How to Invest Wisely in Digital Transformation with Technology Chains

Posted on October 1, 2019

While IDC estimates that 40% of all technology spend this year will go toward digital transformation, many wonder what exactly will this investment look like–particularly for enterprises that have been highly successful at technology-driven innovation? Given that every enterprise is tasked with turning digital disruption into opportunities for revenue growth, IT executives can’t afford to miss these tips in how technology chains make for wiser digital transformation investments.

Digital Transformation’s Primary Failure Point

We’re all aware of the range of emerging technologies that are redefining business as we know it–from artificial intelligence (AI) and the Internet of Things (IoT) to multi-cloud IT strategies and SD-WAN. Yet arguably more important than what organizations are investing in is how. The diverse systems, data repositories, and workflows across different areas of business can quickly lead to disorganization, signaling the dreaded “s” word that keeps executives up at night: silos.

This dread is justified, too: Silos can be the death of digital transformation.

In fact, McKinsey predicts that 70% all digital transformation initiatives will miss the mark due to silos, equating to over $900 billion worth of misused spend. Shaping a sustainable digital transformation strategy is no simple task. An approach that is too narrow or targeted can shackle innovation, depriving multiple associated technologies from working together in the ways they should. Yet too broad of a strategy can lead to dysfunction, indicating the need for the right kind of business alignment.

What’s the secret? Investing in technology chains.

Forrester’s Top Research For CIOs: Technology Chains

Forrester refers to this concept as “technology innovation chains,” and you may have also heard others use the term “holistic technology suites” or “technology value chains.” Vernacular aside, the idea is the same: Tap into a series of related technologies that build upon one another synergistically to create breakthroughs in innovation. In fact, this is how Forrester and Analyst Brian Hopkins defines the term in their research report, Top Research For CIOs: Tech-Driven Innovation.

Focusing on single technologies is dangerous, because IT leaders will potentially miss out on the aggregate benefit of linked technologies that help enterprises make larger strides in their digital transformation journey. Forrester’s research finds that firms with advanced technology-driven innovation practices grow three to four times faster than their industry averages. Before you invest, it makes sense to first “zoom out” a level or two and consider clusters of technologies.

While Forrester’s insight is valuable, their report leaves other critical questions unanswered. How can executives determine which emerging technologies have good synergy? How do IT leaders know which pairings have the best potential to create breakthrough opportunities?

Recognizing Technology Chains

The key to finding synergistic technology chains is to recognize where technology convergence is happening and to closely evaluate critical intersections and interdependencies. Here are two examples of technology convergence, where previously unrelated IT ecosystems are advancing as one:

Beyond trends in convergence, look closely at what disruptive technologies need to function, evaluating both dependencies and risks. Consider, for example, IoT’s requirements for the network, security, AI-powered analysis, and what’s needed to rapidly operationalize on the business intelligence IoT will provide. Enterprises must think about how real-time data exchange must be infused into everything at speed and at scale. How many IT solutions and partners will you need at the table to refine your IoT initiative into a smooth process? It’s safe to bet that accelerated success comes with fewer, extremely tight technology chains that create IoT harmony.

Exploiting Technology Chains Already in the Market

So, how can enterprises start capitalizing on technology chains now?

Improvements in network components provide a foundation for accelerating the impact of chains. Infrastructure investments increase capacity to power these chains, accelerating throughput while reducing costs and increasing agility. Software and cloud applications create additional links in these chains by driving a wider set of results that complement one another. When done right, working through these layers enables innovative enterprises to successfully experiment, challenge the status quo, and create a more sustainable and profitable operating model.

The best way to exploit technology chains is to find them already in the market. Pinpoint those that largely dovetail with your digital transformation strategy and prioritize single, cohesive solutions. Tight integration across all links in the chain or layers in the IT system is perhaps the greatest takeaway. Today’s digital transformers aren’t just purchasing a slew of tools in an attempt to solder together every link in technology chain. The problem with this approach is that it’s a lot of customization work–chaining individual tools leaves the IT team with yet more dashboards to cross-reference or otherwise integrate.

Instead, innovators are recognizing purpose-built technology chains where AI, SD-WAN, cloud apps, and advanced security tools come out of the box as a unified whole. Beyond just product bundles and add-on parts and pieces sold separately, these are integral solutions. For example, some providers embed AI features, new technologies, and capabilities directly into the fabric of the network itself. In other examples, the network technology stack and security stack now come in the same appliance. With these environments, security and cloud app performance can be closely monitored and dynamically controlled. Plus, network, security, and AI insights appears in all one place–a unified portal. And furthermore, solutions come backed by IT management services. These integral approaches start with a long technology chain, helping IT executives to be more strategic about where to custom build additional links.

Tech-driven innovation may always be prone to failure, but executives can leverage technology chains to face the future with confidence. Constellations of capabilities are now all working together as a unified whole and being consumed and sold as such. The result is accelerated success that allows enterprises to compete in the digital age.

Want to digitally transform with certainty? Let Masergy be your guide. With 20 years of history pioneering software-defined networking, we help IT executives realize their digital ambitions. Contact us today for a free consultation.

Ray Watson

Ray Watson is VP of Innovation at Masergy. He brings over 17 years of expertise in IT strategy, application solution design and next-generation network architectures. Ray has enabled numerous global enterprises in transforming their IT infrastructures to guarantee business outcomes. Ray is an industry thought leader in IT transformation and is a frequent speaker on topics such as hybrid networking, SDN, NFV, cloud connectivity and advanced security. Prior to joining Masergy, Ray worked at Airband Communications and Broadwing Communications. He holds a B.S. from Purdue University.

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