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Digital Applications in 202x

As the influence of ‘digital’ on revenue approaches an astounding 50% across industries, enterprises must quickly respond with digital applications to take on the challenges and seize the opportunities. Here is how:

Table of Contents

1

The What and Why

2

How critical and different are they?

3

Newer Guiding Principles

4

Transformation to Digital Applications

5

How does the modernized portfolio look like at run-time?

6

Case Studies

7

Conclusion

8

Contributor
The What and Why

The What and Why

Examples of Digital Applications

Consumerization drives everything in technology these days, including the labels we seem to assign to newer paradigms in IT. So, when we come across a moniker like Digital Applications, we, in the previously esoteric world of IT, might squirm and blurt out with: ‘What? Haven’t applications always been digital? If not, what have they been all these years? Analog?’

The term deserves a lot more respect than the bemused, perhaps even confused, first-reaction might suggest. To put it all into the right context, we have to first understand how fast and how much the line between the two worlds of traditional brick-and-mortar businesses and their relatively young online counterparts and/or extensions is blurring, as shown in Figure 1.

Thanks to innovations made possible only by digital transformations, today we expect physical businesses to figure out who we are when we walk in and then use the data to deliver personalized services. Likewise, while we enjoy the conveniences of online commerce, as we shop from the couch and expect businesses to know where we are, and then use that information to suggest and implement immediate fulfillment options.

Difference between physical and virtual Applications

Illustrative as it might be, the above example is indeed a bit limited to the retail industry. However, we can easily list many scenarios of digital extensions/disruptions across verticals such as healthcare, BSFI, transportation/hospitality, public sector, energy/utilities, manufacturing, and so on; and do so for many business-to-business and business-to-consumer use cases in each sector. Transactions – orders for goods or services – in such a blurring world of the physical and the virtual, across all industry verticals, often zigzag between those two boundaries while fully retaining its state all the while, before it is finally delivered.

Powered by innovations such as Big Data/Analytics, Cloud (with its IaaS, PaaS, and SaaS layers), Enterprise Mobility, Internet of Things (IoT), and Machine Learning/Cognitive Computing, transformative ideas are taking wings to help enterprises turn into being:

  • Always on (vs. only open for business during traditional work hours)
  • Highly ubiquitous (vs. only on channel(s) that they originally started operations withs)
  • Prompt and highly responsive to different fulfillment needs (vs. only a few days later for online)
  • Very up-to-date and consistent with information across all channels (vs. working with fragmented data)

Along those lines, we can go on and on to list other attributes that truly distinguish digital businesses, but our effort here is to define digital applications. The word ‘digital’ is used as a prefix, only to emphasize alignment. An alignment of the listed enabling innovations with required newer techniques so that applications, regardless of their origin, can support their respective digital enterprises with the desired scalability, reachability, and agility.

How critical and different are they?

How critical and different are they?

We, in IT, know only too well that there is a lot more to achieving this alignment than meets the eye. In a way, we have been going through aspects of this change every so often to keep up with technology refreshes and benefit from resultant efficiencies. But this time around, the stakes are higher, and so is the need to act rather swiftly.

Now, it is more about enabling the business to expand and grow rather than merely supporting it, to a point where ‘software’ (i.e. digital applications and their underlying infrastructures) can become the competitive edge. And in some cases, it is even more critical and brutally tactical – to build capabilities to fend off competition from disruptors.
Hybrid Digital Applications Connection

The following table illustrates how digital applications differ from traditional applications in terms of how they are realized – both through modernization and new development efforts.

Legacy Modernization and Digital Applications

Looking at how they stack up against the attributes listed, it becomes evident that Digital Applications stand apart, as a superset, for how they shape, run, and sustain digitalized businesses.

The efforts that go into creating portfolios of such next-generation applications can be more significant for companies that are ‘transforming to be digital’ vs. those that are ‘born-digital’. Although the latter may not have much of a portfolio, their applications may be relatively more ‘digital’ already, making them their key differentiators. For leading digital disruptors, and we all know who they are, this applies to both their so-called Systems of Engagement (SoE) on the edge and Systems of Record (SoR) in the core. Traditional enterprises, on the other hand, have the burden and immediate responsibility to look at their entire portfolio holistically and modernize their mission-critical core systems while simultaneously enhancing the impact and reach of their edge applications. Loss of a significant market share, if not the bigger risk of going out of business, is a definite consequence if a narrower and/or a more sequential approach is pursued.

To understand how imminent and critical this need is, all we need to do is take a moment to look at market research (Figure 2).

Historical data and stats of digital Applications

Hard-hitting findings such as ‘No safe havens from digital disruptions by 2020’ (left) and ‘47% of all revenue to be influenced by digital by 2020 (right) will surely drive the point home.

Newer Guiding Principles

Newer Guiding Principles


User Guide to Digital Applications

In response to the above-mentioned drivers, especially to the not too distant end-of-the-year deadline, enterprises across industry verticals are now going by a radically different set of strategies compared to 3-4 years ago.

There is now a new sense of urgency all around to bring the speed of development, lasting agility, and web-scale performance that these all too critical digital applications are calling for. At the top of this set of guiding principles, or to underscore the criticality, the items in the business survival kit, are the following:

1. A ‘Cloud-first’ Approach vs. a ‘No-cloud’ Stance

The value proposition of the cloud as an enabler of ‘Industrialized IT’ is finally connecting rather emphatically with all businesses, thanks to the overall push towards rapid digitization. While the average TCOs for various cloud services tend to be higher, various offerings such as ‘no CapEx and only OpEx’, speed-to-market, availability, security, and scalability attributes are trumping any lingering inhibitions. For large enterprises, this approach automatically leads to hybrid cloud environments and the orchestration of corresponding hybrid application workloads across private, hosted-private, and public cloud offerings. To add to the speed, performance, maintainability, and affordability of building large-scale private clouds, hyper-converged and/or web-scale IT solutions are coming to the rescue. Yet another enabler of this rapid transformation is the rate at which packaged applications (or COTS or ERP) have been transforming themselves to be more granular, extensible, and cloud-based, thus endearing themselves to be considered for a fair share of the digital application portfolios.

2. Greater Consideration for Open-source Software and Open Architectures

Open is the new way to go. Starting all the way down from processors (think ARM for example), to virtualization, to platforms, and up to applications.

Open solutions such as OpenStack (IaaS) and Cloud-Foundry (PaaS) are gaining momentum and alleviating concerns around Cloud lock-ins, giving digital applications the needed portability. Many open-source software (OSS) solutions are also the mainstay of digital applications, including those for:

Big Data/Analytics

With Hadoop and its rather large ecosystem of solutions, including those for SQL, NoSQL, ETL, BI/BA, etc., to support the processing of structured and unstructured social, IoT data, and related analytics.

Enterprise Mobility

Ubiquity for digital applications comes from how they manifest everywhere in the form of apps (their UI layers) on mobile devices. So, it is no wonder that it is in everyone’s best interest to make this aspect as open as possible, including the two mobile device platforms, i.e., Google’s Android (which has always been open) and Apple (Swift, which is also now open). Aimed to facilitate rapid app development on these platforms are many OSS Mobile App Development Platforms (MADPs) such as Ionic/Cordova, jQuery/Mobile, Titanium/Appcelerator, Sencha Touch, Telerik/Kendo UI, Mobile Angular UI, Xamarin OSS SDK (now part of Microsoft Visual Studio).

IoT

Technology and industry leaders alike are promoting the adoption of IoT solutions with open platforms. Notable among them are the initiatives from:

  • Intel/Samsung: Open Connectivity Foundation’s IoTivity to promote standards
  • GE: Predix for various Industrial IoT (IIoT) applications
  • Verizon: ThingSpace for smart cities

Machine Learning/Cognitive Computing

The broader area of AI covering machine learning and cognitive computing is raising the bar of the value of digital applications to literally mind-boggling levels. We can now address varied, complex use cases across industries, with the kind of intelligence that thus far has been an exclusively human turf, and do so with a scale that only IoT and cloud can gather and process. Some of the open alternatives in this area are:

  1. Apache’s Spark for Machine Learning
  2. Caffe for applications in vision, speech, and multimedia
  3. Apache’s Edgent for IIoT applications
  4. OpenAI is a non-profit AI research company backed by Elon Musk and supported by many technology companies, and it is creating a platform called Universe for different AI applications

Many of the above products/platforms also come with commercial distributions offering needed vendor support while retaining the advantages of community-based co-innovations and minimal licensing costs.

Single-views of Everything with Real-time Data

A key aspect of digital applications is how they realize their full potential when operating in an environment where on the one hand, a single view of their customers is available to the business for cross-selling and upselling purposes, and on the other single views of their products, inventories, and dynamic pricing details are available to its customers in a real-time and consistent manner across all of its channels. Master Data Management (MDM) initiatives that can create these ‘single view’s have now become must-haves in the new world of digital applications. This is an area where speed-to-market has been significantly enhanced with Cloud ERP solutions that can complement enterprise digital applications with required single views.

Transformation to Digital Applications

Transformation to Digital Applications

With all that said about the business dynamics behind this new wave, the important question to address now is, how does an enterprise create a portfolio of digital applications, or rather how does an enterprise transform its applications to a resilient digital portfolio?

Whether we are talking about an established bricks-and-mortar enterprise that is transforming itself to expand/grow and to ward off threats or about a progressive omnichannel business, the fact of the matter is that there is always an existing portfolio that needs to undergo a significant transformation. Just the degree to which it should, varies. Most enabling digital innovations are relatively new and continually evolving, so the elements of migration that we discuss here merit close attention and due consideration by all.

Transformation to Digital Applications

Business Value Assessments

A key to ensuring success in the digital transformation of applications is to focus on tighter alignment with the business from the get-go. In fact, one could even argue that IT has become the business in many scenarios. To achieve that highest level of congruence, we need to introduce the notion of ascribing business value/criticality to individual applications and be able to articulate how changes made to them can positively impact the end business. The changes should add up nicely towards broader strategic business goals and any formal business cases that may have been developed. Using ‘Digital KPIs’ to perform these value-based analyses is essential to getting the right levels of commitment and engagement from stakeholders, including CFOs, CMOs, and even CEOs who would now be at the table, in addition to CIOs. For a quick illustration of the use of these KPIs, for example, one must quantify how changes will achieve a reduction in CAR (Cart Abandonment Rate) so ARPU (Average Revenue Per Customer) can grow by X%, adding up to Y% net revenue growth.

Technology/Architecture Assessments

As for technical assessments, the analyses involve taking a more in-depth look at the details captured over the years in corporate Configuration Management DBs (CMDBs) or other equivalent DBs or registries, and updating them to reflect current status with regard to volatility, target user bases, transaction volumes, architecture, application stack, and integration attributes, etc. Building on top of this comprehensive understanding of the applications, a process of thoughtful grouping and prioritization of the applications will be undertaken to maximize the value of the migration. Accordingly, applications will later be earmarked for migration to appropriate, and most optimal, target digital platforms (or new landing zones) that cut across the hybrid-cloud environments of the proposed digitized enterprise.

Mapping

In defining the target platforms, pragmatics will have to guide the enterprise to respect the new reality of a ‘bi-modal’ IT, which refers to how the SoEs and the SoRs may have polarizing needs of scalability, volatility, urgency, and related governance. These modes of IT are often referred to as fast and traditional (or robust) IT, respectively. Accordingly, the composite hybrid IT environment will have to accommodate appropriate flavors of Cloud (IaaS, PaaS, and SaaS) and legacy/special-purpose infrastructures while we are spec’ing out the target platforms.

Based on the richness of insights gained from the above steps of business value and technology/architecture assessments, the mapping of constituent applications to future platforms will result in the two categories of transformations (‘low-touch’ and ‘high-touch’) as shown below:

Digital Transformations We must note that in addition to the above transformations, there will be such thoughtful decisions as ‘Retire’ (de-commission) and ‘Revisit’ as part of the overall mapping exercise.

The resulting new applications that are spread over target hybrid environments must share a unified service management layer in order to:

  1. seamlessly orchestrate application workloads across
  2. dynamically provision/de-provision instances in each

Of all the ‘R’s that we listed for mapping, refactoring occupies a special place in how applications are being transformed to power up digital businesses. Application vendors took the lead on this form of transformation withsuch initiatives as S/4 HANA and Fusion Apps in the case of SAP and Oracle, respectively, to name a couple of representative movements. Such efforts are bringing all COTS packages to newer levels of alignment with the business drivers and KPIs of digital businesses that we listed early on in this paper.

Industrialized next-gen apps are not exclusive to COTS vendors anymore. With the advent of enterprise PaaS (further aided by Open Source Software frameworks), enterprises also can now put refactoring to use to take the ‘secret sauce’ portion of their application portfolios to similar levels of richness, and, more importantly, to the dizzying levels of agility that they need, to effectively compete and differentiate themselves.

Refactoring

To maximize the value of the transformation efforts, candidate applications that would warrant the high-touch associated with the refactoring treatment should be drawn from the pool of new and newish (developed in the last 3-4 years per models such as n-tier/web services). They may be a smaller minority, but their impact on the digital business will be high and critical. The others, which form the majority, will go through various flavors of low-touch treatments, still deriving such benefits as auto-provisioning, auto-scaling, and zero cap-ex of hybrid clouds.

A deliberate effort must be made to also include applications from ‘shadow IT’ in the list of new and newish applications. After all, there is a reason why shadow IT grew to be what it is – business executives couldn’t wait for IT to move fast enough to meet their pressing needs. Well, it is time to redeem some of that lost respect now – with digital applications.

To address the intricacies of ‘refactoring’ and to do so in a future-proof manner, most enterprises are now turning to an improvised flavor of Service-Oriented Architecture (SOA) called the Microservices Architecture (MSA). MSA improves our ability to compose applications with (distributed) Cloud services that specialize in doing ‘just one thing, and that one thing rather well’. In other words, it is an attempt at the industrialization of the apps by enforcing stricter rules of ‘separation of concerns’ and thereby enabling higher levels of reliability, consistency, and maintainability of the underlying code. The isolation that MSA adds, and also remarkably minimizes the risk of breaking something else while fixing a particular bug.

Micro-services Architecture (MSA)

Whenever we talk about yet another new architecture style for implementing services, questions are raised immediately as to why and how it can improvise SOA of yesteryears. MSA is the next step in our on-going journey of realizing the full potential of the promise of ‘services’ in general. To that extent, it is fair to say that MSA has a better shot at turning SOA into ‘$OA’, in support of the fiscal goals of digital transformations. MSA utilizes services that are very fine-grained, truly specialized, more independent, and cloud-aware. Resulting services will be more container-ready (such as Docker, Kubernetes, CoreOS/rkt, Apache/Mesos, Canonical/LXD, etc.) and be portable and scalable as/when needed.

12 Factor Development (12FD)

MSA needs proven best practices, including design patterns, for enterprises to improve the agility and rate of success of their transformative refactoring efforts. 12 Factor Development is one such framework. It is the result ofefforts led by Martin Fowler, the globally renowned thought-leader from the UK on enterprise architectures. It crystallizes a wide variety of best practices related to application development involving cloud-centric microservices. The factors listed in the framework go beyond code development to cover the dynamics of the resiliency of services over an extended period and of collaboration between teams (as in Dev and Ops) working on the codebase.

The 12 factors and corresponding guiding principles with which the framework aims to streamline the facets of development, resiliency, and collaboration are:

  1. Codebase: One codebase tracked in revision control, many deploys
  2. Dependencies: Explicitly declare and isolate dependencies
  3. Configuration: Store configuration in the environment
  4. Backing services: Treat backing services as attached resources
  5. Build, release, run: Strictly separate build and run stages
  6. Processes: Execute the app as one or more stateless processes
  7. Port binding: Export services via port binding
  8. Concurrency: Scale-out via the process model
  9. Disposability: Maximize robustness with fast startup and graceful shutdown
  10. Dev/prod parity: Keep development, staging, and production as similar as possible
  11. Logs: Treat logs as event streams
  12. Admin processes: Run admin/management tasks as one-off processes

Well and good, but decades of enterprise experience tells us that the trouble with frameworks such as the 12FD is that the implementations thereof can take many subjective paths. Often the means become the end, and productivity suffers. That’s where today’s PaaS platforms, with their support for 12FD and cloud-native applications, come in handy. In fact, 12FD was developed using one such platform – Salesforce.com’s Heroku. It is said that the ‘12 factors’ have been synthesized based on a significant body of work involving hundreds of apps on Heroku.

Cloud-native Digital Applications

This term has been around for a few years now. Since 2014 it has simply started to refers to how business-critical applications, with all the desired attributes discussed so far, can be well-served if they are developed on the cloud and for the cloud. By design and structure, they tend to be:

  • independent of any physical coupling
  • portable, with all their context, across clouds
  • optimized to take full advantage of cloud platforms

There are many enterprise-grade PaaS options now. Given the wide choice of options, an enterprise must take a serious look at tradeoffs related to performance, productivity, and vendor lock-in in picking the desired PaaS for their digital applications. A PaaS offering that is both enterprise-grade and open is Pivotal’s Cloud Foundry (PCF). Other significant players for PaaS include Apprenda, Heroku, Apcera, etc. Established ERP/SaaS vendors like SAP and Oracle too have their own PaaS offerings. Most of them promote polyglot development with support for such languages as Java, JavaScript, C#, Ruby, Python, PHP, HTML 5, CSS, SQL, etc.

Cloud-native application development can be further expedited and made more robust, with the help from packaged services, such as those from Spring Cloud and Netflix (a pioneer in the adoption of MSA development), which come bundled on PCF Marketplace. Examples of such industrialized services include:

  • Eureka for Service Registry
  • Hysterix for Service Discovery
  • Turbine for Fault Tolerance

With this growing list of infrastructural microservices , developers save a significant amount of time, which can be dedicated to efforts on business-facing and value-added microservices.

DevOps

DevOps provides a framework to sustain digital applications with the processes of Continuous Development (CD) and Continuous Integration (CI), and related tools such as the wildly popular GitHub (for Change Management) and Jenkins (Release Management), to name a couple.

Contrary to prevalent beliefs that the incorporation of DevOps methods can only help Fast IT, digital enterprises are proving that DevOps is indeed necessary to build a bridge across the two worlds of IT.

Digital applications are all about a tight alignment with where businesses are headed. In addition to being supportive and responsive to different business drivers, they also help us in making IT more accountable for the overall success of the enterprise. Figure 3 visualizes how that alignment is achieved through the various steps that we discussed.

Business work Flow of Digital Applications

Figure 3

How does the modernized portfolio look like at run-time?

How does the modernized portfolio look like at run-time?

Microservices and digital applications

So, if we put it all together, how does the dynamic run-time world of enterprise digital applications look like?

As shown in Figure 4, there will be microservices across the hybrid boundaries of cloud owned and/or subscribed to by the enterprise, all interacting with each other in a secure manner – to tap into, reach out to, and serve customers who are many orders of magnitude higher than traditional businesses are used to.
Digital applications runtime with micro services
Figure 4

Key Callouts

  • Microservices will be implemented through restful APIs behind the firewall, in the cloud, and on all devices on the edge.
  • Where mature service-oriented infrastructures exist, with a significant base of legacy Web-services, we may see Enterprise Service Buses (ESBs).
  • But, microservices spread across the cloud will increasingly intercommunicate through cloud-based iPaaS solutions.
  • Technologies such as Business Process Management (BPM) and Event-Driven Architectures (EDA) will further enhance the power of microservices providing capabilities such as policy-based orchestration and real-time sense and response.
  • More critical in this infrastructure is the role of API Gateways to enforce authorized access to enterprise services (web services and microservices) from social, mobile/online commerce, and partnership channels.
  • The discipline of microservices and the power and elasticity of hybrid IT provide the horsepower needed to perform at web-scale IT levels as the digital business expands.
Case Studies

Case Studies

There are some highly inspiring and provocative digital applications, across verticals, which are making the news. They have been selectively picked here, strictly for representational value, to showcase not only their direct impact on the businesses they serve but also how digital applications are making our daily lives safer and more productive.

Industrial and Manufacturing (General Electric)

An industrial giant whose annual sales add up to $100 billion wants to be in the business of digital apps generating driving $15 billion in additional revenue. With its digital platform called Predix, GE is creating an ecosystem, which aims to promote a ‘greener’ industrial environment around the world. Predix, with its IoT digital applications from the entire participating manufacturing vertical segment, will strive to ensure that their machines are humming fine with timely attention to repair and maintenance.


Case study of Digital Applications

Transportation and Automotive (Alphabet’s Waymo)

Leveraging years of their research and prototyping work on autonomous vehicles, Alphabet’s Google just created an independent organization called Waymo to apply this technology on a larger scale. Waymo will endeavor to extend this self-driving technology, through digital applications, for ride-sharing, trucking, logistics, public transportation, as well as personal-use vehicles in partnership with auto OEMs.

It is said that personal-use vehicles sit idle for as much as 97% of the time. Waymo hopes to tackle such issues head-on, in addition to reducing the time wasted in commuting and aiming to drastically bring down the 1.2 million fatalities on the world’s roads every year.

Retail (Amazon Go)

Here is another example that makes us pause in awe and appreciate the disruption that digital applications are unleashing to improve our daily lives. No lines and no cashier’s desks as we go through the chores of grocery shopping in the middle of our busy schedules? Yes, that is what we can look forward to when initiatives like Amazon Go go live in the near future, once the digital applications in the current pilots prove out the concept and technology.

Banking and Other Financial Services

It is reported that digital banks are on the rise, but the fact is, only 20% to 40% of their processes are digitized. Banks, insurance companies, and payment processors, for example, are all realizing what a force to reckon with social media is and are forging closer digital partnerships with Social sites for the purposes of marketing and even commerce. As a growth market, when you look at some of the indisputable demographics, Social is right up there with the largest of global growth markets – only a lot less anonymously so. If you take Facebook alone as an example, there are 1.8 billion prospective consumers out there in that single social demographic, most of whom happen to be profiled, for a business to be smarter about what, how, and even when (with location-based services) to sell to this market.

Airlines

Likewise, some of the more progressive airlines are digitizing more and more of their processes to compete more effectively and improve passenger service. So, on a stormy night when everyone is stranded at the airport, do you want to stand in line, knowing that they only have a handful of those service desks and that they are notoriously slow? Or, would you rather pick an alternative flight from a comprehensive list of real-time options from your phone app?

Conclusion

Conclusion

Conclusion of digital applications

That’s but a small sliver of all the cool innovations taking shape across many industries around us today. The power of their impact comes from well-crafted microservices, the use of many complementing technologies such as API Gateways, BPM, and EDA, and the incorporation of the new governance models of DevOps for rapid-fire development and integration.

But, as exciting as these possibilities look, enterprises are yet to tap into the full of power of digitized business processes. As attention shifts from digital strategies to action, we quickly realize that ‘the devil is in the apps’. However, with the focus on the new way of modernization of application portfolios, IT can indeed step up to a more strategic and congruent role to ‘be the business’ rather than be a mere operational support department. That focus will, for sure, lead us to many more dramatic and compelling business innovations to come.
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Contributor
Sreedhar Kajeepeta

Sreedhar Kajeepeta

Chief Technology Officer

About ACS

ACS Solutions is a leading global information technology services and consulting organization with 20,000+ employees and has been serving businesses across industries since 1998. A trusted partner to both mid-market and Fortune 500 clients globally, ACS Solutions has been instrumental in each of their unique digital transformation journeys. Our extensive industry-specific expertise and passion for innovation have helped clients envision, build, scale, and run their businesses more efficiently.

We have a proven track record of developing large and complex software and technology solutions for Fortune 500 clients across industries such as Retail, Healthcare & Lifesciences, Manufacturing, Financial Services, Telecom and more. We enable our customers to achieve a digital competitive advantage through flexible and global delivery models, agile methodologies, and battle-proven frameworks. Headquartered in Duluth, GA, and with several locations across North and South America, Europe and the Asia-Pacific regions, ACS Solutions specializes in 360-degree digital transformation and IT consulting services.

For more information, please reach us at – acssolutions@acsicorp.com