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How the Pandemic Accelerated Digital Transformation

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By Andy Dunbar, Services Director at SoftwareONE UK, Ireland, South Africa and Nordics

Businesses around the world are emerging from a generational crisis. Smart companies saw the COVID-19 pandemic not just as a challenge, but as an opportunity for transformation.

For many, that transformation was digital. It depended on technologies that helped companies to operate more efficiently, respond more effectively to market demands, and accelerate the creation of new products and services.

There is no doubt that the pandemic has accelerated the adoption of digital technologies – but how can companies make it more sustainable, both financially and environmentally.

Balancing the cloud

Cloud adoption has been fast and furious as companies embrace the promise of more cost-effective computing, and greater agility, scalability and flexibility. O’Reilly’s 2021 Cloud in 2021 report reveals that nine in every ten companies now use the cloud, whether for SaaS (Software as a Service) or running their own cloud-native applications.

The pandemic accelerated this journey to the cloud. Companies desperate for remote working practices embraced its flexible service delivery and high availability.

However, while the cloud’s benefits as a platform for digital transformation are well understood, companies have paused to better understand its cost implications. A headlong rush into the cloud risks cost and complexity issues.

This change in focus has given rise to a new discipline: FinOps. FinOps helps businesses balance their cloud expenditure in the face of widening choice, complexity of procurement, and migration complexity. FinOps adopters must gather and analyse data from their different cloud operations, find and exploit opportunities for improvement, and operate their ongoing cloud environment efficiently.

SoftwareONE expects the FinOps trend to continue as companies become more mature in their approach to cloud computing. In its 2021 survey, the FinOps Foundation found that FinOps teams had grown 75% on average over the prior year.

There is plenty of headroom for improvement for companies as they fold this into their overall digital transformation strategy, though. Only 15% of the Foundation’s respondents said that they had a mature and evolving FinOps practice, with 43.5% still admitting that they were just getting the basics in place.

Cognitive consumption

While cloud teams mull better financial management, customers are thinking about the planet. The uncertainty and stress of a global crisis has snapped sustainability into sharp focus. In its survey of pandemic consumer spending in 2021, Deloitte found a strong tilt towards sustainable purchasing. People reported a focus on buying products with sustainable packaging and buying more seasonal and local produce. People had reduced the number of new products that they bought and had cut down on air travel.

This renewed focus on sustainability has also affected the companies that people are willing to buy from. While 28% have stopped buying from brands due to ethical or sustainability concerns, one in three people now choose brands with environmentally sustainable practices and values that resonate with their own.

What are those values? Aside from waste reduction and sustainable packaging, Deloitte noted that individuals were also concerned about companies’ carbon footprint. That concern is only likely to have increased in the wake of the Glasgow COP26 summit, which increased the sense of urgency around climate change.

Sustainable transformation

Businesses are mirroring these consumer concerns as they seek to balance sustainable technological and commercial transformation. That demands technology choices that make a fast, measurable difference in their business while also helping to drive sustainability goals.

At SoftwareONE, we believe that the next era of growth will rely on a subtle blend of innovation, people, culture, and sustainability. We expect suppliers in the technology sector to adopt this focus as they serve changing customer needs, doing more while using fewer resources.

We see digital transformation driving further sustainable change. According to the Global e-Sustainability Initiative’s Digital With Purpose report, technology directly drives 103 of the UN’s 169 sustainable development targets. Their deployment will accelerate progress towards meeting Sustainable Development Goals (SDGs) by 22%, while mitigating regressions away from meeting SDGs by 23% on average.

The GESI identifies multiple broad technologies that can help achieve these goals, including the cloud, ubiquitous and equitable digital access, fast internet, and the internet of things (IoT).

However, there are roadblocks. One of them is electricity consumption in the data centre. The World Economic Forum believes that technology will help us to decouple economic growth from rising carbon emissions, but warns that we must first bring challenges like e-waste and data centre power consumption under control.

Technology companies are already stepping up to the plate, acknowledging the need for sustainability in their own operations. Microsoft and IBM have committed to net zero targets. Google has been offsetting its carbon emissions since 2007, and the company also joined the United Nations’ Race to Zero campaign to halve emissions by 2030 and reach net zero completely by 2050.

Transparency will be key here. In October 2021, Google led the charge by announcing a carbon emission reporting tool for the cloud. This supported a growing need for transparency around environmental sustainability.

These trends demonstrate that digital transformation isn’t just about digitization. Companies that take a purely technological approach to this process will miss a crucial component: culture.

Any digital transformation project must take a focused approach to cultural change. People and the innovation they generate are a central tenet in digital transformation, and we must ensure that they are part of the process.

Cultural transformation takes buy-in at all levels. At one end of the spectrum, the C-suite must provide the strategic and sponsorship support, along with a unifying vision for the project. At the other end, the lowest-level workers have much to contribute as project managers identify opportunities to optimize workflows and introduce new ones. As companies emerge from a generational crisis, digital transformation can make them more resilient, agile, and sustainable. We’re all in this together.

 

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