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The journey to cloud has accelerated in the past two years. As businesses digitally transform and move toward Agile with pod-based teams, it is crucial to focus on strategy-driven models that leverage technology as a force multiplier. Organizations developing long-term digital strategies need to ask business-driven questions, refer to a common language that transcends functions, and engage transformation accelerators to quickly progress digital transformation to thrive and drive value.
Ask the right questions
Cloud, artificial intelligence, cyber, edge computing, Internet of Things—each of these technologies is continuously evolving. To leverage them, it is critical to understand today’s business strategy aligned with an overarching vision. At the same time, companies need to remain flexible so that as contexts change, aligning the appropriate technology becomes more manageable.
We’re currently observing a pattern related to digitization and digital transformation where companies tend to start technology strategy discussions anchored on a particular technology. They know digital requires a strong technology capability, and so they often start there. This is, in part, because business leaders speak a different language from technologists and vice versa. The lack of a common language makes it difficult for leaders to find the right entry point for strategic conversations.
Whether digitizing an existing process or undergoing full-scale digital transformation of an existing business process, it is essential to begin with strategy. This starts with asking the right questions that then proceed to change minds and processes. In a technology environment, what is usually discussed is the artificial intelligence or cloud strategy that should be used. However, for business strategy-led change, the underlying question should be, “What are we trying to achieve for the business?” This question establishes a common ground for a cloud architect to understand the business needs and downstream requirements for the technology estate.
Use a common language
In our recent Deloitte Insights research, “A new language for digital transformation,” we discuss five digital imperatives that make space for paradigm thinking—which distills conversations to strategic themes in a flexible way. These imperatives help develop a common language for business strategies and technologies, to allow digital transformations to break down silos between business and technology leaders and to build tech strategies that can better adapt to the needs of tomorrow.
These imperatives drive the conversation around strategy and focus on the business value that should be delivered from the technology. They further allow a more human conversation to trickle down through business functions, with the technology used as a medium to enable that strategy.
Accelerate strategy and change with industry clouds
Once organizations have a clear strategy, industry clouds can be a powerful accelerator of digital transformation. While they are not new and have been around since the early 2000s, when there were more than a dozen public clouds on the market, as the market has matured and evolved, today’s three big cloud hyperscalers are now investing heavily in them. This pivot toward “verticalized clouds” narrows the focus to offer customized digital capabilities and components for sectors like health care, manufacturing, and financial services, among others. The pandemic created a newfound urgency around the speed to digital, and industry clouds helped digitize business capabilities for remote work, e‑commerce, supply chains, and more.
Industry clouds serve as digital transformation accelerators and enable a new buy-build equation. Per our recent research, industry clouds could potentially become a $640 billion market over the next two years. With a modular approach, businesses have a significant opportunity to take advantage of this technology.
Industry clouds can accelerate change in a way that taps into 21st-century digital blueprints, high-tech capabilities, and a co-creation ecosystem. In this way, companies can more quickly digitize or digitally transform their businesses with a shared operating model, with a focus on reinforcing co-creation and Agile with pod-based teams. Businesses can work with cloud providers and systems integrators to bring together the full force of the ecosystem. This can include, for example, regulatory and compliance considerations—the more infrastructure-as-a-service that the business has with the industry cloud, the more the responsibility falls on the cloud provider as part of the shared services model.
The right questions, a common language, and accelerators can drive strategic value
When developing and implementing digital strategies, it is crucial to be value-driven. However, many organizations struggle to understand, measure, and optimize the value they get from their technology estate and investments. Starting with strategy can help organizations to ask the right questions and avoid getting stuck in technology hype cycles that anchor on a single technology or preferred architectural pattern. A common language can help join stakeholders across leadership with that shared vision, and industry clouds can help bring together the full force of the technology ecosystem to execute against it. When done right, companies with a mature capacity to change and ability to win—that is, exponential enterprises—are 176% more valued and 30% less volatile. Organizations can and should strengthen the link between business strategy and technology to deliver optimum value.
Learn more about this topic by listening to our On Cloud podcast by David Linthicum
As the chief cloud strategy officer for Deloitte Consulting LLP, David is responsible for building innovative technologies that help clients operate more efficiently while delivering strategies that enable them to disrupt their markets. David is widely respected as a visionary in cloud computing—he was recently named the number one cloud influencer in a report by Apollo Research. For more than 20 years, he has inspired corporations and start-ups to innovate and use resources more productively. As the author of more than 13 books and 5,000 articles, David’s thought leadership has appeared in InfoWorld, Wall Street Journal, Forbes, NPR, Gigaom, and Lynda.com. Prior to joining Deloitte, David served as senior vice president at Cloud Technology Partners, where he grew the practice into a major force in the cloud computing market. Previously, he led Blue Mountain Labs, helping organizations find value in cloud and other emerging technologies. He is a graduate of George Mason University.