Cloud in Digital Transformation
No time like the cloud
The term digital transformation has become so prevalent that in some ways it has lost its meaning. Many people take digital transformation for granted, others resist it. Some people see it as inevitable while others think it might be a fad. What is digital transformation? How does the cloud fit in? Is it about the data or the hardware? Why does it matter? Let’s exam these questions and see if we can untangle this a bit.
The first question: What is digital transformation?? A common definition:
Digital transformation can refer to anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models. The term is widely used in the public-sector to refer to modest initiatives such as putting services online or legacy modernization. Thus, the term is more like “digitization” than “digital business transformation.” [Source: Gartner Glossary]
In short, digital transformation can mean a range of things.
Let’s use the airline industry as a real-world example. Remember when an airline or travel agent would mail your ticket with carbon copies? You would then take your ticket to the airport, walk up to the counter, get a boarding pass. From there, you would take your boarding pass to the gate and hand it to another person before boarding the plane.
Thanks to time and technological innovations, this process shifted from mailed paper tickets to reservation numbers and self-check-in machines. Soon enough, we were skipping machines and checking-in via the mobile app.
These were incremental steps towards digital transformation. Each step, made the process of boarding a plane faster and more automated while using less paper. Some could argue that this is a move towards a paperless way of doing business. While digital transformation certainly has a component of doing away with paper that is not the only part of the business that is transformed.
Some believe digital transformation is just another term for the cloud. Moving to the cloud can be a key component of digital transformation but it is certainly not required. The cloud can be one of the engines driving digital transformation. While many organizations are using cloud technologies to improve operational efficiencies, there are just as many organizations going through a digital transformation with on-premise solutions.
Although it’s not required, the cloud can help speed up those transformations. Rather than spending money on additional hardware, the cloud allows you to spin up a solution, try it, and make changes immediately. The freedom to fail cheaply opens the door for experimentation and innovation. Powering up and powering down cloud instances on the fly is a freeing experience. Most cloud vendors offer a pay-as-you-go model. Therefore, organizations have the flexibility to easily scale to accommodate new ideas and experimentation.
Another benefit of using the cloud, besides not having to buy and configure additional hardware, is that of managing digital environments. Many don’t consider the additional cost of managing on-premise hardware. With self-managing databases or cloud-managed databases, this allows teams to deploy and administer multiple databases and focus on the actual data versus the management of the data. IT professionals are now able to provide direct insight, allowing more value to be derived from the data.
”Technology is the engine of digital transformation, data is the fuel, process is the guidance system, and organizational change capability is the landing gear. You need them all, and they must function well together.”
Thomas Davenport, Harvard Business Review
So cloud is a part of digital transformation but it is also an enabler of further digital transformation. Once your data is in the cloud how do you make use of it? In what ways? This is the part where data becomes fuel. Organizations will often move data from their OLTP systems to a data warehouse or a data lake, so it is easily accessible for consumption by different groups.
Making data accessible to different teams across an organization, not only creates a manageable single source of truth, but it also creates opportunities for deeper analysis. For example, by combining data from other systems, data scientists can extract meaningful insights that could give their organization a strong, data-driven competitive advantage.
Having a bit more insight into your customer’s buying habits or what trends are taking place in your market can give your organization the slight edge it needs to move forward. Of course, some of this can take place without ‘digital transformation’ but digital enhancement using the cloud as the engine —with data as the fuel—will allow insights to be discovered at a greater rate.
If you would like to learn more about how organizations are leveraging the power of real-time data and cloud technologies to reduce costs and improve operational efficiencies, watch or listen to a Digital Transformation Storytelling session.