Taking a bi-modal, multi-sourced approach to digital transformation

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1 Taking a bi-modal, multi-sourced approach to digital transformation Business is facing dramatic shifts due to new technologies, millennials and globalisation Analogue companies need to transform in a digital era Bi-modal IT and multi-sourcing go hand in hand Age-old industries that once stood as surely as stone masonry are suddenly shifting like sand under our feet. For example, Uber has rapidly risen to become the world s largest taxi company without actually owning any cars. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the biggest accommodation provider, owns no real estate. These dramatic shifts in the global business landscape caused by new technologies, increased globalisation, and the arrival of the millennial generation create unprecedented risks and opportunities for organisations in almost every vertical. The companies listed above, and many other young start-ups that are outpacing their more established rivals, can be described as digital by nature. Their advantage is they do not have to shake off the legacy technology, systems and processes of the past. The challenge for the older, analogue companies is to transform themselves to adapt and compete with those that are digital by nature. Digital transformation enables organisations to compete more effectively, innovate more quickly, and find new ways of doing business.

2 A great local example is a company that T-Systems and Intervate have been instrumental in helping to evolve. CoolTouch originally a humble cleaning company that focused on cleaning municipal dustbins was able to fundamentally pivot its business model. It created an app-based service through which facilities management companies can log maintenance incidents, and have tasks easily or automatically assigned to reputable maintenance crews in the local area. So what is digital transformation? In essence, digital transformation is any formal business investment in new technology, models, systems and processes to change the way companies sell, market, operate, and scale in an increasingly digital economy. However, it isn t simply about ripping and replacing every legacy asset or every system, and replacing it with the shiniest, brightest new technology innovation. True digital transformation selectively applies the right IT solutions, to respond to opportunities where business value and customer experience converge. Most importantly, it isn t so much about the technology, but rather about the transformational business impacts that new technologies can enable. For example: all at once, a mobile app can be made available to millions of customers via the smartphones that are now a pervasive factor in our lives. The likes of Uber and Airbnb have been incredibly successful due to the simplicity, convenience and intuitiveness of their services. They make use of every piece of data to create the most user-friendly experience where things happen as if by magic. In fact, digital transformation allows organisations from almost all industries to get closer to their customers. Applying the right technology helps in creating more personalised and contextual experiences, surfacing more applications in a

3 user-friendly way, and giving customers greater choice in how they consume services. Narrowing the gap between the organisation and the customer is a process that ultimately culminates in a state of zero distance real-time, instantaneous delivery of services to customers. How should a company go about achieving digital transformation? The first principle we recommend is that of Bi-modal IT, a term coined by analyst house Gartner. Bi-modal IT allows the traditional approach to enterprise technology (emphasising efficiency, stability, accuracy and scalability) to coexist with a second approach that focuses on agility, speed and innovation. While preserving the benefits of the stable, traditional IT operation, the Bi-modal philosophy aims to unleash greater dynamism where necessary applying new techniques to replace old processes, old ways of working, and old ways of measurement. This new kind of partnership enables IT that works (technology that serves clear business requirements or opportunities). Bi-modal IT allows even the largest corporates those with masses of sprawling legacy systems to compete at the same speed as their lean and agile start-up competitors. It s an approach that mirrors the ground breaking new doctrines of change management and leadership guru John Kotter. In his work tiled Accelerate, Kotter advocates a dual operating system within the enterprise a second, highly-agile network structure that functions in tandem with the formal hierarchy structure (the bedrock of the organisation). The second principle that comes to the fore is that of multi-sourcing. This approach is derived from the concept of digital transformation and is essential in making transformation happen.

4 With multi-sourcing, the client flexibly provisions and blends IT solutions from various service providers based on the requirements at that point-in-time. It is in stark contrast to the IT master service agreements of the past, which ran over many years, covered broad aspects of the technology estate, and locked clients into certain standards and vendors. Multi-sourcing goes hand-in-hand with Bi-modal IT. It helps organisations to identify what systems need to change, and at what speed, to keep pace with more agile digital natives. Applied in tandem, Bi-modal IT and multi-sourcing elevate the nature of supplier/client technology relationships. Business transformation becomes the lens through which all IT discussions take place, with a strong focus on great customer experience. As the pace of change in business, and society in general, continues to accelerate, traditional analogue companies are forced to rapidly transform and digitise. However, with trusted ICT partnerships set within the frameworks of Bimodal and multi-sourcing, organisations in every industry can design and implement the strategies to stay relevant and even ahead in the digital era. T-Systems in South Africa: Head of Marketing & Communications Lebohang Thokoane Lebohang.Thokoane@t-systems.co.za +27(11) (Phone) +27(78) (Mobile) About Deutsche Telekom

5 Deutsche Telekom is one of the world s leading integrated telecommunications companies with around 151 million mobile customers, 30 million fixed-network lines and more than 17 million broadband lines (as of December 31, 2014). The Group provides fixed network, mobile communications, Internet and IPTV products and services for consumers and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in more than 50 countries and has approximately 228,000 employees worldwide. The Group generated revenues of EUR 62.7 billion in the 2014 financial year more than 60 percent of it outside Germany. About T-Systems Deutsche Telekom considers the European business customer segment a strategic growth area. Deutsche Telekom offers small, medium-sized and multinational companies ICT solutions for an increasingly complex digital world. In addition to services from the cloud, the range of services is centred around M2M and security solutions, complementary mobile communications and fixed network products, and solutions for virtual collaboration and IT platforms, all of which forms the basis for our customers' digital business models. With approximately 47,800 employees worldwide, T-Systems generated revenue of around EUR 8,6 billion in the 2014 financial year. Since the inception of T-Systems in South Africa in 1997, the company has cemented its position as one of the most successful T-Systems companies outside of Europe. A leading ICT outsourcing service provider locally, T- Systems offers end-to-end ICT solutions in both the ICT Operations and Systems Integration markets. Their extensive portfolio of services covers the vertical, horizontal, IT and TC space. T-Systems South Africa s head office is located in Midrand with another major office in Cape Town, and 20 further representative offices in locations throughout southern Africa.

6 About Intervate Intervate, a T-Systems company in South Africa, is an enabler of digital transformation, delivering digital workplace solutions and customer experiences that drive business value and improve productivity. We have over 14 years experience in delivering innovative solutions that enable digital transformation including Enterprise Mobility, Enterprise Information Management, Customer Relationship Management, Business Process, Cloud solutions and Enterprise Application Integration. Our technical expertise is supported by an understanding of the strategic drivers and challenges that enable us to provide our customers with professional guidance regarding the best practices proven to deliver successful projects and business benefits.