As we are all aware, the face and scope of what was viewed as the ‘traditional’ IT landscape is changing for businesses of all sizes, this rapid change is being driven by the advent and availability of ‘digital’ services across an ever-growing marketspace.
So how do digital service offerings differ from their more traditional counterparts? Some of the more fundamental differences are highlighted below:
1. The approach taken to acquire / develop new services has changed
Traditional service acquisition tends to follow this process which can be time-consuming:
a) Obtain funding
b) Make request
c) Gather requirements
d) Scope the project
e) Develop the system
f) Test
g) Debug
h) Deploy the system
Whereas, digital service acquisition is more streamlined:
a) Find a service
b) Evaluate for appropriateness
c) Provide payment option
d) Provision resources
e) Get started
2. Digital services can be viewed as Business commodities that can be turned ‘on’ and ‘off’ as required – less up-front investment and quicker time-to-market
3. The ability to automate, easily scale and flex digital services (elasticity) to meet ‘ad-hoc’ demand / demand spikes is a key driver for many ‘on-line’ organisations
4. Total cost of ownership can be significantly lower for digital services i.e.
a) Reduction in ‘in-house’ Staff costs
b) Reduction in data centre costs if using the cloud
c) Reduction in data retention costs
d) Reduction in the duration of outsourcing contracts
e) Reduction in use costs – ‘pay-as-you-go’ concept
5. By adopting digital services, interoperability and integration standards can be more easily utilised
6. Business drives IT rather than IT driving the business allowing it more marketspace flexibility to deliver to service consumers
7. Security of and access to services are potentially more complex in a digital environment
8. IT Service Management is emerging as a strategic Business function as service is the focus not infrastructure and software which is the norm for traditional services
9. Data stewardship and ownership is a key concern for digital service environments when control and storage of data is harder to restrict particularly when using the cloud
10. Introducing a digital service gives you the opportunity to optimise the hardware layer, only buying the storage and CPU that the service need
11. Digital services are ‘always on’ and can be accessed anywhere via multiple devices
12. Software costs can be reduced as you only pay for the licences you need for the service at that point and these can be scaled and manipulated as necessary
13. Democratisation of Computing – Bringing enterprise scale infrastructure to small and medium businesses is now possible in a digital environment
14. Costs can be reduced via multi-tenancy of software and hardware that support digital services
15. Since the process for digital service acquisition is more streamlined than traditional methods, the time before a new service can be utilised is reduced
16. The speed for a business to react to ever-changing market and consumer needs is significantly enhanced through the use of appropriate digital services, service automation and Software as a Service (SaaS)
17. Redundancy and business continuity for digital services running in the Cloud can be more easily performed due to the availability of hardware which will minimise downtime
18. Digital services can be viewed as more environmentally friendly as an organisations carbon-footprint can be significantly reduced with shared-tenancy and pay-as-you go services
19. Software updates can be more easily applied to digital services saving time and cost of in-house maintenance
20. Collaboration between employee groups is improved using digital services as processes can be more easily streamlined and communication is improved
21. Traditional services are financially accounted for as CAPEX and depreciated over a period of time, however with digital services will be part of OPEX as their use is normally billed on a monthly basis
So depending on the nature of your business, digital can offer a significant cost, time and resource improvement over traditional IT services, although for a significant number of organisations a mix of both would be a pragmatic approach to take for the foreseeable future.