The current reality for many European organizations is that business as usual is not working. In many industries, it became clear who were the thrivers and laggards based on their digital capabilities, and the ability to respond to the immediate need to innovate and adapt operations and processes. Every organization must evaluate how to adapt technology strategies to support business change, operational resiliency and digital response. The role of app delivery teams in responding to COVID-19 has been fundamental – not only in making sure software and critical apps continue to work but to support remote working, staggering increases in the use of online platforms, and transforming analog to digital services at speed. Software without doubt a bigger piece of how every enterprise competes.
The acceptance of digital has been catapulted forwards. The ability to rapidly develop digital innovation (digital products and services) is clearly recognized as a core competitive requirement. Half of European IT execs who responded to IDC's EMEA sentiment survey (August 2020) prioritize software development capabilities to drive product and service innovation. As a result, many organizations are redesigning the app delivery function as a strategic business capability; not only to meet the demands of a digitally driven economy, but to increase competitiveness by controlling a larger share of organizational digital value creation.
This raises the question: does every organization need to become a software company? The answer is no, but it does mean one of the next big organizational challenges is how to operate more like a software company and develop the skills and capabilities to become both a user and producer of software. IDC believes that in the next 5 years 60% of European organizations will successfully navigate this transition.
However, in charting the way forwards organizations must think carefully about the organizational, technology and process design changes that need to be made. Based on current organizational evolution and progression IDC identifies three core pillars underlying digital innovation success and readiness: 1) automation, 2) hybrid cloud strategies and 3) cloud native architectures.
Let’s first consider the topic of automation and the role of automation in supporting organizations in becoming digitally lean. At the core of digital innovation success is the need for automation to drive velocity, consistency, and quality at scale. However, in 2020 more than 70% of European organizations continue to identify manual processes as the clear bottleneck in app delivery. This makes automation the top priority to support organizational ambitions to deliver software-based digital innovation. Not only to deliver apps, including cloud native apps, via hybrid and multicloud environments, but to also accelerate plans for ERP cloud migration via intelligent applications, connectors and platforms.
Yet recent IDC research finds that a quarter of European organizations lack a unified automation strategy. While this is an 11% improvement on where we were in 2019 progress towards unified automation strategies is slow, with automations around continuous integration, continuous delivery and application release orchestration often siloed to the teams that use them and for the purpose of the job to be done.
2021 must be about automation. Organizations must look at how they unite, integrate and measure end-to-end activities and performance across the entire app delivery pipeline. Automation is a key item on the IT agenda: think automation to solve container at scale challenges and accelerate developer productivity. Container ops automation, end to end tool chain orchestration, and the removal of redundancies, waste and inefficiencies in the release pipeline (in other words reusability is front and central) are core areas identified for urgent improvement.
The second pillar in supporting digital innovation success is the transition to a hybrid-cloud strategy. Hybrid-cloud represents the next generation of cloud and the seamless integration of all clouds and sometimes even non-cloud infrastructure in the datacenter. IDC research shows that European organizations run their cloud native app environments equally balanced between private and public cloud platforms.
Therefore, half of European organizations place hybrid cloud at the core of 2020 modernization efforts. Why? To take advantage of all cloud assets, address complexity in cloud environments and push out a higher cadence of software based digital innovation. Hybrid cloud's value within the wider IT modernization strategy resides in its role in maximizing technology assets, ensuring digital autonomy, and enabling technology flexibility.
The third pillar for consideration and one that goes hand in hand with increased cloud adoption is the shift to cloud native architectures. At the heart of every digital innovation blueprint is a cloud native application delivery engine. Ultimately, creating customer value is tied to an organization's ability to develop, deploy, and run high quality applications across any cloud at speed. The use of cloud native technologies continues to grow rapidly. In 2020, approximately a third of the custom-built app estate running in a cloud is built and deployed natively, representing a 40% year on year increase. For more than half of organizations in Europe cloud native application development allows software teams to iterate faster while lowering the cost of experimentation. With top benefits tied to development simplification, business value creation, and the transition to innovation driven business models. Piecing together the right cloud native app delivery lifecycle is make or break for digital innovation and a determining factor in organizational success over the next five years.
Collectively, these “digital innovation” pillars represent critical attributes of a modern application development and delivery platform. Given the amount of digital transformation taking place, there is an urgency for organizations to set their modern application delivery agendas and position the business for digital innovation success.
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