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Microsoft’s new mission is all about DX

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Microsoft CEO, Satya Nadella
Microsoft CEO, Satya Nadella. - Photo by Bhupinder Nayyar (CC BY 2.0)
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Microsoft is looking to reposition itself to support companies through digital transformation.

Increasingly, Microsoft is broadening its focus beyond individuals to encompass entire societies. At its recent Inspire partner conference, digital transformation was a theme throughout the entire event. As TechTarget’s SearchCIO blog reports, Microsoft CEO Satya Nadella is looking to take advantage of a market opportunity he values at $4.5 trillion.

Transforming products

Nadella sees digital transformation as having four main outcomes: engaging customers, empowering employees, optimizing operations and transforming products. Tellingly, none of these impacts directly relate to the technology that enables them. In fact, the same outcomes could have been cited during any of the technological revolutions of the past few centuries.

For Microsoft, this shift away from being a pure technology company is highly significant. The company now wants to drive change on a scale that new software products and cloud services alone can’t enable.

“Digital cogs”

The company’s instead going to focus on tackling larger problems in society, modern industry and the economy, presenting technology as the enabler rather than the product. Technology will transcend beyond pure hardware and software to create a complete digital environment in which other systems interlink.

“With increasing digitization, where every part of our society and economy has been fundamentally transformed because of digital technology, the opportunity is greater than ever before,” SearchCIO reports Nadella said during Inspire. “Think about how every product, every service is going to have digital cogs associated with it. It’s no longer just about building an information system that keeps track of your products and services – the product and the service, itself, is digital.”

Restructuring

This shift won’t occur overnight. Microsoft itself is having to restructure so it can align itself with the concept. The company is overhauling its entire sales system around the idea of selling business advantages rather than technology.

Microsoft’s also setting up dedicated industry lines with knowledge of the markets they target, including channels for finance, education and healthcare. These will allow the company to develop closer ties with different businesses, giving it a window into their digital transformation needs. It’ll then be able to develop new technological solutions, such as its recently-launched Microsoft 365 all-in-one cloud suite, that have the potential to revolutionize how they work.

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Digital transformation is causing C-suite tensions

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Photo by Taylor Nicole on Unsplash
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Digital transformation is not only about technology, it’s also about changes of practices which need to diffuse through an organization’s culture. This needs to be begin at the top. A new report finds C-suite discord is a block to effective DX processes.

Rapidly undergoing effective digitally transformation puts a strain across C-suite relationships, according to a new survey of major enterprises. The report has been produced by business management software provider Apptio, and commissioned by the Financial Times. Titled “Disruption in the C-suite“, the report is draws on the findings of a survey conducted with 555 senior executives, (50 percent occupying CxO roles). The executives were based in major economic nations: Australia, Denmark, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, the UK and the U.S.

The report finds that while digital transformation leads to greater collaboration across different business functions, it can also create blurred responsibilities across the C-suite. This crossover carries the risk of key issues being missed; it also serves as a source of tension between top executives, as traditional functions merge and territorial disputes are triggered. As a sign of such differences, 71 percent of finance executives found the IT unit within the C-suite should be seeking greater influencing skills to better deliver the change their business requires.

Team deficiencies found in the survey included not having key performance indicators in place with to measure digital transformation progress. Also, the CFO was found to be the least deeply aligned member of the C-suite team, especially not being aligned with the CIO.

To overcome these divisions, the report recommends that organizations invest time in ‘bridging the trust gap’ between functions and seek to ease tensions, especially between the offices of the CIO and the CFO. An important factor is with establishing which function has accountability. Another measure that can be taken is with ensuing that data is more transparent and where key metrics are issued in ‘real-time’.

The report also charts how digital transformation is being fully embraced, as leaders at global brands are embracing processes and technologies like artificial intelligence, workplace reskilling, cloud computing, agile working and de-centralized decision-making.

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Which innovations will shape Canadian industry in 2019?

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Canada is in the midst of an economic shift. New and traditional industries are increasingly being driven by innovation and these advances in technology are shifting the economic landscape at an unprecedented pace.

This is the assessment by Borden Ladner Gervais, which is Canada’s largest law firm. The company has issued a new thought leadership report, titled “Top Innovative Industries Shaping the Canadian Economy”.

The report weighs in on the opportunities and risks Canada faces in order to maintain its status as an international leader in innovation across eight key industries: cybersecurity, the Internet of Things, smart cities, cryptocurrency and blockchain, autonomous vehicles, fintech, renewable energy and cannabis.

To find out more about the report and its implications for Canadian businesses, Digital Journal spoke with Andrew Harrison, a partner at BLG.

Digital Journal: Where does Canada stand as a global tech innovator?

Andrew Harrison: Canada has always been at the forefront of innovation. Products developed by Canadians or Canadian companies encompass a variety of industries and include medicinal insulin, the snowmobile, the telephone, the pager, BlackBerry Messaging, IMAX, the Canadarm and the goalie mask, to name a few. Canadians are also fast adopters of new technologies; email money transfer between individuals, which was inconceivable only a few years ago, has been used by 63 per cent of Canadians.

This is why Canada is recognized worldwide for its research and technological know-how, but we have to be mindful of the challenges in a global competitive market.

DJ: What potential does Canada have to grow faster? Is this sector specific?

Harrison: Canada is well positioned to succeed and take the lead in all innovative industries, but there are definitely sector-specific challenges that could limit this growth. For example, the lack of regulation as to whether cryptocurrencies are considered securities or not is creating uncertainty, which may restrain investment in this sector.

DJ: What are the risks that could hamper innovation and development?

Harrison: For any new product, financing is always an issue; with innovation, money becomes an even more crucial element. Companies must have access to capital – including from individual and institutional investors – if they want to bring their innovative product/process to life. Evolving politics and policies can also have a significant impact.

DJ: What framework will Canada need in the future to secure its innovation potential?

Harrison: The key element is finding a proper balance between regulating the issues that might be created by the innovation itself or its use and providing a space where innovations can thrive without too many restrictions.

DJ: What does the Canadian government need to do?

Harrison: In many cases, laws and regulations were enacted long before we saw these innovative technologies and products brought to life, so they need to be updated. In certain sectors, such as cryptocurrencies and autonomous vehicles, the Canadian government has yet to provide a framework that would define the playing rules for all participants.

The government will also need to take a look at its current regulations on privacy: the coming into force in May 2018 of the European General Data Protection Regulation (“GDPR”) and recent high-profile data breaches have created the need for stronger privacy guidelines. Failure to do so could prevent Canadian businesses from accessing the European market.

DJ: What can academia contribute?

Harrison: Universities play a big role in fostering innovation – they could be the home of research and innovation and incubators of ventures, entrepreneurs, and tech talent. Universities can partner with industry players and have their researchers work closely to solve key industry issues. This is already happening in Canada. The Smith School of Business and Scotiabank, for instance, have partnered to set up the Scotiabank Centre of Customer Analytics at Smith School of Business to bring together professors, graduate students and analytics practitioners to collaborate on applied research projects in customer analytics. The academia plays a big role in creating an innovation ecosystem.

DJ: What is Canada’s most pressing technological need?

Harrison: There is still much work to be done to connect with Canada’s rural and remote communities. In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) declared that broadband Internet amounted to an essential service and adopted minimal performance standards across Canada: 50 megabit per second download and 10 megabit per second upload. However, the evidence presented to the Committee by a variety of stakeholders shows that the digital divide remains prominent in Canada – it is estimated that it will take roughly 10 to 15 years for the remaining 18% of Canadians to reach those minimums. Canada needs to develop a comprehensive rural broadband strategy in partnership with key stakeholders and make funding more accessible for small providers.

DJ: What type of investment is needed with skills and training?

Harrison: Canada has a serious shortage of tech talent, which makes it imperative for both the government, the education, and the business sector to invest in raising and fostering STEM talents. To help businesses attract the talent they require, the federal government is offering hiring grants and wage subsidies to offset payroll costs for recent post-secondary STEM students and graduates.

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Poor IT integration racks up massive costs to companies

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Analysts Cleo have released survey results from 100 IT decision makers, which found that B2B, application and cloud integration challenges amount to a $500,000 loss to enterprises each year.

Another important finding from the report is that poor integrations and lack of resources contribute to hundreds of lost orders each year, leading to annual revenue losses in the range of $250,000-500,000 for 57 percent of those firms surveyed.

As well as spelling out the cost implications, the survey also aimed to identify core business problems behind integration challenges:

  • Experience: The survey found that while 95 percent of the surveyed companies strive to enable their business ecosystems, 38 percent reportedly lacked confidence in their capacity to scale to support the integration initiatives foundational to doing so.
  • Complexity: In relation to this, 63 percent of Information Technology decision-makers stated that new business onboarding is too complex and takes too long.
  • Resources: 29 percent of companies reported they lacked the skilled resources to build and manage integrations between systems, applications and partner ecosystems.
  • Legacy systems: 22 percent of respondents indicated that legacy technologies cause significant delays in generating new revenue. Following this, 81 percent of companies in this position said they believe replacing legacy systems will support emerging business initiatives.

These factors led Cleo CMO Tushar Patel to say: “The overwhelming consensus from these IT decision-makers is that new business demands – many of them brought by forces outside the company – are putting additional pressure on organizations and technologies to deliver better ecosystem integration solutions.”

He adds: “And when they can’t, it’s costing the business money. But for many of these organizations, it’s not an immediately solvable problem because they don’t have the strategy, the tools, the budget, or the resources to execute on these revenue-impacted initiatives.”

In terms of remediation activities to address these obstacles, the vast majority of respondents stated that modernization is key to consolidating disparate technologies, automating data transaction processes and gaining visibility into their critical data flows. These reasons account for why over half of the enterprises indicated they plan to modernize their integration and IT infrastructure in 2019.

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