A Seismic Shift in IT
March 10, 2023
3 min read
The world of software-is-the-brand affects not only B2C, but B2B as well. Former Forrester Vice President and Principal Analyst John C. McCarthy believes successful companies will learn to operate more like cloud-based software companies than traditional IT shops, creating a fundamental shift in technology and a cultural shift for business.
“This is not your father’s IT,” he says.
In the webinar, “Taming Inflation While Driving the Innovation Agenda,” McCarthy joined Origina’s Hari Candadai to discuss strategies and real-world examples for thriving in a software-is-the-brand world.
Volatility and inflation are setting the business context today.
McCarthy parallels what’s happening currently in 2020s with the world of the 1970s. Back then, we had the Arab Oil Embargo and inflation from spending on the War in Vietnam and on the Great Society programs of the 1960s.
Today, we’re dealing with the war in Ukraine and the aftermath of the pandemic. This time, things like pandemic benefits, food supply chains disrupted by climate change, and increased defense spending are responsible for rising inflation.
What’s different this time is how companies are addressing this inflation. Before, they moved IT services to cheaper onshore and eventually offshore locations.
But that card is played out.
Rebounding from the current inflation will need to include using more technology, not less.
“At a macro level, the change going on is summarized by a very simple statement — software is now the brand of the company,” says McCarthy. “It’s not in the back office running accounting. It’s front and center in terms of how you deliver your products, how you differentiate them from the competition, how you engage your customers, and how you deliver an overall brand experience.”
Process automation and the use of robotics and AI have already spilled up from the factory floor into other areas. With mobile, there is a heightened expectation to provide better service fast to create a proactive, personalized experience. Smart products, the Internet of Things, and the digitization of processes will drive efficiency.
Technology will transform from IT-led development to business-led development. This is a tremendous shift for business, product development, and IT.
Mobile applications create a compelling experience with customers. They are a chance to engage and stay connected to them 24/7. Everyone carries their phones. How can that data be used to craft a more personalized experience?
Faster, cheaper, and more nimble comes at a high price, yet most U.S. CEOs are cutting budgets across the board in 2023.
How do you cut costs, but also generate new forms of revenue?
IT decision-makers know they need to lower technology budgets, while still fostering innovation to get ahead of the competition.
It’s a precarious balancing act.
“You need to be constantly asking yourself, do we really want to do this the old way, or how can we leverage the new?” McCarthy says. “Look for new tools and techniques that are becoming particularly important and don’t be beholden to the concept that you need to see it or touch it. Come at it more from a product development point of view rather than the traditional.”
Tools such as customer journey mapping sit at the intersection of company and customer. These cannot only reduce costs, but when implemented also can provide a better customer experience.
Another option that provides the opportunity to free up budgets and resources, according to Candadai, is third-party software support and maintenance, which can maximize the life and value of legacy systems so companies can continue modernizing. Using third-party support can save companies up to 50% on maintenance, which then can be reinvested into the company for innovation.
It is crucial for people on both the business side and the IT side to acknowledge the central role of software, according to McCarthy, and how the world is morphing from an IT-led application development group to a business-led product development function.
“At its core, it’s a very different mindset, skillset, and culture,” says McCarthy. “In this software-is-the-brand world, firms have to deliver availability and reliability. It’s functionality and experience. We’re constantly innovating and updating. It’s a tsunami of releases requiring agile processes, as well as new applications and architecture. The accelerating rate of change requires a composite app-based strategy, not developing Old World slog from the ground up.”
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