How to make the application economy a one horse race

If you’re going to be disruptive in the application economy rather than disrupted by it, then your game plan needs to help you not only stay the course but make it a one horse race.

“If I had asked my customers what they wanted, they would have said a faster horse.”

While there’s no conclusive evidence that Henry Ford ever uttered these words, the famous quote implies the inability of customers to express their needs for innovative products.

What’s wrong with a faster horse?

Now, there’s nothing wrong with a faster horse – some people needed a faster horse – but an automobile was something they never knew they needed until it was invented.

Take a look at what Uber is doing to the taxi industry or what Apple Pay is doing to the retail industry or what Airbnb is doing to the hospitality industry – these are examples of how technology is changing – and disrupting – traditional industries as well as making consumers aware of something they didn’t have before that they all of a sudden ‘must have.’

Consumers never asked for these apps like Henry Ford’s customers never asked for the automobile, but like the automobile, they’re transforming the way we live, work and play right before our eyes.

The difference between the disruptive and the disrupted

If you’re going to be disruptive in your industry rather than disrupted by your industry, then you need to look at things fundamentally differently.

The results of a survey conducted by Vanson Bourne on behalf of CA Technologies indicate how disruptive the application economy is. The global survey of 1,425 senior business executives found that 44% of companies were either extremely or very disrupted in the application economy and half of the respondents saw this level of disruption in their industry.

This disruption is global, it’s all sizes of businesses, it’s internal and customer facing and it’s affecting everyone. People realize this thing called the application economy is going on and many companies are taking remarkable steps to adapt:

  • 52% of companies have acquired a software company or plan to in the next year
  • Companies are bringing more software back in-house, from 33% to 44% in three years. This trend is particularly growing in the finance and healthcare industries with 17 and 13-point growth respectively.

 

How to be disruptive rather than disrupted

To be disruptive in your industry rather than disrupted by the leaders in it, there are two key things you need to start doing inside the enterprise today so you can be a leader in your industry tomorrow:

  • Look to your own leadership
  • Look to your own skillsets and capabilities, especially within technology.

 

The first point speaks directly to another key result from the Vanson Bourne survey: one in four respondents cite lack of executive management understanding as a key obstacle to responding to the application economy. The research also showed that roughly the same number cited lack of knowledge/skills (26%) and cultural issues (24%) as also holding them back.

That’s a real problem. I know CIOs and IT executives have a really hard job. How many parts of the business are referred to as ‘other’?

From an IT perspective, organizations need to start treating internal employees like external customers. The idea of IT as the department of ‘no’ or the gatekeeper is well and truly done.

Survival is not mandatory

According to the research, 67% of leaders are adopting enterprise mobility and that’s a strong initiative. Over half (52%) of leaders report increased customer satisfaction and 53% report faster time to market compared with 20% and 16% for laggards.

The result of not adopting new technologies could potentially be going out of business: who wants to be Blockbuster? Who wants to be Kodak? These are difficult times for these and other organizations.

The message for companies who fail to adopt new processes like DevOps and new technologies is clear. In the words of American engineer, statistician, professor, author, lecturer and management consultant Edward Deming: “Survival is not mandatory.”

It’s not enough for businesses to tick along. It’s up to IT leadership to work with counterparts in the business from marketing to sales to operations to product development to understand what they have to do to not just survive, but thrive in the application economy.

To do this, follow the example of leaders who manage IT more like a business. The survey found that leaders in the application economy were outperforming laggards across all business metrics.

Leaders had:

  • 106% higher revenue growth
  • 68% higher profit growth
  • 50% more revenue coming from new offerings.

 

If you’re adding top line revenue because of what you’re doing in building out applications and by adopting processes like DevOps, you might not get your budget approved every time but IT leaders have told me one thing:

“There’s always budget for making money.”

If there isn’t a budget for what you want to do then look at freeing up what I call an, ‘innovation dividend.’ By that I mean get a pay off from rationalizing your software portfolio, adopting cloud technologies rather than building your own bespoke services, which tend to be fragile and expensive to build and maintain.

The rising role of the technologist in driving innovation

To be disruptive, you also need to look at your own skillsets and capabilities, especially in technology.

It’s the technology people or ‘technologists’ that should be leading these revolutions such as the digital industrial revolution we are experiencing in the application economy. These are the people who are mostly leading the disruptive plays like the examples I gave at the beginning of this post with Uber, Apple Pay and Airbnb.

These innovations in the mobile enterprise are coming from technologists inventing new things in traditional industries.

Put your money on the winning horse

That’s why it’s up to you as an IT leader in your company to take it on yourselves to start driving innovation to make the application economy a one-horse race in your industry – one that you would bet your money on.

So if you don’t want to be a one-trick pony, CA Technologies has the tools to help you change your business in radical ways that disrupt your market and drive customer acquisition in ways your competitors aren’t doing today.

That will put you in a much better position to invent tomorrow as an application economy leader, not laggard.

Find out how CA Technologies can help you achieve that by attending CA World this November. We look forward to seeing you there.

In the meantime, leave me a comment below or Tweet me @AndiMann

Image credit: John Athayde

Andi is VP of Strategic Solutions at CA Technologies and an expert across cloud, mainframe,…

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