Recently one of our clients team got into a discussion on whether Cloud should be part of the digital transformation journey from the start or can it be considered later. As the discussion progressed slowly everybody in the team started shifting the stands to saying cloud is an inevitable part of the digital transformation journey and hence can’t be ignored right from the start.
Cloud computing has become the basic foundation/ building block of the technologies that enable digital transformation. Cloud apart from offering the agility and speed, also offers the ability to experiment with reduced risk to make digital transformation successful. With Pandemic, even fence sitters have started adopting the digital transformation as a way forward now and, it is increasingly gaining more prominence and acceptance as more and more companies embark on the digital transformation journeys and have started reaping benefits of the same. Some of the companies which had already started the digitial transformation journey, benefitted most during the pandemic with minimal business losses compared to their piers waiting to jump into the digital transformation bandwagon. With companies like Amazon (AWS), Google (GCP) and Microsoft (Azure), investing and providing more and more readymade solutions, the clients are able to have a much faster deployments which in turn leading to new and unique customer experiences, increase collaboration and improve speed to market. Banks and financial services companies which were really slow adopters of cloud services, have also started adopting digital transformation. Per PwC, by 2020, core service areas in banks such as credit scoring, statements, consumer payments, and billings for basic account functions will be using the cloud to scale1.
Cloud and digital transformation are closely linked. Cloud helps take care of the key issues of on-prem approach viz: issues with legacy systems, slower change adaptability, longer speed to market and an inability to adapt to fast-changing customer expectations. The early adopters of cloud will get a leg up on the competition in terms of digital experience for their customers and employees.
The role of cloud in digital transformation Practically, the organisations understand that being on cloud doesn’t mean digital transformation, or even simply moving legacy applications to cloud will not enable digital transformation by itself. In fact, it may lead to making the organisations IT landscape more complex and costlier than before, thereby slowing down digital transformation rather than actually accelerating it. The organisations need to see cloud as a part of their overall digital transformation journey and as a piece meal. Moving to cloud can be an important enabler in accelerating this journey and should be considered as an integral part of the holistic digital transformation strategy. Any digital transformation journey goes through different phases including setting goals that the transformation is expected to achieve, creating a plan for the transformation journey, execution of the plan and taking measures to manage risk.
Cloud has an important role to play in all of these phases and the decisions that need to be taken for successful digital transformation. Cloud technologies provide the speed and tools for data and analysis for a review of market and business during the discovery phase. It also captures fast-changing needs and uses analytics to predict future trends.
Cloud provides the agility and environment for testing future models and hypotheses in the design phase. Additionally, it provides an ecosystem of relatively cost-effective and plentiful resources from technologies to platforms to vendors. It increases the interoperability between different resources, which in turn provides more options to digital transformation leaders during the design phase. Cloud technologies can be used to continuously re-caliber the transformation strategy based on frequent feedback and ability to adapt and deliver changes faster.
Similarly, cloud plays a central role in the delivery and execution of digital transformation strategy. Cloud technologies mean faster speed to market, agility, ability to scale up and down with varying demands, and faster adaptation to customer and market demands. Finally, cloud helps digital transformation leaders de-risk investments as opex instead of capex, faster uncoupling of resources if required, as well as the ability to make quick changes.
It has become a precondition to succeed in the digital era and an important cog in the fast-churning wheel of digital transformation. Both technology and business leaders would be well-advised to make it a part of their digital strategy to maximize chances of a successful digital transformation.