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Disrupt or Die: BMC's Tips On Thriving Through Digitization

October 2016

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Companies have been digitizing the business for decades. So it begs the question, what’s different about digital transformation today? During 2016, Lopez Research has spoken to many enterprise clients about their digital transformation efforts. In this discussions, I’ve noticed several common themes.

First, IT leaders are simultaneously dealing with multiple technology transitions based on a rapidly changing environment in mobile, cloud, big data and IoT. Second, digital transformation is different today because technology is impacting every role within an organization. Whether you’re a factory floor worker or a knowledge worker, the tools you’re using today differ from what you used five years ago. The change in how employees and customers access services, combined with the new data and features available through mobile and IoT, means companies must also change their business processes and, most importantly, their mindset.

Additionally, success in these times requires a delicate balance between leveraging and upgrading your existing systems and embracing new technologies and workflows. With this context in mind, I interviewed Robert “Bob” Beauchamp, the chairman and chief executive officer of BMC, to understand how the company was transforming itself and working with its customers to support their digital transformation efforts.

BMC is a classic example of a company that provides many of the systems that help businesses keep the lights on. However, these systems also need to be adapted to work in the modern world. Beauchamp noted that most of BMC’s clients are in the process of redesigning customer engagement, supply chains, and employee experiences for the new digital workplace. “All of these companies are dealing with the existential threat of not modernizing.” He sees BMC’s job as helping facilitate a successful journey that is both fast and with the lowest possible risk.

BMC is also practicing what it preaches. Converting to a privately-held company in 2013 afforded BMC an opportunity to have a coordinated approach to transformation that wasn’t impacted by specific Wall Street quarterly targets. Beauchamp said privatizing enabled BMC to lay out a multi-year vision, rebuild its products around that vision, and expand that vision this year.

For example, it’s invested hundreds of millions of dollars re-architecting its products to be mobile-first and cloud-first, acquiring solutions to build out its portfolio when it makes sense, and building new offerings such as its TrueSight Operations Management solution. As a result of these efforts, products that were flat to declining in sales are now rebounding. Services, such as BMC Remedy IT Service Management, were rewritten and it’s returning to growth with 20 percent year over year increase. In the areas of expanding its strategy, BMC is taking on the DevOps movement as well, having recently previewed the company’s new Innovation Suite that offers ‘no code, low code and pro code’ capabilities to AWS developers.

If the company continues to succeed in its turnaround effort, it could consider an IPO to return capital to its investors and scale into other new markets. For now, the 36 year old company is focused on executing its turnaround plan under private equity, completing its own digital transformation, and retooling its solutions for 6,000 plus enterprise clients. The company’s biggest competition, Beauchamp says, is not another player in the space but rather the outdated perception of BMC from 2011.

Beauchamp offered three pieces of advice for companies wrestling with digital transformation, based on his experience at BMC and working with many large enterprise clients. “First and foremost, anytime you transform it’s as much about people as it is the technology. The team has to embrace the vision. There’s also no vision without execution. The enterprise has to transform itself through its people, culture, and communications.”

Second, unless you’re a digital-native company, you organization has legacy back office systems that run your business, and you can’t just throw them away. Given that reality, management teams realize that the digital revolution requires CIOs to be great integrators. The CIO’s challenge is to update existing systems without slowing down the adoption of new technologies that will improve agility. These systems will be a mixture of cloud and premises-based solutions.

Third, speed and agility are the keys to competitive advantage. From where I sit, these traits were always business requirements. The difference today is that large industries such as financial services, insurance, and hospitality were disrupted by start-ups and companies that effectively used mobile, analytics and cloud computing to deliver compelling experiences. Business processes based on these new technologies can easily be changed as market demands shift.

BMC sees agile app delivery as a key element of digital transformation. IT needs to deliver applications across multi-sourced cloud environments for both cloud-native and traditional applications, including monitoring, workload automation, environment-on-demand, and release automation. At its latest annual conference, BMC Engage, executives discussed how the company was addressing this issue with new and updated products and a set of initiatives that will enable enterprise clients to focus on the critical areas required to excel in the digital era.

Beauchamp also discussed the move to adopting artificial intelligence, big data, and machine learning. He said, “Companies must be able to aggregate data from various sources in a secure and trusted manner. They must have systems that shrink the time it takes to gain insight from weeks and days to minutes and seconds. All of this must integrate with a rich security, operations, and service management framework.”

These discussions have led me to the conclusion that digital transformation isn’t new, but it’s different. It requires executing on the delivery of multiple technology transitions from existing and new vendors. Digital transformation is also a multi-year vision, which means a company’s existing vendors must also have the foresight to transform themselves long before customer’s needs arise. Companies that master that difference will be the leaders of tomorrow’s Fortune 500 companies. Those that lag will struggle for relevance in a real-time, data-driven world.

 

This article was written by Maribel Lopez from Forbes and was legally licensed through the NewsCred publisher network.

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