3 Tips For Managing Perpetual Change From Software-Defined Operating Platforms

Enterprise Tech 3 Tips For Managing Perpetual Change From Software-Defined Operating Platforms Peter Bendor-Samuel Contributor Opinions expressed by Forbes Contributors are their own. Following New! Follow this author to stay notified about their latest stories. Got it! Oct 4, 2022, 06:00am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin Over the past seven years, almost all large companies made substantial progress in implementing digital transformation across a wide variety of functions.

At the core of those enormous investments and efforts was building software-defined operating platforms, which put companies on a trajectory to fundamentally change how they operate their business. However, studies show many companies (70%) failed or underperformed against their digital transformation objectives. In this blog, I’ll discuss three tips for how to avoid that outcome and, instead, reap the significant benefits of software-defined operating platforms.

In my previous blog, I explained the principles of software-defined operating platforms . Unlike other technologies in the past, these digital platforms do not operate as a separate tech stack in an organization. The platform necessitates a very intimate, tight relationship between technology and operations; they become one organism that acts together.

Moreover, both the organization and the platform tech stack become far more dynamic, they change much more often and much more quickly than technology stacks in the past. As I explained in several blogs in the past, digital platforms collapse the former process-driven thinking around which companies organized their structures. Process thinking focused on improving efficiency and quality.

As companies move functions and work into platforms, their focus shifts to significantly improving the service to end users (customers and employees). Software-defined operating platforms focus on the objectives and key results (OKRs) that a company wants to achieve in services that delight end users (rather than focusing on efficiencies). This OKR focus allows a company to reconceive its functions and processes.

But it doesn’t happen just because of the technology. Why So Many Companies Underperform In Digital Transformation As I mentioned before, studies from Everest Group, McKinsey & Company, and other advisory firms found that many large-scale investments in digital transformation underperformed against their objectives. The primary cause for this failure or underperformance against expectations and goals is the amount of change that digital investments require an organization to make.

MORE FOR YOU Hiring Refugees: How One Big Factory Did It Down 80% This Year, What Will It Take For Shopify Stock To Recover? Focal Reveals Its First-Ever Hi-Fi Bluetooth ANC Headphones John Kotter, author of 18 books on change management, says people and organizations are both predisposed to resist change. In fact, companies structure their organizations to focus on stability and predictability. This change-resistance mindset results in tension when a company invests in digital transformation because software-defined operating platforms shift a company into a perpetual state of change.

3 Tips For Organizing To Support Continual Change Tip #1: Embrace And Drive Change When a company adopts a platform mindset, it drives change in two dimensions: Stable processes and functions continually collapse into platforms The platforms continue to evolve, as does the engineering work on the platforms When a company unintentionally and intentionally moves forward on the path of building software-defined operating platforms in every operational dimension (e. g. , sales, marketing, HR, supply chain, facilities management, building management, real estate management), it needs to step back and restructure the organization so that it can deal with the dynamics of continual change.

As the tech stack steps up a different level in a software-defined operating platform, a company must step up and organize around the change. Tip #2: Implement A New Governance Structure As already noted, software-defined operating platforms drive a lot of change. These platforms inevitably disrupt the existing process and functional structure and start to collapse existing organizations into new and different organizations.

Thus, it calls for a new governance structure – platform ownership. This is different from CIOs or product managers implementing product management into their organizations. A platform owner is an individual in the organization that can anticipate, guide, and facilitate the change evolving from a platform.

Change is best managed incrementally, rather than in huge step changes. A platform owner is an owner of both the organization and the tech stack that sits above it. Tip #3: Adapt To A Different Trajectory Of Investments Not all digital transformation efforts underperform.

From studying those that succeed, it is clear that the organization understands that the path to building and perfecting software-defined operating platforms is very much a journey of steps in which the organization learns, adapts, makes new investments, and moves forward. This fundamentally changes a company’s trajectory of investment. As a software-defined operating platform gains momentum, it starts to achieve its OKRs (objectives and key results).

This can have the impact of better sales or better operations and unlock significant value that has not been available previously. So, the investments in these platforms are certainly well worth it. Historically, change management and a portion of IT investments were considered discretionary (non-essential) spend.

But the success of software-defined operating platforms challenges a company’s past thinking about how to make IT and organizational investments. As platforms meet OKRs, improve competitive positioning, and reduce the cost to serve, companies will reallocate these investments into essential spend. Investing in building and continually evolving platforms is well worth it, even in times of hardship and as we anticipate a possible recession.

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