How to Build a Foundation for a Digital Business

If the digital age has taught enterprise leaders an essential lesson, it’s that there’s no easy path to business and IT transformation.

Yet, somewhere at the intersection of various tools and technologies—including cloud computing, mobility, social business tools, analytics and digital collaboration—there’s a critical fact: Success isn’t a result of how an organization uses any particular technology on its own. It’s the way an enterprise weaves everything together to introduce new efficiencies, and sometimes entirely new products, services or ways to tackle work.

To be sure, innovation can prove elusive. “Doing the same things you do today in a digital space isn’t the goal,” points out Daniel Benton, managing director of technology strategy, Accenture Strategy. Instead, business and IT leaders must examine how to construct a business framework and IT infrastructure that supports a more dynamic ecosystem and, in the end, generates greater value for employees, business partners and customers. This can include something as basic as designing a different interface or collaboration strategy, or it can involve a task as complex as reinventing supply chains or customer interactions.

The key to success is aligning business and IT strategies so that they are in lockstep with one another. Jeff Jacobs, a partner at McKinsey & Company, believes that enterprise executives must focus on innovation at every level of the enterprise and think in new and bold ways.

“It’s really about looking beyond departments, business units and specific technologies and viewing things in the context of the entire business model,” he explains. There’s also a need to think about data differently and find ways—such as tapping into the Internet of things—to create more sophisticated capabilities and workflows that lead to innovation and a competitive advantage.

One huge challenge is coping with the incremental and ongoing changes introduced by digital systems. Over time, the accumulation of tools, solutions and technologies introduces exponentially greater complexity.

Navigating this space requires a flatter, faster and more agile organization that purges silos and ends turf battles. There’s a need to re-examine the role of IT and how to best migrate from legacy systems to a more modern architecture, including clouds. As Accenture’s Benton puts it: “Operating models are changing and along with them, supply chains, business relationships and customer interactions.”

Creating a Digital Vision

One company embracing digital transformation is Allergan, a $7.2 billion biotech and life sciences company that reaches across 100 countries. (In March 2015, the company was acquired by Dublin-based Actavis to create a $23 billion company.) In 2010, the firm’s business and IT leaders recognized a need for a faster and more agile framework.

“What came out of the discussion was a recognition that we needed to develop a cloud strategy that could help us operate a lot more efficiently,” reports Vadim Parizher, senior director of enterprise architecture for Allergan, which is best known for its eye care, medical aesthetics, neurologics, and dermatology products such as Botox, Juvéderm and Restasis.

The enterprise architecture team began exploring how best to approach cloud computing and decided that a centralized approach was critical. This translated into a cloud-first strategy for new projects and solutions.

After identifying where public, private and hybrid clouds made sense, the firm began migrating away from on-premises legacy IT systems and toward software-as-a-service (SaaS) applications where they were available, including human resources and legal systems. The next step was to build out a platform-as-a-service (PaaS) capability and move Salesforce’s application onto it. The final step took the firm into the infrastructure layer (infrastructure as a service, or IaaS) by moving all Web-facing properties to Amazon’s AWS environment.

The process was challenging, but it has yielded impressive results. Ultimately, “We have been able to move about 40 percent of our applications portfolio into the public cloud,” Parizher says.