Do organizations that have mastered cloud computing have an easier time advancing into the digital realm? Is digital enterprise even possible without cloud computing? It's very likely that cloud paves the way to the digital enterprise, but don't expect overnight transformation as a result of cloud. Digital enterprise, associated with the design, development and delivery of innovative products and services through online channels, is the result of a long, multi-year journey that includes cloud computing as a vital component.
That's the word from Saugatuck Technology, which just released two new reports that explore the connection between digital enterprise initiatives and cloud computing. Business and IT leaders still have plenty of work ahead of them -- even if they are well along in their cloud implementations, says Saugatuck Technology analyst Mike West in a recent post. As West observes, "the foundation of digital business is the boundary-free enterprise, which is made possible by an array of time- and location-independent computing capabilities – cloud, mobile, social and data analytics plus sensors and APIs." However, he cautions, "there are no shortcuts" to the digital enterprise.
With its inherent ability scale, as well as providing immediate, on-demand access to the latest solutions and approaches, cloud provides ready-to-deploy environments for creating and delivering the innovative business strategies and products that are part of digital enterprise.
It's not that companies aren't already working hard to reach digital nirvana. A separate Saugatuck survey of 203 enterprises finds at least 60 percent are now creating and delivering new digital products and services to customers, and nearly 70 percent are enhancing or updating traditional products and services as a digital experience. Most organizations are still in the early stages of their digitization efforts, but Saugatuck expects digital enterprises to accelerate over the next three to five years. For purposes of its research, Saugatuck defines digital enterprise as a broad sweep of a category that includes driving revenue and creating customer value through innovative business strategies, products, processes and interactive experiences.
"Enterprises are still very early in the lifecycle of digital business, with much left to learn and experience regarding how it is accomplished, and how its success is measured," says Saugatuck analyst Bruce Guptill.
The evolution of digital enterprises will track very closely to that of hybridized cloud IT and business environments, Guptill predicts. The main challenge on the road to digital enterprise is that cloud capabilities themselves are also just starting to take hold in enterprises. Only 29 percent of the companies in the Saugatuck survey say that most of their IT infrastructure and applications portfolio now reside in the cloud -- but this is a number likely to increase to 63 percent over the next few years.
The ability to effectively deploy cloud will shape the speed at which enterprises go digital. Digital business success depends on "the availability and utility of increasingly powerful and flexible cloud-enabled, and cloud-delivered, technology and business services," Guptill states. As cloud takes hold, so will digital business, he says. "As that occurs, business buyers, users, managers and leaders, along with developers and IT leaders will be pushed to 'up their games' in terms of digital business, he continues, noting that digital enterprise will develop in a pattern similar to Software as a Service adoption -- "from the outside (systems of engagement) toward the inside (systems of record)."
A majority of executives in the survey, 57 percent, says they are leveraging the cloud to create new revenue-producing products and services -- up from 42 percent a year ago. Perhaps the learning and experience now coming out of cloud as SaaS projects is the single best asset for the next stage of evolution to the digital business.
