Downturns drive digital business transformation opportunities

In the face of a global economic slowdown, the one thing for certain is that necessity is about to become the mother of invention yet again. While there is no shortage of organizations that to varying degrees have already embraced digital business transformation, the need to accelerate those initiatives will quickly become a matter of survival.

In fact, a forthcoming third wave of digital transformation bodes well for managed service providers (MSPs) that have invested in the skills required to enable organizations to build and deploy the applications that will ultimately drive these initiatives forward. The first two waves of digital transformation occurred prior to the COVID-19 pandemic and immediately following when organizations adopted a raft of cloud-based applications to enable employees working from home to continue to engage customers.

Three classes of applications are driving business transformation

Those applications that are now being relied on to drive digital transformation initiatives tend to span three broad classes of platforms. The first is traditional backend systems such as enterprise resource planning (ERP), which enables organizations to automate what are usually undifferentiated services. For example, a modern instance of general ledger application will significantly reduce the cost of processing invoices.

The second broad class of applications are delivered via a wide range of software-as-a-service (SaaS) deployments. The sheer volume of these applications has given birth to SaaS operations management, also known as SaaSOps, as a distinct IT discipline designed to help organizations struggling to cope with all the SaaS application now being employed.

Finally, the third class are applications are typically ones an organization builds themselves. These custom applications range from low-code/no code applications that might extend an existing application to ones that have been built using legacy or emerging cloud-native application development tools. A recent survey of 606 IT professionals at organizations with more than 3,000 employees conducted by SUSE suggests the shift to the latter class of applications is accelerating. Cloud native technologies are already highly favored among enterprise companies, with more than three quarters (77 percent) using them across all or some of their applications.

MSPs must focus on the shortest path to sustainable business outcomes

The degree to which an organization depends on any of these approaches to digitally transform will naturally vary. Each MSP will need to decide for themselves what level of skills they need to attain and maintain to take advantage of those opportunities based on the preference of their customer base. It’s unlikely a small-to-medium business is likely to have the expertise required to master, for example, building and deploying a cloud-native application on Kubernetes clusters.

The more important thing for MSPs to focus on instead is the shortest path to a sustainable business outcome. These days, the most common vehicle for achieving that goal is often a low-code application designed from the ground up to be extensible that is deployed on a SaaS platform. The biggest margin, however, is likely to be generated by a custom application that requires much more low-level programming skills that might take months to build and deploy.

Regardless of the tools and platforms employed, the most important thing for MSPs to do is pick the spots where they can help customers accelerate digital business transformation initiatives as quickly as possible because if you listen closely enough, you can already hear the panic in their voices.

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