2023 Techstrong Research Trends for Digital Transformation | Predict 2023

here Hi everybody, Mike Rothman here general manager of tech strong research. Welcome to the digital transformation Trends session. So what we're going to do like we did with, you know, kind of devops if you were here this morning, like we kind of did in the keynote session just to reiterate predict 23 is really the first of our Tech strong research driven events.

So what we're doing is we put together documents for each of our coverage areas devops Cloud native security and digital transformation. We put together in two pagers that talk about where we think things are going this year. And in this session, I'm going to talk about digital transformation.

So if we kind of go to the top level here day two is now so get what Mitchell hit on this before and I know you've kind of just heard two panels Mike vizard did one panel Allen did the other panel in terms of really understanding some of the impacts of digital transformation and where things are going but what I'm gonna do is kind of dig into it and a little bit of a greater depth at this point. So the key things here in terms of day two is now is again, we've got a been in that situation that I think is pretty unprecedented certainly in my life. I mean, I would imagine in many of your lives.

I didn't live through, you know kind of the 1918 Spanish flu. So what that did was it forced organizations to really do a tremendous amount of transformation a lot faster than they had anticipated. Some folks say five years.

Folks say 10 years, you know happened within really the first two months, right? I mean and it's hard to remember right, you know kind of we're coming in on three years. Right three years from the onset of of covid-19 and it's hard to kind of remember back then but we had to stay business, right?

The first job was to make sure that folks could be productive from their house that you could deliver value to your customers. And that ultimately your business could continue operating in an environment where nobody could be around each other. So again, We made some decisions, right we kind of decided we were going to kind of go all in on some of the stuff that we had started.

Sometimes you did new initiatives you embraced a bunch of SAS Services. You started moving things out of your data center because in a lot of cases you couldn't have people there right but that forced us to make a number of different decisions under duress, right? We again had the platform that we had again, you know use a security analogy right VPN is a great example of that.

We had a VPN it was designed for the folks that were remote and then we had to make everybody remote. So what you do? If you were lucky enough to have you know, kind of moved that into the cloud you just called the cloud vendors that I need another, you know, a couple thousand licenses.

If not, you had to dramatically increase the scale of your VPN environment. We had examples like that all over the place, right? So under duress we had to make a number of Technology decisions that maybe we are comfortable with right and now we've got a macroeconomic Slowdown coming, you know, one way or the other and we've been dealing with that through most of 2022.

It looks to be more of the same as we go into the first half of 2023, which means we have to start scrutinizing what those Investments were. We can't just take hey, we've always done it this way or this is the platform that we have now is the time to reassess those things right? Now's the time to learn from what we were doing in the last couple of years.

What worked what didn't work again. We're not in the pressure cooker of having to support the business in an environment that none of us have ever seen where we couldn't be together, right? You know, then we had to deal with all the supply chain issues the global supply chain, right?

So now we're kind of starting to be in a situation in 2023 where we can take a breath It feels good. Right feels good to take a breath. So now we can take a breath and start to figure out what we want this stuff to really look like.

Right. Do we need to reprioritize some stuff? Do we need to reassess some of the technology decisions we made um, we want to make sure that we focus digital transformation efforts on things that really transform the business not necessarily the operations of the business.

Although that's part of it. Right but our ability to deliver value to customers. I want to highlight this last paragraph here on the on the slide right true digital transformation projects produce tangible outcomes for customers evolving the business and supporting shifting business strategies quantifiable results matter, especially heading into economic headwinds.

We are going to have to fight for every dollar drama shekel. Um Euro peso, you know, whatever currency it is that you're dealing with we're gonna have to fight for every single scent in order to continue to support our envir. The only way to do that is to be a lot better at quantifying what it is that we do.

So that's really the backdrop, right? We went through the first day of our transformation day two is now so we need to be focused on the right stuff first thing Trend number one tear down the silos successful digital transformation requires the organization to work together across organizational and political boundaries. We'll talk about that essay.

Leveraging collaboration shared incentives and top-down business-driven mandates large corporations, even the modernized still encounter politics and competing agendas, especially as transformation effort scale, right? Everybody wants a piece of the success. They are running for the hills if it's not so much of a success, but that's a different story right data hoarding land grabs for budget and political infighting don't fit.

In the era of agile and devops driven initiatives that rely upon transparent cross-functional and highly collaborative teams across business and Technical organizations. Wow, that's a mouthful. Isn't it?

That's a mouthful. Let's kind of piece that together. Basically if we want to be successful from a transformation standpoint.

We cannot be fighting each other right that old adage of, you know, the enemies not out there. The enemy is within, you know, kind of our walls we can't have that anymore. Right, we can't have that anymore.

We have to break down those boundaries. We have to empower change. And what do we mean by that?

We mean digital transformation is really have to be a top down driven initiative. We've got to have folks in the senior level say this is an important Initiative for our business and we are gonna continue investing in and we're gonna Marshal the resources in order to make this initiative a success, right? Otherwise, they're gonna fail right they're gonna stall and they're gonna fail it's not enough to get the resources.

It has to have the support of the rest of the organization there. Um, we've got to follow the money And what we mean by that right, we mean it's about integrating and really about making sure that not just the Investments but the resources and the focus is kind of really aligned across all these different initiatives any kind of digital transformation initiative is really broad from the standpoint of involving a number of different organizations. These folks have to work together.

It's a teen sport. It requires collaboration incentive systems must be aligned right we talked about that during devops, too. So again, you hear all the different kind of Talks about you know kind of our Trends what you see are a number of things weaving throughout all of our different Trend work and better collaboration breaking down silos and aligning incentives actually has happens within a number of our different areas because again, it's one of these Concepts that really weaves between them and ultimately building a collaboration culture is a critical path item, right organizations was utilized and refine the collaboration capabilities that we're using within the rest of the organization right when we all had to go remote we had to learn how to use tools like Zoom, right, you know for a certain amount of time leveraging tools like slack or Microsoft teams or Google meet or any of these kind of tools.

We have to continue to leverage those tools in order to continue to facilitate the discussion between these groups to accelerate the velocity of Or changes right to embrace a lot of what our devops mentality is been teaching us at what that philosophy has been teaching us for the past. Whatever it is, right eight 10 years at this point. So again our key first trend For digital transformation is to make sure that we are working better as an organization right tear down those silos the second Trend kill the sacred cow.

And again, I don't mean to offend anybody who you know against that's not the point here, right? The point here is regardless of decisions made over the past two years organizations will increasingly question strategy and platform decisions to solidify the technology Foundation as they move forward into the next decade. Tactical decisions driven by medium and long-term strategies help align investments in projects and technologies that can weather near-term storms and set the company up for future success.

So remember right digital transformation, we kind of always want to focus on the outcomes, right? We always want to focus on you know, kind of what what we're doing and why we're doing it and how it's gonna unlock value streams within customers how customers are gonna be a lot happier, right? There's a set of enabling technologies that really require us.

To have underlying technology platforms that make all of this stuff work. So first sub Trend here, right the evolution After the Revolution, we're not talking necessarily about pulling out. I just, you know, ripping out things from underlying the tech Stacks that drive to digital transformation.

I'm talking about that right? We're talking about the fact that because many of the digital transformation efforts that we had over the past couple of years have really focused on Modern architectures really driven by like microservices and cloud services and and platform Services. We're able to swap out many of these components in a much better easier way, right and that allows us to evolve as opposed to have to you know, again rip and replace so revolve evolving different micro Services right taking advantage of different types of platforms.

We're going to see that because when we've decided That whatever, you know the message bus that we have underlying, you know, kind of the application isn't scaling to what it needs to be you can pull that out without having to rip everything else. Up within the environment. So again absolutely critical so that we can really take measured steps to swap out the infrastructure as things start to run into scaling problems and and other issues second Point here cost cognizance.

So again, you may have heard we're kind of in an economic slowdown. Maybe it'll be a formal recession. Maybe it won't but suffice to say all of our investments are being scrutinized at this point, especially things that are kind of bets right and digital transformation at its heart is really a bet on how you think things are going to happen how you want to position your organization to support the next generation of customers the next generation of services from your environment.

So we want to make sure that any technology that we're leveraging Again, we're being cost conscious about it. Right? We've integrated a whole bunch of different Services into our Tech Stacks.

Do we need all of those? Right as companies have become bigger. They've started to aggregate Technologies.

Can I start to maybe swap out gain some leverage with some of my bigger vendors and that allows me to get optimize the cost of my environment. So we want to not just keep on with technology decisions because that's what we've always done. We want to make the best decision and then understand the least disruptive way of evolving to that decision.

Um next Trend new tech plateaus and when you hear that right when you see that I hit the wrong one. Oops, a little little quick on the trigger finger there. So new tech plateaus you're like, oh a plateaus that's not a positive thing.

Right because we're trained everything has to go up into the right and infinitum. So a plateau is a bad thing. Well, not necessarily.

Right with many new technologies or many Technologies right AI mL. No code low code Cloud native and data analytics rapidly maturing underlying digital transformation Technologies reach the plateau of productivity the plateau of productivity. Yes.

I'm stealing a gardener term and I'm not gonna feel bad about it. Um the plateau of productivity. I know Alan was talking about the trough of disillusionment and in his previous panel with with Emmett and Martin Logan.

So, you know you get a little little bit of that already here at predict 23, but you know again what we're talking about are a number of core foundational Technologies kind of having ridden the hype cycle disappointed everybody in terms of what we got, you know, and then finally riding up into the plateau of productivity as a result. They can both accelerate value creation and optimize costs reducing the risk of many transformation efforts. So let's talk a little bit about you know kind of the platforms that we're talking about here infrastructure as a service right the cloud hyperscalers.

You've got obviously the big three AWS Azure Microsoft Azure and Google Cloud platform gcp Maybe he's a little bit of Alibaba in there, you know sometimes yeah, you know, they're a bunch of other linode a bunch of other, you know, kind of platform players that that are in there as well but suffice to say, you know with the big hyperscalers becoming far more mature in terms of how they deliver their services many of the additional surrounding capabilities security and identity and data management and iot, I developer tools right there networking. They've got a whole Suite of applications and capabilities that allow you to do your job better, right? So with a mature data center platform that you can use to build out your technology Stacks again, we're reducing the risk of some type of Auto scale distributed technology platform that may or may not hold up, right?

So that reduces risk As we get more options these folks are competing. So that'll ultimately Drive the cost down. So, you know again I infrastructure as a service maturity is a big deal, right Big Data still big but increasingly manageable right new databases data League Lakes data Lakes say that ten times past data Lake, um, and Analysis tools allow us to do more with the petabytes of data that we have generated again.

There's gonna be more data tomorrow than there is today that's for sure. But what big data analytics what a lot of these Cloud platforms give us is the ability to leverage that data much more effectively. So you have tools, you know, data management tools whether you're talking about like a snowflake or data breaks, you know that you kind of layer on top of you know, kind of your storage and use that as a mechanism to Unleash Your unlock the value of your environment.

These tools are rapidly maturing giving us better alternatives for how we leverage that data. Devops matures. Well, we may have been speaking about that once or twice right, you know kind of today at predict 2023.

So again, you know the analogy we use here and I think Mitch came up with this, this is great, right the modern software Factory moves from Ford Model T era to deming's Toyota Kata model, right? So get just improving the way we build things out more reliable more resilient right faster velocity. So his devops matures is this philosophy and the tools that drive it become better.

We are more able to again. Kickstart and sustain the digital transformation efforts that we have and then right once run anywhere. This is a little different right in that we're talking about Wasim right webassembly, but you know folks are starting to talk as they will.

They will folks are starting to talk about webassembly starting to maybe replace some of the cloud native infrastructure. And there's this big battle and you know places that you probably don't hang out suffice it to say the important thing from your standpoint is um, again, we're getting options for how we deliver capabilities and value to the customers, right if we can do something faster if we can do something at higher velocity with greater consistency. There's nothing wrong with that.

So yeah, we're not at the point. We're gonna take a flyer hard position to say awesome wins, or you know, kind of cloud native loses or any of that kind of stuff what it is that it gives us options. It gives us the ability to build our digital transformation efforts on the most robust most functional platform that we need.

So again in this case new tech plateau, Is a good thing right? What it does is it gives us the ability to mitigate our risk? It gives us the ability to leverage time warn reliable and capable and increasingly cost-effective solutions to really start to drive our digital transformation efforts and let's wrap up with the last of our Trends here in digital transformation globalization complexities right technology can remove traditional borders, but shifting regulatory schemes privacy expectations taxation reality.

Geopolitical risk right across geographies dramatically complicates the rollout of new initiatives and offerings within a global theater yet factoring in these considerations and designing software and systems accordingly strengthens the business case for transformation by increasing agility and value and reducing the payback period so what does this mean? Right what it means is the world is complicated. Right our business environment is complicated and getting more complicated day in and day out and what that means is we have to factor in right The Architects the business strategists the leadership within business have to start factoring a lot of these.

Issues and realities into account when they start deciding how they're going to fund and what they're going to do relative to digital transformation right two years ago, you know Full Speed Ahead. If we don't do it the other guys are gonna do it and that means we are gonna be at a competitive disadvantage. So just go spend the money will grow out of it.

Don't worry about it and money is really cheap right interest rates will really low so you could fund these things and not really worry about it from that standpoint. Well those days are over. So we have to factor in things.

Like how can I get taxed advantaged based upon whatever this digital transformation efforts. Is there is there a tax, you know kind of impact there, right? What happens when some of my suppliers go to war right?

I mean, I know a lot of organizations have you know, significant software capabilities and employee bases in places like Ukraine. Right, and obviously those folks are a little busy now, so they may not be building software to the same degree that they were before. We have to factor some of those things in and that's a terrible unfortunate situation.

I mean such great talent over there in Ukraine to to develop software and really, you know, help build out a lot of these transformation efforts. We've got to focus on making sure that our supply chain is resilient. Right geopolitical things are going to change right covid proved and it's not going away else.

My wife has it right now, which is why I'm hiding in my, you know, kind of Bunker here my office bunker in order to you know, get covid's gonna be around right? So we're gonna have these issues that we're going these hiccups right these disruptions that are gonna happen in our environment over and over again, and we have to factor those into how we plan out our digital transformation efforts and and I'll you know, let me hit one of the bullets we don't have in here and Trend but we will as we update these throughout the year is sustainability. I think you know sustainability is another key initiative that we have to think about within our digital transformation efforts obviously diversity would be another one that we're talking about.

So it's not just you know, supply chain resilience and and financial expectations. There are other aspects that we want to from a macro level. make sure that we're paying attention to as we kind of consider revisit reassess our digital transformation efforts, and finally, let's wrap up with financial expectations management because again, When Senior Management right Finance has to make tough decisions about what they're gonna fund and what they're not going to fund.

It's really based upon what value are we going to get? Right? How is this gonna impact our business?

How is this going to solidify our relationship with customers? I'm a huge fan of scenarios always have been been talking with my ciso folks for many years about building out scenarios for if I invest at this level. This is the outcome.

I can expect we have to do the same thing within digital transformation efforts, right? It's about hey, we do it at this level we can get this kind of payback. We do it that level we get it different level of payback because the reality is finance needs options now, right not everybody can get everything funded to the degree that they need it to so they need options and those options have to do with managing, you know, the financial expectations of what the return is gonna be on these types of environments on these types of transformation efforts.

So those are our digital transformation trends for Oh. Okay for 2023. Um, hopefully you've enjoyed those.

And again, we have a ton of other great stuff happening here at predict for the rest of the day. I know there's another panel coming up. We're gonna have our meeting greet.

So I will be there on Zoom. I think, you know, we can chat it up. We can have a little this different discussion we can talk about what's going on in your world.

So again, thanks for listening in on our digital transformation session, and we will see you in the next session which should be coming up. I believe within the next 15-20 minutes.