The Top 22 Digital Transformation Trends To Look Out For In 2022

This blog was originally published by Contino here.

Written by Deepak Ramchandani, Contino.

2021 was a big year in the world of digital transformation. The pandemic continued to push businesses to accelerate their digital journeys. From data-driven sustainability initiatives to cloud-first remote working solutions, digital transformation was key to staying ahead of the curve.

And the momentum doesn’t stop there—2022 is officially here and we’re excited to see what the year brings us! That’s why we’ve asked our own cloud, DevOps and data experts at Contino for their predictions on the top digital transformation trends of 2022.

In this blog, we’re going to take a look at the results of our survey to offer the 22 hottest topics in the world of digital transformation, cloud adoption, data, security, DevOps and cloud native development this year.

Enterprise Transformation

1. Focusing on Developer and Employee Experience to Win the Talent Wars

In the race for digital transformation, organisations need the talent and skills to be able to deliver upon their ambitious transformation goals.

In an environment where the “Great Attrition” is keeping every chief people and culture officer awake, organisations will have to start focusing on their WHY and providing an employee and developer experience that is second to none. This in turn will be key for organisations to have a motivated and skilled workforce to build a world class customer experience.

2. Democratising Innovation by Federating Digital Platforms and Teams

Over the years, as transformation initiatives focused on cloud, data and DevOps have kicked off, organisations have largely looked to centralise these capabilities via functions such as CoE (centres of excellence). Organisations now need to federate this capability in order to accelerate and scale their transformation initiatives, and to get closer to their value streams and customer product teams.

Achieving this is no mean feat and businesses will need to enable a wide set of teams internally to innovate. This will involve adopting team topologies that help to structure teams into platform teams, stream-aligned teams or enablement teams. To successfully scale digital innovation, these teams will need technical architectures that reflect this organisational design of federation including data-mesh, micro-front ends and cloud landing zones.

3. The Thirst for Enterprise Agility

As organisations look to deliver upon the customer, employee and developer experiences and start to democratise innovation, the need for adopting DevOps and Agile principles at an organisational level becomes fundamental.

In a thirst for being customer-centric and having a direct line of sight of the customer, we still start to see more and more organisations consider their organisational structures and team topologies to pivot towards mature value streams / product teams. This change would look to leverage the best of Agile, DevOps and product-focused thinking to help organisations focus their transformation efforts beyond technology domains.

4. Everyone Will Need a Digital Fintech Core

In order to deliver digital services and products in line with the business’ customer and product experience strategy, every organisation regardless of sector will need a digital fintech core that underpins their business. This core should be capable of:

• Managing customer data
• Handling the authentication and authorisation for customers
• Seamless omni-channel customer operations
• Taking a cloud-native, data and APIs first approach to building products and services
• Providing developers internal to the organisation and part of the external partner ecosystem (incl. customers) with a developer experience and portal that helps them extend on existing products, data sets and services.

Those organisations who have such a core will be able to:

• Deliver seamless and connected digital journeys
• Provide secure multi-channel services to customers
• Allow existing incumbents to partner with digital native startups to accelerate their go-to-market and deliver compelling products for their customers.
• Pave the way for open innovation across the ecosystem by allowing partners and customers to consume their APIs so they can build their own integrations and platforms.

Two examples here are that of Standard Chartered partnering with Starling Bank to launch their new Digital Banking proposition and EDF Energy partnering with Octopus Energy Group’s Kraken Technologies to build state of the art customer operations platform.

Cloud Adoption

5. Cloud as the Digital Fabric to Innovation

We are no longer expecting organisations to debate the role of cloud within their strategy. If anything, the discussion will be focused on how cloud can underpin the digital fabric that every organisation will need to be able to offer their products-services-experiences digitally, at scale and in a secure and reliable manner.

6. Multi-Cloud Adoption Will Grow

The adoption of multiple cloud providers is already prevalent within the industry. However, a key differentiator in successful multi-cloud adoption will be how organisations manage and consume these multiple cloud providers.

Successful organisations will have a multi-cloud control plane that democratises the consumption of multiple cloud providers, allowing them to govern and manage its usage whilst permitting internal development and product teams to use the right platform for the job.

Whilst there continues to be a debate in the industry about which strategy is the right one—single, multi or poly cloud—at Contino we acknowledge that organisations will consume multiple cloud providers. Therefore focusing an organisation’s strategy on enabling internal development and product teams to be able to consume these with the right guardrails, architectural patterns and providing an enviable developer experience is where the effort should be spent.

Note:

• Multi-cloud: In a multi-cloud approach, you are running the same workloads on multiple vendors, allowing you to remove the points of failure related to specific vendors.
• Poly-cloud: In the poly-cloud approach you run specific parts of your workloads on the best provider for that specific function.

7. Greater Emphasis on Mature Cloud Operating Models

The criticality of a mature cloud operating model to an organisation’s cloud adoption has been highlighted by various leading schools of thought for quite some time now.

However, as the consumption of cloud has skyrocketed during the pandemic, those organisations without a mature cloud operating model have seen a stalled adoption of cloud with little business value; impacting their ability to innovate, accelerate their time-to-market and stay relevant in the current industry landscape.

As organisations increasingly start to provide products and services in this digital-first era, having a cloud operating model that is interlinked with the organisation’s agile ways of working and product development methodologies, and focuses on democratising the adoption of cloud within the organisation will be key.

8. Cloud as a Sustainability Accelerator

Over the last 18 months we’ve seen a significant increase in the consumption of cloud services. Whilst this has helped accelerate cloud adoption across industries, the world faces an extraordinary challenge: stabilising our climate by accelerating our net-zero initiatives.

By far the most important trend over the last year has been the collective focus and importance that cloud service providers, consumers and partners have placed on leveraging cloud as an accelerator to build a more sustainable digital fabric for the future.

This was demonstrated by the big three (Amazon, Microsoft and Google) launching key services and initiatives that help organisations learn, measure, and improve their workloads using environmental best practices for cloud computing; all whilst also improving the underlying carbon footprint of their own platforms.

Some key releases here include:

• AWS: launching their Shared Sustainability Model and Sustainability Well-Architected pillar and customer carbon footprint tool.
• Azure: launching their Cloud for Sustainability and making further improvements to their Emissions Impact Dashboard
• Google Cloud: providing users with visibility of regions with the lowest carbon impact inside its Cloud Console.

We are just getting started here and collectively we all have the ability to make a significant contribution to our climate change and net-zero initiatives. If you’re looking for some inspiration, check out:

• Our roundtable with AWS and EDF Energy on the journey to net zero in the energy sector.
• Our blogs on “Ways to Leverage the Cloud to Reduce Your Ecological Cost”
• Some real-life examples on “How to Build Data-Driven Solutions for Sustainable Development Goals“.

9. FinOps as a Priority

Building on the sustainability theme, organisations will need to either establish and/or scale FinOps as a key discipline to help manage, control and demonstrate the value of cloud spend.

With cloud adoption showing no signs of slowing down, organisations will need to establish mature processes, visibility and automation to ensure their cloud spend isn’t spiralling out of control and have a financial trace in place that helps them map cloud spend back to business value. In 2021 FinOps was a nice to have; in 2022 it will be a key priority for organisations.

Security

10. The Continued Rise of Zero Trust and SASE

With the unprecedented shift to remote work, the increased adoption of cloud and new digital products and services and the relentless threat of pace of supply-chain attacks and data breaches…organisations need to have a framework and model that allows them to continue to innovate whilst staying resilient and secure.

The move towards Zero Trust and SASE based principles drives organisations to treat identity as the new perimeter and protect their data by treating all user traffic as untrusted. Failure to adopt zero trust will result in a subpar employee experience (leading to attrition) and an inability to innovate at pace in a cloud-first digital era.

11. Digital Identity as a Means to Accelerate Consumption of Digital Services

With business looking to increasingly provide their products and services digitally, organisations will have to provide a mature approach to customer identity, particularly in sectors providing critical services to customer and citizens (eg. financial services, public sector, healthcare).

Customer identity is the main front door for any consumer to securely authenticate, authorise and interact with their providers and the products/services they have procured. A lack of a mature approach to customer identity can lead to: distrust in the brand, a disjointed and fragmented customer experience and customers being unable to access their services.

This challenge is further compounded in countries like the UK where a national approach to citizen identity is ever evolving, with several previous initiatives having failed and an upcoming initiative due to launch in April 2022.

Given that the private sector cannot solely rely on public sector initiatives in this space, organisations will have to invest and mature their approach to Customer Identity and Access Management (CIAM) in order to gain the trust and confidence of their customer in an ever increasing digital-first environment.

Furthermore, in order for organisations to move towards a zero trust model internally, Digital Identity for Employees (IAM) will be another key focus area to provide a secure and resilient employee experience.

12. Cloud Service Providers Will Enable More Data Residency and Compliance Innovation

With regulatory and geo-political tensions having an impact on an organisation’s ability to consume cloud at scale for critical workloads in certain regions, all the cloud providers are looking at how to best comply with data residence and compliance requirements across the globe.

For example, with the recent advent of European directives and working bodies such as Schrems II, ECUC (European Cloud User Coalition) and Gaia X, Amazon, Microsoft and Google are all taking steps to limit data transfers across regions (incl. support related metrics) to avoid any further regulatory scrutiny.

Some of the steps being taken include:

• Being able to choose the storage locations for personal data, diagnostic data and service-generated data
• Providing further customer managed encryption options.
• Launching confidential compute services allowing organisations to encrypt data in the cloud while it’s being processed
• Reducing the need for any data transfers outside the chosen regions even for diagnostics and troubleshooting purposes

Whilst these requirements from the European Commission are designed to safeguard the privacy rights of citizens, if not managed pragmatically they run the risk of slowing down cloud adoption (and thereby digital innovation) within the region.

That being said, some of the initial proposals from the big 3 cloud service providers seem to be headed in the right direction and should look to set the standard for the secure adoption of cloud services, particularly when it comes to data protection. Check out our blog post on how to use cloud technologies to stay compliant post Schrems II if you’d like to know more.

13. Focusing on Securing Your Digital Supply Chain

In an increasingly digital world, not prioritising one’s digital supply chain can be the difference between doing business and going bust.

Just as we’ve seen with the recent Log4j vulnerability, supply chain security is critical for organisations and nations to be able to scale the adoption of digital services; so much so that the UK Government has unveiled a series of measures to potentially mandate IT service providers to follow new cyber security rules (such as the NCSC’s Cyber Assessment Framework as part of new proposals to help British businesses manage the growing cyber threat.

At its core, a secure software supply chain encompasses anything that goes into building and delivering an application to the end customer. It is built on the foundations of secure software development practices (e.g. following OWASP top 10, SAST, etc.).

Any implementation of secure supply chain best practices needs to establish provenance about all aspects of the build process, provide transparency for all steps and create mechanisms that ensure trustworthy delivery. Check out more on how Contino approaches building a secure supply chain here.

Cloud Native Development

14. Dojos and Game Days to Upskill and Engage Your Team

In an era of the “Great Attrition” where the talent wars for digital skills are fierce, organisations need to find ways to keep their existing engineering talent engaged whilst also building their own unicorns.

Whilst Dojos and Game Days aren’t new approaches, their importance in developing and growing in-house talent could not be overstated and should continue to play a key role in your engineering strategy and building internal tech intensity.

15. Developer Experience Will Be Key to Attracting, Nurturing and Retaining Talent

Building on the previous trends on Dojos and talent retention, successful organisations will be able to provide an enviable developer experience (DX) for their engineering teams; allowing them to be more productive, creative and resulting in better team health. An awesome DX focuses on the developer journey to optimise software delivery, and tackle productivity.

The importance of DX to develop and nurture talent can not be understated; the subject has been extensively researched by the State of DevOps Report and Microsoft’s Developer Velocity Lab in their recent reports.

So next time you're thinking about how to retain and hire talent, start by showing them how good your pipelines and documentation are. Core engineering disciplines such as good documentation and healthy pipelines are a manifestation of how your organisation manages the development of digital services from ideation to reality. Check out more here if you’re keen to build an awesome developer experience.

16. Observability Will Be Front and Centre

A fundamental component to an organisation’s developer experience in an ever increasing and complex landscape of software systems and platforms is ensuring that their systems are operable. This is achieved by building observability into the core of every system and platform being developed.

An observable system is one where you can infer its internal state purely from the system's outputs—and one that is operable at the speed demanded by modern digital transformations.

Observability is the logical next step from traditional monitoring practices, where the platform or product being monitored is a “black box” - and the only way to understand what it is doing inside is to observe the outputs. Observability will be fundamental for organisations to understand their operational resilience, performance and prioritise future improvement for their digital product roadmap.

17. Modern Team Topologies and Team APIs to Scale Digital Services

With organisations now getting into their stride with their digital and cloud adoption programmes having delivered their initial services in the hands of their customers and building more and more complex digital services, most will have to reconsider their team topologies and build specialist platforms teams for certain capabilities.

Historically, both platforms and product teams would have been combined in order to accelerate delivery. Now, with a focus on enabling and accelerating a wider set of engineering teams and improving developer productivity, organisations will select a core set of platforms (cloud platforms, data platforms, digital identity) and provide these as a service for product teams to consume.

18. Artificial Intelligence to Help Accelerate Engineering and Development Efforts

We’ve seen an uptick in investment in AI powered development tools and frameworks to help engineering accelerate their development cycles and lower the barriers to entry in the software development domain.

With releases of products such as Github Co-Pilot, AWS’s investments in creating AutoML models for code reviews, vulnerability detection and optimisation…we see this as a great application of AI to help reduce the noise and complexity for engineering teams. Given the challenges mentioned above around talent attraction and retention, these services can also help provide that unique developer experience within your organisation and help engineering teams focus on the more challenging tasks at hand. Let’s be honest, we could all do with Clippy for code in our lives!

Data, AI and ML

19. AutoML Will Unlock Benefits of Data Science and Machine Learning

We have seen some impressive investments and improvements by the big three cloud service providers when it comes to AutoML, providing a range of services from: pre-trained models, the ability to create custom models with easy to use graphical interfaces and industry specific pre-trained models and frameworks all helping accelerate the adoption of machine learning (ML).

With announcements of services such as Vertex AI by Google Cloud and with large enterprises starting to take baby steps in cleaning, organising and cataloging their data, AutoML will be a huge catalyst and accelerator for organisations to start with their ML journey.

This means your data scientists won’t need to be ML engineers, requiring up-to 80% fewer lines of code to train a model versus bespoke platforms, enabling data scientists and ML engineers across all levels of expertise the ability to implement ML Operations (MLOps) to efficiently build and manage ML projects throughout the entire development lifecycle. Approaches such as these are critical when considering nearly two in five companies cite a lack of technical expertise as a major roadblock.

20. Sustainability Is as Much About Data as It Is About Economics

As mentioned above, stabilising our climate by accelerating our net-zero initiatives is going to be a key priority for every single one of us. However, this transition towards net-zero is as much a data challenge as it is that of shifting economics. Organisations need to be able to baseline their current carbon footprint, set their sustainability objectives and track their transition to net zero in near-real time in order to make better decisions as a business and build a sustainable supply chain that is viable for the long term.

We believe this transition will be pursued through one of the four drivers of: brand image, cost savings, regulatory compliance and competitive advantage through sustainable innovation. All of which will require organisations to collate and leverage data that informs their next steps. This could include data from cloud service providers to ensure optimal data centre energy usage, evaluate the carbon footprint of electricity usage, use geospatial data to optimise their logistics and many others.

In fact, Contino ran a hackathon earlier this year with Google Cloud on how to use data for good and apply ML to Sustainability goals.

21. Using Data to Deliver a Differentiated Customer Experience

If 2021 and the pandemic has taught us one thing, it’s that customer expectations are higher than ever and with ever increasing competitive threat from disruptors across every industry, organisations need to be able to offer a more personalised and differentiated customer experience across the products and services they offer. At the heart of this personalisation lies the ability to capture, manage and harness customer data across the various systems (CRM, identity, systems of record, etc.).

In 2022 organisations across every sector will be looking to build a customer experience that is reflective of their brand and to provide customers with personalised, seamless and connected digital journeys enabled by data, cloud and customer-centric design principles.

However, with various data governance, management and cataloguing services now being introduced by the big three cloud service providers, organisations now have a platform to build and capture this customer data to underpin their next generation of digital products, services and experiences. Providers like Microsoft are going a step further and introducing common data models across all their products that allow for industry specific use cases to be built, further simplifying the adoption. Moving towards a single source of trust to enable contextualised customer experiences will be critical and the role of Customer Data Platforms and Customer 360 will be key.

22. Democratising Valuable Data via Data Mesh

With data being a key product and asset for every digital initiative an organisation would be embarking upon, there is a need to move the data ownership closer to those teams producing it allowing for greater autonomy and flexibility, greater experimentation and lessening the burden on a central data team.

This can be supported by architectural paradigms such as data mesh and data hub by moving away from central data management and ownership concepts, allowing for federated data management, with centralised data cataloging and underpinned by modern team topologies (akin to those mentioned above). This in turn helps democratise the consumption of valuable data within an organisation and helps overcome the traditional challenges between data consumers and providers often hamstrung by the lack of data standardisation.

There are of course many more trends that we could cover in the data space, but these are our top highlights. For more inspiration on all things data, check out our Data Maturity in the Public Cloud report and our whitepaper on 7 Data, AI and ML Use Cases That Differentiate Your Business.

Conclusion

Today, businesses operate in a crowded marketplace where customers are confronted with seemingly endless choices and have high expectations for personalised experiences. To remain competitive, organisations need to transform and move towards providing a world-class digital experience powered by data that will better serve their customers.

On top of this, organisations need to operate as a responsible enterprise and build sustainable operations that have a positive social impact. This sense of purpose along with an enviable developer and employee experience will be key to attracting the talent required to embark upon this transformation journey—a transformation that has to be focused on taking a customer-centric approach to developing products and services and on creating the right culture for its people.

So next time you’re wondering where to start, focus on whether you need to improve your customer experience, employee experience, developer experience or operational experience. Work backwards from there and the pieces of the puzzle will start falling into place. And if they don’t, you can always get in touch to see how Contino can help transform your business!