[New Wave] Digital Transformation as the New Normal

Recently, the market environment has been rapidly changing with shifts to contactless business models and an increase in remote work. In the New Normal era, where what was once considered abnormal has become normal, Digital Transformations are a crucial topic. Digital transformation refers to the phenomenon of discovering new types of business models by integrating IT across various industries such as manufacturing, finance, and agriculture; some even call it the Fourth Industrial Revolution. This trend is accelerating further.

Novelist William Gibson said, "The future is already here ? it's just not very evenly distributed." Leading global companies began their digital transformations over a decade ago. In 2014, Andy Jassy, CEO of Amazon Web Services (AWS), a leader in cloud computing, declared at an annual technology conference that "the cloud is the new normal." The following year, at the same event, Rob Alexander, Chief Information Officer (CIO) of the major U.S. bank Capital One, announced, "We are migrating key products to the cloud and plan to reduce our eight data centers in 2014 to three by 2018."

Jim Fowler, CIO of the global manufacturer GE, stated, "Over the next three years, we will migrate about 9,000 workloads to AWS, reduce our 34 data centers to four, and move 60% of our operations to the cloud." He emphasized that this is not an experiment or a test but an unavoidable reality. Netflix, which brought disruptive change to the global broadcasting industry, transitioned from the traditional DVD mail delivery business to an online video streaming service model. After experiencing a major outage in its own data centers, Netflix adopted the cloud in 2009 and has provided all services exclusively on the cloud since 2015. These companies are pioneers of digital transformation.

Digital transformation became the New Normal due to unforeseen reasons. Leading companies chose the cloud as the fastest way to digitally transform because it allows agile experimentation with new business models without impacting existing operations. In 2017, McDonald's simultaneously launched 'McDelivery,' a mobile app-based delivery service, across 360,000 locations worldwide. Despite the challenging task of offering 6,000 menu items in 120 countries to 66 million customers and integrating with multinational delivery partners, the service was successfully launched on the cloud in just four months. As a result, an additional 500,000 orders per hour were generated, and $1 billion in annual revenue from delivery was created in 23 markets.

How can companies successfully achieve digital transformation using the cloud? CEO Jassy noted that companies successful in cloud migration share certain patterns. He emphasized that "executives must have a belief in change and lead with leadership, setting aggressive top-down goals and providing employees with training on new technologies." Traditionally, a top-down approach might have been met with resistance, but training on new technologies like the cloud and leadership’s commitment to change actually motivated employees. Large Korean companies such as LG Electronics, which are undergoing cloud-based digital transformations, are adopting similar best practices.

Voltaire, an 18th-century French philosopher, said, "Perfect is the enemy of good." This is a valuable maxim for business leaders who must now inevitably consider digital transformation. The days of spending time on reviews and tests are over; like the pioneers, it is time to take action.

Yoon Seok-chan, AWS Senior Tech Evangelist