Why Managed SD-WAN is an Enabler for Digital Transformation

  • A white paper exploring the importance of SD-WAN for digital transformation.
  • Digital Transformation is Driving Network Transformation
  • New Business Models

Digital Transformation is perhaps the most widely used term in today’s business vocabulary and with good reason. It has the power to make or break organizations. Organizations of all sizes and in every sector have embarked upon some form of digital transformation (DX) initiative.

IT leaders today have a good understanding of the role that technologies like cloud, big data, social and mobile play in digital transformation.

DX is now widely understood from business outcomes and from the high-level technology perspective. However, what most people fail to recognize is the importance of the underlying connectivity layer. A well-designed enterprise WAN can support successful DX initiatives.  However, a poor WAN architecture for cloud, big data and mobile has the potential to derail the process.

IT leaders today have a good understanding of the role that technologies like cloud, big data, social and mobile play in digital transformation. These higher-level technology stacks get most of the attention, while foundational areas like enterprise WAN connectivity are often ignored.

In the pre-digital transformation era, the CIO was the sole decision-maker in all technology-related issues. This traditional decision-making structure has unravelled with the arrival of new stakeholders, in particular, the Chief Marketing Officer and the Chief Digital Officer.  As marketing and sales departments become more digitally savvy, CMO’s are signing up for marketing clouds, sales clouds and other SaaS applications without the involvement of the CIO.

The importance of digital transformation has prompted many organisations to create new positions like the Chief Digital Officer (CDO). CDOs work closely with departments such as supply chain, logistics, manufacturing and others to implement focussed digital initiatives. Often, these initiatives are billed as business projects; therefore, they don’t fall under the broader corporate IT portfolio.

Without the CIO’s participation, the impact of these shadow IT projects are not factored into the WAN design, leading to poor application performance and customer satisfaction.

This white paper intends to explore the most popular and exciting applications of digital transformation in various industry sectors and assess the impact of these changes on the enterprise WAN. We explore the drawbacks of traditional WAN architectures and understand how a managed SD-WAN service can overcome some of these challenges.

Finally, the paper hopes to highlight the perils of embarking on a digital transformation initiative without considering its implications on the enterprise WAN infrastructure.

Digital Transformation is Driving Network Transformation

A look at what digital transformation means for different sectors of the economy. Understand the key areas of digital transformation and it’s implications for the enterprise WAN.

IRRESPECTIVE OF THE SECTOR, THE KEY AREAS OF DIGITAL TRANSFORMATION ARE CUSTOMER CENTRICITY, OPERATIONS AND NEW BUSINESS MODELS. EACH OF THESE AREAS HAS A HUGE IMPACT ON THE VOLUME, VARIETY AND VELOCITY OF TRAFFIC ON THE ENTERPRISE WAN.

The exact nature of digital transformation varies by sector, but, irrespective, the overall business outcome can be summed up under three areas, namely Customer Experience, Operations and Business Models.

Customer Experience

Customer experience has always been central to businesses; to gain a better understanding of customers, firms relied primarily on market research, and customer surveys conducted offline with a small representative sample space. However, now, with the almost universal adoption of social media and other digital channels, organizations have the opportunity to reach customers directly, thus enabling them to understand customers better and ultimately deliver better products and services.

Digital channels also provide more direct and real-time feedback that traditional market research never did. To fully exploit this opportunity, firms need a robust IT infrastructure built on a solid enterprise WAN foundation to deal with the terabytes of data collected from these interactions.

Operations

Customers in this day and age are spoilt for choice. Social media and a plethora of digital channels certainly give organizations a solid understanding of customer requirements. But to act on those requirements and deliver the products and services requires operational efficiency and agilty.

Operational agility is achieved in several ways; the move from on-premise data centers to data centers in the cloud and adoption of Software-as-a Service are some of them. Others include the use of big data analytics to generate business insights or the deployment of IoT in areas such as logistics and supply chain management.

Adoption of these new technologies has a direct impact on the enterprise WAN. The WAN must now be capable of carrying vast amounts of data while having the ability to distinguish business-critical application data and real-time data from non-critical ones.

New Business Models

The industry landscape is replete with examples of companies that once dominated their sectors, only to be beaten by nimble startups with innovative business models.

The industry landscape is replete with examples of companies that once dominated their sectors, only to be beaten by nimble startups with innovative business models. Uber, a taxi company that owns no cars, and Airbnb, that owns no hotels, come to mind. Apple’s iTunes and Netflix are both examples of companies that reinvented the business model and went on to dominate their respective sectors.

However, look closer, and it is not difficult to spot the role of technology in these achievements. Netflix would never have achieved its success without cloudbased systems. The much admired and often copied Netflix recommendation system relies on a cloud architecture for collecting, saving and analyzing massive amounts of customer data. None of this would be possible without a robust enterprise WAN.

Digital transformation is resulting in a huge increase in the data that transverses the enterprise WAN. This data increase comes from two sources, information technology (IT) systems and operational technology (OT) systems. IT is used for data-centric computing while OT is used to monitor events, processes and devices and make adjustments in enterprise and industrial operations.

Traditional MPLS networks were designed to handle IT traffic primarily from the user to the in-house datacenter. Owing to the rapid adoption of Software-as-a-Service, most WAN traffic is from the network edge to the cloud provider. Traditional Enterprise WAN architectures were never designed to handle this volume, variety and velocity of this traffic.

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