By Guy Warren, CEO, and Peter Duffy, Head of Product Management, ITRS Group

Amidst global chaos, the term “digital transformation” dominated 2020 and the first half of 2021 – and it doesn’t seem like that’s changing any time soon. In response to the unforeseen circumstances and shifting customer demands borne of the COVID-19 pandemic, companies have been prioritising investment in their digital infrastructure, and the popularity of technologies such as Cloud computing have surged drastically.

Approached correctly, the digital transformation journey can increase efficiencies, reduce costs and, ultimately, be the competitive edge companies need now more than ever.

But, for the majority of businesses, the digital transformation journey is a long and complicated one. Often, CIOs underestimate the complexity of dynamic environments such as Cloud, resulting in system failure and outages.

There is a path to success; but how do businesses find the way – or, at least, the roadmap?

Digital transformation drives business success

In order to understand the path to a successful digital transformation, it is first necessary to closely examine current trends. While digital transformation has been a particularly hot topic over the last 12 months, the term has been circulating for at least the past decade. The current phase, however, is faster than the world has ever seen before.

Secondly, this current phase is not necessarily defined by the migration of processes that were completely offline to online. Rather, it primarily involves the migration of monolithic architecture that exists in data centres to elastic, or dynamic, environments. The end result, then, is multiple smaller pieces of data and infrastructure moving online simultaneously, being used to support multiple business processes in a microservices architecture.

Beyond individual trends, however, the defining feature of this current wave is arguably that we have now reached a critical point, whereby IT success and overall business success are directly correlated.

Stumbling blocks persist

Today, the benefits of digital transformation are undeniable – so much so, in fact, that those who don’t participate will rapidly find themselves at a competitive disadvantage and risk being nudged out of their market. But the process is a complex one, requiring a comprehensive, forward-looking strategy in order to be successful. And a key problem, spanning markets from financial services to gaming, is that CIOs and other business leaders underestimate the complexity of these new environments.

Let’s consider a business that is in the process of moving elements of its functionality to public Cloud as an example. It will likely have a hybrid-IT estate which is partly on the Cloud and partly on-premise – two environments that have significant differences which must be appreciated. Many businesses either try and treat the environments the same or – arguably worse – treat them as two distinct operations, without an overarching strategy. Both of these approaches can lead to inefficiencies, or even system failures.

Then there is the problem of cost. When used correctly, Cloud has the potential to drastically reduce costs for businesses, but the amount of money currently being wasted on Cloud spend is staggering. In fact, 35% of spend in public Cloud is wasted, according to RightScale.

Why is this the case? More often than not, the problem originates at the transition to The Cloud. Most firms adopt a “lift and shift” method – whereby they retain their traditional approach to sizing the infrastructure required, without taking into account the unique characteristics of The Cloud.

This static approach to Cloud sizing and buying, where the infrastructure capacity is defined once and then rarely revisited, fails to take advantage of the Cloud’s greatest asset, and the primary source of its cost-saving capabilities: flexibility.

What’s the fix?

In order to remedy this problem, we advocate a three-stage process.

The first stage is right-sizing – involving the highly granular data capture of resources. In order to take a holistic approach to the Cloud and leverage its potential, firms must understand the sizes of instances needed for each application workload. Capacity management tools can automatically assess existing infrastructure and applications to determine how much capacity is actually required (as opposed to what has historically been provisioned). This assessment can then be used to determine which cloud resources are best aligned to this requirement, to optimize Cloud costs.  Crucially, in a hybrid environment, this can also identify areas where workloads should be move back from Cloud to on-premise, where capacity is available.

Next is right-buying. Public cloud providers offer a myriad of buying options, from on-demand spot pricing to multi-year commitments.  In order to determine the optimal spend profile, tolling needs to continually assess existing and planned usage against the varying prices provided by the providers.  Again, this can all be automated with the correct tools.

The final stage is optimisation. It is vital that firms plan for growth and predict upcoming costs with advanced predictive analytics and forward-thinking scenario modelling.  Firms must use a single tool across the different environments as to maintain a complete oversight of their estate – but they must ensure that this tool is able to maintain consistent reporting regardless of environment.

With the global pandemic raising questions for IT teams around agility, accessibility and flexibility, there is a renewed focus on operational demands, shifting how businesses leverage Cloud technology going forward in order to remain competitive and scalable. With technologies like serverless architecture, AI platforms, edge computing, DevSecOps and open source gathering steam, cloud computing is entering a fourth industrial revolution that blurs the boundaries between the physical, digital, and biological worlds.

As well as a focus on making technology faster and more flexible, enterprises must not forget that the real reason of investment in Cloud adoption is to drive business growth and beat the competition. And this depends not on implementing the latest technology for its own sake, but on strategically leveraging the latest tech capabilities to achieve business outcomes.