Value Migration and the Impact of a Journey into Application Transformation

Many organizations attempt transformation and use transformation-centric language, but they really don’t believe in it or strive for it. Because? They don’t see the value in it. Profession doesn’t always mean possession. How do your strategies match with your conformity to take the journey?

One of the most difficult lessons to learn is that transformation is inevitable. It is above all those other things – M&A, organizational changes, new leadership, new products / services, new markets – OR, maybe it’s because of all these things? Lack of transformation kills a firm’s value delivery, thus limiting the power and authority of the entire enterprise. Those who live in the upper branches of the organizational tree, with relatively comfortable financial situations and high degrees of autonomy, find this difficult to understand. While we may feel as though we are free to do what we please, transformation is sovereign over every departmental plan and action.

Your company has entrusted to you, value creation. Have you, in turn, trusted transformation to take you to the future of value creation? It should be THE top priority.

As priorities evolve, you will say, “I don’t care about our historical abilities to ____?_____. Our business has changed, our needs have changed. What I really care about is _____?____. What I will pay a premium for is _____?____.

You’d better be in a position to fill in these blanks. The pattern is clear – when needs (think – value migration) are emerging, the business looks to transformation. When needs mature, business looks for low cost and stability.

Emotionally, it’s easier to change when you’re hemorrhaging

What’s on your radar screen? If your executives are worried about competitors’ moves, customer’s demands, or market shifts, they very well better be worried about how to transform the plethora of applications to support these changes – starting today.

As Andy Grove, former CEO of Intel, said, “There is at least one point in the history of any company when you have to change dramatically to rise to the next performance level. Miss that moment and you start to decline.

Transformational denial can blind your organization.

Take a look at this quote from a recent key executive, “We found it very very hard to face up to the decision. Financially, it should have been easy. In retrospect, it should have been easy strategically too. Yet, we, the management, were at each other’s throats over this.

Sound familiar?

Success can trap you. The more successful you are as a company, the more difficult it is to transform into something else. To take advantage of the opportunities in front of you, you must transform. And your portfolio of applications had better be nimble enough, agile enough, scalable enough, integrated enough, and cost effective enough not to get in the way.

The time to transform is to do it while your core business is still strong enough to see it through. Need proof? Take a look at the big legacy technology companies today. Ask yourself, “at what point is our decline irreversible?

One of the best ways to influence the ‘we’ve-always-done-it-this-way” group is to work diligently and responsibly on the transformation journey. Always representing the strategy in a positive light – increasing the awareness for the need for the journey. Your critics will have a difficult time finding legitimate arguments against it.

Can you wait?

46 years ago, in 1970, the market capitalization of (all) the world’s companies was $929B. 23 years later, in 1993, this grew to $12.6T. Today, the capitalization of the world’s 100 largest companies stands at $16.2T.

Are you on the verge of forgetting? The longer you wait to transform, the greater legacy can choke an enterprise. At some point, firms develop institutional-Alzheimer’s. Wait long enough, the damage will be so complete that nothing you do will generate value of any consequence. You could find yourself on the short-end of any digital business strategy – a death sentence in today’s environment.

Begin transformation by asking, “What journey should I be developing today?

Justification

We’ve all heard them and experienced them. The eight common excuses for not transforming

  • “They” (another BU, department, region, etc.) don’t deserve help. They got themselves into this current state, let them get themselves out
  • The call for transformation applies to others
  • We don’t know of any other companies doing this
  • Competing needs, goals, and strategies
  • Any money invested in transformation with be wasted or re-appropriated
  • We may become involved so deep we’ll become victims ourselves
  • Don’t know where to start, and don’t have time
  • Any effort won’t make any difference

CostOfAdditionalApplications

Be smart, have a plan…

There is no right or wrong answer to the transformation journey or the value it can generate. There is more than one road to the future. Remember baseball legion Yogi Berra’s line, “If you come to a fork in the road, take it.”

The Transformation Suitcase

What to put in your enterprise-wide suitcase for the eventual journey in transformation? At first thought, you don’t know what to take. Here’s an idea: Put in everything that is in the back-half of its life cycle. Put in all the legacy AND lack of technology-currency you can find. Also, all the BU-centric solutions that were implemented during those budget-lean years. Plus all the stand alone applications with manual interfaces. In other words, you are focused on all the technologies that have zero value left to offer the organization.

Hopefully, you will identify many things to put into your suitcase.

As important as your transformation journey is, you want, and need, the enterprise’s backing. On your own, you have neither the ability to fulfill nor the power to disrupt the momentum of legacy. Take a look at the following current-state application architecture of one of North America’s largest utilities. Ask yourself, “Is this model sustainable?”

CurrentStateAppArch_PGE-Example

Can you envision doubling or tripling this complexity? Support staff? Operational cost? Consider, this graphic represents only 20% (top 300 of 1,500) of the application portfolio with:

  • “Put-out-a-fire” architecture
  • Point fixes that don’t fix problems
  • Bypassing the middleware because it’s “cheaper”
  • Departmental IT (e.g. shadow IT)
  • Bewildering range of integration choices
  • Functional redundancy
  • Prevalent manual processes

Implementing the Plan

Implementation of your transformation journey is critical. A roadmap must be approved, executed, and governed. You are either “mixing mortar”, “filling the cracks in the wall”, or “building a cathedral”.

You decide.

Roads? Where we’re going, we don’t need roads…

See you in the future…

Frank Wood

Executive Transformation Advisor

frankwood944@yahoo.com

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