What is a digital estate?
Every modern company has some form of digital estate. Much like a physical estate, a digital estate is an abstract reference to a collection of tangible owned assets. In a digital estate, those assets include virtual machines (VMs), servers, applications, data, and so on. Essentially, a digital estate is the collection of IT assets that power business processes and supporting operations.
The importance of a digital estate is most obvious during the planning and execution of digital transformation efforts. During transformation journeys, the cloud strategy teams use the digital estate to map the business outcomes to release plans and technical efforts. That all starts with an inventory and measurement of the digital assets that the organization owns today.
How can a digital estate be measured?
The measurement of a digital estate changes depending on the desired business outcomes.
Infrastructure migrations: When an organization is inward-facing and seeks to optimize costs, operational processes, agility, or other aspects of their operations, the digital estate focuses on VMs, servers, and workloads.
Application innovation: For customer-focused transformations, the lens is a bit different. The focus should be placed on the applications, APIs, and transactional data that supports the customers. VMs and network appliances often receive less focus.
Data-driven innovation: In today's digitally driven market, it's difficult to launch a new product or service without a strong foundation in data. During cloud-enabled data innovation efforts, the focus is more on the silos of data across the organization.
Operational stability: Businesses are dependent on stable technologies to operate effectively. Near-zero downtime and service reliability are crucial in competitive markets. When operational stability is a priority, the digital estate should be measured on positive or negative impact to stable operations. Business continuity, disaster recovery, and reliability of workloads and each asset are required measures when operational stability is a priority.
After an organization understands the most important form of transformation, digital estate planning becomes much easier to manage.
Each type of transformation can be measured with any of the above views. Companies commonly complete all these transformations in parallel. We strongly recommend that company leadership and the cloud strategy team agree regarding the transformation that is most important for business success. That understanding serves as the basis for common language and metrics across multiple initiatives.
How can a financial model be updated to reflect the digital estate?
An analysis of the digital estate drives cloud adoption activities. It also informs financial models by providing cloud costing models, which in turn drive return on investment (ROI).
To complete the digital estate analysis, take the following steps:
- Determine analysis approach.
- Collect current state inventory.
- Rationalize the assets in the digital estate.
- Align assets to cloud offerings to calculate pricing.
Financial models and migration backlogs can be modified to reflect the rationalized and priced estate.
Before digital estate planning begins, determine which approach to use.