It is not about updating technology, but about updating the vision of the business. A bank like n26 is not a business that uses technology, but a technology that comes in the form of a bank and is inseparable from a bank. With, for example, the Portuguese startup Farfetch, it becomes impossible to distinguish software and business. With digital transformation, the software of an organization becomes its essence, its business.
All changes are difficult. But this transformation is particularly difficult to accept. Most leaders and employees of a company or public institution do not see their organization as essentially software. If this is the case if it is also difficult for you to design your business as a software business and think about scenarios. Imagine that your business is a digital business.
What changes? Or imagine a scenario in which a new competitor, fully digital, threatens your business. What weapons would be used by this competitor? How would these allow you to gain advantages over your company? Like metamorphosis, digital transformation is a process, a sequence. It is not done from one day to the next. It requires strategy and a strategy map possibly a Quidgest BSC.
There are new opportunities in the digital economy. But they are more open, accessible to more players and on an international scale. Without the weight of legacy, a new entrant often has an advantage and can pose a serious threat to already established companies. The scale of digital and the absence of barriers to expansion make it impossible to be safe anywhere. Bookstores around the world felt this with Amazon.
Pre-digital companies are not doomed. A bank like Deutsche Bank will not necessarily fail to enter fully digital fintech companies. But there is a threat, which has to be taken very seriously. Digital is both a disruption and the new standard. This may be more evident in some sectors than in others, but no industry is immune. Activities properly supported by software multiply the productivity or effectiveness of digitally-owned companies dramatically, by the thousands or millions.
However, this is far from easy to achieve, due to an aversion to change, difficulties in bringing together technological skills with increasingly scarce and expensive software skills, and for lack of strategic perception. Often, following is not enough. The former benefits from an advantageous position because it is the first, which is difficult but not impossible to overcome.
The key is to learn how to merge business with information technology in a way that is truly transformative. The software will not remain unscathed to this change. The software has to change radically. It is not the old software the typical financial management package, in particular that will support digital transformation.
Digital transformation requires innovation, it is the current way of designating innovation and applying all the benefits and risks of innovation and creativity.
Digital transformation is the innovation supported by the technological revolution of our time. What is not a digital transformation is also easy to understand. Removing information systems from organizations and expecting them, absurdly, to work better. Exclude organizations from thinking about their digital future. Denial of the possibility of digital transformation is an effective way of destroying an organization. The first application brings with it critical data streams. New applications join the platform to get access to those data streams, and bring with them their own streams.
Streams bring applications, which in turn bring more streams. The core idea is that an event stream can be treated as a record of what has happened, and any system or application can tap into this in real time to react, respond, or process the data stream. This has very significant implications. Internally, companies are often a spaghetti-mess of interconnected systems, with each application jury-rigged to every other. This is an incredibly costly, slow approach. Event streams offer an alternative: there can be a central platform supporting real-time processing, querying, and computation.
Each application publishes the streams related to its part of the business and relies on other streams, in a fully decoupled manner. In driving interconnection, the event streaming platform acts as the central nervous system for the emerging software-defined company. We can think of the individual, disconnected UI-centric applications as a kind of single-celled organism of the software world. A multicell animal has a nervous system that coordinates all the individual cells into a single entity that can respond, plan, and act instantaneously to whatever it experiences in any of its constituent parts.
A digital company needs a software equivalent to this nervous system that connects all its systems, applications, and processes.
This is what makes us believe this emerging event streaming platform will be the single most strategic data platform in a modern company. That is insufficient for the current state, let alone the emerging trends.
What is needed is a real-time data platform that incorporates the full storage and query processing capabilities of a database into a modern, horizontally scalable, data platform. And the needs for this platform are more than just simply reading and writing to these streams of events. An event stream is not just a transient, lossy spray of data about the things happening now—it is the full, reliable, persistent record of what has happened in the business going from past to present.
Combining the storage and processing capabilities of a database with real-time data might seem a bit odd. If we think of a database as a kind of container that holds a pile of passive data, then event streams might seem quite far from the domain of databases. But the idea of stream processing turns this on its head. This leads to a fundamentally different framing of what a database can be.
In a traditional database, the data sits passively and waits for an application or person to issue queries that are responded to. In stream processing, this is inverted: the data is a continuous, active stream of events, fed to passive queries that simply react and process that stream. In some ways databases already exhibited this duality of tables and streams of events in their internal design if not their external features. Most databases are built around a commit log that acts as a persistent stream of the data modification events.
This log is usually nothing more than an implementation detail in traditional databases, not accessible to queries. Hackers will have expanded targets and entry points. But companies also need to retool preventive security measures. Go right ahead and keep churning out those buzzworthy customer and employee experiences.
The Wall Street Journal news organization was not involved in the creation of this content. Developer democratization emerges big time Democratization is one of the biggest trends in software development, something that impacts companies across every industry. In other words, music is software. When the foundation of a business shifts from atoms to bits, the basic orientation of the work of the commercial enterprise shifts from products to platforms.
Platforms are Software In the twentieth century, product models could last as long as 40 years, which explains why a highly efficient product assembly line and a steady stream of five-year business plans could guarantee decades of profitability. Today, product life cycles are often less than five years and render five-year business plans useless. Leading edge businesses focus on building digital platforms and let the platforms define a continuous stream of products to meet evolving customer demands.
These platforms are essentially software applications that create innovative ways to accelerate commerce. Uber, Airbnb, and Expedia are examples of businesses built on software. They own no hard assets and yet each of these examples accounts for a significant, if not the majority, amount of activity in their industries. As more and more industries become digitized, the fundamental work of companies will be transformed as they evolve into software companies.
For example, in the housing industry, businesses have been construction companies that built homes.
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