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Digital Vortex: How Not to Be the 40% That Will Fail!

- September 8, 2015 - 5 Comments

VortexAt least 40% of businesses will fail at staying digitally agile.

Among 941 business leaders in 12 industries surveyed, 43% percent confirms that they “either do not acknowledge the risk of digital disruption, or have not addressed it sufficiently.” This disquieting statistic is accompanied by another finding: in each industry, four out of ten (40%) incumbents surveyed, whose market shares are dominant today, will be displaced by the digital disruption within five years (Digital Vortex, Global Center for Digital Business Transformation. June 2015). Yet, only 25% says they’re actively pursuing a solution or willing to disrupt themselves in order to stay competitive.

For further reading about this Digital Vortex study, check out my colleagues’ blog: At the Center of the Digital Vortex – Chaos, Disruption, and Opportunity.

In this blog, I’m not going to discuss the study or its methodology with you. Instead, I will talk about the one common denominator that all businesses across industries have – the WAN – the savior for those 40% at risk of being displaced.

No One Business Is Immune, Even Ours.

Key insights from the survey show that no one industry is immune from the gravitational and rotational pull of the digital vortex – “a digital center in which business models, offerings and value chains are digitized to the maximum extent possible.” (So don’t be the 32% that wait-and-see, as discovered in the survey.)

At Cisco, a few years ago, we noticed that a handful of forward-thinking customers had started to rethink their WAN’s expectations with a strong emphasis on: quicker and faster deployment, agile services delivery, abilities to do more with less, and their goal: innovative business outcomes. Diving deeper into the drivers behind such motivation we found that they were going through a fundamental change in their business model with an eye on digitization, rebalancing what’s core and context, and preparing for a culture of agile risks taking to drive quantifiable business improvement results. IT leaders in these organizations confirmed that their wide-area-networks (WAN) were the most critical element, an enabler (but could also be the Achilles’ heel) to achieving that vision.

This early realization, as instigated by our customers, opened our eyes. At that time, it was apparent too that it was the beginning of a movement that quickly became enormous (what is now coined as the Digital Vortex). Organizations soon clamored to transform their WAN to deliver a digitized experience. Our own WAN business at Cisco was on the verge of a relentless digital disruption as well. The WAN, as we knew it, was changing with the emergence of SDN, SaaS, vCPE, NFV, Path Control, Application Visibility, WAN Optimization, thin client computing, BYOD, etc. We not only had to innovate the appropriate solutions to help our customers achieve their vision, but also had to reshape our processes in order to cope. Clearly, our business was being pulled into the Digital Vortex as well.

Coping with the Digital Vortex

To cope with the Digital Vortex means to be agile, to stay a head of the game, to innovate vigorously, all for one goal: to create new and better business outcomes. But, how do you do it? Well, it starts with that one common denominator: the WAN.

The WAN, an intelligent WAN, is every organization’s catalyst for innovation. The WAN should be a foundation and also an enabler for how organizations will innovate. Let me illustrate a specific journey for transforming the WAN to the ideal WAN.

IWAN2

 

– As a starter, the ideal WAN must enable a clear set of use cases, ones that target specific business outcomes expected by customers. At Cisco, a team of forward thinking customers participated in real-time in the development process and interacted directly with engineering architects to provide feedback on the next set of deliverables with the aim to continuously enhance the ideal WAN. Aside from old-fashioned, face-to-face meetings, enterprise-class social media and collaboration technologies were used to have the customers’ voices penetrated deep into the engineering organization.

– The ideal WAN must provide prescriptive solutions that provides an end-to-end solution leveraging multiple network technologies required to enable a rich set of use cases. These prescriptive solutions were fully tested as part of the development process at Cisco. This allowed customers to dramatically speed up the time to implement the new networks. While the ideal WAN was transforming, Cisco’s test practice also changed from primary systems based testing to solution testing in real-time – all fully digitized and easily accessible to engineers and customers.

– The ideal WAN’s prescriptive solutions must include best practices on how to configure specific parameters across multiple technologies to deliver the best possible user experience. It should be highly customizable to adapt, where needed, to specific deployment scenarios and application loads.

– The ideal WAN should be able to move quickly towards intent-based user interaction models for orchestration and management by leveraging SDN controller architectures and open APIs. These user interaction models should be fully object-based and digitized in order to speed up deployment and change configurations.

– The ideal WAN must be open to 3rd party management tools to provide organizations with alternative options catering to their specific business practices and models.

And the ending result was Cisco Intelligent WAN (IWAN).

Looking back, I realize that digitization is not the final destination. It is an ongoing journey, a disruptive mindset for driving business innovation. My advice: start the journey today and take small steps, then adjust from there. This will go a long way to ensure your organization will NOT be the 40%.

Proactive Organizations, Seek Guidance

For those that are already ahead of the game, leverage validated design guides and proven deployment recommendations as your foundation. In a follow-up blog: Key Tenets of a Digital Business Network, my colleague, Anna Duong, will outline a prescriptive recommendation for a hypothetical organization, NeedToChange.

NeedToChange’s Summary of Challenges

Factors Driving Change (not in any priority order)

  1. PCI Compliance
  2. Deteriorating Application Performance
  3. Multi-tiered Branch Offices
  4. Need for WiFi Access Offering
  5. 50% Remote Workforce
  6. Security Concern for Direct Internet Access
  7. Voice and Video
  8. Public Cloud Computing Services
  9. Bandwidth Intensive Business Critical Data Applications
  10. Static Traffic Prioritization
  11. Data Centers with T3 links into MPLS network and an Internet link:
    • Improve application performance;
    • Reduce cost;
    • Increase uptime;
    • Reduce complexity;
    • Provide access to public cloud computing services;
    • Provide better support for real time applications;
    • Reduce the time it takes to implement new network services; and
    • Increased agility both in terms of supporting new facilities and in supporting growth within existing facilities.

Read the second blog in this installment: The Digital Vortex Part 2: Key Tenets of a Digital Business Network from Anna Duong.

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5 Comments

  1. "Need to Change" with a good summary is well written . Thank you

  2. Will be waiting for the 2nd part ;-)

  3. Nice Blog Hugo - Great Reading and worth sharing :-)

  4. This ia the right direction

  5. A very well written blog thanks Hugo