Digital transformation – new capability or new core?

"IT is a tool, not an end – and on the Internet, nobody knows you’re a dog," according to Lynn Greiner.

For the past while, pundits have been telling us that every company will become an IT company, and, more recently, that every company will become a software company.

Oh really?

Yes, the world is changing, has changed, as it has many times in the past. And no doubt eighteenth and nineteenth century pundits told hard-working factory owners that every company was going to become a steam company, or later an electric company.

How many of those predications came true? Not too many, I suspect.

The fact of the matter is that, pundits notwithstanding, the only companies that became steam companies were those manufacturing steam generators or parts for them. The only companies that became electric companies were those building and running generating facilities. The rest of the companies? Well, they became exactly what they had been before – they just used steam or electricity to help them do their existing work better, assuming their existing products were still relevant.

And that’s what’s happening in the era when supposedly everyone is to become an IT or software company. They’re not.

Instead, they’re using the IT and software to make them better at what they already did.

Yes, there are digital transformations going on, but a digital transformation does not an IT company make. As a matter of fact, even IT companies and software companies are undergoing their own digital transformations. Transforming isn’t about abandoning your core business, it’s about using a new set of tools and business processes to make that business even better.

That’s all IT is – a tool. Ditto software. Unless you’re a company whose business is to produce software for sale, those programs your developers build are tools created to enhance or expand a core business. They exist to support the business, not to replace it.

Granted, some businesses are going to change radically, or even disappear. But that has happened since time immemorial. Very few companies build horse-drawn carriages anymore. Now they build automobiles. Vinyl records were, in the main, supplanted by compact disks, which were in turn bumped by DVDs, and now streaming is the hot technology. Those changes also impacted the folks who make turntables and CD or DVD players. Dial phones gave way to touch tone, and land lines to cell phones.

Evolution is hitting pretty much everything, but it’s not always completely replacing things. Instead, old and new each co-exist in their niches. For example, databases are slowly but surely replacing a lot of filing cabinets – but paper isn’t going away. And despite predictions to the contrary, e-books do not rule the world. Physical books are enjoying a comeback – but they’re not eliminating e-books either. People are realizing that each format has its appropriate home, and acting accordingly.

However, those physical and e-books are being produced in very different ways, thanks, yes, to IT and software. Thanks to technology, publishers can print copies more efficiently, and produce small runs of volumes that previously wouldn’t have seen the light of day. Indie authors can take advantage of software to turn their manuscripts into e-books, or format them for print-on-demand services, saving them money. Publishing has not become an IT industry or a software industry, but it’s taking advantage of tools and processes from both areas to change up its game.

Of course, with any new tool, you need people skilled in creating and using it. That means software developers are showing up in hitherto development-free zones. That’s not new either. Over 20 years ago, a friend took a job as a software developer at a manufacturing firm that was adding electronics to its previously analog products. The company still built equipment to do a specific job; that equipment just became smarter and more functional.

What is new is the eruption of technology that helps companies become more effective. The Internet of Things, with its proliferation of sensors and other connected doodads, is creating more need for programmers and people who understand IT to take care of those Things. They don’t replace the people who understand the machines, they augment them. Machine designers do have to become acquainted with the new technology, just as carriage designers had to adapt their skills to building horseless carriages with engines in them, but they’re still designing more evolved versions of their machines. And the programmers also have to learn about what they’re writing software for.

Technology is adding layers to every industry’s portfolio – security is an overarching concern, for example – and it may be removing some components, but the notion that companies magically become software companies or IT companies just because they’ve adopted new tools is just clickbait.

In a way, it’s rather lazy of the gurus to make sweeping statements like the ones that began this post. It’s definitely a way to raise eyebrows, but it’s not anywhere close to accurate. As has happened in the past, and will happen in the future, our world is evolving to integrate new technologies and new skills into old businesses. Some of those businesses will survive, and some will go the way of the dodo, but very few will magically transform into IT or software companies, and if they do, it’s because the company itself chose to revamp its business and change products. It’s not because it adopted new tools to help it succeed.




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