The cloud—the constellation of connected servers, data warehouses, and associated software and services—is at the core of a digital transformation strategy.
Organizations of all sizes recognize that the cloud is the fastest way to modernize their operations to increase efficiency while better serving customers. For many organizations, the shift to the cloud simply means running their applications in a public cloud infrastructure instead of the traditional on-premises datacenter. For other organizations, however, a software as a service (SaaS) model that uses cloud applications as well as the underlying cloud platform is a quicker path to digital transformation.
Whatever model an organization chooses, we find that the key to success isn’t what implementation looks like, but rather how leaders, architects, and entire companies approach the digital transformation journey. Success in the cloud isn’t just about the technology or the features available—it’s about the organizational mindset. For a successful digital transformation, your organization must prepare for changes that span the entire enterprise to include organizational structure, processes, people, culture, and leadership. It’s as much a leadership and social exercise as it is a technical exercise.
we provide a perspective on what to expect when implementing your cloud solution using Microsoft Dynamics 365. We introduce principles relevant to any SaaS application. Concepts introduced here are elaborated on in subsequent chapters. We hope these principles help you set your course and guide you in your leap into the cloud.
We start by addressing how to develop a cloud mindset in an organization, which is foundational to your digital transformation. Then we delve into factors to consider and understand before you shift to a shared public cloud from an on-premises setup. These include how the shift will impact controls you have in place and how to think differently about scalability, performance, shared resources, and more. After that, we discuss the principles around customization and extending cloud apps. Finally, we explore the operating model, always up-to date evergreen cloud models, and the options to migrate to the Dynamics 365 cloud from on-premises.
Adopt a cloud mindset
Embracing change is a common theme, but infusing it throughout your organization is vital to your digital transformation journey. Therefore, we include it as a thread that runs throughout this chapter and book. Adopting the cloud mindset is also an intentional way to help organizations break the mold and think differently about how applications are designed, developed, secured, and managed in the cloud.
First, let’s understand the “why” behind the pervasive adoption of SaaS business applications by organizations across the globe. Traditional approaches to business applications mostly involve the IT department building a custom application or using an off-the-shelf product augmented with customizations to meet the specific business requirements. The typical approach includes phases to gather requirements, build, go live, operate, and then follow the change management process to request changes or add new features. The IT department has full control of the application, change process, releases, updates, infrastructure, and everything needed to keep the solution running for years.
On the surface, this sounds ideal. It has been the standard operating model for deploying and operating business applications. This way of working, however, is losing relevance in today’s fast-paced world of shifting supply chains and evolving customer needs and expectations.
Application development and deployment was disrupted not necessarily because of the cloud or new technology—the undercurrent that made the cloud pervasive was the changing landscape of business. Unharnessed data from ubiquitous smart and IoT devices and other sources fueled startups that disrupted whole industries seemingly overnight. With that, the average lifespan of companies plummeted. This inflection made the survival of a business dependent on delivering the best product, the best customer experiences, and constant innovation to meet ever-growing expectations. This new business arena means businesses must change more often, evolve their processes more quickly, and become more data driven to understand customer needs, pain points, and preferences.
The changes we’re talking about aren’t triggered by the cloud or technology. These are thrust upon us by the changing business landscape. Adopting a cloud mindset, then, is about transforming your processes, people, culture, and leadership in such a way that your organization can embrace change quickly and successfully. We believe the fundamental organizational characteristics that will determine success in this environment come down to focusing on delivering business value through a secure cloud technology platform. This includes the ability to harness the data that is captured to generate insights and actions. This platform will also rely on automation to quickly react to changing needs. In this section, we explore these organizational characteristics that help drive the cloud-first mindset to achieve digital transformation.
Focus on business value
Technology is a ubiquitous force that influences almost every business. Indeed, the IT department within a bank or a manufacturing company may be larger than entire tech companies. Understanding how technology affects customers and business is important to help any company survive and thrive. It’s also important to not let technology hinder growth or impede business.
The role of technology is to deliver business value by driving efficiency. However, we often see enterprises whose technological landscape has become so large and complex over the years that they fail to deliver the agility demanded by the business. The IT departments are consumed with dealing with the complexity of software compatibility, update cycles, end of life deadlines, aging infrastructure, and antiquated security policies with little time to focus on delivering business value.
An evergreen SaaS cloud approach to your business application, however, takes away much of the infrastructure and operational IT effort to keep the servers running, software patched, and other routine tasks, and turns the focus of IT on the business. Operating in the cloud doesn’t mean there are no operational responsibilities, environment management, updates to SaaS services, feature deprecations, user communications, or coordinating change management for enhancements and new capabilities, monitoring, and support. These functions are all still required, but with a key difference: IT is now much closer to the business application layer and has a greater opportunity to focus their energy on delivering positive business outcomes.
IT has a greater opportunity to focus on delivering positive business outcomes.
Automate the routine tasks so you can focus on creative, more challenging work.
Decision-making around digital transformation now carries existential consequences.
Focus on business value
Technology is a ubiquitous force that influences almost every business. Indeed, the IT department within a bank or a manufacturing company may be larger than entire tech companies. Understanding how technology affects customers and business is important to help any company survive and thrive. It’s also important to not let technology hinder growth or impede business.
The role of technology is to deliver business value by driving efficiency. However, we often see enterprises whose technological landscape has become so large and complex over the years that they fail to deliver the agility demanded by the business. The IT departments are consumed with dealing with the complexity of software compatibility, update cycles, end of life deadlines, aging infrastructure, and antiquated security policies with little time to focus on delivering business value.
An evergreen SaaS cloud approach to your business application, however, takes away much of the infrastructure and operational IT effort to keep the servers running, software patched, and other routine tasks, and turns the focus of IT on the business. Operating in the cloud doesn’t mean there are no operational responsibilities, environment management, updates to SaaS services, feature deprecations, user communications, or coordinating change management for enhancements and new capabilities, monitoring, and support. These functions are all still required, but with a key difference: IT is now much closer to the business application layer and has a greater opportunity to focus their energy on delivering positive business outcomes.
Traditionally, business applications depict a set of key business processes that allows the users to capture, track, and report on the process and its progress. These business processes usually take the form of having a user interface (UI) built on top of an underlying data store to capture or display the information from the database. These “forms over data” software applications can help organizations keep track of information and make it easily available through reports. However, from an end user’s perspective, they’re a data capture tool that doesn’t really help them do their job any faster or better. This design of business applications
hasn’t changed in decades. It’s an outdated model that doesn’t bring any additional value to the business or to the end user, and doesn’t differentiate a business’s offerings and customer experience from their competition, which is likely following a similar outdated approach.
Additionally, on an individual level, we want to automate routine, boring tasks and focus on more creative, challenging work. IT has a greater opportunity to focus on delivering positive business outcomes.
For example, take a point-of-sale application that helps you address your customer by first name and provides them personalized relevant offers based on their loyalty, or recommends products based on their purchase history and Artificial Intelligence (AI). This will be better received by your employees and customers than an application that can barely determine if a product is in stock or not. Simply offering the best deal or best quality product isn’t enough in today’s hyper-competitive environment. To win, you need to differentiate between your customers, respond to their unique behaviors, and react to fluctuating market demands.
Businesses likely already have the data to do this, but may lack the technology to turn data into practical insight. For example, Dynamics 365 Commerce taps your systems to gather customer intelligence from a myriad of sources (such as social media activity, online browsing habits, and in-store purchases) and presents it so that you can shape your service accordingly. You can then manage product recommendations, unique promotions, and tailored communications, and distribute them across all channels via the platform.
Dynamics 365 applications are focused on delivering value to the business and empowering end users, changing the business application industry paradigm by forcing every business to innovate faster.
The “If it ain’t broke, don’t fix it” mentality common in large organizations, where business applications can remain unchanged for up to 10 years, puts the enterprise at risk. Unless your business is a monopoly and can sustain without investing in technology, the hard reality is most businesses today won’t survive without strategic plans for digital transformation.
You need to ask yourself some questions:
▪ Has the rest of your industry not transformed and embraced technology?
▪ Do your customers demand a better and faster process?
▪ Is your competition growing their market share by eating into yours?
▪ Does your competition have a better Net Promoter Score (NPS)?
If you answered yes to most or if you don’t know the answers, your business might be failing to adapt and react to changes in customer behavior and expectations. Businesses that don’t invest in technology will face challenging disruptive competitors, either global behemoths or innovative startups. You need digital transformation technology that gives you the command of three essentials: deep, cross-channel customer insight; synchronized operations from front end to back end; and scalability to drive rich experiences as needed.
Decision-making around such technology now carries existential consequences. Lack of strategic visionary thinking, long-term planning, and matching investments can prove to be catastrophic.
The critical point is your business application shouldn’t be designed and deployed with an expectation that it will remain unchanged for long periods of time. Instead, the core design principle for business applications should be ease of change. You should take advantage of the wonders of automation to deliver changes as often as daily and weekly, at the whim of business. This continuous development philosophy is core to a Dynamics 365 SaaS application with weekly maintenance updates and multiple waves of new features delivered every year. Realizing the value of these cloud applications, therefore, is about adopting the latest best-in-class capabilities, continuously delivered. With this new mindset, SaaS services aren’t just used to meet business requirements—they’re helping drive business value and adoption.
Increasingly, technology is becoming so powerful and democratized that non-developers and people with no formal training in software development are empowered to build applications, create workflows that automate their work, and use machine learning with ready-made AI models to analyze data. This concept of citizen application development has drastically transformed businesses, where end users are developing solutions to solve business problems and sharing these applications with colleagues. This organic approach to app development has short-circuited the application development lifecycle, helping address the perennial issue of software adoption.
These scenarios all help illustrate how a transition to the cloud can play an instrumental role in refocusing technology to deliver business value.
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