The digital rebuild: New business models need new foundations

Digitalisation isn’t coming; it’s already here. Across all sectors, organisations are looking at how they can go digital as they adapt to new business models, whether it’s the sharing economy, multi-sided markets, data-sharing platforms or on-demand ecosystems. For some, it’s about maintaining a competitive edge; for others, it’s about warding off the threat of new entrants, unencumbered by legacy systems and ways of thinking.

According to IDC, 50% of the Global 2000, Forbes’ comprehensive annual ranking of the world’s largest public companies, will see most of their business depend on their ability to create digitally-enhanced products, services and experiences by 2020, whilst by the end of 2017, 70% of the Global 2000 will have teams dedicated to digital transformation or innovation.

Knowing what you need to do vs doing what you need to do

Research from Gartner found that CIOs expect digital revenues to grow from 16% – to 37% in the next five years, so saying you need to be digital and being digital are going to be two very different things. For legacy players, successful transformation means overcoming several obstacles; namely being agile, secure, able to scale and deliver cost efficiencies.

>See also: Laying the foundations for digital transformation

To be agile means meeting the demands of end-users – both customers and employees – to innovate and deliver in days rather than months in the pursuit of delivering a superior experience. For established, global enterprises with multiple layers of approval, this requires a complete unpicking of systems, processes and, in many cases, culture.

However, the drive for agility cannot be at the sacrifice of security. Vulnerabilities have increased as more of an organisation becomes exposed in a connected and mobile world, threatening the security of mission-critical data.

Security failures now are met with condemnation from media, industry commentators and customers, such as those found in the wake of the recent WannaCry ransomware attack which spread to over 150 countries, most notably throwing the UK’s NHS into chaos, forcing France’s Renault factories to close, and infecting Germany’s Deutsche Bahn rail network.

Having the ability to scale means adapting to the new norm: IT no longer happens within the silo of the IT department. It now touches every department and every aspect of operations, as the internet has brought easy, low-cost access to applications and services by all.

Finally, this all needs to be achieved while finding ways to reduce operational IT costs to reinvest into digital innovation.

Painting over the cracks or rebuilding the foundations

If you wanted an eco-friendly house with low emissions, it is often better to start from scratch than try and retrofit an older building. This is predominantly true if the property in question is particularly old.

Whilst it might have a lot of character, from an environmental perspective these dwellings are likely to be inefficient and require significant, expensive work to get them up to scratch. In that instance, completely starting from the foundations up makes sense, both in terms of managing costs but also achieving exactly what is required.

>See also: The digital ecosystem: IT infrastructure now on CEO’s agenda

In some instances, of course, there isn’t the luxury of knocking down and starting again. Buildings used as hotels or with historic value may need to be open to generate revenue, and need to be redeveloped in such a way that future proofs them, making them fit both now and in several years’ time. This all needs to happen without disrupting their customers’ experience.

The same is true for digital transformation. Ideally, these new business models need to be built using the right materials for the job, and that goes all the way back to the right foundations. Retrofitting something originally designed to deliver an analogue way of working is only going to take an organisation so far.

Most organisations will need to come up with a compromise – ensuring they secure the value of what already exists, without impacting on what it can deliver now and in the future.

Whichever approach is taken – renovation or rebuild – it requires foundations, or an infrastructure, that allows an organization to be agile, that keeps mission critical data secure, that is scalable and cost efficient.

Solid foundations in the cloud

Agility, security, scalability and cost-effectiveness are some of the hallmarks of the various cloud computing environments available. Talked about for years, cloud is now at a point where organisations have a multitude of options and providers to choose from.

This is reflected in their approach to IT – just 10% of US and Europe enterprises are reluctant to use cloud computing for new applications for IT projects, according to a report by 451 Research, commissioned by VMware and Atos. Elsewhere, Gartner has stated that by 2020 a corporate no-cloud policy will be as rare as a no-internet policy is today.

>See also: Digital Day: Inspiring the next generation of talent

The appetite for cloud is growing, along with the understanding that it can be the foundation on which to overcome the barriers to digital transformation. Recent research shows that increasing agility and enhancing scalability for demand were amongst the top three drivers for planned cloud projects. The report also found that almost 48% of enterprises moving applications into the private cloud, do so for security and control reasons.

The right cloud combination for you, not one size fits all

That said, there is no such thing as a perfect solution. The proliferation of cloud computing has given rise to different environments which, if not managed correctly, can be no more suited to delivering new business models than the on-premise legacy infrastructure they are replacing.

70% of organisations are using private, public and hybrid clouds to take advantage of the benefits and restrictions, that applications needing different environments can use depending on their use and requirements.

The key is planning the implementation properly. For that, IT needs to work with lines of business to identify and prioritise requirements, whether speed to market, cost efficiency, testing and development or regulatory compliance.

This should result in the right mix of environments being deployed to deliver an infrastructure which meets the needs of the organisation’s digital transformation both today and for tomorrow.

>See also: 5 factors driving digital transformation 

Digitalisation may be impacting organisations of all shapes and sizes across all sectors, but that should not be confused with there being a one-size-fits all solution. The same is true for the platform on which it is built.

Just as what being truly digital means depends on the subject, so too does its infrastructure need to flex and evolve depending on the requirements being asked of it. It is only by knowing what is demanded that enterprise IT departments, in coordination with internal stakeholders, can determine the right mix of cloud environments to create the foundation on which new business models will flourish.


Sourced by Mark Nouris, Group VP Atos Hybrid Cloud, Atos


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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...