From climate disruption to political instability and unexpected economic shifts – not to mention the coronavirus pandemic – the last two years have been marked by far-reaching global uncertainties. One clear lesson has emerged in the aftermath of these events: businesses that cultivated competencies, cultures and processes to enable them to thrive in times of uncertainty far outpaced their less agile and flexible competitors.
Above all else, we’ve learned that being able to pivot, innovate and rapidly adapt to changing market conditions is an essential survival skill for 21st century businesses. Tomorrow’s most successful companies will be best able to shift their business models and strategies to keep pace with their customers’ changing wants and needs. To achieve this, they’ll need to develop the right strategy, the right culture and the right technology foundation. Put these three things together and you’ve got what we call the cloud-native enterprise.
Digital leaders are businesses that have done just that. This concept — how businesses can become cloud-native enterprises — was among the highlights of a recent IDC Infobrief that we teamed up with Amazon Web Services (AWS) to commission. The research examined the present and future role of cloud technologies in supporting business growth, sustainability and resilience.
What Is a Cloud-Native Enterprise?
Cloud-native enterprises are companies that have left behind the model of IT-led cloud adoption in favor of large-scale, all-encompassing transformation initiatives. They’re businesses that have figured out how to get the most out of their cloud transformations. They no longer look to the cloud as a means of cutting costs or driving revenue, but instead see it as an engine to power experimentation and innovation. Ultimately, the cloud native enterprise is an organization that has modernized to become a long-lasting, sustainable, diverse organization.
The research revealed that these leading organizations possess a specific set of shared traits that enable them to wholly align IT strategy, modernization, operations and funding models with their most important business goals. Their cultures emphasize data and technology literacy, and their leaders tend to view the cloud as a foundation for innovation and as essential to the company’s future survival.
In particular, IDC found that digital leaders are far more likely to possess several key characteristics over their less-mature peers:
- Digital leaders are extensive public cloud users who focus on large-scale strategic transformation and driving innovation.
- Their leadership tends to have high DQs or “digital intelligence quotients” and to support cloud-first cultures and operating models.
- They leverage automation and digital augmentation to complete tasks, processes and decision-making more accurately and efficiently.
- Digital leaders derive a larger share of their revenues from digital products and services than their less-mature industry peers.
Although their numbers are growing quickly, digital leaders are still in the minority among businesses. Only 13% of European companies are considered digital leaders, though 22% of North American enterprises make the grade. However, these organizations are able to differentiate themselves from competitors, creating clear competitive advantage through their strategic alignment and maturity.
Becoming a Digital Leader in Today’s Cloud-First World
Digital leadership requires much more than cloud adoption. Simply lifting-and-shifting your applications to public cloud infrastructure won’t make you a digital leader. Nor will undertaking a small number of localized business experiments, where individual departments look for new revenue sources in the cloud in a series of discrete projects. Instead, becoming a digital leader requires cultural change, operational and business process transformation and technology adoption. These aspects of the transformation are interdependent and inseparable from one another, since digital leadership is a holistic concept that will touch every area of the business.
To undertake this sort of comprehensive transformation, a business needs to become able to harness the full potential of cloud-native technologies — along with the ways of working they make possible — to fundamentally change its relationship with customers and what it has to offer. This requires embracing cloud-connected workplace cultures and building digital competencies into the very fabric of the organization. It can also mean radically changing the way the business operates.
However, the potential benefits are enormous. Cloud-native enterprises are able to accomplish things that their competitors who aren’t in the cloud simply can’t do. They can innovate continuously because the costs and risks of failure are so low. Their workforces feel empowered to experiment, bringing energy and creativity to their jobs because they’re encouraged to keep learning. And they experience otherwise unrealizable efficiencies that enable them to reduce energy consumption and decrease their carbon footprint.
In a world where change is the only constant, this is a master recipe for business success. As IDC puts it, “digital leaders have built the digital muscle to respond to changing market conditions” — a winning strategy no matter what the future may hold.
Want to learn more about how your organization can prepare to succeed in a cloud-native future? Check out our latest eBook and discover why we’re calling 2022 the year of the cloud-native enterprise. Or contact us to learn how Cloudreach, an Atos company, can help smooth your path to the cloud.