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Out with the Old: Software Applications Drive New Business Strategies

The pace of technological change is fundamentally disrupting the way we live and work, pushing companies to rethink and reinvent the way they do business through software. In every industry, companies are using software to establish new competitive frontiers, expand into new markets, create seamless customer experiences, and generate new sources of revenue.

Gartner reports shows that new software applications are the driving force for companies aiming to achieve digital transformation and innovation. By 2017, seventy-five percent of new software will be built to meet requirements to achieve digital business goals. The strongest possible conclusion is that the strategy behind any new software application is the single most important tool for reinventing and reinvigorating an existing business, or the creation of a new and disruptive business. The undeniable truth is that modern enterprise software applications can help businesses seize new opportunities brought by the digital era and open new competitive frontiers.

For example, FAW Group Corporation, a Chinese state-owned automotive manufacturing company headquartered in Changchun, Jilin, has launched an Android-based automotive system — inkaNet — that uses the MirrorLink device interoperability standard to enable the connection between vehicles and mobile phones so that smart phone applications (such as navigation) are better optimized to driving environments. The result is a substantial contribution to both convenience and safety. The FAW inkaNet system also supports natural semantic recognition to better predict a wide gamut of individual user intentions without the requirement that each user follows a set of fixed rules for interactions with the device. An additional major benefit of the Android platform is openness: all interested software developers can easily develop applications to run in the inkaNet ecosystem. By demonstrating the ability to show a wide differentiation in car products, new software applications are stretching the competitive frontier for businesses in the transportation sector.

Transforming into a software-driven business is not an easy task for most companies. The fact is that many legacy corporate IT systems are showing their age, with an estimated seventy to eighty percent of today’s business transactions processed in COBOL, a computer language that first appeared in 1959. Many companies are trying to compete in the 21st century with applications built decades ago — monolithic applications that took a long time to build and take a long time to change. Modern enterprises need new application strategies to help them accelerate the uplift of their IT systems to meet the pace of today’s business climate — not only to sustain their historical advantages, but also to gain important ground on the competition.

Strategy 1: Liquid Applications

In a high-velocity, software-driven world, there is less time for complex, lengthy, and expensive coding of applications, or massive, multi-year system implementations. What is needed is a fundamentally new way to build software — faster, flexible, and more “liquid”— by rapidly assembling reusable components that meet the needs of endlessly shifting business environments.

Liquid applications apply modular architectures, next-generation integration techniques, and a cloud-first and mobile-first mindset. When combined with engineering development innovations such as Agile and DevOps, modular architectures enable the continuous delivery of software that evolves as business needs change. The big shift is from monolithic applications to a world of smaller components and service modules.

Liquid applications require enterprises to create modular architectures featuring reusable components that can be sourced internally or externally. Emerging Platform-as-a-Service (PaaS) environments provide well-defined technical architectures that include interface standards, governance, and reusable code. The result is the rapid creation and assembly of cloud-first and mobile-first business applications that are engineered to operate at scale and designed for easy interaction by customers and employees alike.

Strategy 2: Intelligent Applications

To manage growing volume, velocity, and complexity — and maximize the business value of internal and external data — companies are embedding software intelligence everywhere. Advances in computer science, such as increased processing power, innovations in natural language processing, machine learning, and cognitive computing lead to software intelligence. Based on these breakthroughs, software is taught to automate decision-making through rule-based algorithms, and to evolve and innovate based on recursive learning techniques. Intelligent applications offer three critical capabilities:

The first is Intelligent Automation. By automating routine tasks, intelligent applications offload complexity and supplement human effort through technologies such as auto-correction and robotics. Intelligent automation improves productivity by doing more work in a fraction of the time with greater accuracy. The second is Integrated Analytics, which creates systems that can sense, assess, and respond to the data inputs and outputs of embedded business processes to deliver radically improved performance. The third capability is Self-Governance. Through the use of digital agents, intelligent applications can be taught to learn and govern themselves which, in turn, can revolutionize customer service, infrastructure management, and business innovation.

Strategy 3: Connected Applications

To grow revenue and defend their market position, companies need to create new competitive frontiers using software. Doing so requires opening multiple dimensions of application connectivity. Connected applications offer companies the technical means to dynamically interface with the Internet of Things (IoT) and with business partner and customer ecosystems. As the IoT matures, connected applications will run everywhere — not just on traditional hardware such as phones, tablets, and PCs, but also in manufacturing, pipelines, industrial equipment, cars, wearables, and more — to convert products into connected product-service hybrids.

These applications change the way companies operate by opening up their manufacturing operations, production facilities, products, and services to new technologies. Connected applications are also required to dynamically interface with business partner and customer ecosystems in today’s highly networked, digital business environment. When properly designed and managed, each ecosystem multiplies the power of all the participants, leading to new combinations of functionality — and new revenue opportunities — that would have been difficult to achieve otherwise.

Are You Ready to Take the Lead?

These three new application strategies also depend on embracing an entirely new operating model for software development, encompassing customized Enterprise Resource Planning (ERP) and Software-as-a-Service (SaaS). For many companies, the legacy model for IT operations is neither suitable nor sufficient for today’s high-velocity business environment. Going forward, IT managers must be prepared to define and execute new business strategies through new software. In all cases, businesses must strive to gain technical insight and a vision that assumes a prominent role for building modern software. Innovations must be strategic, and driven by joint planning processes that span both the business and IT.

Complete comprehension entails an understanding — by both the business and IT teams — of what it means to be a software-driven business. Both groups need to understand how modern software can spur growth, shape new markets, and reach new customers. Business and IT must work together closely to orchestrate innovative products and solutions. When long-term competitive advantage is at risk, being a “fast follower” may not be fast enough.

Are you ready to take the lead?

By Marco Cassinadri/Hongbiao Yu

Managing Director, Technology Lead, Accenture Greater China/Managing Director, Electronics and High Tech Industry, Accenture Greater China

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