Technology is omnipresent and is changing literally every day. Think about how businesses sell products and services in 2017 versus just ten years ago. Think about how you, as a consumer, pay your bills, engage with your peers, or even track your exercise today. A lot has changed.
CompTIA has described the evolution of IT in three stages: The mainframe era, the PC/Internet era, and the cloud/mobile era. And in their IT Industry Outlook 2017 piece, CompTIA says, “Digital transformation is driving the dynamics of the IT industry. Companies are starting to grasp the disruptive nature of this new era in enterprise technology, and they are using the tools of the cloud era to redefine their organization and expand their IT capabilities.”
What is Digital Transformation (DX)?
One of our favorite summations of Digital Transformation, aka DX, comes from i-SCOOP: “Digital transformation is the profound and accelerating transformation of business activities, processes, competencies, and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way, with present and future shifts in mind.”
More simplified, DX refers to the total and overall societal effect of digitalization, which is the process of converting information of any kind into a digital format.
Digital Transformation is and will continue to affect every company in every industry, and because of it, businesses can undergo a fundamental change in the way they operate. In a digital era, with an abundance of digitized information, organizations are rethinking the strategies needed to meet customer needs. DX also fundamentally changes how customers engage with business services and offerings, whether it’s through mobile, wearable technology, or other devices.
Quick Review of Cloud Computing & XaaS
Cloud Computing may not currently carry quite the same buzz as Digital Transformation; however, for us, PC Magazine hit the nail on the head with a clear and concise definition: “In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of your computer's hard drive. The cloud is just a metaphor for the Internet.”
In 2009, Cloud Computing was certainly a buzzword, and the availability of high-capacity networks, low-cost computers and storage devices, as well as the widespread adoption of hardware virtualization led to its growth. Cloud Computing was and continues to be a popular solution to several organizations because they no longer need to purchase, store, and maintain expensive network equipment, reducing the time and money involved in maintaining, updating, and repairing their own server hardware and software.
Three common cloud services are Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS)—collectively known as (SPIaaS)—but more and more vendors are coming up with new ways of delivering traditional services via the cloud. These creative approaches have led to the concept of “Anything as a Service” or X-as-a-Service (XaaS).
The XaaS trend in IT is to provide anything as a service, relying on cloud technologies, a measurable service use and a subscription model that makes it easy to package a service and offer it to others, while hiding the complexity and support issues of the service framework from the customer.
How Are Cloud Computing and Digital Transformation Connected?
Cloud computing and Digital Transformation go hand-in-hand. Cloud services, which effectively offer unlimited and dynamic IT resources, form the foundation of Digital Transformation and can facilitate rapid business change. Many organizations are learning that Digital Transformation strategies serve to directly enhance the effectiveness and benefits of Cloud implementations.
In the Cloud Industry Forum (CIF) May 2016 survey, where 250 senior IT and business decision makers were polled about their digital transformation efforts, it was revealed that “85% of businesses with a Digital Transformation plan have benefited from a tangible competitive advantage. Cloud services, which effectively offer unlimited and dynamic IT resources, form the foundation of Digital Transformation and can facilitate rapid business change.”
Alex Hilton, CEO of Cloud Industry Forum added, “Tt is also clear from our research that Digital Transformation strategies serve to directly enhance the effectiveness and benefits of Cloud implementations in their own right.”
Brian Dean of Network Computing says, "Digital transformation does not assume that the physical business will disappear. However, it assumes that revenue from the physical business will continue to erode until a new equilibrium is reached between the digital and physical environments. The cloud provides a good starting point that can ultimately create a digital business in a dynamic environment."
What Does this All Mean for Your Business?
International Data Corporation (IDC) predicted that by the end of 2017, 70% of the Global 500 will build dedicated teams focused on digital transformation and innovation. Why will these activities be such a high priority? Companies are starting to recognize that new tech trends are leading to a new operational model: the direct contribution of technology to overall business outcomes.
According to CompTIA's 2017 research report, Building Digital Organizations, “While the new era of IT is being driven by new technology— in particular cloud computing and mobile devices—digital tools are only one part of digital transformation. The other component is process and policy, and changes in these areas are proving to be more challenging than adoption of new technology.”
To quote Netmagic, “Cloud computing is a vital cog in the wheel of digital transformation. In fact, it lays the foundation of the digital evolution of an enterprise.” Cloud computing is the agent of digital disruption, and we can see that there are significant benefits to be had by businesses that pursue both Digital Transformation and Cloud strategies in tandem.
Lastly, visit our Digital Transformation Solution Spotlight to learn more about the key areas in which to consider implementing formal training across your organization to help your business truly embrace and leverage Digital Transformation.