Author: David Linthicum - GigaOm Analyst

Modern Digital Enablement Checklist:

How to Close the “Last Mile” Gap with a Cloud-Based Approach

Organizations choosing not to play in digital modernization are missing out on

major force multipliers that allow businesses to protect their existing markets,
expand into new market areas, and be more socially and environmentally aware.
Indeed, this is about leveraging technology for good, as well as embracing it to
drive business value.
This report is designed for those looking to enable their organizations digitally, but who do not know where to start. We will cover
what is important around digital adaptation, including what changes need to occur inside business processes, the technology stack,
and (most importantly) individuals’ hearts and minds. We will also review what it takes to accelerate your digital posture, including
how you can think about approaching new tools and technology that are now on-demand or can be accessed remotely at any time
for any reason and at a much lower price than physical assets.

So, what happened to create this opportunity to evolve your business from average to market-leading? To put it simply, innovation
and the rise of technology. Let us consider a health care provider embracing the public cloud for data analytics workloads, and
powering these analytics with machine learning to determine if symptoms are leading to diagnosis, and then using the proper
diagnosis to determine the best treatments. Instead of the symptoms and treatments being monitored by a single doctor, they are
monitored by 10,000 virtual doctors, who trained an AI system, with years of treatment and outcome data being considered. To
that end, the key benefits of machine learning in this context could be 1) accurate data-driven patient treatment and, 2), accurate
diagnostics, 3) predicting and preventing future health issues.
©️ Knowingly, Inc. 2019

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 Innovative Market Disruption
Smaller organizations were once not considered a threat to larger or more established competitors. The arrival of cloud computing
has allowed these smaller organizations to punch above their weight class. With the cloud, they can disrupt, catch up to, and in
some cases, even surpass entrenched market leaders. Many examples are already well known. Uber disrupted taxi services. Amazon
disrupted the entire retail industry. However, some disruptors are not as well known. TransferWise co-founders came up with the
idea for their London-based company while looking at the high fees they were paying big banks to transfer money between Estonia
and London. Indeed, banks and exchange kiosks can charge between 5 to 10 percent of the total transfer amount. What the market
once perceived as an unavoidable nuisance, TransferWise saw as an opportunity to disrupt the currency exchange marketplace.
TransferWise charges the best possible daily exchange rate at the time of any given transfer.

Moreover, the service also provides transparency, telling the user exactly how much they will pay in fees on every single transfer.
Best of all, the fees can be as low as 1 percent of the total, depending on the currency. Today, more than 2 million customers send
over $1 billion each month on the platform. In this case, a mix of technology, such as cloud computing, was all that was needed to
work around existing market limitations.

We do not often hear about smaller disruptors entering large established sectors such as insurance, banking, logistics, tech,
healthcare, and manufacturing, with the objective of taking market share away from established brands. While there are many
stories similar to TransferWise, these smaller disruptors tend to be recently formed, digitally savvy startups. Also, their smaller size
is now less relevant than in the past. Success today depends on the right tools more than capital and maturity. Disruptors are
leveraging technology and their infrastructure in new and different ways to deliver apps and services.

Leveraging technology such as cloud computing allows new and existing organizations to have 20 times1 the impact with the
same amount of investment in technology as compared to just five years ago. The cloud requires less investment in infrastructure,
IT administration, and maintenance. Time saved can be rededicated to other core business functions. Because of this, the digital
enablement of all enterprises is table stakes for organizations that plan to survive and thrive in the next decade. Smart organizations
already use the following technology as force multipliers: modern cloud tools, data analytics, artificial intelligence powered by
machine learning, and modern development approaches such as DevOps.

Red flags, such as lower than expected revenue growth or lower stock prices, are popping up right now for those who have not yet
started the transformation. Investors want to know how the big brands plan to evolve in a rapidly changing market and embrace
data analytics and ML.
©️ Knowingly, Inc. 2019

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 What can traditional organizations do to keep up with, or excel, in their
new digital-powered markets?
Most traditional organizations have some presence in the cloud or cloud strategy. They now need to evaluate how and when to
move additional applications and data workloads there. Many will take years to complete their migration of systems to public cloud
computing providers. A viable path could be towards traditional hybrid cloud, meaning an environment pairing private and public
clouds; or pairing traditional, on-premises systems with data workloads in public clouds. However, even if they could move the
workloads much faster, they still have a traditional culture to contend with that is not willing (or ready) to leverage new approaches
and technology. This could be good news for those looking to disrupt established markets.

How should organizations assess their current state?

This means evaluating the current reality, creating an inventory of the issues that need to be addressed, establishing a vision for the
future state, and ensuring that staff talent aligns with these expectations. While this seems like a simple process, it is a majority of
the effort for digital adoption. Once the organization has a complete understanding of the current state of things, it is still holistically
myopic. There are generally unforeseen dynamics to consider that include:

What is the current use of technology for business innovation and enablement? If an organization is a Global 2000
company, chances are they have given themselves an upper 10 percent ranking relative to other organizations’ use of
technology (perhaps more optimistic than the reality). Realistically, they are usually in the middle of the pack companies
that are leveraging digital technology effectively. Core metrics should focus on the positive outcome through the use of
technology, such as the ability to launch or change a product quickly to take advantage of market opportunities.

Can leveraging technology work to disrupt any market? The ability for existing or upcoming competitors to meet and
exceed customer expectations is possible through the use of innovative technology architectures. Of course, this depends
on the type of products and services provided, and the ability to protect the status quo. In some instances, organizations
may have the desire but have yet to adopt a digital culture.

What is the degree of existing digital enablement? While most enterprises have some level of digital enablement
today, it is typically not to the “last mile,” meaning the connectivity placed between traditional systems and the cloud that
are not yet integrated. For example, a motorcycle manufacturer has a supply chain system that supports the manufacturing
of motorcycles, ensuring an inventory of parts is available for a production run. With current systems, they can provide
a 30- to 60-day window of delivery, and the bike options are recorded at the dealership at the time a deposit is placed.
Their competitor allows customers to order a bike online with full access to options and customization. The purchaser
can then go online or use an app on their phone to monitor the build of the bike, its testing, and delivery schedules. The
competitor’s system automatically schedules delivery, inspection, and the first few maintenance visits. Who would you
rather buy a motorcycle from?

How do you enable customers to tap into the data surrounding them? Most organizations cannot tap into the massive
amounts of data surrounding them. Examples include traditional IT, security, operational, and decision support data,
either within the public cloud or on-premises. Indeed, the number one priority of digital enablement is to leverage data
for enhanced operational and strategic purposes, binding the data to core business processes and facilitating decision
©️ Knowingly, Inc. 2019

making with near-perfect data.

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 How can organizations arm themselves for digital transformation?
We need to understand what the gap is between where the enterprise needs to be digitally and how vulnerable it is to digital
disruption from the upstart, as well as being aware of established competition. Organizations need to select the tools to fill the last
mile gap or do what it takes to make digital links with key components of the business, ensuring they can read, react, and respond
to perfect data. In the case of our motorcycle company above, while their existing supply chain system does a fair job of tracking
parts inventory prior to assembly runs, there are additional technologies that they could leverage to turn motorcycle production from
partially automated to fully digitally enabled. The layers represented in figure 1 include:

Infrastructure is anything that provides a foundation for the base technologies. This includes cloud services such as IaaS
and PaaS, as well as containers, serverless, IoT, and edge computing.

Base technology is one layer above infrastructure. It includes Kubernetes for container orchestration, blockchain for a
peer-to-peer transaction, machine learning (which brings AI to practical use), and general and purpose-built databases.
Kubernetes is important, it allows container applications to scale through clustering, and blockchain provides secure
transactions outside of expensive and proprietary banking systems.

Data analytics engine. The ability to access data in ways that provide insights for the business. This includes abstraction
of the data, as well as the use of AI technology to training knowledge engines.

Applications represent the use of process orchestration, including new technologies such as Robotic Process Automation
(RPA), as well as the use of DevOps as a way to automate innovation and use of the base technologies. The rise of SaaS as
the highest cloud in the food chain makes it capable of leveraging technologies below it for the benefit of the business
and be able to deliver applications on-demand. DevOps is the automation of the agile methodology, providing toolchains
to automate the development, testing, integration, and deployment of software as needed by the business.
©️ Knowingly, Inc. 2019

Figure 1. Technology layers

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 How can organizations gain a true advantage
by leveraging technology-as-a-service?
There has been a lot of talk about capital expenditures versus
operational expenditures as they relate to cloud computing.
The real value of the cloud, including SaaS-delivered systems,
is that it may provision resources as needed (on-demand) and
is constantly being improved by the system providers. Note that
continuous improvement means end-users will be using better
versions of the software systems each time they log in.
The true disruptive change here is that the technology listed
above with the motorcycle company example can be on-
demand or as-a-service. For digital enablement, this is the only
option, because on-demand systems (such as the inventory
systems mentioned above) can function for the business
without a hardware or software footprint.

However, agility is the core advantage of as-a-service. This is

due to the apparent benefit that changes can occur without
hardware or software changes, and resources can be added and
removed at the “speed of need.”

For example, as the motorcycle company sees the market

change, they can quickly augment, add, or remove inventory,
sales, or logistic systems as needed. The ability to leverage an
overseas logistics on-demand application to sell bikes in Asia
can automate the processes of dealing with customs and other
regulations.

How should you get started?

So, what does your digitally enabled future look like? Chances
are, if you took the time to read this paper, you are ready to
begin the transformation that will take your organization from
good to great. You have the courage to make the required
changes and the ability to understand what value you will get
from those changes.

The use of cloud computing is systemic to all of these changes

enabling organizations to deliver more value to customers
and be an innovation leader in the vertical and their market.
Indeed, cloud computing has become the norm for processing
applications and data, as well as providing access to advanced
technologies.
©️ Knowingly, Inc. 2019

We recommend the following steps:

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 Self-assessment. Understand where you are. You need to do an honest assessment of your opportunities and limitations.
Understand your market. What are the opportunities, and what are the table stakes versus what will be considered unique
and innovative? This is not about just keeping up. This is about inventing new things to revolutionize your industry. Failure
is an option. Failing to try is not.

Tech-assessment. Understand what technology to leverage, focusing largely on cloud computing. While it is easy to
“manage by magazine” and pick the technology that the cool kids use, this is about leveraging technology that lives up to
your digital vision. Use on-demand systems as force multipliers for both speed and agility, compressing the time it takes to
get into the market.

Transform. Set up your sprints. Yes, it is good to follow a grand vision, but this is really about lots of small projects or sprints.
Work on small, attainable tasks that can be done in less than 30 days. The tasks should include all work toward the goal of
digital enablement but be a set of solid and measurable units of work for the digital enablement team.

Understand that this is ongoing.

This is not a huge project that you do once, then it is over, and then you wait for new requirements
to come down the road at some point. This is about building something that is a living, breathing
collection of technology, processes, and knowledge that is constantly being improved.
The business approach will have full enablement.

6. The art of digital adoption.

While many things are said to be more about a state of mind than a state of being, this is where the real battles will be fought. This
sea of change is more about the courage to change the way you do business for the better than simply changing the technology. It
is time to leverage new ideas and new innovations that recreate old markets and create new ones. It is about disrupting yourself first
and the market second. Both tasks are on the critical path.
©️ Knowingly, Inc. 2019

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Sponsor’s Perspective
“It’s Never Too Late to Join the Digital Revolution”

By Sendur Sellakumar
Senior Vice President, Cloud and Chief Product Officer

More than 20 years into the internet era, organizations across countries and industries are embracing digitization. Many of these
organizations are experiencing significant benefits, including improved operational efficiencies and increased employee productivity.
But not all organizations have achieved their goals with digitization. The good news is that it’s not too late to get on board.

While the challenge facing all organizations is clear – adopting modern technology is imperative for organizational survival –
organizations that have been slow to join the digital future still have an opportunity to thrive. Finding the path forward requires
making data-driven decisions and evolving organizational structure, processes, and culture to take advantage of these benefits.

Successful data-driven companies find that having the data is vital, but so is making it accessible to the people in the organization
who need to use it, in the form and place where they need it. A cloud-first approach is the best way to accomplish this goal. Adopting
software as-a-service (SaaS), for example, enables organizations to focus resources on the highest-value activities and unlock the full
value of their data.

Cloud-based services allow organizations to get value much faster than traditional on-premises approaches. The cloud is also
perfectly suited to the scalability and performance demands of successful organizations. It’s no surprise that the growth of cloud-
generated data far exceeds on-premises data growth. For organizations with a substantial investment in on-premises IT, hybrid
environments (stitching together public or private or on-premises infrastructure or some combination) allow them to determine
how, what and when to move to the cloud.

Nubank is a perfect example of an organization taking full advantage of data and the cloud to drive amazing growth. David Vélez,
CEO of the Brazil-based financial services provider, says Nubank has grown its client base to more than 15 million — a 25% percent
increase since August. They’re driving change in the well-established world of South American consumer finance by embracing
a data-backed business culture as well as a modern tech stack including Splunk Cloud. As a result, they’re delivering improved
customer satisfaction while at the same time lowering customer fees. They’re growing their business from zero to formidable.

This white paper is to help you understand what it takes to accelerate your organization’s digital story, including detailing the tools
and technology required to drive forward. It includes ways to assess the current state of your organization – where you are, where
you need to go and what you need to do differently to get there.

“Companies like Nubank are driving rapid growth by embracing a data-backed

business culture as well as a modern tech stack including Splunk Cloud.”

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ABOUT

ANALYST David Linthicum

David Linthicum is a CTO and internationally renowned thought leader in cloud computing.
David has spent the last 25 years leading, showing, and teaching large global enterprise
organizations across all industries how to use technology resources more productively and
constantly innovate.

David has been a CTO five times for both public and private companies, and a CEO two times in
the last 25 years. David has published 13 books on computing and his thought leadership has
appeared in the Wall Street Journal, NPR, Forbes, InfoWorld, and Lynda.com. He has expanded
the vision of both startups and established corporations as to what is possible and achievable.

All of David’s opinions are his own.

@DAVIDLINTHICUM

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© Knowingly, Inc. 2019. “Modern Digital Enablement Checklist: How to Close the “Last Mile” Gap
with a Cloud-Based Approach” is a trademark of Knowingly, Inc. For permission to reproduce this
report, please contact sales@gigaom.com.