You used to be a leader, but not in the cloud era. Get used to it – Huawei

Digital transformation is a loosely defined term which will nonetheless impact every business in one way or another, though some organizations will now drop down the pecking order, according to Huawei.

Speaking at Huawei Connect 2016, Rotating CEO Eric Xu said cloud computing will not only impact how a company operates fundamentally, but will also disrupt the hierarchy within individual subsectors. This may be more difficult for some to accept as they find themselves chasing industry innovators as opposed to setting the tone.

Cloud computing has been widely recognised as the great equalizer in industry. A company’s ability to compete is no longer based on the size of its bank account (to a degree), as scalable computing and the power of the internet have brought challenger brands to the masses. Companies like AirBnB who were non-existent 15 years ago are now widely admired and their abilities sought-after. This explosion of Cloud 1.0 companies (those born in the cloud) has redefined the definition of an industry leader.

According to Xu, this could be one of the stumbling blocks of a digital transformation journey, as decision makers in the more traditional organizations need to accept they are now the followers of the Cloud 1.0 companies and no longer the ones setting the pace. How an executive with a six figure salary in a Fortune 500 company accepts this may define how this organization adapts to the digital ecosystem. It could be quite a humbling experience and a difficult pill to swallow for some.

Aside from the reality check, the digital transformation journey holds numerous other challenges for the Cloud 2.0 companies, those who are growing with the cloud. First and foremost, application development will be a stumbling block for some. For Xu, this is primarily due to the resource which is invested into becoming a more agile company.

Huawei currently employs roughly 3,000 permanent developers and a further 7,000 contractors. No-one is saying every organization should employ 10,000 developers, but the numbers demonstrate the scale and importance of an agile application development team. Without this resource agility and subsequently digital transformation will not be achievable.

Another more significant area which needs to be addressed is that of the CIO. As with the traditional business model, the traditional CIO has now gone out of fashion, and unlike retro jeans in Dalston, it’s unlikely to come back. Xu has now redefined the CIO as a CI³O representing the expanded remit of the role.

As with its predecessor the CI³O takes into account the information capabilities of the business, but should now be responsible for innovation as well and interconnection of IT services between the enterprise and its customers, employees and partners. The CI³O has to be a businessman who can not only grasp the complicated nuances of the technology world, but also create a path which defines how the same technology will bolster the company in the real world. CI³O’s can no longer hide in the dark corners of the company, but need to be at the forefront of the boardroom, defining the future of the business.

Those CIO’s who are unable to grasp their new responsibilities and remain in the traditional mind frame will be the roadblock on the road to digital transformation. It could be the case the IT team is in fact holding back the company from the digital ecosystem simply because it is not ready to adapt.

Cloud computing is not a new topic, and neither is it a particularly revolutionary one anymore. Everyone understands the cloud what the cloud can offer, and now it’s time for the Cloud 2.0 organizations to grasp it. For more traditional organizations this means a long, hard look in the mirror to get to grips with their new position in the pecking order, as well as assessing whether the IT function is what is holding back the digital transformation journey.

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