Airbnb,” Brennan IT executive general manager Simon Barlow added. “But so what, that was five years ago. What else is disrupting our marketplace today?

End-user priorities

From an end-user standpoint, Barlow acknowledged a rise in business focused conversations with customers, customers that establish an outcome and then seek solutions to deliver that outcome.

“But if I truly think about a business that has reengineered how they operate both internally and externally, I think about Qantas,” Barlow added. “How much has the airline industry moved on?

“You used to have to print out a boarding pass, queue, check-in, queue, place your bag, queue again for security. It was a pain. Now you can book online, you can turn up with your card, you go through security and sit in the lounge.

Page Break

“Qantas and the industry has taken what they have traditionally done, digitised it and made it a lot more pleasant experience. There’s a lot of merit in taking a process, removing the wastage and making it leaner, agile and a better end-user experience. That would fall under the digital transformation bracket in my opinion.”

In 2017, CIOs know they need to make businesses more digital, and many IT leaders are taking deliberate steps to get there.

Across the industry in Australia however, digital initiatives and pilots have yet to translate into mainstream demand for deployment.

“It’s still early days from our side,” Meridian IT practice manager of managed services and cloud Robert Simione added. “You have to define what digital transformation is and everyone has a different version.

“Are we already doing that today but it’s just called something different? We are seeing more demand around agility, we’re seeing that come from our customers who are wanting to do more with less.”

Delving deeper, Simione cited automation as a key driver for end- users today, creating challenges for traditional value-added resellers operating in the new digital world.

“As a traditional infrastructure company, that’s difficult for us because we’re used to selling boxes,” Simione acknowledged. “Now we’re having conversations with customers and they just want things to work simpler and to do X and to do Y but how can we enable that?

“We’re having lots of conversations internally and with our vendors and customers to maximise this opportunity.”

Going against the grain, AtlasPlato CTO Richard Mitton questioned the relevance of the CIO in the digital process today, claiming that its role in transforming businesses “has come to an end”.

“Collectively, we predominantly sold to the CIO and that role has bought transformation before,” he explained. “We didn’t call it transformation but it was an email system and it changed the way we communicated with each other and the rest of the world.

Richard Mitton (AtlasPlato) and Dean Robertson (Mexia)
Richard Mitton (AtlasPlato) and Dean Robertson (Mexia)

“When networking came it transformed how businesses worked and that came through the CIO, and the same happened with cloud. It was everything from an infrastructure point of view.”

But the question now, according to Mitton, is how much more change can an infrastructure driven position in a company bring to that company?

“The answer is going above the infrastructure, it’s no longer about connecting a user and keeping the data in the applications,” he explained. “It’s now about looking into that asset and asking how we can tap into that data asset that has been sitting there stagnant, and instead start to add value.

“The traditional CIO is challenged today to reinvent what their role is. They must stop thinking about sorting out back-up and security projects, they are just operational issues. They need to look at maximising their assets.”

With every organisation set to require a digital platform strategy, it will take bold, modern leadership skills by CIOs to develop business ecosystems to improve operations and create an environment for sustained innovation.

“Regarding CIOs becoming less relevant, I believe that’s a dangerous assumption to make,” Dimension Data general manager of end-user computing Ed Phillips said. “We operate in the mid-market and above and most customers have some form of a digital strategy, although it might take different names.

“And CIOs are central to this, with their role becoming even more relevant.”

As a leading system integrator within the local market, Phillips said the CIOs currently engaged with Dimension Data operate at the forefront of digital strategy building, with businesses starting to seek advice and guidance from internal technology leaders.

“A lot of this language that we use around digital transformation, it comes from C-levels within organisations that are realising that IT is a critical, if not the most important piece of their future,” Phillips said. “The biggest change in the way people work will be through technology.”

Chris Farrow (Tech Data) and Ed Phillips (Dimension Data)
Chris Farrow (Tech Data) and Ed Phillips (Dimension Data)

For Phillips, key focus points for businesses centre around creating a differentiated user experience, whether it’s customers, employees or both.

And irrespective of company size, businesses across the country are grappling with the digital transformation equation, with most looking towards technology providers as the first port of call to help build innovative road maps.

“From an SMB perspective, there’s a revolution happening around digital transformation,” eNerds CEO Jamie Warner said.

“If you subscribe to the notion that ‘software is eating the world’, and while that can be a true statement to make, for SMBs, they don’t have a lot of capabilities to start building things to disrupt their own market.

“But it’s happening where SaaS vendors are coming in and changing markets, that’s happening all the time. But it’s not from the businesses themselves in the industry, they are embracing Office 365, Dropbox for Business and a range of cloud technologies that start ticking the boxes of digital.”

Role of the channel

Of note to technology providers, one third of enterprises globally remain underprepared for the wave of digital transformation impacting the industry, creating new demand for channel partners as C-level strategies screech to a halt.

According to Ovum research, 33 per cent of businesses remain challenged by the process of replacing legacy networks and dedicated service platforms with a coherent digital environment.

“Now more than ever, customers are asking for help because to do anything that they want to do, they need the skills of a system integrator and technology provider,” Phillips added. “There’s an increase in relevance but the challenge is more around how to communicate with those companies in a relevant way.

Page Break

“We’ve created industry specific groups to be more literate around verticals such as block chain. We have also embarked on a huge journey internally to re-skill and retrain people to maintain that relevance.”

Within this new digital environment, businesses across the world are becoming blocked in the quest to create flexible and cost-effective systems, systems that can deliver changes rapidly and dynamically.

In addition, research shows that while 60 per cent of organisations believe their process of digital transformation is “well advanced” or “in progress,” only seven per cent believe it to be complete.

From a partner perspective, 90 per cent of organisations claim to have a digital strategy in place, but once again, have failed to advance past preliminary stages of development.

“The mistake is, because digital is in the term, IT think that it’s their job to solve,” Mexia CEO Dean Robertson said. “It’s not just IT, IT is just part of an overall solution. There’s only three things that any business wants to achieve, increase revenue, decrease costs and decrease risk.

“As a consultancy business, our job is to ensure that we are not there to create digital transformation, but to articulate what it means for our customer.

"Digital transformation starts with the CEO and if they aren’t on board, it must exist in small slices to demonstrate the value back to the CEO. It has to be an organisational shift.”

Dean Robertson (Mexia)
Dean Robertson (Mexia)

With digital transformation sitting at the top of the agenda across almost every industry sector, the disparity between intention and execution subsequently creates new opportunities for the channel across a range of verticals.

“If we’re going to deliver digital transformation across the enterprise, it can’t be an all-in-one approach,” Informatica solution director Brad Starr added.

“To ensure that a CEO sponsors this is to ensure that they are aware this can’t be done through a single approach.”

With the onus now on senior executives to adopt a leadership role in creating a business ecosystem to drive a digital platform strategy, partners must remain aware of the subtle but substantial differences in approach and outcomes.

“Sometimes it’s about doing things differently and sometimes it’s about doing different things,” Farrow added. “If you’re doing something that is fundamentally different rather than something that you’re already doing differently, if you reach too early for efficiency then you’re probably going to kill it.

“There’s a reflex when it comes to IT and there’s a reflex about efficiency that can be problematic. You need a very inspired CIO who simultaneously thinks about innovation and information.”

As many business leaders begin to take deliberate steps towards creating a digital world — as initiatives and pilots become mainstream — the need for trusted advisors, consultants and strategists heightens.

Consequently, the channel can capitalise on the immaturity and complexity of the digital transition, assisting organisations currently at a transformation crossroads.

Robert Simione (Meridian IT) and Simon Barlow (Brennan IT)
Robert Simione (Meridian IT) and Simon Barlow (Brennan IT)

“As a partner, how do you qualify a customer that is ready for digital transformation before you invest in engaging?” Nicol asked.

“There’s two elements to the transformation for the channel to consider. Firstly, what is the infrastructure role required to enable such transformation?

“It’s an agile platform from which you can deploy new services because being agile is a key element to transforming. Then once you can deploy new services and you have data, do you have the right capabilities within the business to interpret that? And what role does the channel play?”

According to Nicol, partners can play a role in the infrastructure piece through building an agile platform that is secure and enables the delivery of new applications quickly on any device.

But then, what methods are in place to interpret, capture and manipulate data to make decisions?

“Innovation is also about experimenting and learning,” Robertson added. “It’s not about deploying million dollar two year programs.

It’s about how do we engage and engage quickly so we don’t have to embark on six month sales cycles for a period of work.

“But at the same time, we like to play where we can win so in this world, we ask our customers questions. If they have a senior executive team engaged in digital transformation and we feel like the company is ready then we will go in with both feet.”

This roundtable was sponsored by Citrix and Tech Data. Photos by Maria Stefina.