Benefits of digital transformation

There are many benefits to transforming a business so that it can leverage the latest advances in computing, software, and data technologies. Whether it’s launching new products or building new capabilities into an existing business, the technology space is ever evolving and the pace of innovation seems to be increasing. Companies that have implemented or were born digital as cloud-native companies have a significant advantage over those that haven’t.

Whether it’s going from a monolithic application architecture that struggles to serve global clients to containers, Kubernetes, and global service orchestration, or the adoption of a data warehouse to empower analytics use cases, organizations that embrace a new way of doing things can make the most of new technologies as they quickly learn, test, validate and adopt them.

According to the Google Cloud documentation, here are the main benefits of going through digital transformation:

• Modernize infrastructure
• Manage data
• Gain insight
• Break down team silos
• Solve business problems
• Realize cost savings

Let’s look at them in detail.

Modernize infrastructure

Companies that transform digitally and adopt cloud-native ways of architecting systems can meaningfully optimize their hardware and software usage. By migrating away from building and managing infrastructure themselves, they can quickly and easily build systems that have evolved from the traditional, server-based architecture to more modern, service-based architecture or even serverless systems. These systems allow their engineers to automate much of the day-to-day tasks of operating and managing infrastructure through features such as auto-scaling, which dynamically scales the infrastructure up and down based on load. They also allow for global traffic routing, ensuring that customers have the best experience based on their geography and minimizing the time and effort required to build systems that scale globally.

Manage data

Data is exploding and as companies try to gain more insight into the health of their go-to-market approach and how their customers think about them, being able to capture, organize, and integrate these datasets can be challenging. Digital transformation empowers you to go from paper processes to digital processes where new tools and capabilities can be applied to store, transform, analyze, and monetize data. Organizations can ingest vast amounts of data, going from terabyte to petabyte to hexabyte scale from a myriad of different systems, regardless of whether they’re internal or external.

Gain insight

Digital systems not only allow you to more easily and efficiently manage data but also facilitate the act of deriving value from the data. Companies can adopt new approaches to sharpen the focus of their business on their core value, applying things such as machine learning to provide more value to their customers and generate new revenue streams. Business leaders can also be empowered to make better decisions through higher fidelity real-time data, which gives them a better understanding of the current state of the business and what challenges it faces.

Break down team silos

The transition from paper to digital also facilitates productivity and collaboration for teams across geographies. Employees can easily find, access, share, and collaborate on files and projects at the speed of light rather than being at the mercy of paper-based processes. Customers also benefit from this as the teams that they work with can deliver more value faster relative to competitors who don’t adopt modern practices. A marketing team in India, for example, might need to update a campaign for the local market. With a digital cloud-based system, a team in the US can quickly and easily upload all of the raw marketing files to a shared drive where the India team can access it to make the appropriate updates, all with the click of a button.

Solve business problems

The adoption of technology also helps organizations approach their processes and applications with a new lens. Digital systems help business leaders quickly pinpoint challenges within the organization and its engagement with customers. By equipping them with the information they need to improve how they work and engage with customers, the business can dynamically solve problems as they arise and can continuously refine its approach.

Realize cost savings

The result of implementing digital systems and modern ways of doing business across people, processes, and technology also results in cost savings. Paper-based processes are often cumbersome and expensive, requiring significant human work and can be very slow. These challenges can be overcome by implementing technology to automate away process complexity and cost. For example, through paper processes, it may take weeks to generate, validate, issue, and execute a contract. You have to engage multiple teams to put the paperwork together, validate that what is generated will pass integrity checks, and have the appropriate provisions. From there, you may have to mail or fax a contract to someone and hope that someone is on the other end to pick it up and put it through the appropriate process. Through a digital system, however, you can automate the specific contractual requirements to have them generated with the click of a button and issued for signature – within hours rather than weeks.

There are many benefits to transforming digitally, ranging from realizing cost savings, solving business problems, and breaking down silos to more technical reasons such as modernizing infrastructure, managing data, and gaining insight from that data.

Hypothetical case study – Acme Inc.

Behind many of the major technological revolutions of the past couple of decades, there were often developments in key variables making them possible; computing, networking, and data. Whether we are discussing personal computers, smartphones, or cloud computing, they were all enabled thanks to advances in the density and scale of computing resources, the availability and quality of networking, and the accessibility of data.

Before we dive into the intricacies of Google Cloud, its services, and the impact it is having on businesses, it is important to establish foundational knowledge to ensure we start on the same page. Let’s frame the technological revolution by following along with a hypothetical company, Acme Inc.

Acme Inc. – its evolution from the 1980s to the 2020s

In the early days of Acme Inc., when it was first founded in the 1980s, they were selling desktop software for personal computers. They had three offices, each with their own server closet, where any required systems were installed and hosted. Most of their corporate processes were based on paper, with the vast majority of the work not being digital. Security was relatively easy to set up and manage; only the two IT folks on the team had access to the server rooms and all employees left their corporate computers at the office – they were locked down to their desks. In this world, the perimeter was well defined; everyone had to go to the office to access corporate systems and through physical security, you could generally ensure the infrastructure was secure. No one could take their computers home and IT must be onsite to troubleshoot but overall, it seemed to be working and life went on.

As time passed, Acme Inc. continued to grow and by the 1990s, they had 10 offices around the US. The IT team realized that they wouldn’t be able to physically manage and troubleshoot distributed systems across 10 offices and they needed to pivot their model. They had started digitizing their processes given the needs of the business and clients. Meanwhile, finance was starting to complain about the many hardware and software purchases required to maintain the technology ecosystem. Between all of the server and license requests, they decided to implement centralized infrastructure, empowering them to purchase equipment in bulk and making life easier for the IT team by consolidating all of the infrastructure that they needed to manage in one location.

Acme Inc. implemented a data center strategy and by the 2000s, they were running a couple of private cloud locations. They adopt VMware and virtualization to make the most of their hardware, allowing them to maximize hardware utilization by sharing the compute resources from their servers across multiple applications. They set up a backup and disaster recovery strategy by running a hot-cold setup where their backup data center would help them recover from any issues with the primary location. Managing all of the corporate infrastructure, however, started to become a burden given the heavy weight and cost of running a data center. Between keeping up with all of the security vulnerabilities, ensuring hardware procurement would support future capacity needs, and also managing finance’s complaints about large capital expenditures, the IT team became overwhelmed.

Thankfully, the advent of Software-as-a-Service (SaaS) solutions came onto the scene as organizations were looking to offload the responsibility of managing and securing infrastructure. IT can procure technology solutions that are hosted for them, empowering them to focus exclusively on permissions and data for the application while not having to worry about all of the additional layers of infrastructure that need to be addressed when you host things yourself.

Going into the 2010s, Acme Inc. adopted several SaaS solutions for their infrastructure, ranging from productivity tools such as email, HR, and finance systems. The core of what they offered, however, was still self-hosted as their desktop application was now being modernized to be offered as a service. This ensured that you would be able to generate predictable, recurring revenue (keeping finance happy) and help address the needs of your clients. Unfortunately, because their data center was still self-hosted, Acme Inc. discovered that a nation-state attacker was able to access a database that one of their admins forgot to patch. This caused much pain for IT and sales as Acme Inc. now had to navigate challenging conversations about how they manage infrastructure and had a hard time earning the trust of their customers. Fortunately for Acme Inc., there was a new computing revolution just on the horizon.

By 2020, Acme Inc. decided to migrate its infrastructure from on-premises to an Infrastructure-as-a-Service (IaaS) provider. This enabled the Acme Inc. team to focus less on managing and securing the lower layers of infrastructure while empowering them to focus on projects that would move the needle for their organization. Rather than managing a database, their data engineer started building out a data lake. They moved all of their servers from their on-premises data centers to the cloud, which enabled them to spin down those assets and sell them off.

With this capital burden being lifted, the Acme Inc. team invested in improving developer productivity and adopted a few new approaches to building code and managing teams: DevOps and microservices-based architecture. By adopting more modern approaches to launching applications, Acme Inc.’s application is now more scalable and easily improvable than ever before. They push code to production weekly and can compete with even the hottest, most well-funded start-ups.