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Businesses need to use technology to be more customer-centric, according to analyst Forrester.
The firm's vice-president and group director, Laura Koetzle, urged delegates at the recent Forrester Forum in Lisbon to make the customer the centre of everything the business does.
Opening the forum, she said: "You have to get away from IT gravity. Instead, focus on the business agenda to win, serve and retain customers."
Traditional businesses are struggling to compete with internet companies, with CEOs not prepared to invest in digitising their businesses to the same extent as big tech providers.
Highlighting this, DER Touristik Online head of development Sascha Alexander Mai said at the forum that his firm is "scared" of Amazon. "We are waiting for the day Amazon goes into to tourism," he said.
Addressing delegates during a session on digital transformation, Alexander Mai said Amazon's use of technology enables it to grow its number of customers. "Their main key performance indicator is growth and 75% of all products purchased online are purchased through Amazon. The amount of money you have to spend is ridiculous," he said.
But some IT heads are starting to recognise the need to spend more on IT to achieve business transformation.
During a keynote presentation at the Forrester event, former chief technology officer of Portugal Telecom, Manuel Rosa da Silva, said CIOs need to simplify their legacy IT, and claimed to have spent $10bn on technology over the past few years.
"Unless you take a machete to your legacy and kill applications, you won't get anywhere"
Manuel Rosa da Silva, Portugal Telecom
"Things gets a lot more complex – but our legacy holds us back. Hiding all this legacy is like putting on cosmetic cream to hide wrinkles. Unless you take a machete to your legacy and kill applications, you won't get anywhere," he said.
Rosa da Silva said he created a "007 team" at Portugal Telecom, with a "licence to kill" legacy applications. The team's key performance indicators were measured in the number of applications they killed.
But Rosa da Silva warned that it takes a lot of hard work to simplify complex IT, and there is a big cost. "We spent more on IT than on telecoms," he said. This investment is significant given the company is a telecoms provider, but Rosa da Silva said his mission was creating a company that is "a lot more simple" and "there are no shortcuts".
Using cloud to simplify IT
Portugal Telecom's web portal takes in more advertising revenue than Portugal’s national television network, yet Rosa da Silva said he was happy to run the infrastructure on the cloud. "Portugal Telecom is currently negotiating with AWS [Amazon Web Services], Google and Microsoft Azure to put its entire advertising portal into the cloud," he said.
For Rosa da Silva, cloud helps to simplify the organisation. "As a telco, Portugal Telecom has a sophisticated IT team, but I go and look at AWS and they are at least four or five generations ahead."
According to Forrester principal analyst Michael Facemire, from a software development perspective, organisations need to behave more like software-as-a-service (SaaS) providers.
"Software used to take 18 months to build. The challenge today is to get applications out in two to four months. Software is approaching a zero-day event," he said.
Facemire urged companies to create software in a way that enables it to be updated rapidly. “Amazon updates software 100 times a day. Build minimum viable product and use analytics to measure feedback. Use data to make product decisions and you become closer to customers,” he said.
Developing for digitisation
He added that open-source tools such as Node.JS and Nginx can help organisations create SaaS-like systems that are easier to develop.
Facemire also recommended that CIOs assess the impact of services such as Cortana from Microsoft and Apple’s Siri, which are creating new application areas based on inference, to suggest products or topics to the user.