Challenging times are the real crucible of digital transformation

June 21, 2022

You can’t help but feel a foreboding sense of gloom when doomscrolling Twitter or sampling news feeds on YouTube, or even watching TV news, if anyone still does that.

Pandemic, war, labor concerns, supply chain shocks, rising fuel costs, housing prices and food shortages seem to be generating global crises with increasing frequency, creating uncertainty for all.

Unless you are one of the lucky ones still working in IT.

If you are a fortunate professional in our technical workforce or IT leadership, you may have been able to ride out the past couple years with relative ease. Perhaps, working remotely and ordering food delivery, with the job security of having multiple employers competing to hire digital talent. (I commented on this “Digital Survivor’s Guilt” phenomenon near the beginning of the coronavirus.)

Whether you feel grateful or guilty about your relative fortune in this space, times are likely to become a lot more unstable as market realities begin to affect digital workers within IT organizations.

From salad bowl days to bottlenecks

For the last decade, two trends have allowed technology vendors and workers to soar above other industries.

First, almost any serious business in every industry became a digital business, with systems driving incredible growth and valuation expectations for companies perceived as technology vendors or innovators.

Second, near-zero interest rates fueled inexpensive business financing and a constant influx of cheap capital investment into technology companies. Acquisitions followed fast and furious, paying high multiples to consolidate market share as a preferred growth method.

I call this post-dot-bomb, post-downturn interval the ‘salad bowl days’ where cloud computing and open source became ubiquitous. Major players and equity firms were willing to experiment and mix almost any tech service offering into a melange of digital solutions for enterprises.

Now that we’re seeing severe bottlenecks in supply chains and customer demand declining for companies in almost every industry, the technology departments and vendors that support the digital backbone of enterprises are finally facing the same uncertainty that a restaurant owner did in 2020.

Some startups may look at the near future, and possibly close or clearance their businesses off to larger vendors earlier than they should.

Major vendors, whether deliberately by policy or as a knee-jerk reaction to recent acquisitions and tightening capital expectations, will take this opportunity to put strategic projects on hold. They might defer investments, spin off divisions, or lay people off – just when a digital advantage is needed most.

Turning pressure into positives

Tighter conditions are not always cause for doom and gloom. Our current bottleneck is also a crucible: a much tougher business environment in which we can remix and harden the company’s digital business.

It is well known that companies who can innovate through a downturn are in a much better position to take market share from competitors who stand still or cut back, relative to the all-you-can-throw-in salad bowl days.

If you are a leader with responsibility for the digital function of a business, what to do? IT budgets tighten each year, even in good times. You can try arguments for more budget, but with most IT projects already going over budget, it’s no wonder that CFOs are inevitably blocking new proposals.

Fortunately, there are several business practices companies can experiment with to improve their digital outlook without necessarily increasing bottom line costs.

1. Train from within. Since customer-focused work can be highly variable and recruiting highly skilled talent from outside the company, set aside some time for training and mentoring with shared team incentives for learning new capabilities.
2. Form a platform team. Whether you choose a support desk or storefront model, making consistent tooling and provisioning less hassle for dev, test and ops teams can massively boost their productivity and innovation rate, along with morale.
3. Eliminate procedural garbage and encourage process excellence. Maybe it is time to Marie Kondo the way your teams work, and throw out anything that doesn’t make them happy. You might start by removing unused or redundant technologies, but even more benefit can be realized by taking a deeper look at manual work processes and draconian policies, perhaps with a center of excellence that spans teams to identify opportunities for smoother approvals and better automation.
4. Open source contribution connects your team to the larger development community, allowing your company to remain influential in helping to advance the technologies every enterprise will increasingly depend upon. OSS involvement is a key job satisfaction attribute for many of your most innovative people.
5. Partner with customers. Digital transformation isn’t about intellectual property, data and code, it is the alignment of every aspect of the organization’s technology around the needs of customers. Don’t just cop out and send them surveys or something. Stay connected with customers as part of your collective brain trust, and help them face their own current challenges.

The Intellyx Take

Digital transformation may be a tired term to some of my dear readers, but it is especially valuable in high-pressure environments.

As a generalist IT analyst with a cross-cutting focus, I understand the above points are not even close to complete – they are a few representative examples of how innovative companies respond creatively to uncertain times like these.

When the world changes this fast, the category-leading companies most likely to emerge from the crucible with momentum will look beyond the blunt instruments of cost-cutting measures and layoffs. After all, real transformation is not just about adjusting tools and headcount. Everything about the way you work should be up for experimentation and renegotiation.