It's difficult to mention digital transformation without the word "agility" entering the picture. Gaining a competitive advantage in the business world increasingly revolves around an IT architecture that supports real-time interactions and data-driven decisions. This, in turn, unleashes new levels of innovation and even the ability to disrupt an industry—or even the world.
Today’s digital enterprise is cloud-centric. According to IDC, enterprise adoption for cloud computing has reached 70%, and 56% of organizations are looking for opportunities to implement the cloud. As a 2015 McKinsey & Company report, “From Box to Cloud,” points out: "Cloud computing is moving closer to the center of executives' strategy discussions." Yet, despite these advances, it's painfully apparent that some organizations struggle to develop a plan that moves them out of the data center business so IT can participate more driving more value to the business.
What Cloud-Native Startups Can Teach Enterprises
Plenty of industries—the newspaper business being an excellent example—have focused on their own demise long before cloud and mobile apps became major disruptors. Yet, the New York Times recently reported its third straight quarter of better-than-the-economy growth. Revenue at the paper is up 6.8%, due largely to migrating away from a traditional industry revenue model (ad revenue) and embracing a “freemium”-type model that so many startups have found success with. The newspaper has leveraged social media to bring quality journalism to a new generation of readers and subsequently blocked users from accessing more than five articles a month. Many consumers held out, but by taking this fresh approach the New York Times now boasts more than 2.5 million digital subscribers, and it has managed to keep this number steady for more than a year.
One thing centenarian businesses are good at is adapting to changing market conditions. They wouldn’t be around so long if this weren’t the case. So how can long-standing organizations start to adopt a more agile business model? How can they leverage new technologies to gain a competitive edge? What does a best practice approach look like? There are some important lessons we can learn from industry leaders that have embraced disruptors and leverage cloud technologies effectively.
Consider All Nippon Airways. The company, which operates a fleet of 240 aircraft and accommodates upwards of 49 million annual passengers flying to 72 destinations, had to find a way to differentiate itself from a spate of upstart, low-cost carriers. Executives recognized that the carrier couldn't compete on price alone—at least not without undermining or completely abandoning its current business model.
Achieving closer interactions with customers was at the center of its digital strategy. ANA needed a high-performing and scalable email system that could deliver real-time notifications to flyers. This capability, executives recognized, would reduce pressure on ground and phone agents to provide updates about flight cancellations, changes, and other important matters. Although the cost gains were clear, the initiative also ratcheted up value for customers. They could view notifications on their smartphones and stay up-to-date without calling into the airline.
ANA turned to Oracle Exadata Database Machine, along with GoldenGate and Oracle Enterprise Manager, to create a real-time data framework. The cloud-based environment allows passengers to view events as they happen. No less important: Passengers can customize notifications, including what they are informed about and what frequency ANA communicates with them. All told, the migration to the new IT platform required only eight months. A conventional migration would have spanned about 13 months.
Other companies have realized similar gains by adopting an agile, flexible IT framework to support its business. Macy's, another company with a long history, turned to Oracle Database Exadata Cloud Service when it wanted to introduce an intelligent merchandising application in 2016. The solution delivered a broader and deeper understanding of customers’ evolving preferences, and provided predictable and consistent application performance.
Nippon Paint Holdings, a 136-year-old business, embarked on a global expansion strategy through Oracle Engineered Systems. Oracle SuperCluster M7 delivered a high-performing and scalable platform to improve the company’s competitive position and support global growth: By consolidating five database servers into a single storage system, the firm has witnessed a 5x gain in data load time—from 2GB per second to 10GB per second.
Becoming cloud-ready is an important step in preparing to tackle the challenges of digital business. The cloud delivers potentially business-altering gains in scalability, flexibility, and cost-efficiency. It provides the framework to streamline processes and workflows while introducing opportunities for entirely new products and services.
In the coming years, enterprises that can adopt cloud technology and apply it in broad and deep ways throughout the organization are far better positioned to emerge as digital leaders. Digital business requires a fast, flexible, and dynamic framework. Clouds are now at the center of business and IT transformation.