How Digital Transformation Is Transforming

Goals that were once considered strategic are now seen as table stakes.

Along many organizations’ digital transformation journeys, the goal posts have moved and now, what was once the digital ceiling has become the digital floor.

That’s the perspective from Elizabeth Ebert, CIO advisory partner at Infosys Consulting in Fremont, California. She spoke with StrategicCIO360 about how IT teams can best adapt to changing expectations, how to manage cloud costs and why ESG is connected to digital transformation.

What best practices should companies keep in mind to enable digital transformation?

Our clients are embracing a variety of transformation initiatives with varying levels of tangible outcomes. Nearly all have incorporated next-generation technologies and platforms in their strategies and are now pivoting their efforts to embrace new business capabilities and operating models deploying IT and non-IT resources in business and technology aligned innovation waves.

Transformation initiatives to date have hit many tech-centric objectives, sometimes referred to as “small-T transformation,” implementing more modern tools. Additionally, while these initiatives were often positioned as being the most strategic, the goal posts are moving and they are now table stakes.

In our recent publication, Infosys Digital Radar 2022, we determined what was once the digital ceiling has become the digital floor—the once-difficult adoption threshold has become the minimum standard. This means that companies must break their “digitization” thinking, which has constrained their results, and look at the holistic opportunities of digital transformation.

How should organizations effectively manage and maximize their cloud budget?

Organizations are recognizing that leveraging cloud technologies demands more specific financial governance and planning to have full transparency of cloud costs. We see promise in “FinOps” as a discipline and set of practices to align with cloud development and deployment to include financial decision-making in the delivery of cloud-based capabilities.

Cloud platform vendors generally have provided services that improve cost management capabilities, but most organizations have found themselves utilizing multiple public and private cloud platforms. FinOps concepts should also be included in an organization’s IT operating model so that consumption commitments and other financial dimensions are included in capability development planning and funding. The governance model that looks at the full cost lifecycle can then incorporate that data into the ROI or whatever financial decision is made to approve and prioritize processes.

Organizations that incorporate some type of cost allocation model can also incorporate those expectations into their “bill-back” logic so the business organization is fully aware of the cost profile and can align with expected outcomes.

How will cloud computing enable new business models?

The value in cloud computing for visionary companies is in the broad and strategic portfolio of cloud services that the hyperscalers are providing above and beyond infrastructure services. For example, machine learning, artificial intelligence and powerful data analytics are all becoming more robust and will power innovation and the enablement of new business models.

Additionally, the hyperscalers have recognized the importance of providing capabilities that are tailored to specific industries—such as the “store of the future” enablement for retailers or telehealth capabilities for healthcare companies. Once these capabilities are considered and provide new sources of revenue, cloud computing costs can be reconsidered and aligned with the business outcomes that cloud can drive.

Why is it important for companies to consider ESG strategies—environment, social and governance—when it comes to digital transformation?

Clients are now recognizing that to realize the strategic objectives of digital transformation, to be truly digital, they need to refocus on innovation, data centricity, customer engagement and creating new business models. Interestingly enough, many of our clients are finding that there is a common denominator in these initiatives centered on ESG strategies. This confluence appears to be a perfect storm of sorts that is being energized by the next generation of consumers and customers that are prioritizing experience and brand mission as they make spending decisions.

Organizations experienced an initial “staging” of these vectors as they navigated the pandemic—some of the changes adopted were sustainable, others are transient as Covid-19 wanes. A key takeaway however has been many learned how to transform, and the ESG stage is set with a much more ambitious set of target outcomes.

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