Why the software-defined world is key to organizational transformation


Over the course of my IT career, I have never seen such a radical shift of a sentiment for software engineering. Software isn’t just changing industries, it’s defining them — and it's the key to ensuring digital transformation is successful.

Dmitry Loschinin
CEO at Luxoft, A DXC Technology Company
Dmitry Loschinin
Dmitry Loschinin

The Covid-19 pandemic hastened digital transformation for many businesses. In just over a year, organizations learned to design, test, release and even retire software and business services at a pace they had previously not imagined was possible.


According to McKinsey Global Surveys,



Companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years. And the share of digital or digitally enabled products in their portfolios has accelerated by a shocking seven years.



Although the need for digital transformation grows, few manage it properly. As McKinsey notes elsewhere, about 70% of digital transformations fail, while only 30% succeed.


In the past, digital transformation was driven largely by the need to better serve customers. As a result, companies were often cautious about how quickly they introduced new technologies for fear that their customers wouldn’t be ready or able to adapt to change. At the beginning of 2020, 67% of U.S. CEOs expressed concerns about migrating all of their business to the cloud. The pandemic has largely quelled those fears by making digital innovation a requirement for survival.


As a result, the post-pandemic world is increasingly being defined by software. Organizations across industries are embedding software in their products — software-defined assets — and connecting those products to their operations and ecosystems, creating connected software-defined assets. These cyber-physical assets need continuous development, upgrading and retiring. The digital lifecycle management (DLCM) process requires platforms to operate them, pipelines to power the value stream and the core capability to evolve them. To succeed, all organizations will need to make software engineering a central activity of their business.


Software engineering capabilities ensure that organizations can compete and respond to change, whether in market conditions or highly regulated environments. In a software-defined business, product updates and enhancements are delivered daily, weekly or monthly to connected energy systems, health care technologies, civic infrastructure and more.

This new operating model will naturally segue into AI-driven predictive and preventative operations, allowing organizations to move away from responding to outages and fixing broken systems and move toward more resilient systems, reducing the costs of operational processes and innovation. A software-defined model also facilitates and supports a virtual workforce, providing organizations with access to a richer talent pool and the cost and labor flexibility that enables a business to scale seamlessly.

Learn how Luxoft helped Vantage Power accelerate time-to-market and reduce operational costs by over 80%

To maximize the potential of software engineering, organizations must follow some best practices when approaching their digital transformation:

Break down silos

It’s common for organizations to exercise caution and deploy new technologies and processes in silos. But this fails to consider how they will ultimately need to work within other areas of the business. A high-level strategy that clarifies how new technologies and best practices will impact the organization as a whole ensures the highest potential for a successful transformation.

Develop a workforce for the future

The ability to develop the necessary talent and skills throughout the organization will be a critical determining factor in your digital transformation’s success. While you may have some talent readily available, the pandemic has likely created gaps in your workforce. You can offset your talent shortage by leveraging distributed teams. This approach allows you to extend your workforce with digital specialists based anywhere in the world who can bring new skills and expertise to your digitalization efforts and help ensure success.

Ensure you have the right tools

Pandemic restrictions may be lifting but virtual work is here to stay. To maximize its efficiencies, you’ll need to refashion your remote work strategy for the long run. That will include upgrading or replacing tools you previously deployed ad-hoc to support remote workers during the pandemic’s lockdown phase and rethinking practices for working and communicating with distributed teams.


Software engineering is central to creating value in the modern business. It’s essential that organizations pivot toward developing sophisticated software applications to meet the needs of their business and customers.


In the post-pandemic world, software engineering will be critical for delivering the high-quality services consumers demand, as well as providing reliable tools that enable teams to work remotely without constraints. Software engineering tailored by industry is the key to keeping up with the pace of innovation, and organizations that embrace it will fare better than those that don’t in the post-pandemic software-defined world.


In future articles, I'll write more about this topic, starting with my next article on connected software-defined assets.

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