In response to climate changes, tropical trees in the Andes are moving higher between 8-12 feet vertically in a year to cooler grounds to support their existence. That’s nature adapting for survival.
A 2016 McGill University study found city birds are smarter than their country counterparts. A city bird learns to eat crumbs off a restaurant plate bringing to us lessons on exploiting new resources.
Taking a cue from nature, businesses must learn to adapt, be more agile and rethink on their strategies in an environment that is continually getting disrupted by digital technologies and new business models. Like the city birds or the tropical trees, their ability to move, adapt and scale quickly will decide their future.
The competition has grown tougher with not just digital natives but also many of the incumbents competing in new digital ways. Companies who adopt an operating model that continually pivots in response to changing market demands, with both improved business processes on the inside and new end-to-end customer journeys on the outside are the ones who will succeed.
While digital transformation is top of mind, a Forrester study found that over half of the digital transformation efforts stalled out in 2018.
Digital transformation is not just about technology
Most businesses view digital transformation as mere technological transformation, but to be effective, it must include a revamp of systems and processes – in addition to a cultural transformation. It also necessitates exploring newer business models.
Digital transformation is particularly challenging for businesses that own large legacy infrastructure that are not compatible to newer technologies. This makes agile innovation at speed and scale a huge challenge. Change management issues and heavy investment requirements create additional hurdles.
Moving applications to the cloud
Every organization has a multitude of enterprise applications whether it is ERP, CRM, SCM and HRM that keep the business operating smoothly and meet the customer need. Traditionally, these applications were monolithic packages hosted on-premise involving cumbersome implementation cycles. Digital capabilities can deliver enhanced operational efficiencies, improving business agility. This makes cloud-based apps a great investment. With cloud, implementation became shorter, agile with low dependency on both software and hardware systems. Cloud based applications delivered through an XaaS model allow enterprises to be quicker, more open and more adaptive.
Infosys recently put together a research report titled, “Behind the Scenes of an Intelligent Enterprise: Moving Enterprise Applications to the Cloud” where it explored the drivers and objectives of adopting cloud applications. The report incorporated inputs from 853 respondents, who were senior executives engaged in digital and cloud initiatives, across 12 industries. The study uncovered several factors around the adoption of cloud apps.
While most enterprises view improved data security and superior customer experience among the top benefits, enterprises who see greater agility to respond to changing market conditions as the biggest advantage are the ones who come out as the visionaries in the market.
More than half of the companies we interviewed considered cloud as the building block for enabling digital transformation. An almost equal number found the advanced computing capabilities of cloud very compelling. In fact, they had several objectives in mind when they began their cloud app journey. These included:
- Integration and standardization of the enterprise technology landscape
- Innovation to create competitive advantage
- Reduced time to market with faster development and deployment of apps
- Delivery of enhanced customer experiences
- Improved access to data and devices thus increasing mobility and collaboration
- Increase in reach to new geographies and markets
Inclusion of cloud as a strategic imperative delivered both strategic and operational benefits. It fortified their core and opened it up with API-microservices to create secure pathways that allowed them to decouple the evolution of their frontends and backends, which meant enterprises could continuously renew their front end without disrupting the core. They could experiment, quickly iterate and evolve. Empowered with next-gen digital capabilities they could drive better business outcomes often by creating new business models.
Three approaches to migrating to the cloud
When moving business applications to the cloud, enterprises need to choose an approach that aligns with their objectives and expected outcomes. Our study reports three different approaches:
1. Line of business
A line of business (LOB) approach allows enterprises to independently turn on new cloud applications with little involvement from IT. This allows use of readily available third-party solutions without disrupting the existing set up. It builds stakeholder confidence around ROI.
2. Enterprise cloud platform
Here, it is a transformation-led approach utilizing multiple cloud services. It addresses issues around disparate systems, enables standardization and mitigates concerns about organisational readiness. However, this approach is complex and effort intensive.
3. Combination approach
Enterprises also chose to opt for a combination approach that offers the advantages of both but can sometimes increase the complexity due to possible conflicts between business unit strategy and wider CXO initiatives.
It is essential to note the critical success factors, which include:
- Involvement of the business executive layer across the stages of cloud app transformation
- Ensuring clarity on digital initiatives across all levels of stakeholders
- Selecting the right partner to help navigate the journey
Today, a majority of enterprises see cloud applications as a driver for business transformation. In this journey, the best of the companies build operating models that are responsive to changing market needs. As they navigate this path, several critical decisions need to be made such as which cloud approach to take, what are the technology investments that should be repurposed, how to gain stakeholder confidence on ROI and keep up with the latest data security. Ensuring that you make the right decisions is critical for success.