Strategies Beyond "In House" to Address Digital Transformation

This recent EY study on the Digital Deal Economy caught my attention. The survey of 600 non-tech corporate executives shows that 74% believe that digital transformation has either substantial or transformative impact on business operations, 66% on customer relationships  and 59% on vendors and supply chain. The implications is that there are still a sizable number of executives that still "don't get" the disruption and opportunities stemming from digital. That's scary if you work for one of these executives or businesses.

But what really caught me was this question and answer on growth

EY Digital Transformation Strategies

possibly implying that organizations only have these options to invest in digital transformation. You can either develop in-house (organic), outsource, or acquire digital capabilities. This is a simple, broad classification and larger organizations are likely to leverage all three depending on need and circumstance.

But it got me thinking about the language EY used around "organic" options.

What does "develop in-house" mean in a Digital organization?


Developing "in house" is an outdated term coming from when organizations could either build or buy technology. Buying effectively meant you were purchasing software and developing the business needs around its capabilities. Many organizations buying software tended to leverage "out of the box" capabilities because of the cost and complexity configuring and customizing enterprise solutions. Of course this often proved harder to achieve than expected since you needed talent trained and experienced to develop off these platforms and have practices to maintain the customizations whenever the software was upgraded.

The alternative of course was to hire programmers and develop custom solutions. Business executives often drove for custom solutions whenever they demonstrated a competitive advantage versus off the shelf software options, but often failed to fund ongoing development efforts. The result is that many proprietary solutions evolved to "legacy applications" because of the lack of investment and attention.

But there are other categories that may still be "organic" but I would argue against classifying them as having the same issues as "in house". You can license platforms that enable citizen development where operations and development of platform capabilities are outsourced to the SaaS vendor, and application development can be done internally, by acquiring applications from an app store, or by outsourcing. These solutions offer greater flexibility and fewer complications to maintain versus what we commonly associate with "in house" solutions.

Another "digital" solution is enabled by integrating multiple capabilities into a proprietary implementation. You might develop a solution using an IFTTT product to move data between platforms, selected functionality from platforms that are API driven, and RAD mobile tools to configure front end user experiences. None of this may require actual "development" (as in coding) and require more knowledge of how to integrate solutions and configure tools.

Businesses in the midst of a digital transformation need to look at these and other organic options. It's also time to bury the "in house" context and realize that there are many innovative solutions that don't carry the same issues as the "build or buy" solutions of the past.


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