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Digital disruption - leader or follower?

Digital disruption - leader or follower?

Build your foundations now, cloud is the platform for digital transformation, advises Louise Francis of IDC.

All your data is going to be connected to the cloud eventually... You need to transform your cloud model so you can cope with it and manage it

Louise Francis, IDC New Zealand

When IDC surveyed New Zealand companies if they have been digitally disrupted, 72 per cent of organisations said ‘yes’, with 9 per cent describing the impact as 'greatly impacted'.

Twenty six per cent said ‘not yet’ but expect it to happen in the next two years, while 2 per cent said ‘not yet - no change expected’.

“I actually think those 2 per cent are dreaming, unless they are already in the optimised space,” says Louise Francis, research manager for IT spending, IDC New Zealand.

By optimised space, she means the organisations have reached the top of the cloud maturity space and believe “they are best in class in terms of innovation and in being a transformation engine”.

But then, says Francis, even if organisations are already in the optimised space, their industries are going to change.

“They still have to change, so disruption is a reality of life,” says Francis, in her keynote at the recent Huawei Cloud Conference in Auckland.

Digital transformation has reached critical mass in New Zealand, she states.

She says the company's research around this, shows how workloads are now shifting into hybrid cloud.

Read more: Big answers trump Big Data

This year or early next year, the scales will tip from on premise or traditional use of outsourcing to cloud, to hybrid cloud.

In this environment, think about how to become the lead dog, she told the conference delegates. “Build the foundations now.”

The lead dog is ahead of the team and sets the pace, she states. They have qualities of intelligence, initiative and common sense. They also have the ability to follow the trail in bad conditions.

She puts forth two choices for today’s enterprise - as a ‘lead dog’ or a T-Rex.

Francis explains why cloud transformation is critical to digital transformation.

“Digital transformation (DX) is the continuous process by which enterprises adapt to, or drive, disruptive changes in their customers and markets or external ecosystems."

This is done, she says, by leveraging digital competencies such as cloud, to innovate new business models, products and services that seamlessly blend digital and physical and business and customer experience - all while improving operational efficiencies and organisational performance.

The cloud drives these disruptive changes, she states. “The goal is to become the disruptor, not the disrupted.”

'The lead dog is ahead of the team and sets the pace.' - Louise Francis, IDC NZ
'The lead dog is ahead of the team and sets the pace.' - Louise Francis, IDC NZ

Cloud and DX predictions

To help organisations in this environment, she shares some of IDC’s predictions on how cloud computing will affect New Zealand over the next two to three years.

Cloud first: “The cloud will be the default option,” she declares.

Cloud is the platform for digital transformation: Almost a third of organisations will be operating under a cloud-first mode. Currently 60 to 70 per cent of companies in the optimised space actually have a cloud-first approach to technology she says.

Cloud core: More than 40 per cent of IT organisations will commit to hybrid cloud architectures in 2017.

Open’ becomes a mandatory cloud evaluation criteria by 2017: Over the next two years, standardisation of critical element of the cloud will make it easier for companies to integrate and move workloads across private, public and hybrid clouds, she states.

IT and line of business: Francis says 80 per cent of major IT decisions will involve a partnership between IT and line of business. “We are going to surpass this prediction within the next two years,” she declares.

By 2020, 60 per cent of IT assets will be offsite: These assets will primarily be in the cloud. The staff in the organisation will be building competencies around new innovations.

Cloud first, customer first

Francis says New Zealand companies aim to address digital disruption by using three tools: Cloud orchestration/hybrid management, modernise legacy apps and infrastructure rationalisation.

But companies have told IDC the main driver of cloud transformation is customer experience.

“Everything you do in the cloud is not building better technology platforms, but better customer experience,” she says. “Everyone is talking about the customer now, you need to focus on the customer benefits."

The cloud transformation thrivers give a higher priority on providing contextualised and personalised customer experiences, she says.

"Focus on customer facing technology," she states. "Survivors focus on traditional infrastructure."

Benchmark yourself

She says it is important for organisations to benchmark themselves on where they are in the cloud maturity landscape.

As well, she says the framework IDC developed can be applied to digital transformation and any kind of technology.

She warns, though, that this framework “is not as neat as it looks”.

"There are really some big mountains to climb there," she told conference delegates, and the biggest is the step from opportunistic phase (collaborative standardisation) to repeatable phase, where an organisation’s agility is unleashed.

The ad hoc stage, which is the first step, is really the experimentation stage, she explains.

This is when point solutions are coming through the organisation. “Shadow IT is rife at this stage.”

The opportunistic phase is where most companies are currently, in New Zealand and also around the world. This is where we see collaboration, though still quite short-term, around a particular campaign.

Once you get to the managed stage though, the step to optimise is not that hard, she states. “It is just refining what you are already doing into that managed stage and working through that optimised phase.”

She says not many companies here and globally are at this stage. Survey results show that only 4 per cent of companies globally believe they are in this class.

But to move to the opportunistic phase, you need to have the vision and the roadmap, says Francis.

You need to raise the awareness not only with the leadership team, but also with the boards You need to identify the gaps in the organisation, start doing those audits and develop a cloud team.

“When we talk about a cloud team, it is not a subsegment of the IT team,” she explains. “It is subsegment of the organisation, bringing in the skills across the organisation.”

Enterprises will have more data in the cloud, than in their own data centres in three to five years, she states.

“All your data is going to be connected to the cloud eventually …. such as IoT data. It is going to be outside the organisation. You need to transform your cloud model so you can cope with it and manage it.”

Borrow from the leaders, stresses Francis.

Get ideas from those that are truly disruptive and apply those techniques in ways that are actually unique to you and your organisation.

Louise Francis, IDC New Zealand

“Get ideas from those that are truly disruptive and apply those techniques in ways that are actually unique to you and your organisation."

“Assess where you need to be in two, three or five years. What do you need to do to be a disruptor?

“Identify the gaps in your vision, in your technology, your processes, your people and understand the business context and the overarching goals of your cloud transformation journey.”

Understand what the culture is and the change management required for the organisation, so you can become a cloud organisation, says Francis.

“Don’t forget the line of business. They will be critical partners in your cloud and digital transformation journey."

“It is a continuous journey, there is no such thing as a finish point... It is an infinity loop; by the time you get to the end, you go to the start.”

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

Follow CIO New Zealand on Twitter:@cio_nz

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Photo by Divina Paredes
Photo by Divina Paredes

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