We have reached an exciting milestone in how we harness digital technologies. The shifts forced by the pandemic have altered our behaviors and expectations around the digital services we use. As many have said, the past 20 months accelerated years of planned digitization. But it’s only starting to become evident how successful that transformation has been, what drives it, and how to adapt to a tsunami of new, emerging realities and consequences.
First, we must look at the progress of digital transformation. We’ve all read headlines about research findings that indicate most digital transformation efforts fail. Whether I quote findings from McKinsey, Everest, or a plethora of other research, there is an almost consistent rate of failure. How we define failure in this context can vary, but most definitions come down to whether business value was delivered or not – and most digital transformations appear not to deliver.
But the world has been changing in other ways. A recent survey conducted by 451 Research paints a very different picture, in which 44% of companies polled are well into the execution stages of their transformation strategies, and of that group, 66% are starting to see tangible success, while 10% declare their transformation projects are a complete success.
While previous research highlights failed transformation efforts, I believe the shift in success rates can be attributed to a growing understanding of motivations and the best practices for successful digital transformation. Simply put, companies are getting smarter about why they need to transform and what needs to be changed.
The top reasons for transformation are pretty familiar. According to the aforementioned survey, improving customer/employee experiences leads with 55%, followed by reducing cost (50%) and managing data growth (44%). If you treat these reasons as a triumvirate, you can see how they collate and complement each other.
What’s Driving Digital Transformation?
Let’s start with customer/employee experiences, as they are often the guiding light of digital modernization across various sectors. The expectations are for transactions that are mobile-driven, available anywhere, in real time, and dependable.
This is not surprising because people are transacting more online. An August 2020 survey by the online retailer Good Eggs revealed that two-thirds of respondents bought groceries online compared to 15% in the previous year – and people have stuck to those habits. Similar trends are visible across other retail sectors, and even if people head to stores versus order online, they take a digital approach with them. Consistent multi-channel engagement, whether online or through mobile apps, is increasingly considered table stakes among today’s consumers.
If customers are maturing in their use of digital, companies need to follow suit. Here we can contextualize the cost and data views. Data is important because it can provide better insight into customer behaviors and company performance. Managing the data and applications to provide that level of insight and responsiveness requires agility, elasticity, and scale. This is the cost point – digital transformation shouldn’t just be about lowering costs in general. It should be about lowering the cost of transacting with the customer at their convenience. Additionally, in the long run, automation will help lower costs for applications that scale.
Thus, if you combine the three elements, digital transformation comes into its own. But with that comes the realization that what happens in the background – particularly with the underlying databases – is critical for success. It seems obvious, but that’s in hindsight. Companies have only recently realized this, perhaps because all three elements hadn’t truly been previously in place. Today, 69% of organizations say three-quarters of their workloads require modernization to support evolving business requirements.
Requirements of a Modern Database
Databases are a crucial part of that modernization. The fact is that traditional relational databases do not provide the scale and flexibility to match the needs mentioned above. Modern NoSQL databases have been designed for a cloud world and therefore can. Yet, that’s not enough. Not only do relational databases remain useful, but there are mountains of development skills and experiences to support them. Companies know this, which is why 81% agree that their organizations prefer multi-model databases.
I won’t attempt to unpack that concept in this column. Suffice it to say that we see the emergence of a post-NoSQL world. This refers to how some NoSQL platforms have evolved to include relational database features while retaining their DNA for modern Data Management environments.
I argue that we can start differentiating database platforms based on how they embrace the multi-model concept – namely, combining cache, key-value, relational, document, search, and analytics features. For example, does the database support a flexible data model such as JSON? Does it support declarative query languages and ACID Transactions in SQL? Is it scalable and does it provide sub-millisecond latency? Does it support different types of data locality?
Additionally, it’s no secret today that companies are tired of database sprawl. They desire consolidation and better visibility, and cutting-edge NoSQL database platforms provide this as well. Besides the three reasons stated above, the fourth important factor for selecting a modern database system is to reduce sprawl and complexity.
Modern Databases in 2022 and Beyond
To summarize, research shows that digital transformation has started to stick for four reasons: more attuned customers, using data to better understand customers, improving customer experience and operations, and accomplishing all of that without breaking the bank. As companies realize they cannot do that without modernizing or replacing most of their workloads, much of the focus falls on databases. These must blend legacy and modern technology, handle various modes, and leverage the accrued experiences of developing relational databases while providing current benefits such as scale, management, and consolidation.
Only the most modern database platforms can provide all of that. As the world changes, so do databases. There has never been a better time or better reason for a new, modern database as a foundation for business.