It should free tech staff to develop unique, profitable digital products, services
Business Times
CHRIS CHELLIAH
FRI, DEC 31, 2021–5:50 AM
The cloud could be a ‘force multiplier’ — the scalable, resilient technology foundation for long-term innovation and growth.
ORGANISATIONS worldwide will spend an eye-popping US$1.78 trillion on cloud and other “digital transformation” initiatives in 2022, according to Statista.
IDC predicts that by 2023, half of all companies will generate more than 40 per cent of their revenues from digital products and services, compared with a third in 2020.
Question is, are companies and governments investing to truly transform their products and services, ageing processes, and conventional models, or are they just applying digital lipstick to business as usual?
Question is, are companies and governments investing to truly transform … or are they just applying digital lipstick to business as usual?
Forrester calls the latter “digital sameness”, and it’s a dangerous trap, because as the lines between industries continue to blur amid the accelerating pace of technology and business change, enterprises need to reinvent themselves.
… enterprises need to reinvent themselves (not “digital sameness”)
For example, Asia-Pacific governments will take the lead in delivering world-class digital services in 2022, based on what Forrester calls the “3 pillars of a digital society”.
Those pillars are
- digital identity (for security and privacy purposes),
- digital currency (led by China, where more than 20 million consumers use the digital yuan), and
- data interoperability (Forrester cites the Singapore-Australia Digital Economy agreement and the India-Singapore payments link).
In the private sector, 1 or more digital “outsiders” already are disrupting just about every industry, whether it’s retail, media, entertainment, travel, education, logistics, financial services, healthcare, consumer electronics, or transportation.
If you’re an incumbent player in 1 of those sectors and aren’t building new digitally based business models, revenue streams, and customer relationships, watch as the digital innovators pick off more high-margin parts of your business.
One company that’s on the front foot is Singtel, which is partnering digital unicorn Grab to offer banking services to retail and corporate customers in Singapore.
The incumbent banks anticipated the fintechs going after parts of their core business, but a telco and a digital ride-hailing company?
Expect to see more such unconventional digital partnerships across sectors.
This is why the shift to cloud computing, including autonomous technologies, is so critical.
Some organisations turn to the cloud for the short-term gains: the ability to move spending from fixed capital to ongoing operations; the ability to get regular technology updates without a lot of heavy lifting; the ability to scale their technology infrastructure and applications seamlessly.
Most organisations are choosing multiple cloud providers, in part to mitigate the risks of downtime and performance bottlenecks. All those benefits are important, no question.
But the big rewards come to those organisations that see cloud more as a liberator, freeing their technical people from spending most of their time on system security, provisioning, maintenance, tuning, and upgrades so that they can spend more time on developing unique, profitable digital products and services.
Gartner calls the cloud a “force multiplier” — the scalable, resilient technology foundation for long-term innovation and growth.
Gartner calls the cloud a “force multiplier” — the scalable, resilient technology foundation for long-term innovation and growth.
Another critical cloud attribute is speed: It allows organisations to execute innovations faster than ever before.
One retail CIO talks about embracing the accelerating pace of change in terms of building a “digital mindset”, one that starts with using cloud-based development platforms and tools to spin up new app dev environments in minutes, quickly deploy new features in iterative steps, and just as quickly move on to other projects when priorities change.
For the past decade or so, boards gave their management teams quite a bit of leeway to explore the benefits of cloud applications and infrastructure.
As we emerge from the global pandemic, 2022 will be the year of reckoning, with boards asking their executive teams:
What is the evidence that those investments are positioning us for long-term competitive advantage?
What is the evidence that those investments are positioning us for long-term competitive advantage?
ML and AI as core competencies
As we all know, data is the working capital of the modern digital organisation, but most enterprises are drowning in it.
Machine learning and artificial intelligence algorithms represent the life raft, helping enterprises analyse and continually learn from the massive amounts of data they collect in order to improve decision-making and inform a range of next actions.
For the most part, enterprises are still experimenting with ML/AI.
For example, marketers are starting to use ML-based tools to personalise offers to customers and measure how satisfied they are at different digital touch points.
Trucking companies are applying ML algorithms to map out the most optimal routes for their drivers.
ML-based systems are even helping governments match refugees with the most suitable communities to live.
But a continuing challenge is finding the requisite skills.
While most companies and government institutions don’t have the resources to marshal an army of data science PhDs, a more practical alternative is to build smaller, more focused “MLOps” teams — much like DevOps teams in application development.
Such teams consist of, yes, data scientists, but also developers and other IT operations people whose ongoing mission is to deploy, maintain, and constantly improve ML/AL models in production.
Meantime, enterprises are taking advantage of cloud infrastructure and applications with ML and AI algorithms built in. ]
The KBot tool of retailer Kmart Australia, for example, uses AI-powered Oracle Digital Assistant cloud software to give home-improvement shoppers information about product dimensions and features, and it recommends complementary offerings based on previously viewed products.
Oracle’s ML-based cloud HR applications give hiring managers recommendations for best-fit candidates and help them predict attrition.
The ML-based Oracle Autonomous Database does the system provisioning, tuning, and patching for enterprises as a matter of course; it doesn’t require companies to hire specialised ML experts.
Forrester predicts that one in 5 organisations will double down on what it calls “AI inside” — AI and ML embedded in their systems and operational practices.
By 2025, Gartner predicts, the 10 per cent of enterprises with established ML/AI engineering best practices will generate at least 3 times more value from those practices than the 90 per cent of enterprises that don’t.
Seize the early-mover advantage.
By 2025, Gartner predicts, the 10 per cent of enterprises with established ML/AI engineering best practices will generate at least 3 times more value from those practices than the 90 per cent of enterprises that don’t.
About the author
The writer is senior vice-president, customer strategy, insight & business development, at Oracle Asia-Pacific
