Why most businesses will be “software-driven” in 36 months
- 16 June, 2015 04:05
As companies transform into software-driven enterprises, bringing high-quality applications to market faster becomes one of the most critical differentiators.
The results of a global study - The Battle for Competitive Advantage in the App Economy - commissioned by CA Technologies reveals the need for speed in the application economy.
In the study, forty three percent of those surveyed believe that becoming a software-driven enterprise is a critical driver of competitive advantage today, rising to 78 per cent in three years.
Increased agility and faster time to market top the list of competitive strategies for companies in the application economy; and, according to respondents who have already begun adopting more advanced software strategies, this transformation is having significant impact on their time to decision: 45 per cent claim this today, and 61 per cent expect it to be the case in the next three years.
“It’s no longer enough for companies to have superior products or services,” says Otto Berkes, Chief Technology Officer, CA Technologies.
“Today, success depends upon delivering a superior customer experience. As companies undergo digital transformation, they must focus on the customer experience since it will be a key differentiator in today's application economy.”
Conducted by Oxford Economics, the study surveyed senior business and technology executives around the globe about application strategy and its impact on business outcomes.
For Berkes, the results show that companies are adapting to the application economy at a “rapid and accelerating pace”, and are rethinking competitive advantage and differentiation in the process.
According to the study, becoming a more software-driven business also has a positive impact on market share (47 per cent), the development of new products and services (42 per cent), and financial performance (36 per cent) - all trends that respondents see accelerating.
Additional key findings include that more than half of respondents (51 per cent) say they have invested in newer forms of software (mobile apps, API-enabled software, etc.) over the past three years, and nearly as many say they will increase their level of investment over the next three years.
Furthermore, 54 per cent are developing new strategies for customer interactions while 49 per cent of respondents are bringing more software development back in-house and 47 per cent have or are planning to use M&A to increase app development capabilities, indicating software’s strategic role.
Despite significant transformation of companies into software-driven enterprises, Berkes believes results from this survey indicate that the biggest changes are still ahead.
Based on key insights from the data and interviews with respondents, Berkes reveals seven rules of engagement that companies should follow as they seek competitive advantage:
1. Be ready to break things:
“When organisational change is inevitable, rules may get bent,” Berkes adds. “And change is happening - fast.
“Nearly half of respondents believe that becoming a more software-driven business has had an impact on time-to-decision, and another 37 percent say that internal operations have been deeply affected.”
2. Squeeze the value out of data:
“Respondents say they are proficient at marketing directly to consumers (59 percent say they are very or highly effective), but few (only 22 percent) have all the details - like tracking customer preferences nailed down,” Berkes adds.
3. Learn to listen:
“Using social media well is critical to interacting with customers and business partners alike,” Berkes adds.
“More than 40 per cent of respondents say it is a must-have skill in the new environment. One key thing to remember is that these tools are not just new ways to push information out—they are great ways to capture intelligence as well.”
4. Guard data fiercely - and know what you are protecting:
“Protecting customer data is a fundamental rule of engagement, and companies are investing in bigger budgets and new tools to get the job done,” Berkes adds.
“Sixty percent of respondents say they are spending more to protect customer data, and even more are doing the same to safeguard internal information.”
5. Bring innovation to collaboration:
“Old barriers do not apply in the application economy,” Berkes adds. “Nearly half of respondents say that bringing together security executives with the heads of business units is enabling new business opportunities.”
6. Give the people what they want:
“In the app economy, customers expect quick, intuitive interaction,” Berkes adds. “They will not countenance outages, data loss, or downloads that take longer than a few seconds.
“With an enormous increase in revenue driven by customer interactions with apps expected in three years, getting this right is an existential necessity.”
7. Remember that culture eats strategy for lunch:
“Organisational resistance is a given whenever change occurs,” Berkes adds.
“Nearly 40 per cent of respondents say the biggest obstacle to becoming more adept at software and application development is a culture that won’t support it.”