The harsh reality of digital transformation

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This article appeared in the June 2017 issue of CRN magazine.

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The harsh reality of digital transformation

COMMENT  |  Digital transformation is here, and it’s everywhere! Haven’t you heard? Forget about cloud, we’re talking about digital transformation now!

The IT industry has shifted away from simply talking about cloud to now focusing on digital transformation, but the thing is that the concept of digital transformation isn’t new – but then again, neither was cloud.

Why is digital transformation the current rage for marketers? It actually makes sense: we’ve been talking about cloud for almost a decade, and by this stage, most organisations have either moved to the cloud in some fashion, or at least have a strategy in place to do so (or have a strategy to put a strategy in place soon).

Cloud is merely a delivery mechanism: anything from basic storage and compute services, advanced collaboration and communication solutions, and really advanced services such as analytics and intelligence services. While some level of these services can be delivered on-premises, they can only go so far because most organisations cannot afford or engineer the hyperscale resources needed to deliver the truly advanced capabilities.

Should every partner rush out and start talking about digital transformation? A lot already are, which is a dangerous thing: customers can smell bullshit from a mile away. “You’re here to tell me that an advanced storage solution is the cornerstone to my organisation’s digital transformation? Sure...”

It’s not about individual products, or even sets of technologies. Skype for Business does not bring about a digital transformation, digital collaboration, or whatever you want to call it. Implementing hot desks does not give you activity-based working. It’s just one part of the solution.

It starts with people

As suppliers, we can keep throwing products, vendors and partners at the problem, saying that we offer the most complete set of “digital transformation” services in the market, but we’d be lying. The truth is that transformation starts and ends with people. A restaurant might offer you the best menu, the best location and a celebrated chef, but if the waiter is rude, then your entire experience is tarnished.

For too long, we in IT have focused on the tools, dictating from up on high what technology our customers should be using. Things started to change (a bit) in 2007 when the iPhone came out. Executives started walking into IT departments and saying, “Just make it work.” 

Then “the consumerisation of IT” swept through. That wasn’t a temporary phase – it continues to this day. If companies don’t give staff a social network, they will go out and find one. Now the company and its clients are being discussed in Slack, Yammer or WhatsApp. If you make it too hard for workers to share files and co-author with external people, they’ll install Box, Dropbox, OneDrive, Google Drive, or any number of other such file sharing systems. Now you have a compliance nightmare.

I have spent years working with customers around their Office 365 plans, and I’ve seen a distinct change in approach among IT leaders who increasingly understand that users will vote with their fingers. Instead of the age-old approach of giving users the basics and rolling more modules out over time, some IT leaders are enabling all Office 365 services. This approach allows them to sit back and look at what users want to use, and how. 

This approach can create a bit of chaos initially, but that chaos is monitored and controlled. Gone are the days where management said, “We will use this tool, go forth and spread the word.” Now they start by looking at what users want, and aim to meet in the middle.

Having worked with Office 365 over the past seven years, and having spoken with hundreds of partners locally and globally, I can confirm that almost every Microsoft partner now says they “do Office 365”. 

The problem is that this generally ends at the mailbox migration. In some cases, that ends at the intranet or phone system. Very few actually understand everything included in the toolkit, can sell it, and have the staff to deliver it. Precious few partners choose to band together to deliver a more holistic outcome for customer, but that is exactly what needs to happen.

Partners and IT pros can be generally categorised into three different personas:

Those who don’t want to change because they don’t believe or agree with the vendor or market. In the Microsoft view of the world, this group would include traditional system integrators who sold servers, installations and managed services. These would also be hosting partners who think that customers will still choose them over Office 365 or Azure.

Those who know they need to change, but don’t know how.

They see the writing on the wall, they see their customer demands changing, and they see that they can’t keep up with commodity services being offered by the giants. These partners have been to vendor sessions that have told them why they need to change, and they’ve believed it. They’ve even been to workshops with “transformational consultants” who actually used to work at the vendor and have hit a funding gold vein to deliver these workshops, but have no recent or practical experience building or running a partner in the current environment. So they don’t know where to go next.

Those who have already changed.

These are either partners who have pivoted, built new practices and spun off new divisions, or they’re entirely new businesses formed by staff from partners in one of the previous categories.

The challenge that partners face is this clash of ideologies, both internally from staff and externally from customers:

Staff who see that their employer is not going in the right direction will jump ship to a competitor – or, they’ll go out and start their own business, putting their money where their mouth is.

Customers who feel that their partner is just selling them traditional IT services around installations, upgrades, migrations and managed services aimed at keeping the lights on and providing support, and will eventually look for a more modern partner.

As is the case with most issues that pop up amidst new ventures in the reseller circuit, there is no simple fix here. Just like the cloud journey, there will be pain for partners at the start (and some will be stung harsher than others). The switch to cloud was simple, comparatively: change sales approaches and compensation models, change marketing, learn new technologies, and adjust support models. 

The digital transformation? IT only plays a part in that – as an enabler, not the actual driver. Let’s not fool ourselves – we are not strategic partners or trusted advisors to our customers: we are suppliers and service providers.

If we want to engage with our customers around digital transformation, we must embody change management, business analysis, consulting services, software development and a variety of IT services that historically were not core services for most systems integrators.

Loryan Strant was the founder and managing director of award-winning Microsoft partner Paradyne and now consults directly with end customers and partners. His website is www.thecloudmouth.com  

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