Why technical change readiness is key to digital transformation

Organizations have practiced a buy-rather-than-build IT strategy for decades. Buying commercial-of-the-shelf (COTS) software has been good practice for a long time and is therefore dominating the application landscape in many organizations. These monolithic systems are not easily modified without causing technical debt, posing a challenge when the business requires swift changes and new functionality. This is a well-known dilemma for IT departments. Managing core applications while simultaneously providing flexibility and agility to the business is a great challenge and requires new thinking and technologies.

The challenge

The pace of business constantly evolves, and new technology further spurs the speed of business. Customers demand lower prices, higher quality, and a better buying experience. Political, economic, social, technological, legal, and environmental factors constantly change. The skill of mastering change is a critical success factor for most organizations today.

While the pressure for agility and speed increases for organizations, commercial and monolithic standard applications is not designed to adapt to constant change. Extensive customization poses a threat of ending up in technical debt. Technical debt might lead to critical incident handling, disruptions for the business, and difficulties in upgrading and following the supplier's product plan. Ultimately, customization risks challenging the complete implementation of critical core systems.

Moreover, the lead time for launching new functionality in monolithic applications is often several months which does not respond well to the business need for rapid change.

My experience is that this is a common fact in many organizations but few are aware of the concept of technical change readiness and how it relates to organizational change and digital transformation. The business responds to market demands by pushing for rapid development in the existing application landscape. As the business often is unaware of the technical consequences of making major changes in monolithic applications, the IT department is putting itself in a bad position. The IT department will not be able to meet expectations of development lead time cycles and the more code deployed in the monolithic application landscape, the more technical debt is being built up. As technical debt increases, maintenance cost increases and more time is required for incident handling and problem management. It's a downward spiral to the opposite of what the business expects and requires.

The solution

A new supporting tech stack is necessary to offload the need for customizing core applications and to reduce the lead times of new functionality. A tech stack that is designed for change and integrates seamlessly with core applications. This is where cloud technologies come into play and can provide the flexibility required by the business. Cloud technologies offer essential features for improving technical change readiness and enabling digital innovation.

• Low upfront investments in technology.

• Easy to decommission if needed without capital waste

• Scalable in both directions, up and down

• Extreme short time-2-market of new functionality

• Opportunity to create competitive advantages through digital applications

This is the thinking of Gartner and the intention of the bimodal model introduced in 2014. Bimodal is the practice of managing two separate but coherent styles of work; one focused on predictability; the other one on exploration.

Mode 1 is optimized for areas that are more predictable such as standard applications. It focuses on exploiting what is known while renovating the legacy environment into a state that is fit for a digital world. Mode 2 is exploratory, experimenting to solve new problems and optimized for areas of uncertainty or areas with a high rate of change. These initiatives often begin with a hypothesis that is tested and adapted during a process involving short iterations, potentially adopting a minimum viable product (MVP) approach. Both modes are essential to creating substantial value and driving significant organizational change, and neither is static.

Marrying a more predictable evolution of products and technologies (Mode 1) with the new and innovative (Mode 2) is the essence of an enterprise's bimodal capability. Both play an essential role in digital transformation.

Recommendation

To succeed in digital transformation, I recommend starting by assessing your technical readiness. What is your state of technical change readiness today and where do you need to be tomorrow? If the rate of change in parts of your business is medium to high, you might want to consider a bimodal mode of operation with a complementary cloud tech stack. Such a setup will offload your core systems and enable digital opportunities for your business.

Feel free to contact me if you wish to further discuss the subject. I'm just scratching the surface on this topic and it's much more to it of course. As in all theories and models, there are pitfalls but also good practices that work. Experience and execution are key to any result, no matter the theory. You can schedule a meeting with me or send an email to anders.eriksson@elva-group.com.

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