It’s not as simple as “stick it in the cloud”

Today, business leaders are grappling with a massive amount of change. No matter what industry businesses are operating in they are all looking to be the next ‘Uber’. In other words, they are looking to be the next disruptor.   

But in order to be disruptive new products, business models and ecosystems are required. Consumers are wearing the trousers in the customer/business relationship. No longer can businesses rely on just their product or service to win the hearts of consumers. In a world where consumers are in the driver’s seat, businesses need to think of the customer experience first.   

Customer experience and digital transformation go hand in hand. That’s why ‘digital transformation’ has become a business buzzword and sits at the core of many business strategies.   

The term ‘digital transformation’ may be thrown around a lot, but there is still a misunderstanding as to what it actually means. In terms of implementation, it’s about businesses adopting technology that supports an overarching business objective. All too often though, businesses rush into adopting technology before thinking about what improvements that the technology they have implemented actually makes to certain aspects of the business.    

This is where the understanding of the buzzword can become cloudy. Success doesn’t magically happen once businesses have adopted technology. It is driven from a business’ ability to implement technology that will innovate the way it connects with consumers, make positive changes to its business model and enhances company culture, amongst other key aims.   

Across all industries IT departments are being challenged with the task to help support the business’ objectives to become more responsive, connected, agile, and collaborative. No longer can a firm rely on its size as a success factor because recently, it has been the smaller, nimbler start-ups that have been best placed to implement a successful digital transformation strategy. We’ve witnessed this primarily from the fintech sector, which is arguably better serving their clients than some of the more established banks that are struggling to implement new technology into their complicated and clunky legacy IT systems. 

To be the next disruptor, or to at least keep up with the disruptors, CIOs need to be looking at ways of implementing digital transformation strategies that are in line with their business objectives. Only then will adoption of technology drive genuine value rather than just jumping on the “adopt tech” bandwagon for the sake of it.   

Responding to customer demands 

Purchasing habits today are dramatically different than 10 years ago. Today, we are living in an on-demand world. Retailers can deliver products within 24 hours after purchasing online or in store; a multitude of cuisines can reach our doorstep within the hour through the likes of the Deliveroo app; a personal driver can be waiting outside our location at the touch of a button within minutes thanks to Uber and Addison Lee. All of these types of services have something in common – simplicity and speed.   

Thanks to consumers being more willing to share information for more personalised offerings, it has never been simpler for businesses to get to know their customers.     

This on-demand culture has pushed businesses to think about connecting with customers on a 1-to-1 basis and adopt technology that will collect tailored insights that allows this to happen. However, businesses must think beyond the tech and insights – they need to ensure they have a robust platform that can cope with peaks and troughs in demand. For example, if a retailer with a legacy system were to put up an online offer which attracted a lot of consumer attention, the technology that connects both the website stock figures with their actual stock room numbers may not be able to keep up. This would have a negative effect on customer service as customers may order and pay for something that is no longer available meaning that the retailer would then need to refund the customer.    

Businesses with a low customer intelligence quotient with a large estate of legacy systems, who are resistant to change, with a top heavy decision making culture will naturally find it more difficult to digitally transform.  Deciding what to do with a portfolio of applications in order to gain greater agility or faster response times, while juggling requirements such as regulation, data sovereignty, security, integration complexity, contractual certainty, and service level agreements into consideration, can be a little like playing three dimensional chess.   

In the initial stages of the digital transformation process the more thought a CIO gives to these older applications and highlights the challenges they represent the better. Only then will they know how a legacy application estate can impact a digitally transformed user experience.    

It’s a race, don’t sit back   

In all industries, start-ups are increasing the competition. Many larger organisations are doing all they can to keep up and retain their customer base. Some corporations, like international law firms, have recognised this competition and are acquiring the businesses who simply know what they need to do in order to not get ‘Ubered’.   

However, it’s not as straightforward as investing in more tech. Many large corporations already have tech coming out of their ears. Simply adding more layers will just make more mess and won’t be enough to fix a broken process or disengaged customer service.   

A costly mistake many businesses make is focusing on the back-end technology and how to implement it, rather than the desired business outcomes. This can result in investment being wasted on technology that drives no specific business value. In addition to this, time spent focusing on limited tech is time which could be spent getting to grips with the tech that does bring real business value. More than ever, time really is money. It’s simply the fastest organisation to have uncovered a problem and have taken the smartest, most efficient approach to solving it that will survive and come out on top.   

The Best Execution Venue 

When organisations follow their competitors into the cloud without careful consideration and planning, mistakes can be made. There’s no “one size fits all” approach when it comes to digital transformation and cloud is not always the answer.  Thought into how cloud fits into a business’ broader transformation strategy is needed, or else it may not meet specific business and customer demands.   

There are many different types of clouds, businesses just need to get their head around what will work best for them. Public cloud is best suited for flexible workloads with short term computing resources. It comes into its own when highly scalable workloads are needed, yet it also has the ability to be switched on and off easily.  Alternatively, private cloud is more suitable for longer-term workloads, of around three years, that require predictable levels of resources and more complex security requirements. Grid computing with three year workloads can run in a custom security environment using managed hosting, saving money over cloud and supplemented with bare metal services for short term needs. Some older applications at the end of their lifecycle may be best left alone or moved into a colocation environment for integration into other venues. Successful digital transformation with a legacy IT estate depends on a hybrid IT model with the flexibility to choose the best execution venue for each application and integrate into other environments.   

Many corporations today are opting for both public and private clouds as well as managed hosting and colocation that require a number of providers and can be difficult to integrate across a network. This approach can offer a greater level of flexibility and efficiency; however, it can be a lot for the CIO to juggle. A less stressful option for CIOs of enterprises that rely on multiple execution venues is to seek a managed services provider to provide integrated application lifecycle management, and unified managed services across a variety of execution venues including public clouds. That way complexity is kept to a minimum. 

The ever-evolving business   

Change is inevitable and since time began businesses have been evolving to meet consumer demand and step up to competition. It’s as simple as sink or swim - businesses must either take steps to adapt or be overtaken by their more agile competitors. 

Embarking on a digital transformation strategy is something that needs careful consideration before jumping the gun and adopting tech that they may ultimately find, after a long adoption process, has no value to the customer. Think Lean where the focus is on customer value.  Businesses must think what they want to achieve first, then secondly how it will step up to the challenges and opportunities it will face during the transformation process.   

Rather than “sticking it in the cloud” businesses must ensure its customer value creating applications are up to the task and a business must think long and hard about any all-encompassing “cloud first” strategies. Instead of following the suit of competitors they must think: which environment is best for such applications? Is the way they’re managed suitable for the business? And ultimately, will the environment support future growth in a secure way?    

Matt Leonard, Solution Engineering & Marketing Director, CenturyLink EMEA 

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