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Touchless supply chain planning – deployment

Capgemini
Capgemini
2022-02-03

Frictionless planning models leverage a target operating model that takes advantage of the organization’s global resources and capabilities, connecting them to achieve a truly touchless process.

In the first two articles in this short series, I’ve looked at the challenges of present-day supply chain planning, at the benefits of a frictionless model, and at how it differs from current approaches. In this, the third and final article, we’re going to explore deploying frictionless planning across the extended enterprise.

Why focus on deployment? Because in this case, it’s likely to be particularly demanding: in a major enterprise, the links in a supply chain extend over many functional and geographical areas, and there are many stakeholders.

Why focus on deployment? Because in this case, it’s likely to be particularly demanding: in a major enterprise, the links in a supply chain extend over many functional and geographical areas, and there are many stakeholders.

What’s needed is a target operating model that can take advantage of the organization’s worldwide resources and capabilities, connecting them to achieve a truly frictionless process. It’s a model that has three building blocks.

#1: Plan

For an extended global enterprise, supply chain plans need to be dynamic, in order to respond to changing conditions while remaining cost-effective. A consolidated planning hub, built on an optimized and dynamic technology platform, can develop these plans from end to end, globally and touchlessly. The hub can ensure:

  • That plans are generated to a system that has regional or global scale
  • That the parameters in the system to generate those plans are optimal and fine-tuned
  • That the correct system technology is used and up to date.

#2: Connect

Also a key part of the model is a team within the market that is focused on business partnering, collaboration with stakeholders and plan adoption. Its members harness local and global knowledge and skills in order to create demand, to put plans into action, and to ensure there is flexibility in the response.

Working with vendors, partners and the wider supply chain and commercial organization, and providing feedback to the consolidated planning hub, they:

  • Provide inputs and feedback to the planning hub to improve plan accuracy
  • Ensure the market adopts the plans provided by the planning hub
  • Provide a seamless flow of information between different stakeholders, so they can collaborate to create and fulfil demand.

#3: Sustain

Making a success of supply chain planning isn’t a one-time fix. The third building block is the creation and maintenance of a culture of innovation, to drive continuous improvement. This includes rapid proofs-of-concept to test new ideas, the development of collaborative ideas with industry and academia, a strong governance structure to manage innovations, and establishing a principle of innovation-as-a-service.

Capgemini’s own Applied Innovation Exchange provides a robust framework in which the momentum behind innovation of this kind can be maintained. It comprises elements that enable organizations to:

  • Discover – discover sector pivots, explore new business models, immerse in emerging technology, and define action plans to drive change
  • Devise – rapidly build, test, and learn – experiment with emerging concepts to test value for the business
  • Deploy – scale innovation to deliver enterprise-grade business outcomes across the organization’s entire portfolio
  • Sustain – create structures for innovation (such as funding model and governance) or deliver innovation as a service.

Preparing the ground

By definition, target operating models are a destination – which means there is also a starting point. No global enterprise commits to a frictionless supply chain model from a clean sheet: there are legacy processes and technology platforms to consider and address.

Capgemini offers architectures and approaches that help with this transition. For example, our Digital Global Enterprise Model (D-GEM) platform is a ready-to-deploy database of processes and operational best practices to fast-track the transformation journey, and our ESOAR methodology (eliminate, standardize, optimize, automate, robotize) streamlines current operations, redirecting resources from repetitive tasks towards higher-value business activities and establishing new levels of best practice.

Getting started

We saw in the previous article how all this delivers tangible results to major real-world enterprises. Here’s another example: an industrial company active in aerospace and home/building technologies had de-centralized planning processes, some of them automated, some manual. Multiple systems were being used for different aspects of planning.

By streamlining operations and bringing them together in a single, enterprise-wide process, the organization achieved on-time-to-customer request levels of over 90%; past-due customer orders of under 2%; a reduction in inventory levels of 40%; and improvements in asset cross utilization of 30%.

If the frictionless approach to supply chain planning that I’ve been discussing in these articles is of interest to you, please get in touch It can make a competitive difference to major businesses – a difference that isn’t just real and immediate, but one that will also scale and flex to meet new challenges, including those we can’t yet even imagine – because that, after all, is the way it’s always been in the supply chain.

To learn more about how Capgemini’s Touchless Supply Chain Planning can transform your organization to drive enhanced customer experience and reduced cost, contact: sandip.sharma@capgemini.com and shaun.cheyne@capgemini.com

Sandip Sharma is a Senior Director and leads Capgemini’s Business Services end-to-end Touchless Supply Chain Planning capability. He also works with clients to create compelling transformation solutions and services to design, run, and evolve their supply chain operations.

Shaun Cheyne is a Director at Capgemini Invent and leads the UK’s Consumer Products Supply Chain capability. He works with clients to enhance business value through supply chain transformation from strategy to implementation.

Touchless supply chain planning – what makes it different?

Capgemini
Capgemini
2022-02-03

Frictionless planning models leverage touchless, continuous, and AI-based processing, making it possible to work in a radically different way.

In the first article in this short series, I outlined the challenges of present-day supply chain planning, and I briefly described how a frictionless approach can become a competitive differentiator, both in terms of streamlined internal operations and improved customer service.

This time, we’re going to dive a little deeper into how touchless supply chain planning differs from current approaches.

Traditional vs. frictionless

Frictionless planning models make it possible to work in a radically different way. Let’s make some comparisons.

Traditionally, processes are siloed: demand here, and supply there; planning here, and execution there. The focus is mostly on the here-and-now, or on the medium term at best – and if things go wrong, the firefighting can be considerable. But with frictionless planning, most of the time-consuming processes are touchless and continuous, allowing the focus to switch to the medium term. Also, because data can be drawn from across the business, insights can deliver long-term value, and assist strategic decision-making.

Traditionally, the approach is reactive and control-based. Metrics focus on efficiency and effectiveness, and two-dimensional segmentations aren’t often revisited. By contrast, frictionless planning models are smarter. Enterprise-wide insights and analytics accelerate decision-making, and intelligent, automated routines enable multi-dimensional segmentations to be spun up to order, and for different purposes. Once again, the focus is on delivering value to the business.

Traditionally, the supply chain workforce is structured in the form of a pyramid, weighted by volume, and with a standard support model and team design. Emphasis is given to industrialized transactional handling in processing hubs – whereas the frictionless approach enables a mix of hub and market planning organization to be established, so as to achieve standardization, to support scalability, to provide market intelligence, and to facilitate collaboration. It’s an AI-augmented workforce, where the planning architecture takes charge of managing the end-to-end workflow, and where people are assigned to tasks not by transaction volumes, but by exception – because most, if not all, the heavy lifting is done touchlessly.

Traditionally, controls are centralized and somewhat rigid. With a frictionless model, controls are automated, risk-based, and dynamic, adapting to circumstances, and any manual interactions and approvals are addressed by AI-augmented team members. The technology supports an intelligent ecosystem that incorporates digital twins, which can be used to develop try-outs and rules from which further automation can be introduced.

To see the effect of all these differences, let’s take demand planning as an example. Traditionally, this is addressed by individual SKUs (stock-keeping units). A frictionless model can consider a larger number of variables from the extended enterprise to influence the forecast, and can also make adjustments to that forecast using real-time point-of-sale signals. What’s more, it does this on a touchless basis, reducing the need for manual intervention to perhaps 30% of cases, so people can focus only on the areas of need.

In short, what emerges is effectively a supply chain control tower, which facilitates agile sales and operations planning (S&OP), provides visibility, identifies alerts, runs scenarios to recommend actions to resolve those alerts, and automates decision-making based on rule-based frameworks.

Real-world success

Like you, I expect, I’ve read plenty of articles that make a case for end-to-end digital transformation – and yes, I realize that in talking about these smart, enterprise-wide models, that’s what I’m doing here too.

But in this instance, at least, it isn’t just business buzz-speak. The benefits of touchless supply chain planning aren’t just possible in theory – they’re already happening.

For example:

  • After transforming its supply chain model, a global CPG manufacturer achieved identified 40–50% of its product portfolio as candidates for touchless demand planning using machine learning (ML) forecasting
  • A European beverage manufacturer achieved 25–30% relative reduction in forecast error, 10–14% inventory reduction, and 20% planners’ time release from demand sensing
  • A global CPG enterprise achieved 72% no touch purchase order (NTPO) compliance from a starting point of 39%, by improving master data, planning system parameter tuning, and loss tree analysis
  • A global industrial leader had too many processes, systems, and long-lead times in responding to customer needs (over 8 months). The business carried too much inventory ($5 billion), which led to much waste through product obsolescence. The company saved 25% in inventory costs within the first year of adopting an integrated solution

In the third and final article in this series, I’ll be looking at deploying touchless planning across the extended enterprise.

To learn more about how Capgemini’s Touchless Supply Chain Planning can transform your organization to drive enhanced customer experience and reduced cost, contact: sandip.sharma@capgemini.com and shaun.cheyne@capgemini.com

Sandip Sharma is a Senior Director and leads Capgemini’s Business Services end-to-end Touchless Supply Chain Planning capability. He also works with clients to create compelling transformation solutions and services to design, run, and evolve their supply chain operations.

Shaun Cheyne is a Director at Capgemini Invent and leads the UK’s Consumer Products Supply Chain capability. He works with clients to enhance business value through supply chain transformation from strategy to implementation.

Five 2022 predictions for energy and utilities

Capgemini
Capgemini
2022-02-02

As we emerge from the pandemic, climate change and energy transition agendas are at a critical juncture. Knee-jerk reactions to short term crises will exacerbate our greatest challenges further. But neither can they be put off for a later time. To hit the right path, galvanize the transition, and manage the climate emergency, the sector must coordinate, innovate, and collaborate across all levels. In 2022, we’re going to see leaders around the world begin to hit their stride.

Alongside Capgemini’s annual analysis from the World Energy Market Observatory, our experts James Forrest, Peter King and Philippe Vié explore five key predictions for the energy and utilities sector in 2022.

High energy prices endanger the climate change agenda

Market uncertainty caused by the COVID-19 pandemic and the global energy crisis is set to carry long into 2022. Energy prices will keep rising as supply constraints, political tensions and post-pandemic economic recovery continue. There is no guarantee that the security of supply – which remained strong throughout the pandemic – will continue in 2022.

Expect governments to take action. As we have seen in the UK and elsewhere in Europe, these are times when governments tend to intervene, both to support suppliers and to ensure does not falter. Political tensions are rising globally at local and international levels, which could hamper efforts to review energy market mechanisms. But the bystander approach is untenable when the challenge is everybody’s problem. If the transition is going to be a hallmark of this decade, it should be protected this year.

Global energy markets face another perfect storm as outsiders capitalize

Faltering energy companies will be at the mercy of increased M&A activity from larger companies who are taking the long view of energy market profitability, looking beyond today’s unfavorable conditions to capitalize on cheap deals. This process of consolidation will enable financially secure players to adapt faster in the energy transition. We can hope that this will lead to greater collaboration between market players.

We can also expect to see continued market disruption from capital-rich outsiders like Shell and Mitsubishi. Last year’s activities herald an era of diversification in the sector and consumers may be surprised by . This increased competition will likely drive further innovation.

A step-change in adaptation and risk monitoring

The chances of vastly improved climate change mitigation and adaptation solutions in 2022 remain slim. While there’s been more awareness about risk in the years since the Fukushima nuclear disaster, many firms still don’t know how to properly measure or quantify risk. This is not only a barrier to action but presents an outright danger to people and the environment in a year where more natural disasters are almost certain. We can expect to see more investment in quantifying operational risk and monitoring as the industry works to become more reactive and predictive. This is nowhere more apparent than in the electricity and water sectors which in the past year have seen major high-profile climate-related events. Whether efforts will be adequate is another question.

Expect to see fixes for challenges at a local level, with firms adapting and improving physical infrastructure. Take for instance, the recent failure of Texas’ wind turbines, which presents a clear need to improve design and interconnection across the board and tailor it to the demands of its geography. As we increasingly rely on and invest in solar and wind technologies, inherent complexities and risks are becoming clearer. We can expect to see a combination of greater innovation for challenges, such as soil erosion creating dust at solar farms, and greater urgency at a basic level. Quick and easy physical adaptations, like concrete bunds at energy facilities to prevent flooding from disrupting supply, should be rolled out in 2022.

Bringing hydrogen and nuclear into the fold

Hydrogen has a key role in the future, and yet we’re far away from global ambitions if it is to take a key role in the Energy Transition. The sector can be expected to focus on making green hydrogen cheaper and improving efficiency, which will provide another option on clean dispatchable generation. Clean energy solutions like solar and wind, which are now at the right price point, will be deployed at a greater pace in 2022. Whether green hydrogen will in fact accelerate is harder to say. If funding becomes more concrete and availability of low carbon generation is reliable, the odds look bright.

We can also expect development of regional solutions and industrial hubs, with the help of interconnectors, to diversify energy and maximize the potential output of specific areas. However, reliability or affordability remain obstacles. If companies deliver products at the right price point and ensure the infrastructure exists to host them, we’re going to see significant progress in this area.

The case for investment in nuclear will be more convincingly made in 2022. Nuclear offers low carbon energy at a known price, insulated from global energy trends. We can expect governments to start to make direct commitments to nuclear (both large and small plants) as one way of demonstrating the viability of their Net Zero plans.

The year of truth for COP26 commitments

Following COP26, the question is whether nations will make good on their 2030 commitments to make the 1.5-degree target feasible, and we expect many key players, including the EU, to accelerate their transition agenda and legislation. Less predictable is whether the US, India and China will escalate climate funding and 2030 plans too. The US in particular finds itself at a crossroads, with the far-reaching Build Back Better Act liable to go either way. What we can say is that industry will be watching. We can also expect businesses to ramp up their lobbying efforts to overcome the administrative and regulatory hurdles currently holding them back from an affordable and accessible transition.

In view of COP27, we are going to see more and more political groups drawing the parallel between the levels of crisis financing we’ve witnessed over the pandemic and the dedication of increased funding to the climate crisis – an existential threat, with far greater financial and health consequences than the pandemic. We can reasonably expect funding to accelerate. Keep your eye on developing nations as capital is unlocked, with the goal of helping them to adapt to climate change and stimulating investment in clean energy production. As cliché as it sounds, it really is now or never.

Authors


James Forrest

EVP: Global Industry Leader Energy and Utilities at Capgemini

Philippe Vie

 Group Leader Energy and Utilities at Capgemini

peter_king

Peter King

Global Energy and Utilities Lead Capgemini Invent, VP at Capgemini Invent

Creating a data-powered culture

Dinand Tinholt
2022-02-01

Data provides answers, but people drive change

“Culture eats strategy for breakfast.” The famous quote by Peter Drucker is a perfect call out here as no matter how detailed and solid your data-powered vision and strategy are if the people executing it don’t nurture the data culture then your journey is likely to fail. Becoming a data-driven organization isn’t just about data or technology, it is about transforming the way decisions are made based on deep analysis of facts rather than intuitions and emotions. Organizations are made up of individuals and the people working there determine the success of a data-driven transformation. Therefore, any transformation journey needs to have organizational culture at the root of any change it wants to affect.

The Capgemini Research Institute report on The data-powered enterprise found that a majority (75%) of data masters invest in a collaborative and innovation-driven data culture building a data-first culture.”

Companies that follow a data-powered culture not only stay resilient but thrive in disruptions. Data forms the lynchpin of their flywheel model of operations that drives customer-centricity, innovation, and adoption of advanced technologies. Data is ingrained in their DNA, guiding all decision-making and helping them be nimble, agile, and able to adapt to adversities.

But how do you successfully do that?

To build a data-first culture, we have adopted a structured approach of advocacy and adoption

In our AI & Data Activate programs for clients across the globe and industries, there is usually a technology stream to modernize a data platform, a business stream to implement use cases, an organizational/process stream to streamline data governance, and a change-management stream to support the people dimension. It is about winning the hearts and minds of all stakeholders within (and often even outside) organizations to create and/or strengthen a data-driven mindset.

Hofstede depicts an organizational culture like different layers of an onion, with values at its core and practices permeating each layer. Driving a data-driven culture within an organization starts with values. This means that data-driven decision-making within an organization should be seen as the default. This requires commitment at all levels in the organization, amplified through communication, training, and management attention. At a global consumer-products company that we worked with for many years, executives at the CxO level would not even consider proposals not underpinned by a thorough data-driven assessment, and they considered their analytical prowess a unique differentiator in the market.

After values, it is important to embed a data-driven culture in rituals which are mostly processes, meetings, and ways of working. The next layer is heroes or having champions within an organization that has adopted the new data-driven way of working. They are the key advocates that exemplify the new way of working through leading by example. These examples are supported by success stories. Hence, PR and communication play a crucial role to amplify these stories. At the outer layer of culture are symbols. Marketing and expanding the reach of a data-driven transformation means creating brand awareness within an organization, through PR management and publishing assets, images, and stories.

Finally, every layer of the culture model is permeated by practices or, simply put, what you do. Without a strong data-powered culture, evidence-based decision-making gets relegated to only a few areas of operations, and organizations fall back on tried-and-tested strategies for important decision-making.

The power of habit: Cultivating data-driven behaviors across the enterprise

For the best data-powered organizations, data has become a habit. In “The Power of Habit,” Charles Duhigg writes about why companies and people do what they do. He looks at habits from a scientific perspective and identifies a three-step habit loop with Cues, Routines, and Rewards. Changing a habit to support culture change often focuses on changing the routines ingrained within an organization to promote a data-driven culture. Instilling new data-driven habits means creating new cues with new routines and associated rewards. To make data the cornerstone of their organization, companies need to invest across four operational pillars: people, platforms, partners, and processes. A relationship that is less transactional and more strategic between business groups and IT and BI teams would enable data to permeate the organization and become an enterprise-wide priority.

Finally, when making any change in an organization, make sure user-centricity is at the core of everything you do. Every design of a new tool or process needs to be ruthlessly user-centric. We’re all marketers and behavioral scientists. If you desire to augment decision-making with data, cognition is key. Less is more, with simplicity being the ultimate sophistication – to quote Leonardo Da Vinci.

Data success

An international consumer goods manufacturer inculcated data-powered thinking and used meaningful and relevant data from across the organization to connect closely with its one billion customers. A data incubator was set up and launched to initiate a transformation that put information and insights at the heart of all decision-making. The needs of the customers were defined. The insights and analytics supported the human decisions to improve desired outcomes, leading to demonstrable business benefits by surfacing opportunity, supporting human creativity, and increasing penetration, effectiveness, and revenues. These success stories were actively shared, champions were promoted, stories were told, and new ways of working were designed with a pure user-centric lens. Becoming more data-driven became powerful, simple to do, and a daily habit.

While every company aspires to utilize data to make better decisions consistently, many fall short due to old habits or not having a clear approach. To infuse data-powered culture in an organization’s DNA, business leaders must take a step-by-step approach to win the hearts and minds of everyone.

INNOVATION TAKEAWAYS

VALUES ARE AT THE CORE

Data-driven decision-making within an organization should be seen as the default, accepting nothing less through all the ranks.

WE COULD BE HEROES

Recognize, profile, and support cultural role models that show a data-powered mindset in their daily work.

SYMBOLS LEAD THE WAY

PR management and publishing assets, images, and stories all help to brand and market a data-powered culture.

Interesting read?

Data-powered Innovation Review | Wave 3 features 15 such articles crafted by leading Capgemini experts in data, sharing their life-long experience and vision in innovation. In addition, several articles are in collaboration with key technology partners such as Google, Snowflake, Informatica, Altair, A21 Labs, and Zelros to reimagine what’s possible. Download your copy here!

Boost your cloud journey with Capgemini’s data center migration program

Thomas de Vita
2022-02-01

In fact, according to Gartner’s Leadership Vision 2021, by 2024, 25% of traditional large enterprise CIOs will be held accountable for digital business operational results, effectively becoming “COO by proxy.”

As such, digital transformation is now a leading budget priority for 77% of CIOs worldwide. The business drivers behind a move to cloud are too many to list here, but for one, cost efficiencies are gained by businesses as they move from heavy CapEx to a more flexible OpEx model. Secondly, the previously tricky practice of divestitures during M&A is hugely simplified through the cloud, as the need for converging networks is eliminated. Thirdly, if a business so chooses, it can completely stop dealing with the data center internally, and simply offshore that responsibility to its cloud provider.

If businesses want to take advantage of these opportunities, they need the flexibility to reinvent their data centers locally, in the cloud and at the edge – to effectively meet new business expectations with ongoing innovation around scalable infrastructure, security, AI, advanced analytics, 5G edge computing, and more.

This is all easier said than done, however. Data migration projects are complex with myriad IT systems, vendors, and regulations. Any shortfalls in execution will result in unplanned outages, security breaches, and compliance issues.

That’s why, to help businesses in meeting their digital transformation goals, Capgemini joined forces with Microsoft last year to launch the Data Center Migration (DCM) Program. Between Microsoft’s track record of innovation, funding capability, extensive service catalogue and Capgemini’s experience of driving large transformation projects, and ultimately, the capability to scale up and industrialize that model for time and cost efficiency, it’s a partnership that makes sense for businesses.

Through this exclusive partnership with Microsoft, Capgemini enables the migration of clients’ data centers and workloads to Microsoft Azure with minimal disruption to business.

Harnessing the power of Microsoft Azure, we have helped many global brands to accelerate their business results. Here are some recent examples:

  • Action’s retail business is mainly built around brick-and-mortar stores, so the onset of the pandemic created an immediate existential threat to the business and a need to build an online shopping platform. Capgemini, together with Microsoft, helped Action in migrating its workloads to the cloud. Built on Azure, the new cloud platform supported online shopping via click and collect in France, which was then rolled out across Europe. This agility helped Action to remain operational during the pandemic.
  • Capgemini’s longstanding customer GEFCO recently renewed its contract to modernize its IT infrastructure. The aim of this project is to reinforce security and quickly adopt public cloud to accelerate businesses cost reduction. Capgemini will adopt a multi-cloud approach to deliver on GEFCO’s Infrastructure transformation objectives.

The business drivers for a move to the cloud are manifold, and CIOs are increasingly being evaluated on their ability to use innovative technologies to build agility and accelerate business results. As the pressure to migrate to the cloud intensifies, CIOs should look to external experts that have the infrastructure and expertise to simplify the migration process and create a strategy for scaling over time.

To find out more about the DCM Program, contact a member of our team here.

Digital security and the quantum internet; do the two go together?

Julian van Velzen
Julian van Velzen
2022-02-01

Encryption is changing with the advent of quantum technology. Governments need to act now to be safe in the future. Quantum mechanics enables new unbreakable security standards. Quantum technology must not fall into the wrong hands. A widely supported framework limits the chances of misconduct.  It is imperative that the EU takes a leading role in the development of quantum technologies.
The choices made today by public safety and security organizations with regard to the quantum internet will determine our future security. With the advent of new advanced computers cracking today’s encryption with ease, we must act now and draft the laws and regulations of tomorrow.

Governments beware: the second quantum revolution is unfolding. Where the first quantum revolution laid the foundation for modern science, we will soon see science being translated into practical applications to solve the world’s most complex problems. These problems now require literally millions of years of computing time on the world’s strongest (classical) supercomputers. It is clear that, in various industries, quantum technology will have a disruptive effect.

Like ordinary computers, quantum computers will also be connected to each other through a ‘quantum internet’. Currently, the internet provides the global connection between classical computers and is an indispensable part of today’s society. Along with the early rise of the internet, concerns about (online) safety grew in tandem. From internet banking to the storage of personal data, cybersecurity became woven into the internet. Deducing from how the internet evolved from ARPANET to TCP/IP stacks, we will likely see a similar situation with the quantum internet.

The security of the quantum internet

There are two areas of concern with regard to the security of the quantum internet. On the one hand, the quantum internet brings the possibility of (and the need for) answering emerging challenges in the cybersecurity domain. At a time where digital processes are a cornerstone of every organization, we rely heavily on proper cybersecurity measures and up-to-date encryption. Fast changing, and increasingly complex cybersecurity poses the risk that governments, businesses, and individuals will not be able to keep up with the latest security measures to ensure safety of their data. Alarmingly, this means we run the risk of critical systems being easy to break into.

At the same time, the advent of unprecedented quantum computing power threatens to break critical encryption. There could be disastrous consequences should quantum computers fall into the hands of malevolent groups or individuals. Hostile nations or terrorist organizations could use this computing technique to uncover state secrets, steal intellectual property, or disrupt financial markets. It is therefore crucial to mitigate the risks of quantum computers and prevent malicious parties from gaining access to certain parts of the quantum internet.

Governments must take a leading role in the preparation of the quantum internet’s advent. First, outdated encryption must be updated. Timing is of the essence or governments run the risk of sensitive and critical information being stolen. Security for critical information that must remain confidential even in the long term will be the first to be adapted — and fast. There is no more time to lose. Second, governments will have to regulate those who can make use of the quantum internet’s unprecedented possibilities to avoid quantum computers falling into the wrong hands.

Mitigating the quantum risk is complicated because unbreakable encryption and blind quantum computing make it impossible to have insight into the intentions of quantum internet users. A well thought out protocol will have to be developed, through which access to the quantum internet for the right parties can be guaranteed and malicious parties can be denied. It is important that governments and their public security agencies are at the forefront of this. Choices about standards, protocols, and regulation will be decisive in ensuring the wise use of the quantum internet. The choices we make now will determine our future digital security.

Digital security at the time of quantum technology

Let’s discuss post-quantum cryptography (PQC). This is cryptography that is believed to be impossible to break, even for quantum (super)computers. However, as technology evolves, we can never know for sure whether unbreakable remains unbreakable. For example, encryption that was deemed safe in the past has since been cracked. In the 1990s, it was assumed that essential keys in internet traffic, such as the symmetric keys RC2, RC4, DES or 3DES, and hashing functions such as MD2, MD5 or SHA1 were safe. But in time, through new mathematical insight and faster computers, it turned out that these standards could be successfully broken by smarter algorithms on ordinary computers. Now it appears that asymmetric keys such as ECC and RSA, and, to a lesser extent, symmetric keys such as AES, can be broken using quantum computers. So, while we expect PQC to be unbreakable by either classical or quantum computers, we do not know this for sure. New mathematical insights could lead to PQC having to be replaced as well.

For the most sensitive data, it is therefore important to go one step further. Fortunately, the quantum internet offers a solution here. By using the entanglement of particles (a characteristic of quantum physics that makes particles share a special bond), encryption can be designed that is provably unbreakable. This means that even if new mathematical insights were to occur, the encryption would still not be broken. The development of the technology behind this, which is referred to as ‘quantum key distribution’ (QKD), is in full swing. However, many breakthroughs are still needed before a European network with encryption based on QKD is available. And even then, the implementation of QKD will be extremely expensive and complex, and therefore not suitable for every use-case. However, if data needs to remain protected for a long time, it can offer a solution.

Even if this form of unbreakable encryption becomes available, a variety of different encryption techniques will still need to be in place. This is due to the fact that QKD is only intended for key exchange. With regard to other cryptographic primitives (such as digital signatures or message encryption), other forms of encryption are still relied on (either PQC or older traditional or contemporary forms of encryption).

Different applications will require different forms of PQC and there will be no ‘one size fits all’ solution. The use of PQC will have to be evaluated case by case, considering different properties such as key lengths and encryption/decryption performance, the algorithm, and its implementation.

All in all, digital security will change in the age of quantum technology. Our security will increasingly depend on complex systems, and migration to more secure systems will become ever more complicated due to the cumulation of data. At the moment, awareness of the need is still too low, although large companies are beginning to recognize its importance. It will also be a major challenge to renew standards across the broad scope in which encryption is used. In addition, smaller governments or companies with smaller budgets will struggle to cope with the large number of complex systems, which will delay the migration. This poses a risk of there being holes in the protection of our digital security. The solution lies in better cooperation within governments; both amongst governments and with private sector companies, knowledge institutions and civil society.

Responsible use of the quantum internet

The question here remains: how can malicious parties be prevented from abusing quantum technology? We must prevent criminals, terrorists, or hostile governments from using quantum computers to break traditional encryption and gain access to essential infrastructure, such as power plants or military systems. The consequences of this would be incalculable. Besides breaking encryption, more algorithms that run on quantum computers could potentially harm society. An example would be quantum algorithms that are particularly effective in calculating the chemical properties of molecules. These algorithms allow new materials and drugs to be invented. But here, too, there is a downside. What if a government acting on its own authority uses quantum computers to develop chemical weapons or a new virus?

Therein lies an additional danger. Due to the changing encryption on the quantum internet, it is becoming increasingly complicated to check that users have the right intentions. By using PQC or QKD, messages sent over the quantum internet can no longer be traced, even by intelligence services. In addition, the quantum internet could offer possibilities to perform calculations and use the internet completely anonymously. This so-called ‘blind quantum computing’ ensures that even the owner of the quantum computer is unable to find out what calculations users perform on the computers. While this can offer great applications in terms of privacy, there is a risk of losing all insight into users’ intentions.

In Europe, innovation in the field of quantum technology is predominantly financed through public funds. Its benefits will therefore have to reach entire populations. It is quite conceivable that once the quantum internet is functional, there will be winners and losers. Globally, we as humanity would therefore do well to open up this quantum internet and grant each other the right to communicate securely when it comes to critical information. The right to keep sensitive information secure should not only be reserved for the smartest countries and parties.

In addition, we will still need to regulate what the quantum internet is used for, because even without the ability to send uncrackable data, both the sender and the receiver should not be allowed to spread harm.

This means that, with the approaching possibilities of the quantum internet, a widely supported framework is needed that steers towards responsible use. Public security entities will have to ask themselves questions such as: how do we ensure fair access, controls, and guarantees? And how do we defend ourselves against malicious organizations and individuals?

Technological sovereignty

By now, governments around the world have started to see the importance, and dangers, of the quantum internet. In the United States, for example, the National Quantum Initiative has a grant of more than $1bn at its disposal. However, there is always a bigger fish: the US program is small fry compared to that of China. In 2020, the Chinese government announced a $10bn subsidy program. This ambitious science program undeniably makes China one of the world leaders in quantum technology. In recent years, the European Union has also invested a lot of money in various quantum technologies; the European Quantum Flagship program has a budget of over €1bn until 2028. Quantum technology also plays a role in other grant programs, such as Horizon Europe (with a proposed budget of around €100bn), and individual EU Member States have ambitious programs in place.

Alongside government projects, companies are investing in research. Although the associated profit is virtually zero at this time, these companies are proactively preparing for the paradigm shift that quantum technology can, and almost certainly will, bring. European companies are not standing still in this respect. Due to the necessity of a space travel element in quantum communication and security, multinationals such as Airbus and Thales are at the forefront of quantum innovation. Yet, the market is dominated by American ‘big tech’ firms. Financing comes from both the deep pockets of these firms themselves and the venture capital that abundantly flows in the United States.

To safeguard European values, take advantage of economic opportunities, and protect our technological sovereignty, we must catch up soon. Europe has previously been slow to respond in the race for artificial intelligence: can we keep up and even get ahead in the field of quantum technology?

Making choices on the front line

The quantum internet age is nearing. Now is the time to make deliberate choices with regard to its openness and sovereignty, and the topic must be addressed in drawing up today’s security policies.

European governments must set an example in a world of changed digital security. Billions of euros in subsidy processes will be needed in the roll-out of QKD networks, and companies will have to be made aware of the dangers and benefits of the quantum internet. Simultaneously, state-sensitive data must be properly protected.

Finally, public security bodies will have to make choices in order to ensure fair and responsible access to the quantum internet. To protect the interests of citizens, access cannot be reserved purely for the richest or smartest, and malicious organizations must be prevented from using the quantum internet to disrupt social systems.

Do we opt for a structure dominated by American and Chinese big tech, or do we strive for a structure like the existing internet? Will we learn from the historical development of the internet, and proactively create universal laws and regulations, protocols, and standards?

To be at the forefront of innovation, instead of passively following, is of great importance to the security and sovereignty of Europe and its nation states. Let the adage “If you want to go fast, go alone; but if you want to go far, go together” apply to our European future in the world of quantum innovation.

Definitions
Quantum internetThe vision of a quantum internet is to connect quantum processors by means of quantum communication. In synergy with the classical internet, the quantum internet will enable new internet technology that used to be impossible. Examples include unbreakable cryptography, clusters of parallel quantum computers, and quantum sensor networks.
Quantum key distributionQuantum key distribution (QKD) is a technique that uses the entanglement of quantum particles, allowing for uncrackable keys to be shared.
Post-quantum cryptoPost-quantum cryptography (PQC) is classical encryption, believed to be safe from future quantum attacks.
Quantum computingQuantum computers are machines that make smart use of quantum mechanical phenomena, which can cause some arithmetic tasks to be accelerated to an extreme degree.
Blind quantum computing‘Blind’ means that the supplier of the quantum computer does not have (complete) information about the tasks that are performed. This means that the user has complete privacy.

Find out more

This article has been adapted from a chapter in the Trends in Safety 2021-2022 report giving European leaders insight into the safety and security trends affecting citizens in the Netherlands.

  • The full report in Dutch can be found here
  • An executive summary in English can be found here

For information on Capgemini’s Public Security and Safety solutions, visit our website here.

Authors

Julian van Velzen
Expert quantum technology
Julian van Velzen is CTIO & Head of Capgemini’s Quantum Lab: a global network of quantum experts, partners, and facilities, focused on three key areas: sensing, communication and computing. From this Lab, Capgemini is exploring with its clients how to apply research and build demos to help solve business and societal problems that, up until now, have been seemingly intractable.
Email : julian.van.velzen@capgemini.com
Luc Baardman
Senior Consultant Public Sector
Luc works at Capgemini Invent on projects in  which he searches for the common denominator in achieving profit for every party in every collaboration. Luc applies Capgemini’s method of Empowering Ecosystems in public themes, such as smart cities and cybersecurity in both national and European playing fields.
Email : luc.baardman@capgemini.co

Authors

Julian van Velzen

Julian van Velzen

Quantum CTIO, Head of Capgemini’s Quantum Lab
I’m passionate about the possibilities of quantum technologies and proud to be putting Capgemini’s investment in quantum on the map. With our Quantum Lab, a global network of quantum experts, partners, and facilities, we’re exploring with our clients how we can apply research, build demos, and help solve business and societal problems that till now have seemed intractable. It’s exciting to be at the forefront of this disruptive technology, where I can use my background in physics and experience in digital transformation to help clients kick-start their quantum journey. Making the impossible possible!
Luc Baardman

Luc Baardman

Managing Consultant and Lead Enabling Sustainability Capgemini Invent NL
“Sustainability at its core is the most important transformation question of our time. Left unanswered, it will wreak havoc upon the world and its population, and it is up to all of us to play our part in becoming sustainable in an inclusive manner. Capgemini’s part is to remove the impediments for a better future, to truly enable sustainability.”

    2022 Key trends in smart territories

    Luc Baardman
    Luc Baardman
    2022-01-31

    With almost 70% of the world’s population predicted to be living in urban areas by 2050, digital technology will be the oxygen that enables citizens and businesses in cities and surrounding communities to function effectively and harmoniously, using streamlined and connected infrastructure and services.

    The latest EU Open Data Maturity Report, published in December 2021, reveals another year of progress by 34 nations surveyed in ongoing efforts to encourage and enable the secure and appropriately regulated sharing of data held by the public sector.

    This strong, year-on-year trend is set to continue in 2022 as the EU’s Open Data Directive prompts the actions required to overcome historic barriers and to promote access to public sector datasets with high potential economic and societal impact.

    1. Data will be the essential fuel on the journey to intelligent urban ecosystems

    The volume and diversity of information freely available from the day-to-day activities of citizens and businesses is growing by the minute. When added to the data held by the public sector, this combination adds significant fuel to the drive by smart cities and territories to deliver innovative, easy-to-access services, that nourish local communities and economies, attract visitors and promote sustainability.

    By striking the right balance between the value of open data and the essential principles of data protection and privacy, the smart technology possibilities are endless, especially when real-time data is added to the mix.

    Harnessing the Internet of Things and sensors in smart devices can transform service quality and value, such as public transport apps that display not just a bus or train timetable, but optimize the routes based on user-data, making travel easier, more attractive and affordable, convenient and sustainable.

    Similarly, a live view of available municipal car parking spaces helps journey planning, cuts urban congestion and illegal parking. Information will also identify those who fail to make parking payments, ensuring that important income is collected. It also helps the uptake of shared car concepts, as smart companies can analyze the data to target neighborhoods that are more ready for the shift (especially those where cars are 99% unused).

    The will to move towards intelligent urban ecosystems is already with us. As we showed in our 2020 research Street smart: Putting the citizen at the center of smart city initiatives, most citizens believe that the smart city will lead to more sustainability (58%) and better urban services (57%). The extension of open data, to citizens, academics, businesses and other service providers, will only enhance the ability of cities and wider communities to predict the needs of citizens and create the infrastructure that meets those needs.

    And the logical extension of these principles is the expansion of data sharing across borders, between communities, cities, regions and nations, creating connections, sharing benefits (and costs too) and building security.

    This digital driven collaboration culture will surely also open doors to another dimension: the Metaverse for cities. For instance, Seoul has announced that it is the first city to create a metaverse by building a virtual communication ecosystem for all areas of its municipal administration, targeted for 2023. We believe that other smart territories can be expected to embrace this idea as well and put it on the table of discussion in 2022.

    2. Resilience will be a cornerstone principle of urban planning and development

    A recurring challenge for big cities and nations hosting major sporting events, like The Olympic Games and the FIFA World Cup, is ensuring that the infrastructure left by the hosts retains value and function as a community asset, long after the athletes and footballers have left.

    Recent history paints a mixed picture post-Olympic Games, with the abandoned sports stadia in Rio contrasting with the successful redevelopment of the East End of London, with the former Olympic Stadium nowadays home to Premier League football, concerts, business and cultural events.

    COVID-19 has created a similar challenge for businesses and public authorities too, with office buildings and other venues and assets standing largely empty as employees and citizens continue to stay at home in large numbers.

    The concept and desirability of Resilient Cities is not new, with the Rockefeller Foundation’s 2014 Resilient Cities Challenge delivering transformational results in Rotterdam, Antwerp and Glasgow.

    But unique circumstances create unique opportunities and 2022 will see resilience at the heart of infrastructure planning in cities, built around RAMS principles – Reliability, Availability, Maintainability and Safety – providing the flexibility to change the use of buildings and other assets to meet evolving requirements, one off events or emergency situations.

    In 2022 urban leaders will have to ask themselves – what do we do with the newly installed COVID-19 infrastructure? Successful cities will make use of the current dip in urban car kilometers, outfitting streets with cycling paths that stimulate healthy transport. By building in resilience, adaptability and multi-usability, cities will become more sustainable and in tune with the evolving needs of citizens, businesses and visitors alike.

    3. Smart citizens will increasingly influence public policy in cities

    The existence of digital technology in cities is only successful when citizens, businesses and visitors feel confident about using it, and when it adds value and enjoyment to their experience of city life. In 2022 enlightened public authorities will increasingly recognize that encouraging and enabling the participation of citizens is crucial to the achievement of truly smart cities and territories.

    This year, the use of digital participation platforms such as Decidim and CONSUL will expand, providing additional, accessible and direct ways for locals to participate in the democratic process, collaborating and co-creating solutions that address grassroots requirements and goals, including devolving budgetary control to community representatives.

    There will be more shining examples of this shift towards public co-decision-making, like Barcelona, where Decidim enabled almost 7,000 citizens to participate in the creation of the city’s municipal action plan. In Helsinki, residents were invited to vote on the merits of almost €9 million worth of city projects, with the proposals receiving the most votes getting the go-ahead.

    Participatory budgeting is now built into the fabric of government in the Finnish capital, under the headline “The Helsinki of dreams is made together”.

    4. Data and cloud computing will make transparency and cybersecurity even more vital

    As cities and surrounding communities become more data-driven and data dependent, so the need for more robust and comprehensive cybersecurity counter measures grows too.

    But 2022 will also be a year in which the ethical considerations relating to the collection, analysis and increased use of personal data will challenge how that data is used to train machine learning models and create artificial intelligence algorithms. Sharper focus will be required when data is used by multiple interested parties.

    Public expectations of transparency about how data is being used, the values, principles and policies underpinning its use and the governance models and accountability of those using it will continue to grow, with organizations less than open about their approach suffering from increased levels of reputational damage. Biases in data sets must actively be fought.

    5. Co-ordination and collaboration will continue to keep pace with urbanization

    Smart cities and territories have to be human-centric, to make those living, working and visiting feel safe, comfortable and at ease with their surroundings. As millions of people continue to move to urban areas each year, co-ordination and collaboration between neighboring cities, suburbs and communities becomes essential for social cohesion and economic prosperity and sustainability.

    Services deliver most value when they are continuous, irrespective of location and jurisdiction, transitioning seamlessly as individuals move around. But achieving this requires co-operation on many levels, political, financial, operational, and technical, and in many places, these are many hurdles yet to be overcome.

    But despite the restrictions of COVID-19 remaining in place at the start of 2022, governments, public authorities and citizens are ready to capitalize on new freedoms and new normals. The pandemic has shown that organizations and individuals that are traditionally cautious and slow to act are in fact capable of innovation, agility and speed in a crisis, and intend to take these skills and mindsets into other areas of their lives. It’s a time of profound change.

    Further reading

    Find out more about Capgemini’s public administration services.

    Our look at 2022 trends in smart territories was compiled in conversation with:

    Luc Baardman

    Luc Baardman

    Managing Consultant and Lead Enabling Sustainability Capgemini Invent NL
    “Sustainability at its core is the most important transformation question of our time. Left unanswered, it will wreak havoc upon the world and its population, and it is up to all of us to play our part in becoming sustainable in an inclusive manner. Capgemini’s part is to remove the impediments for a better future, to truly enable sustainability.”

    Vasilisa Sayapina

    Manager, Capgemini Invent
    Vasilisa is a sustainable HR enthusiast with an expertise in multiple topics of Reinventing work: talent management, digital upskilling, learning & development.

      Elevate your cloud strategy – Cloud economics & optimization

      Capgemini
      Capgemini
      28 Jan 2022

      Leveraging Public Cloud Platforms is not a hype anymore, adopting Public Cloud is a must to compete in today’s digital market. With the flexibility and speed of delivery, Public Cloud helps companies lower the time-to-market and explore new innovative technologies. This explains why many companies have already adopted some form of the Public Cloud.

      However, lack of cloud governance may raise your IT spend drastically, do you still have control over your Public Cloud spend? Read the interview of Rijk van den Bosch, Cloud CoE Lead, Capgemini, about the real cost challenges of Cloud

      Taming the spiraling costs of Cloud

      In the market, Capgemini sees that one of the biggest challenges is Public Cloud Governance and how to keep control over Security, Costs, Risks and Architecture compliance. Cost is one of the biggest aspects of this challenge and includes:

      • Controlling (over-) spending: When the growing usage of Public Cloud reaches the office of the CFO, generally teams are overspending.
      • Transparency in costs: With different teams and departments using Public Cloud features, consumption of Public Cloud increases as the number of services grow, leading to a lack of transparency in costs.
      • Utilization of resources: Using the flexibility and scalability of Public Cloud is fundamental to keep the costs low. This means that resources that are not- or underutilized can be shut- or scaled down to reduce the consumption costs.
      • IaaS implementations that can be modernized: Modernizing your application landscape to microservices, containers of even serverless applications gives you the opportunity to use the real flexibility and scalability of the Public Cloud.

      See-Decide-Act: Capgemini’s Cloud Economics and Optimization

      Our Cloud Economics and Optimisation assessment, is a consultation that aims to detect, identify and implement necessary cost optimisation to minimize cloud operating costs, through a structured approach. This Service also provides greater emphasis on creating a culture of cloud cost accountability and transparency. The assessment combines our expertise, best practices and a toolset to:

      • Visualize Cloud Consumption
      • Create an inventory of your Public Cloud estate
      • Improve on Cloud Costs efficiency

      Identify quick wins in cost reduction for your IT landscape

      Capgemini offers this as a 7-8-week assessment, that involves a high-level assessment of your Public Cloud environment, analysis of your Public Cloud consumption and the delivery of an advice report to reduce and control your Public Cloud spend. The offer is Cloud Agnostic, this means that it can be based on any Cloud Service Provider like Microsoft Azure, Amazon Web Services and Google Cloud Platform.

      With minimal effort and costs the assessment will gain you the following valuable insights.

      • Quick Wins to reduce your Public Cloud spend in just a few steps.
      • Visibility and transparency in your actual Public Cloud consumption and the forecasted consumption.
      • Advice on Application Modernization and the usage of Platform as a Service features like containers, webservices and/or serverless functions.
      • Help create a culture of cloud cost accountability and transparency.

      Capgemini SAP2Cloud transformation – reap the full benefits

      Capgemini
      Capgemini
      2022-01-28

      Are you desperate to move to cloud but uncertain about where to begin? What will your strategy, and roadmap look like? Organizations need the right public SAP to cloud migration solutions to guarantee a smooth transformation for business and enhance business value. Migrating critical workloads to public cloud can help reduce time to market, enhance ROI and stimulate innovation.

      Our modular SAP2Cloud transformation services shape the digital core of your operations, helping you reap the full benefits for the future of your operations. This transition is more than an upgrade – it is a response to the new digital world climate where rapid digitization of businesses is fore fronting the necessity to stay ahead of competitors and maximize business value.

      As a world leader in ERP and digital transformation, Capgemini possess a depth to our experience and real-world success in building migration strategies to help our clients arrive with ease at a next-generation platform. We have a portfolio of accelerators to help clients operate and innovate in public cloud. Cloud-agnostic and vendor-neutral workloads and applications act as foundation to our services – so you can relax without fear of lock-in. Your cloud strategy will naturally evolve, and it needs breathing room to do so.

      Moving traditional SAP architectures to cloud requires a strategic plan to unleash competitive advantage and foster innovation for future growth. We facilitate the development of new services natively in the cloud and manage a hybrid cloud estate with multiple providers.

      We employ a range industrialized approaches, to help you make this transition and we consistently drive innovation into our methods through automation and reviewing use-cases. Our SAP2Cloud automation service provides the necessary tools and experience to shift your entire SAP estate to IaaS cloud environment (AWS, Azure, Google Cloud).

      Capgemini built automation accelerators like Migration as a Code (MaaC), Capgemini Cloud Migration Optimizer (CCMO), Capgemini Cloud Migration Assistant (CCMA), as well as automation cockpit and standardized templates for the due diligence and designing phase, deliver a faster, and more optimized deployment experience. CCMA is speedy, accurate and cost-efficient. It lends a predictability to the migration process. MaaC & CCMO helps with the repetitive and time-consuming tasks associated with cloud migration, helping our clients increase migration speed and reduce risk. It automates all the SAP product and Database templatized deployment, increases greenfield implementation and migration speed. Both have proved to be effective in delivering quantifiable benefits that advance both business and technical goals.

      Disciplined operations and predictable business growth are the main benefits that come with the transition. A simplified IT infrastructure, reduction in costs, improved consumption management, cloud scalability, improved customer engagement, increased agility and flexibility and a relaxation of increasing resource demands will inevitably boost your organization’s capabilities, consolidating change at a deeper level and allowing for a flourishing of business outcomes in the future.

      To reap the full benefits by virtue of this transformation, the main questions you need to ask yourself prior to the change are:

      • What are your business objectives and ambitions?
      • What is the maturity level of your organization in different areas?
      • What are your business needs, and security and regulatory constraints?

      What’s more, technology only plays a part in this migration – this is an organizational cultural shift and requires a shifting of mindsets to really focus on the outcomes. Successfully implementing cloud is a balancing act of different variables and therefore it can be a disruptive and complex initiative, however, with the right transformation services on deck to craft a unique strategic plan for you, you can be at ease that every small step forward guarantees both short-term and long-term benefits.

      Catalyzing innovation through a unique transformation process is the number one way to grow as a business. Capgemini occupies a unique position given its deep understanding of the SAP solutions in the cloud and through its established partnership with hyperscalers to reap greater synergies. We are one of the leaders in Gartner’s 2020 Magic Quadrant for Public Cloud Infrastructure Professional and Managed Services, worldwide and our partnership with SAP and market giants such as AWS, Azure and GCP helps customers achieve new levels of success.

      To learn more about Capgemini’s approach to SAP – https://www.capgemini.com/service/cloud-services/

      Author


      Devendra Goyal
      Head – Global SAP2Cloud Offer & SAP2Cloud Transformation

      Predictions that will revolutionize the cloud game in 2022

      Capgemini
      2022-01-27

      This year, cloud adoption will accelerate even faster as organizations become more at ease with the variations and patterns of cloud and seek to leverage increased value from their investments.

      Our top-five cloud predictions for 2022:

      Cloud native transcends technologies or tools. It is an approach to building applications that take full advantage of cloud computing where modern technologies and ways of working are embraced to deliver immense value to organizations. However, cloud native is about how we create and deliver applications, not where, meaning that process and cultural practices must be transformed alongside the architecture patterns we develop.

      In 2022, cloud native will transition from a supplementary enabler to a core component of a future-proof cloud strategy as enterprises look to bootstrap their digital strategies post-pandemic and reform after their transition to cloud models. Enterprises will look to re-evaluate their existing strategies and base them on cloud-native approaches as a first principle.

      We are already seeing the technology decision signals with 64% of organizations using containers, a core architectural principle of cloud native, as their deployment target in 2021, compared to 48% using virtual machines (State of DevOps Report 2021). In fact, 95% of new applications use containers (451 Research) within their architecture today.

      We will also see cloud native extend to the edge as applications are built using microservices (aka the Edge 2.0 paradigm) supported by 5G technology that will enable cloud service providers to extend cloud to their customers and deliver services in new and innovative ways. Edge computing can provide developers an environment to create innovative 5G applications across powerful use cases across industries. This will represent a need to be able to manage these new patterns (see next trend).

      Delivering business improvements in more consumable increments, empowering teams, celebrating mistakes/failures, and promoting a culture of collaboration and openness are principles promoted by the DevOps/Agile movement years ago. In line with the technology shift mentioned earlier, a cloud-native mindset within the enterprise will emerge more prominently, forced by pandemic events and the need to shift priorities, cater to disruption, and transform business models.

      2: Digital cloud platform strategies will remain critical, but must extend to new architecture paradigms.

      Cloud adoption requires a platform strategy. Platforms allow users to take advantage of cloud native and business services in a centralized manner. Platforms are built on the principles of reusability and automation, which help digital teams save money and create more quickly.

      For tech to be a real driver of innovation and growth, IT needs to reorganize itself around flexible and independent platforms. By 2025, 75% of large enterprises will build self-service infrastructure platforms to enable rapid product innovation, up from 15% in 2020. Platform features such as containers, DevSecOps tooling, monitoring tools, self-service, and identity management remain key foundational components that are developed and maintained by established platform teams. Platform features must be repeatable, standardized, and easily consumable by developers – treated as living, breathing​ sets of “products” that are iterated, updated, and maintained in line with business needs.

      In 2022, we will see platform strategies shift to encompass more modern variants of edge computing (Edge 2.0), enabling the development of planet-scale applications, capturing distributed data sources, and applying AI/ML to create new and unprecedented customer experiences and industry use cases. This will place new pressure on the platform principles adopted by the enterprise to leverage unified control planes, application lifecycle tooling, distributed security, distributed data processing and embedded analytics, and software defined edge. Containers and Kubernetes will be the key platform foundation for edge architecture as recognized by the investment by the hyperscaler providers in Azure Stack, Google Anthos, and AWS Snowball Edge – all based on Kubernetes.

      3: Environment, Social, Governance (ESG) is now a board-level priority and the highest growing/emerging risk, with cloud a key accelerator for ESG initiatives.

      ESG is now a priority for organizations as they are tasked with reducing carbon footprints, protecting financial and social capital, and having to comply with disclosing key data around such efforts. In 2017, 85% of the S&P 500 reported sustainability efforts and in 2022 we expect this to be higher, with many smaller organizations beginning to report their efforts.

      Measuring and reporting the impact has been challenging as organizations look to record their environment footprints, reduce their resource utilization, leverage carbon offsets, and replace high carbon footprints with lower ones. The sheer volume of data to be captured and the need for accuracy and precision around each of these areas has led to the hyperscalers developing APIs specifically aimed at helping provide automated, accurate, and real-time access to ESG data to turn insights into meaningful actions.

      In 2021, we saw Microsoft Cloud for Sustainability announced, a SaaS offering providing a suite of tools to help enterprises measure their environmental impact. Similarly, AWS customers can now leverage AWS Data Exchange for sustainability to load data directly into S3 and analyze data sets using data and analytics and machine learning services. It also provides access to 75+ ESG data products, including third-party scores, raw company-level ESG metrics, and reporting frameworks from providers such as ArabesqueSASB, and RepRisk. AWS has also updated its Cloud Frameworks, adding a shared sustainability model and a pillar for sustainability into the AWS Well Architect Framework to help customers navigate.

      4: With digital transformation driving accelerated release velocity, the focus on Service Reliability Engineering (SRE) is on the rise to ensure a secure, stable, and highly productive operations environment.

      SRE practices aim to apply software engineering principles to operations in order to improve the reliability of IT systems, with a constant focus on eliminating the toil from operations teams. Many of the early adopters focused on a people- and tool-centric approach to SRE by onboarding engineering skills and making random tool investments. They continue to struggle with adoption and value realization owing to challenges arising from lack of proper process and tooling standards, inefficient operating models, and more importantly, the lack of cultural shift that was necessary for driving the change.

      In 2022, we will witness enterprise-wide adoption by establishing a clear focus on the critical success pillars of SRE. The success however will depend on the organization’s ability to execute operating model shifts to align with product-centric delivery, reskilling operations teams with engineers who can code and automate, tool simplification, and rationalization for AIOPS, and focusing on hyper-automation initiatives.

      5: Continue bringing cloud thinking to traditional environments.

      Applying cloud thinking to traditional environments (much like the Phoenix Project) is nothing new. We have been doing this for the last 3–5 years.

      In 2022, an even bigger move to continue bringing cloud thinking to traditional environments automation, CI/CD, SRE, platform thinking, “CloudOps” (i.e., operations like we do in cloud) is brought to on-prem environments. Add enhancements such as Google Anthos, Azure Stack, OpenShift and AWS Outpost – now “the public cloud” is enabled on-prem for applications that cannot currently move (e.g., for known reasons such as highly connected, very old technology, technology not available in cloud or regulatory, risk, compliance). Ultimately, applications can be prepared before the jump is made to public cloud.

      The challenges are that modernizing traditional environments is sometimes even harder than moving to public cloud. Traditional environments are highly siloed with limited collaboration between silos. Many different tools, techniques and utilities have been implemented over the years and people have “commitments” to these methods (through sphere of influence, resistance to change – the normal adoption barrier we have with cloud).

      The gain, however, can be very substantial. No more heroics, less unknown outages, and highly repetitive actions automated. Getting a new VM does not have to take a month (or longer) and it does not require an army to create it. Simple automation scripts or even tying together existing scripts can yield great benefits.

      Special thanks to Bernard Drost & Renjith Sreekumar for contributing to the research and predictions.

      Author


      James Dunn
      Global Head – Cloud Services,
      Cloud Infrastructure Services