Is serverless computing the holy grail for Chief Digital Officers?

The role of the Chief Digital Officer (CDO) has changed dramatically. No longer is it enough to pilot initiatives based on basic digital capabilities. Organizations have to ask: How do we want to deliver the promise of our services in the digital world? What else should we be doing beyond creating new digital experiences? Digital transformation touches every part of the business involving comprehensive changes to the way the business works and the products and services it delivers.

Customer expectations are changing rapidly and growth has become unpredictable with competition coming from unexpected places. As a result, shareholder expectations are harder and harder to meet. Today’s business goals, particularly in people-centric organizations, are threefold:

  • To grow employee impact by transforming productivity and experience.
  • To help business unit leaders unlock value and drive better outcomes to the bottom line.
  • To transform the organization and its services and create the best possible customer experience.

People productivity is the core of enterprise survival. As such, the workplace of the future must be based on the needs of people, not the limits of technology. Advances in technologies like machine learning, and the ever dropping prices on compute and storage capacity, mean we can now provide software with more natural interfaces including conversational natural language interfaces. Just as with consumer grade applications and offerings, there is an expectation that enterprise software will exhibit similar capabilities. The possibilities for delivering new enterprise software experiences are exciting. For the first time, we can create true self-driving software.

To be truly successful, companies need to embrace a new mindset when it comes to enterprise software. As enterprises move to the cloud, they need to think about their systems architecture for the future, not solely about the applications stack. ERP will still provide the core source of intelligence for everything that sits outside. Organizations should be thinking about the underlying platform architecture and how that supports them in creating new self-driving capabilities — extending the skills of natural language driven assistants, orchestrating business workflows and deploying their own differentiated micro-services — without customizing the ERP itself. Serverless computing provides an efficient way to do this.

Serverless computing is essentially employing a service-oriented architecture consisting of connected micro services rather than full, individual applications. It allows enterprises to use single-purpose modular components to provide singular services such as identity management, machine learning, data retrieval and processing, and analytics. This enables the simultaneous use of various services without limits on computing resources or physical capacities.

Serverless computing capabilities provide three key benefits that are transforming the way companies do business.

1. Optimize operations and boost people productivity

Fierce competition between cloud vendors has not only resulted in lower prices for both cloud storage and computing power, it has also lead to ever-more-advanced systems and a whole new range of solutions.

Serverless computing technology can enhance nearly every aspect of business activities with specific advantages that include:

  • Limitless scalability
  • Peak application performance
  • Reliable services

As cloud computing establishes itself as the new standard, businesses are becoming less-inclined to maintain an in-house data infrastructure. The knowledge and upkeep necessary to manage physical servers and other data-related hardware represents a sizeable expense, especially for large enterprises that gather and process considerable amounts of data on a daily basis. In addition, services are usually scattered across multiple applications, making it difficult to patch together comprehensive solutions — and even more problematic to untangle when it’s time for repair or replacement.

Serverless computing is designed to solve both of these problems, providing the capacity to easily combine individual services into an effective data system. Components work together seamlessly, but each one can be scaled, updated or swapped out quickly and easily.

Organizations can create tailored application solutions to fit their specific needs, ensuring more effective use of resources. Plus, the time from idea to deployment of digital innovation is reduced, maximizing the speed of innovation.

2. Adapt rapidly at minimal cost

Serverless computing helps organizations dramatically reduce the cost of application deployment. In many cases, companies have to leave APIs, applications and services running 24/7, as most legacy systems lack the agility to enable and disable these resources on demand. Serverless infrastructure, on the other hand, executes functions only when they’re needed, drastically reducing idle uptime without a resulting drop in response time. And since services are only carried out on an as-needed basis, this elastic capability also means that organizations don’t have to pay for active programs that aren’t actually in use.

3. Improve customer interactions

Serverless computing also delivers a new way to enrich customer-side applications and services as well. Take, for instance, transactions between a retailer and its customers that utilize text messages to provide order status updates. The system will likely be swamped during the holiday season, straining conventional, fixed computing resources. This often leads to frustrating errors and communication delays that negatively affect customer interactions. Conversely, fewer orders during the rest of the year may mean that these same resources go largely unused, wasting money and IT manpower. With serverless computing, these functions can be scaled up to meet increased demand during peak periods and reduced when demand decreases, giving customers the same experience year-round.

These advantages apply to data-heavy businesses in the service industry as well. Insurers, for example, can use this technology to conduct more granular analysis of their customer’s driving history and other related data to better assess risks and offer more customized coverage. Serverless computing also allows insurance companies to easily integrate functions that enable consistent omni-channel experiences. Customers can explore insurance products, receive personalized recommendations, purchase policies and make adjustments to their coverage within an automated phone system, online or from a mobile device without losing functionality between experiences.

Create the best possible customer experience

Serverless computing is still a fairly new concept, and it’s ripe for evolution in the coming years. There’s little doubt that this technology is going to be adopted by an increasing number of businesses, but it’s likely that the near future will involve the rise of hybrid systems as this transition takes place. To this effect, organizations will look toward a combination of legacy data infrastructures enhanced by Containers-as-a-Service, Platform-as-a-Service and Function as a Service (FaaS) functions.

In addition, automation will become a key component of serverless systems, cutting down on the deployment errors that currently plague FaaS applications such as Amazon Web Service’s Lambda function. There may also be a move toward vendor-agnostic platforms that allow open-source-like collaboration on FaaS functions without the restrictions posed by service lock-ins.

New technology approaches like this will significantly impact what Chief Digital Officers can accomplish, creating new digital experiences but also changing how businesses deliver services to their customers. Combined with natural software user experiences, and self-driving capabilities, this is a game changer.

About the author

Sales Pitch

Ton Dobbe is a former B2B software product marketer who's on a mission to save mission-driven SaaS CEOs from the stress of 'not enough' traction. He's the author of The Remarkable Effect, the host of the Tech-Entrepreneur on a Mission podcast, and writes a daily newsletter on the secrets to mastering predictable traction.