How enterprises can cope with digital disruption

When Spanish banking giant BBVA was gearing up to prepare for the forces of digital disruption, it applied what every bank knows best – risk control.

“Our biggest risk was to buy the most expensive proprietary systems in the market,” said José María Ruesta, BBVA’s global head of infrastructure, service and open systems. “In our datacentres, we had complex interfaces that were never documented – our life was not easy and there was no room for innovation.”

In response, Ruesta said BBVA replaced its proprietary systems with open source platforms, which has helped the bank to reduce transaction costs and improve developer productivity significantly.

BBVA was one of several large enterprises, from Spain to Australia, that took to the stage at the Red Hat Summit in San Francisco to share lessons on how they were bracing themselves for change in an uncertain and volatile world.

In his keynote address, Red Hat CEO Jim Whitehurst grouped these lessons into three main themes: prepping for constant change, empowering employees and staff engagement.

Noting that “planning is dead”, especially when organisations do not always know where the future lays, Whitehurst said organisations could “configure for change” without knowing what the change would be.

To do so, he said organisations could apply the principles of agile development and DevOps – try, learn and modify – into business processes. Some organisations have taken a step further, by building modularity into their technology infrastructure so they can adapt to change rather than end up with legacy systems, he said.

When it comes to enabling employees to cope with change, Whitehurst said while the use of automation to replace or augment what people are doing would continue, just as important is the need to provide employees with the information and tools they need to make decisions.

“It’s about making sure people understand the strategy of the company, the context they’re working in, and setting the appropriate values,” he said. “From a technology perspective, it’s about building the right systems that provide the right information and tools to the right people at the right time.”

Finally, Whitehurst called for companies to engage their staff in real time so that they can react to change quickly and take advantage of new opportunities.

“In the past, IT was often seen as an inhibitor to this, because IT systems were moving slower than the business might want to move. But what we’re seeing with some new technologies is that IT is becoming an enabler that’s driving the pace of change,” he said.

An example of this is ICT service provider T-Systems, whose CEO Adel Al-Saleh said it had invested more than €1bn over the past five years to build new capabilities to support its clients.

“The whole disruption of the cloud and digitisation is something we’ve had to face as well,” said Al-Saleh, noting that T-Systems turned to open source software from Red Hat such as OpenShift and OpenStack to build flexible infrastructure for clients such as car makers.

“In the past, it took them years to get an application into a car, but today we’re using OpenShift as the PaaS [platform-as-a-service) layer to enable DevOps for these car companies, which have been able to bring up applications in less than a month.”