Digital transformation has risen to the top of the agenda for organisations – and there are no signs of this changing. In response to the pandemic, companies have turned to digital solutions to solve a range of problems, and investment in digital infrastructure has skyrocketed – particularly in cloud technology, which has reached new levels of adoption. Done right, digital transformation can increase efficiencies, reduce costs, and, at a time of fierce competition, give companies a much-needed edge. But for the majority of businesses, the digital transformation journey is a long and complicated one. Often, CIOs underestimate the complexity of dynamic environments such as the cloud, resulting in system failure and outages.
This poses a critical question: what steps need to be taken to ensure a smooth and effective digital transformation journey?
Digital transformation drives business success
To understand the path to a successful digital transformation, it is first necessary to closely examine current trends. While digital transformation has been a particularly hot topic over the last 12 months, the term has been circulating for at least the past decade. The current phase, however, is faster than the world has ever seen before.
Importantly, this current phase is not necessarily defined by the migration of processes that were completely offline to online. Rather, it primarily involves the migration of monolithic architecture that exists in data centres to elastic, or dynamic, environments. The end result, then, is multiple smaller pieces of data and infrastructure moving online simultaneously, being used to support multiple business processes in a microservices architecture.
Beyond individual trends, however, the defining feature of this current wave is arguably that we have now reached a critical point, whereby IT success and overall business success are directly correlated.
Has ‘digital transformation’ become a meaningless buzzword?
Stumbling blocks persist
Today, the benefits of digital transformation are undeniable – to such an extent, in fact, that those who don’t participate will rapidly find themselves at a competitive disadvantage and risk being edged out of their market. But the process is a complex one, requiring a comprehensive, forward-looking strategy in order to be successful. And a key problem, spanning markets from financial services to gaming, is that CIOs and other business leaders underestimate the complexity of these new environments.
Let’s consider a business that is in the process of moving elements of its functionality to public cloud, as an example. It will typically have a hybrid-IT estate, which is partly on cloud and partly on-premise – two environments that have significant differences which must be appreciated. Many businesses either try and treat the environments the same or – arguably worse – treat them as two distinct operations, without an overarching strategy. Both of these approaches can lead to inefficiencies, or even system failures.
Then there is the problem of cost. When used correctly, cloud has the potential to drastically reduce costs for businesses, but the amount of money currently being wasted on cloud spend is staggering. In fact, 35% of spend in public cloud is wasted, according to RightScale.
Why is this the case? More often than not, the problem originates at the transition to cloud. Most firms adopt a “lift and shift” method – whereby they retain their traditional approach to sizing the infrastructure required, without taking into account the unique characteristics of cloud.
This static approach to cloud sizing and buying, where the infrastructure capacity is defined once and then rarely revisited, fails to take advantage of cloud’s greatest asset, and the primary source of its cost-saving capabilities: flexibility.
Which departments should be prioritised for digital transformation?
What’s the fix?
In order to remedy this problem, we advocate a three-stage process.
The first stage is right-sizing – involving the highly granular data capture of resources. In order to take a strategic approach to cloud and leverage its potential, firms must understand the sizes of instances needed for each application workload. Capacity management tools can automatically assess existing infrastructure and applications to determine how much capacity is actually required (as opposed to what has historically been provisioned). This assessment can then be used to determine which cloud resources are best aligned to this requirement, to optimise cloud costs. Crucially, in a hybrid environment, this can also identify areas where workloads should be move back from cloud to on-premise, where capacity is available.
Next is right-buying. Public cloud providers offer a myriad of buying options, from on-demand spot pricing to multi-year commitments. In order to determine the optimal spend profile, tolling needs to continually assess existing and planned usage against the varying prices provided by the providers. Again, this can all be automated with the correct tools.
The final stage is optimisation. It is vital that firms plan for growth and predict upcoming costs with advanced predictive analytics and forward-thinking scenario modelling. Firms must use a single tool across the different environments as to maintain a complete oversight of their estate – but they must ensure that this tool is able to maintain consistent reporting regardless of environment.
With the global pandemic raising questions for IT teams around agility, accessibility and flexibility, there is a renewed focus on operational demands, shifting how businesses leverage cloud technology going forward in order to remain competitive and scalable. With technologies like serverless architecture, AI platforms, edge computing, DevSecOps and open source gathering steam, cloud computing is entering a fourth industrial revolution that blurs the boundaries between the physical, digital, and biological worlds.
Enterprises should not forget why they are investing in cloud technology. Yes, it makes their business faster and more flexible. But they must remember that the end goal is business growth and a competitive edge. What is vital for a smooth digital transformation journey, is that the latest technology isn’t simply implemented for its own sake, but is outcome-oriented and fits into the wider business strategy.