AI and IoT have already demonstrated their transformative potential individually, reshaping industries and enhancing various aspects of our lives. However, the true power lies in their convergence. By integrating AI with IoT, organizations can create intelligent and connected systems that collect, analyze, and act upon real-time data. This combination unlocks a new realm of possibilities, empowering businesses to make data-driven decisions, automate processes, and deliver personalized experiences. From optimizing supply chains and predictive maintenance to revolutionizing healthcare and enabling smart cities, integrating AI and IoT paves the way for unprecedented advancements and efficiencies.

Let’s explore the seamless integration of AI and IoT and its profound implications across industries. We will explore the synergistic effects of combining AI’s cognitive abilities with IoT’s extensive data collection capabilities, showcasing the real-world applications, benefits, challenges, and best practices of creating intelligent and connected systems through AI and IoT integration.

Let’s dive deeper into understanding AI and IoT.

What is AI (Artificial Intelligence)?

Artificial Intelligence is a field of study that aims to create machines capable of exhibiting human-like intelligence. It encompasses various techniques, including machine learning, natural language processing (NLP), computer vision, and robotics. Machine learning, in particular, enables systems to learn from data and improve their performance over time without explicit programming.

Natural Language Processing (NLP) empowers computers to comprehend and analyze human language, while computer vision enables machines to recognize and interpret visual data extracted from images and videos. These AI subfields have found numerous applications across industries, including virtual assistants, recommendation systems, fraud detection, and autonomous vehicles.

What is IoT (Internet of Things)?

The term “Internet of Things” pertains to an extensive network of tangible objects embedded with sensors, software, and connectivity, facilitating their ability to gather and exchange data via the Internet. These “smart” objects range from consumer devices like home appliances and wearables to industrial equipment, agricultural sensors, and urban infrastructure. IoT devices continuously collect and transmit data from their surroundings to central servers or cloud platforms for further analysis and decision-making. The adoption of IoT has increased across industries due to its potential to optimize operations, enhance safety, improve energy efficiency, and enable data-driven insights.

What are the benefits and applications of AI and IoT Independently?

AI and IoT have individually revolutionized various sectors and use cases. With its advanced algorithms, AI has enabled personalized recommendations in e-commerce, improved customer service through chatbots, optimized supply chain operations, and detected fraudulent activities in financial transactions. IoT has enabled remote monitoring of industrial equipment for predictive maintenance, improved healthcare outcomes through remote patient monitoring, enhanced energy efficiency through Smart home automation, and transformed urban planning through Smart city initiatives. However, the real potential lies in integrating AI with IoT to create more intelligent and dynamic systems.

What does the synergy of AI and IoT result in?

A. How does AI enhance IoT?

AI enriches IoT by utilizing its sophisticated analytics and cognitive abilities to extract valuable insights from the immense data volumes produced by IoT devices. IoT devices collect vast amounts of data, often in real-time, making it challenging to analyze and interpret manually. Through the prowess of AI-driven analytics, data can be swiftly processed, uncovering patterns, anomalies, and trends that might elude human operators’ detection. For example, AI algorithms can analyze sensor data from industrial equipment to detect early signs of potential failures, enabling predictive maintenance and minimizing downtime. By incorporating AI into IoT systems, businesses can achieve higher automation, efficiency, and responsiveness levels.

B. How does IoT enhance AI?

IoT enhances AI by providing rich, real-world data for training and fine-tuning AI models. AI algorithms rely on large datasets to learn patterns and make accurate predictions. IoT devices act as data collectors, continuously capturing data from the physical world, such as environmental conditions, consumer behaviour, and product usage patterns. This real-world data is invaluable for AI models, allowing them to understand the context in which decisions are made and adapt to dynamic environments. With more IoT devices deployed and data collected, AI models become more accurate and responsive, leading to better decision-making and actionable insights.

C. What are the advantages of combining AI and IoT?

Integrating AI and IoT presents several advantages beyond what either technology can achieve individually. The combination enables real-time data analysis and decision-making, leading to more responsive systems and quicker insights. The continuous feedback loop between IoT devices and AI models ensures ongoing optimization and adaptation to changing environments. Additionally, the ability to automate processes based on AI analysis of IoT data streamlines operations reduces human intervention, and improves overall efficiency. Ultimately, integrating AI and IoT empowers businesses to transform data into actionable intelligence, leading to smarter decisions, better user experiences, and new opportunities for innovation.

What are the key components of AI and IoT integration?

A. Sensors and Data Collection:

At the heart of IoT are sensors, which serve as the eyes and ears of the interconnected system. These sensors are embedded in physical objects and devices, capturing temperature, humidity, motion, location, and more data. The insights gleaned from data collected by these sensors offer valuable information about the surrounding environment, empowering AI algorithms to analyze and make well-informed decisions grounded in real-world data.

B. Data Processing and Analysis:

IoT generates a staggering amount of data, often in real-time, which requires robust data processing and analysis capabilities. Edge computing plays a vital role here by processing data locally at the network’s edge, reducing latency, and ensuring real-time responsiveness. Cloud computing enhances edge computing by providing scalable and resilient data processing capabilities, empowering AI algorithms to analyze extensive datasets and extract actionable insights.

C. Decision-Making and Automation:

AI algorithms leverage the processed IoT data to make data-driven decisions, including forecasting maintenance needs, optimizing energy consumption, and identifying anomalies. These decisions, in turn, initiate automated actions, such as scheduling maintenance tasks, adjusting device parameters, or alerting relevant stakeholders. Integrating AI-driven decision-making and automation results in heightened system efficiency and proactivity, saving time and resources while enhancing overall performance.

D. Real-time Insights and Predictive Analytics:

AI algorithms can generate immediate insights and responses to dynamic conditions by analyzing real-time IoT data. For instance, AI-powered Smart home systems can adjust thermostats, lighting, and security settings in real-time based on occupancy patterns and environmental conditions. Additionally, predictive analytics based on historical IoT data can anticipate future trends, enabling businesses to take proactive measures and capitalize on emerging opportunities.

Let’s look at AI and IoT integration use cases.

A. Smart Homes and Home Automation:

AI and IoT integration in smart homes enables homeowners to create intelligent, energy-efficient living spaces. AI-powered virtual assistants, like Amazon Alexa or Google Assistant, can control IoT devices such as smart thermostats, lighting systems, and security cameras. This integration allows homeowners to automate tasks, adjust settings remotely, and receive real-time insights into energy consumption, leading to cost savings and enhanced convenience.

B. Industrial IoT and Predictive Maintenance:

In industrial settings, AI and IoT integration revolutionizes maintenance practices. Sensors embedded in machinery continuously monitor equipment health and performance, providing real-time data to AI algorithms. AI-driven predictive maintenance can detect anomalies and potential failures, enabling proactive maintenance to prevent costly downtime and improve operational efficiency.

C. Healthcare and Remote Patient Monitoring:

AI and IoT integration have the potential to transform healthcare by enabling remote patient monitoring and personalized care. IoT-enabled wearable devices can continuously monitor vital signs and transmit data to AI-powered healthcare systems.By employing AI algorithms, this data can be scrutinized to identify initial indicators of health concerns, offer tailored suggestions for treatment, and notify medical experts during urgent circumstances.

D. Smart Cities and Urban Planning:

AI and IoT integration is crucial in creating smart cities with improved infrastructure and services. IoT sensors deployed across urban areas collect data on traffic flow, air quality, waste management, and energy usage. AI algorithms analyze this data to optimize transportation routes, reduce congestion, manage waste more efficiently, and enhance urban planning.

E. Transportation and Autonomous Vehicles:

The fusion of AI and IoT is driving the advancement of autonomous cars. IoT sensors provide real-time data on road conditions, weather, and vehicle performance. AI algorithms process this data to make split-second decisions, enabling autonomous vehicles to navigate safely and efficiently on roads.

What are the challenges of AI and IoT integration?

A. Data Security and Privacy Concerns:

The extensive volume of data produced by IoT devices gives rise to worries regarding security and privacy. Integrating AI means handling even more sensitive information, increasing the potential for data breaches and cyber-attacks. Ensuring robust data security measures and adhering to privacy regulations are crucial in mitigating these risks.

B. Interoperability and Standardization:

The diverse range of IoT devices from various manufacturers may need more standardized communication protocols, hindering seamless integration with AI systems. We addressed interoperability challenges to enable smooth data exchange between IoT devices and AI platforms.

C. Scalability and Complexity:

As the number of IoT devices and data volume grows, the scalability and complexity of AI systems increase. We ensured that AI algorithms can handle the ever-expanding data streams, and computations become paramount for successful integration.

D. Ethical and Social Implications:

The use of AI and IoT raises ethical considerations, such as data ownership, algorithmic bias, and potential job displacement due to automation. Striking a balance between technological advancement and ethical responsibilities is essential to ensure that AI and IoT integration benefits society responsibly.

What are the best practices for successful integration?

A. Data Governance and Management:

Implementing robust data governance and management practices is crucial for AI and IoT integration. Define clear data ownership, access controls, and sharing policies to ensure data security and compliance. Additionally, establish data quality assurance processes to maintain accurate and reliable data for AI analysis.

B. Robust Security Measures:

Address the security challenges of AI and IoT integration by adopting strong encryption, secure communication protocols, and authentication mechanisms. Regularly update and patch IoT devices to protect against vulnerabilities and potential cyber-attacks. Employ multi-layered security measures to safeguard data and infrastructure.

C. Collaboration between AI and IoT Teams:

Foster collaboration between AI and IoT teams to ensure a cohesive approach to integration. Encourage regular communication, knowledge sharing, and joint problem-solving. The combined expertise of both groups can lead to innovative solutions and effective AI and IoT implementation.

D. Continuous Monitoring and Improvement:

Monitor the performance of AI algorithms and IoT devices continuously. Gather input from users and stakeholders to pinpoint areas for enhancement and possible concerns. Regularly update AI models and software to adapt to changing data patterns and maintain peak performance.

What does the future of AI and IoT integration look like?

The future of AI and IoT integration is a promising landscape, marked by transformative advancements that will reshape industries and daily life. As AI algorithms gain the ability to analyze vast amounts of real-time data from interconnected IoT devices, decision-making processes will become more innovative and more proactive. This convergence will lead to the rise of autonomous systems, revolutionizing transportation, manufacturing, and urban planning.

The seamless integration of AI and IoT will pave the way for personalized experiences, from Smart homes catering to individual preferences to healthcare wearables offering personalized medical insights. As edge AI and federated learning become prevalent, we addressed privacy and data security concerns, allowing for decentralized and efficient data processing.

Ethical considerations and regulations will be crucial in ensuring responsible AI and IoT deployment, while sustainability practices will find new avenues through efficient energy management and waste reduction. The future holds boundless possibilities, with AI and IoT poised to usher in a connected world, transforming how we live, work, and interact with technology.

The future holds boundless possibilities, with AI and IoT poised to usher in a connected world, transforming how we live, work, and interact with technology.

Microservices have emerged as a game-changing architectural style for designing and developing modern software applications. This approach offers numerous advantages, such as –

1. Scalability
2. Flexibility
3. Easier maintenance

This article delves into microservices, exploring their benefits, challenges, and best practices for building robust and efficient systems.

What are Microservices?

Microservices break down an application into loosely coupled, independently deployable services. Each service emphasizes a specific business capability and communicates with other services through lightweight protocols, commonly using HTTP or messaging queues.

This design philosophy promotes modularization, making it easier to understand, develop, and scale complex applications.

Essential Principles for Microservice Architecture Design

The following fundamental principles guide the design of Microservices architecture:

1. Independent & Autonomous Services: Designed as individual and self-contained units, each Microservice is responsible for specific business functions, allowing them to operate independently.
2. Scalability: The architecture supports horizontal scaling of services, enabling efficient utilization of resources and ensuring optimal performance during periods of increased demand.
3. Decentralization: Services in the Microservices architecture are decentralized, meaning each service has its database and communicates with others through lightweight protocols.
4. Resilient Services: Microservices are resilient, capable of handling failures gracefully without affecting the overall system’s stability.
5. Real-Time Load Balancing: The architecture incorporates real-time load balancing to evenly distribute incoming requests across multiple instances of a service, preventing any specific component from becoming overloaded.
6. Availability: High availability is a priority in Microservices design, aiming to reduce downtime and provide uninterrupted service to users.
7. Continuous Delivery through DevOps Integration: DevOps practices facilitate continuous delivery and seamless deployment of updates to Microservices.
8. Seamless API Integration and Continuous Monitoring: The architecture emphasizes seamless integration of services through APIs, allowing them to communicate effectively. Continuous monitoring ensures proper tracking of performance metrics to help detect issues promptly.
9. Isolation from Failures: Each Microservice is isolated from others, minimizing the impact of a failure in one service on the rest of the system.
10. Auto-Provisioning: Automation is utilized for auto-scaling and provisioning resources based on demand, allowing the system to adapt dynamically to varying workloads.

By using these principles, developers can create a Microservices architecture that is flexible, robust, and capable of meeting the challenges of modern application development and deployment.

Common Design Patterns in Microservices

Microservices architecture employs various design patterns to address different challenges and ensure effective communication and coordination among services. Here are some commonly used design patterns:

1. Aggregator: The Aggregator pattern gathers data from multiple Microservices and combines it into a single, unified response, providing a comprehensive view to the client.
2. API Gateway: The API Gateway pattern is a single entry point for clients to interact with the Microservices. It handles client requests, performs authentication, and routes them to the appropriate services.
3. Chained or Chain of Responsibility: In this pattern, a request passes through a series of handlers or Microservices, each responsible for specific tasks or processing. The output of one service becomes the input of the next, forming a chain.
4. Asynchronous Messaging: Asynchronous Messaging pattern uses message queues to facilitate communication between Microservices, allowing them to exchange information without direct interaction, leading to better scalability and fault tolerance.
5. Database or Shared Data: This pattern involves sharing a common database or data store among multiple Microservices. It simplifies data access but requires careful consideration of data ownership and consistency.
6. Event Sourcing: Stores domain events as the primary source of truth, enabling easy recovery and historical analysis of the system’s state.
7. Branch: The Branch pattern allows Microservices to offer different versions or extensions of functionality, enabling experimentation or gradual feature rollouts.
8. Command Query Responsibility Segregator (CQRS): CQRS segregates the read and write operations in a Microservice, using separate models for queries and commands, optimizing data retrieval and modification.
9. Circuit Breaker: The Circuit Breaker pattern prevents cascading failures by automatically halting requests to a Microservice experiencing issues, thereby preserving system stability.
10. Decomposition: Decomposition involves breaking down a monolithic application into smaller, more manageable Microservices based on specific business capabilities.

Developers can efficiently design and implement Microservices that exhibit better modularity, scalability, and maintainability, contributing to the overall success of the architecture.

Few Sample Architecture Of Microservices

Advantages of Microservices

1. Scalability: With microservices, individual components can scale independently based on workload, enabling efficient resource utilization and better performance during high traffic.
2. Flexibility: The loosely coupled nature of microservices allows developers to update, modify, or replace individual services without impacting the entire application. This agility enables faster development and deployment cycles.
3. Fault Isolation: Since services can decouple, a failure in one service does not cascade to others, reducing the risk of system-wide crashes and making fault isolation more manageable.
4. Technology Heterogeneity: Different services can use varied programming languages, frameworks, and databases, allowing teams to select the most suitable technology for each service’s requirements.
5. Continuous Deployment: Microservices facilitate continuous deployment by enabling the release of individual services independently, ensuring faster and safer rollouts.

Challenges of Microservices

1. Distributed System Complexity: Managing a distributed system introduces complexities in terms of communication, data consistency, and error handling, which require careful design and planning.
2. Operational Overhead: Operating multiple services necessitates robust monitoring, logging, and management systems to ensure smooth functioning and quick identification of issues.
3. Data Management: Maintaining data consistency across multiple services can be challenging, and implementing effective data management strategies becomes crucial.
4. Service Coordination: As the number of services grows, orchestrating their interactions and maintaining service contracts can become intricate.

Best Practices for Microservices

1. Design Around Business Capabilities: Structure services based on specific business domains to ensure clear ownership and responsibility for each functionality.
2. Embrace Automation: Invest in automation for building, testing, deployment, and monitoring to reduce manual efforts and improve efficiency.
3. Monitor Relentlessly: Implement robust monitoring and alerting systems to identify and address performance bottlenecks and issues proactively.
4. Plan for Failure: Design services with resilience in mind. Use circuit breakers, retries, and fallback mechanisms to handle failures gracefully.
5. Secure Communication: Ensure secure communication between services by implementing encryption and authentication mechanisms, which effectively deter unauthorized access.

Conclusion

Microservices have revolutionized modern software application architecting, development, and scaling.

Organizations can achieve greater agility, scalability, and maintainability by breaking down monolithic systems into more minor, manageable services.

However, adopting microservices requires careful planning, coordination, and adherence to best practices to harness their full potential.

With the advantages of microservices and addressing the associated challenges, businesses can build robust and adaptable software architectures that meet the demands of today’s fast-paced digital landscape.

By Sumit Munot (Delivery Manager – Javascript Fullstack)

Micro Frontends are revolutionizing the traditional approach to building, deploying, delivering, and maintaining web applications. In the conventional model, these tasks required large-scale developer teams and complex, centralized systems. However, the rise of Micro Frontends is changing the game. This innovative design approach involves breaking down a front-end app into individual, semi-independent “micro apps” that collaborate loosely, much like microservices.

By adopting this new technique, organizations can achieve significant benefits. Firstly, it enables the decoupling of large teams to empower smaller groups to develop strategies and make decisions autonomously on their projects. 

Additionally, it offers several advantages:

1. Reducing cross dependencies: Micro Frontends help minimize the dependencies between different teams or services, allowing them to work more independently and efficiently.
2. Separating deployment plans for individual services/applications: With Micro Frontends, deployment plans can be tailored to each specific service or application, facilitating faster and more targeted releases.
3. Splitting the front-end codebase into manageable pieces: By breaking the front-end codebase into smaller, more manageable pieces, developers can focus on specific functionalities or features without being overwhelmed by the entire codebase.

Organizations can supercharge speed, ignite innovation, and ensure fail-safe operations with Micro Frontends. Centralization often leads to team frustrations, as external dependencies become challenging to resolve, given that one team’s work can heavily impact another’s. Micro frontends address this issue by promoting autonomy and reducing interdependencies.

Architecture Of Micro Frontend: Say Goodbye to Monoliths!

Addressing codebase growth with Micro Frontends: As the product expands, the codebase grows in complexity, necessitating delegating different features to separate teams.

However, when multiple teams consistently work on the same monolithic codebase, it often leads to conflicts and delays in the CI/CD pipeline. To mitigate these challenges, breaking down the monolithic architecture into Micro Frontends empowers individual teams to take ownership of feature development and appropriately leverage the framework for their specific product requirements.

Unlike microservices, there is no standardized approach or architecture for Micro Frontends. We have adopted a Single Page Application (SPA) Micro Frontend architecture, which ensures scalability within a distributed development environment.

The diagram provides an overview of the Micro Frontend architecture, showcasing the relationship between Micro Frontend source control, deployment through the CI/CD pipeline, and the host app consisting of Micro Frontend services:

Our host app integrates Micro frontend applications within their codebases, servers, and CI/CD pipelines. These mini-apps are divided based on routes, allowing our DevOps team to efficiently build and continuously deploy various feature updates to the production environment without impacting the entire product.

When breaking down the application, we follow a value-driven approach, ensuring that each mini-app delivers value on its own. This approach allows for greater flexibility and targeted development efforts within the micro frontend architecture.

What are the benefits of Micro Frontends?

By leveraging the appropriate tools and components, any team can surpass the challenges of monolithic applications and simplify them into individual release features. The fear of unintended consequences causing application breakdown becomes obsolete. Independent groups can collaborate seamlessly, focusing on distinct front-end features and developing them comprehensively, from the database to the user interface. Micro Frontends enable the following possibilities:

1. Facilitate autonomous teamwork: Each team can concentrate on their specific part of the project without extensive coordination or dependency on other groups.
2. Build independent applications: Micro Frontends allow the creation of self-contained applications that operate without relying on shared variables or runtime, even if multiple teams employ the same framework or codebase.
3. Enhance versatility: With teams working independently, there is greater flexibility in exploring diverse ideas and designs.
4. Develop cross-team APIs: Micro frontends encourage native browsers for communication and enable the creation of APIs across different teams.
5. Flexible updates and upgrades: The user-centric nature of Micro Frontends streamlines the process of releasing new updates, making it more efficient, quicker, and responsive.
6. Decrease codebase complexity: By clearly defining the goals of each component within an application, the codebase becomes cleaner and easier to work with, often avoiding problematic coupling between components that can occur otherwise.
7. Implement autonomous deployment: Micro Frontends support continuous delivery pipelines, where teams can independently build, test, and deploy their code without worrying about the status of other code within the application.
8. Scalability and extensibility: Micro frontends, developed in smaller units, provide developers with better control over their projects, allowing for more effortless scalability and the ability to toggle features on and off to manage complexity effectively.
9. Embrace the single responsibility principle: Each module in Micro Frontends adheres to the principle of having a single responsibility, contributing to cleaner and more maintainable code.
10. Improve user experience: With the independence of cross-functional teams, every aspect of the user experience and application can be meticulously thought through, resulting in an enhanced user experience.

Micro Frontends herald a paradigm shift in software development, granting teams the autonomy to work independently. Promoting efficient development practices enables streamlined workflows and faster iteration cycles. This approach ultimately leads to improved user experiences and more manageable applications. With Micro Frontends, organizations can embrace a modular architecture that empowers teams, fuels innovation, and enhances productivity.

Challenges with Micro Frontends

While Micro Frontends offer numerous advantages, specific issues need to be considered and addressed:

1. Increased code duplication and framework complexity: Each team can choose their technologies, and the browser may download multiple frameworks and duplicate code to impact performance and improve the overall complexity of the application.
2. Balancing autonomy and shared dependencies: There is a tension between allowing teams to independently compile their applications and the desire to have common dependencies for efficient code reuse. However, introducing changes to shared dependencies may require additional efforts to accommodate one-off releases.
3. Consideration of the development environment: When developing Micro Frontends in a non-production-like climate, it becomes essential to regularly integrate and deploy them to environments that closely resemble the production environment. Additionally, thorough testing, both manual and automated, in these production-like environments is crucial to identify and address integration issues as early as possible.

Leveraging Micro Frontends to address complex codebases

Micro Frontends offer a valuable solution for tackling complex codebases and scaling architectures. They serve as an effective component model, providing a modular approach to application development, streamlining development processes, and facilitating faster project delivery. While numerous solutions are available in the market, it’s crucial to consider the variety of patterns and carefully evaluate factors such as team size and communication between components and frameworks.

By adopting Micro Frontends, organizations can develop targeted solutions for specific challenges within their applications. Transforming an extensive front-end application into a Micro Frontend architecture can significantly reduce technical friction and enhance overall efficiency.

Mastering Micro Frontends

Enter Micro Frontends – a game-changing architectural pattern that allows for the independent development and deployment of smaller, self-contained frontend modules. With Micro Frontends, teams can effectively decouple their front-end codebase, enabling seamless collaboration, faster development cycles, and improved scalability. This approach opens possibilities, empowering organizations to create highly modular, maintainable, and adaptable web applications. As we embark on this exciting journey, let’s delve into the road ahead for Micro Frontends and discover its boundless potential for the future of front-end development.

By Sumit Munot (Delivery Manager – Javascript Fullstack, NeoSOFT)

Starting Your Cloud Journey The Right Way – Steps To Cloud Transformation

A cloud journey enables companies to seamlessly move their applications and workloads to the Cloud. A strategic approach that avoids disrupting current processes is the right path to a successful Cloud journey and transformation. Here are a few essential steps that will guide you in your cloud journey:

1. Adopt A Three-Pillar Approach.

Business, operations, and technology are the three core pillars of any company. A strategic approach that addresses these three pillars is integral to getting maximum value from cloud adoption or migration. Identifying business domains that can realize the full potential of the Cloud to increase revenues and improve margins, choosing technologies in line with your business strategy and risk constraints, and implementing operating models oriented around the Cloud will enable companies to drive innovation and achieve sustainable, long term success with cloud transformation.

2. Prioritize These Questions Before Crafting Your Cloud Transformation Strategy.

Before you embrace a cloud journey, answering these questions will help clarify your security strategy and establish a roadmap for your cloud journey. Here are a few essential questions you need to answer:

⦁ What is your motivation to invest in Cloud?
⦁ What challenges will the cloud address?
⦁ Will customers derive tangible benefits from switching to the Cloud?
⦁ What long-term benefits are you looking to achieve?
⦁ How will the cloud impact business and organization culture?
⦁ How will cloud transformation impact current business processes?
⦁ In what ways have you integrated technology throughout your company? What are your expectations?
⦁ Do you have an existing strategy for successful cloud adoption and migration?

3. Navigate The Cloud, One Step At A Time.

Cloud transformation can be complex, but following certain best practices can ensure a successful journey. Dividing the cloud migration process into planning, migration, and ongoing cloud management will help achieve integrated transformation. Let us look at each of these steps in detail.

Planning

The planning process consists of three main steps: Discovery, Assessment, and Prioritization. Discovery refers to identifying all the assets in your technology landscape. Assessment includes evaluating the suitability of on-premises apps and services for migration. The prioritization process determines which applications and services should be migrated to the Cloud to establish a timeline. Let’s look at the three steps: discovery, assessment, and prioritization.

1. Discovery

A thorough understanding of the on-premises environment is crucial before migrating to the Cloud. Many businesses still rely on traditional IT architectures, with applications designed for on-premises use. An accurate overview of all the on-premises applications is essential for effective migration planning. The IT landscape’s hardware, software, relationships, dependencies, and service maps need careful evaluation during discovery—any potentially hidden SaaS apps considered to ensure a clear understanding of the technology landscape.

Track assets to delve deeper into more critical details about them:

⦁ Ownership details
⦁ Asset usage patterns
⦁ The cost incurred for the assets
⦁ End-of-life or end-of-service dates
⦁ Software licensing terms, conditions, and renewals
⦁ Application compatibilities
⦁ Security vulnerabilities

As illustrated in the figure below, most of this information is available in your company’s internal sources, such as system & license management tools, procurement systems, human resources systems, and internal sources. At the same time, you can obtain information about EOL and EOS dates, compatibility issues, and security vulnerabilities from external sources. Such information contains clues that allow organizations to plan their cloud migration journey effectively.

The next step is to assess which apps and services need migration to the Cloud. The key factors to consider when determining the suitability of existing applications and cloud providers for migration are as follows:

2. Assessment

The next step is to assess which apps and services need migration to the Cloud. The key factors to consider when determining the suitability of existing applications and cloud providers for migration are as follows:

⦁ The level of effort needed to migrate an app or service.
⦁ Apps and services that don’t require migration.
⦁ Architecture or security concerns and business impact or customer impact.
⦁ The total cost of ownership of on-premises apps or services.

It is essential to determine which applications fit better into the Cloud environment. When migrating apps and services to the Cloud, key decision-makers need to be sure of the benefits it will bring in the long term. Companies must evaluate the cost of running the apps on the Cloud compared to keeping them on-premises with assessment tools.

3. Prioritization

This phase prioritizes the apps that must move to the Cloud first. How do you determine which apps must migrate first and which can wait? Let’s prioritize.

⦁ Start your migration process by focusing on less complex apps.
⦁ Choose apps that will have a low impact on the business operations.
⦁ Give priority to internal-facing applications before the customer-facing application.

Businesses can opt for migration for technological reasons. Migrating an app with heavy storage requirements makes sense only if its storage usage is near capacity and demands hardware upgrades on-premises.

Cloud Migration

Consider the changes migration will bring to your business model. Before migrating the assets, they should share the data acquired in the planning and assessment stage with the stakeholders and IT teams. Hence, everyone is well aware of migration’s impact on the business. Here are a few steps outlined to maximize the chances of successful cloud migration.

1. Plan your Cloud migration.

Consider the total cost and migration structure and evaluate the service provider for your migration beforehand. Establish the migration architect role to design strategies for data migration and define cloud-solution requirements. A migration architect plays a critical role in executing all aspects of the migration. Determine the level of cloud integration (shallow cloud integration or deep cloud integration). Choose whether to go single-cloud or multi-cloud, depending on your business requirements. Establish performance baselines well in advance to diagnose any problems and evaluate post-migration performance.

2. Prioritize Cloud Infrastructure security.

Security is a significant concern for every business when switching to Cloud. An impactful analysis is integral to understanding the security gaps in the cloud transformation journey. Companies increasingly rely on machine data to gain insights into security vulnerabilities and ensure apps and services run securely. Picking the right cloud hosting platform is crucial to ensure the longevity, stability, speed, security, and cost-efficiency of the digital assets you have planned for cloud enablement.

3. Set objectives and key results.

Before starting the migration process, businesses must establish objectives and key results (OKRs). Objectives and key results help determine whether the migration has benefited the organization. Development productivity, user and developer experience, stability and security, and speed to market/delivery are a few of the critical metrics businesses must measure to ensure a successful migration.

4. Set up compliance baselines.

Businesses need to adhere to a set of rules and regulations when planning their migration. Compliance rules keep evolving in response to the threat landscape, and companies should ensure continued compliance by investing in the proper security controls and configurations.
You can put your cloud migration plan in motion for one or more assets after evaluating factors such as urgency, adaptability, and ease of execution. Businesses often consider metrics such as the total number of users, device count, location, interoperability, business continuity, and data integrity.

Tips for Successful Cloud Migration

Listed below are a few tips businesses can follow to ensure a future smooth migration:

A cloud strategy should align with your business strategy and business operations.

Creating a cloud strategy that aligns differently from your overall business strategy could benefit your ROI. Your cloud migration strategies should support and facilitate the implementation of business strategies. Focus on more than just the IT aspect of your business. Ensure the chosen business verticals benefit from your cloud strategy.

Assess Cloud-related risks.

Businesses must assess the five cloud-related risks such as agility risk, availability risk, compliance risk, security risk, and supplier risk. Evaluating these risks ensures sound cloud deployment decisions for your business. Weighing the risks against the benefits offers better clarity on the post-migration performance of the company.

Consider different Cloud migration strategies.

There are different approaches to cloud migration, and you can select the one that best suits your needs. Rehost, refactor, repurchase, re-platform, retain, and remove are the six cloud migration strategies businesses can implement.

Get rid of data silos.

Data silos present multiple risks and impede performance. Businesses should establish a common data platform across clouds to eliminate silos. A unified view of the Cloud with a single platform ensures a seamless user experience while eliminating the need to refactor for separate vendors when moving data from one Cloud to another.

Utilize Cloud staging.

Cloud staging refers to moving elements of end-user computing to the Cloud. It helps users transform desktops with centralized cloud-based storage. Businesses choose between maintaining existing desktop types alongside a new platform or migrating their users entirely to the new platform. With cloud staging, users can migrate to another desktop with zero downtime for maximum productivity.

Create a Cloud-first environment

Creating a cloud-first environment will ensure your business reaps the full benefits of cloud adoption. To adapt to the cloud environment workforce must be trained. The Cloud is a powerful tool for digital transformation and an inseparable component driving innovation for your business. By utilizing the Cloud’s scalability, flexibility, and advanced features, companies are successfully transforming their operations, optimizing their resources, and unlocking new growth opportunities.

Execute effective testing

Testing gives insights into whether the migration will produce the desired results. Testing enables you to simulate real-world workloads to understand slowdowns and outages as you migrate across load scales.

Ongoing Cloud Management

Ongoing cloud management refers to managing the applications and services on the Cloud as soon as the migration is complete. Cloud migration is not a one-off activity. After migration, businesses must operate and optimize in response to changing business requirements.

Cloud management begins with the migration of the first workload. Automation tools play a critical role in managing cloud-based workloads. Cloud management is essential to ensure optimal resource management, security, and compliance in this fast-paced environment.

An overview of the cost-effective scope of ongoing support for cloud management consulting might help understand its need better.

We list below the top cloud challenges and tips to curb them in your ongoing cloud management activity:

1. Cloud governance and compliance

Governance is crucial in maintaining the alignment between technology and business and ensuring compliance with corporate policies, industry standards, and government regulations. 

⦁ Set standardized architectures that comply with corporate versions, patches, and configuration guidelines.
⦁ Capitalize on reusable templates to deploy standardized architectures and orchestrate infrastructure and services across public clouds.
⦁ Orchestrate ongoing operations such as monitoring and performance optimization; alerts, notifications, and escalations; and self-healing capabilities.
⦁ Automate compliance with governance frameworks

When individuals and departments acquire SaaS apps without the knowledge of Central IT, such apps may not comply with the rules and regulations as they are outside the purview of the IT governance framework. Therefore, central IT must be involved in technology selection to align the assets with the compliance requirements. Implementing the right governance tools will enable companies to automate compliance and define standardized architectures that comply with corporate guidelines.

2. Optimizing spends

Optimizing cloud spending is a significant challenge facing modern businesses. Cloud resources used optimally achieve more substantial cost savings. Ongoing cloud management ensures the efficient use of cloud resources at reduced costs. Best practices include:

⦁ Eliminating apps with overlapping functionality.
⦁ Identifying unused apps.
⦁ Implementing the latest tools to identify areas with potential for cost savings.
⦁ Leveraging cloud-based automation to increase productivity.

3. Strengthening security

Decentralized decision-making is a significant contributor to weak security. All stakeholders and employees involved should be equally aware of the importance of safety and the best practices to ensure maximum Cloud security. There are different tools that businesses can employ to improve security in the cloud environment. These tools will send alerts for misconfigured networking, facilitate role-based access, maintain audit trails that track cloud resource usage, and ensure integration with SSO and directory services for consistent access to cloud resources.

NeoSOFT has been fueling the shift towards cloud enablement for businesses across industries.

Developed AWS Cloud Infrastructure and Containerized Applications

NeoSOFT provided a cloud architecture solution design and VPN tunneling for authorized access to sensitive data. This mechanism adds an extra security layer to the stored data. Our developers utilized an OS-level virtualization method for application containerization to deploy and run distributed application solutions.

Impact: 70% Increase in Data Efficiency

Integrated IoT and Cloud Computing for a Customized Home Automation System

Our team of expert cloud engineers leveraged automation and cloud tools to develop a cross-platform application that integrated a simple and intuitive design, offering seamless access to smart home devices. The application’s user-friendly interface boosted engagement by providing greater control over security, energy efficiency, and low operating costs. Enable users to monitor, schedule, and automate all their smart devices from one location.

Impact: 25% Increase in Download Speeds

Engineered a Robust Cloud-Based Web App for the World’s First Fully-Integrated Sports Smart-Wear Company.

Our Cloud engineers empowered the client with cloud computing and data management tools to construct a website featuring distinct modules for the admin, affiliate marketing, and channel partners. The app efficiently manages country-specific distribution, influencer-based product promotion, and user data access. Advanced analytics integration also provided real-time sales reports, inventory management, device tracking, and production glitch reporting.

Impact: 30% Increase in Operational Excellence

The Road to Cloud Success

Navigating the journey and transition toward cloud transformation can be challenging. However, many enterprises have moved to the Cloud in response to challenges they have experienced, like unexpected outages, downtime, data loss, lack of flexibility, complexity, and increased costs. Businesses that embrace cloud transformation may retain their competitive advantage. Cloud migration allows enterprises to move from a Cap-Ex-based IT infrastructure to an Op-Ex-based model.

The right people, processes, and tools can facilitate a smooth cloud transformation journey. Businesses can witness sustained results only if technology execution capabilities are up to the task. The key to cloud transformation success is to select a migration model that aligns with economic and risk constraints. The company should clearly understand its risk appetite and business strategies when making cloud transformation decisions and evaluating its IT capabilities.

Organizations require to establish comprehensive enterprise IT strategies to fulfil the overarching business requirements and stay competitive. Information Technology constantly evolves to provide new ways to do business, and the last decade saw the emergence of cloud computing solutions as a powerful technology to drive long-term benefits for an enterprise.

IT infrastructure is a broad field comprising different components such as network and security structure, storage and servers, business applications, operating systems, and databases. Organizations are grappling with key challenges when it comes to scaling up their IT infrastructure.

In this blog, we’ll explore some critical top-of-the-mind questions for cloud professionals, such as-

Exploring the Potential of Cloud Computing

Cloud computing solutions have been a key enabler for big innovations in enterprises and could provide the answers to the myriad of questions that challenge CIOs today. Cloud computing services enable enterprises to become more agile. Cloud offers better data security, data storage, extra flexibility, enhanced organizational visibility, smoother work processes, more data intelligence, and increased employee collaboration. It optimizes workflows and aids better decision-making while minimizing costs.

Cloud has now moved from merely being an on-demand and grid computing platform and is now tapping into advancements in virtualization, networking, provisioning, and multi-tenant architectures. Cloud services are critical to building leaner and more nimble IT organizations. It gives companies access to innovative capabilities with robust data centers and IT departments.

The first step to designing a cloud strategy is to outline the business goals and the challenges the cloud will be able to resolve. A holistic approach to creating a cloud strategy will help create an adaptable governance framework empowering businesses with the flexibility to handle different implementation demands and risk profiles.

How Does Cloud Create Tangible Business Value for Enterprises?

Cloud computing and digital transformation are integral to modernizing the IT environment. Listed here are the top six cloud value drivers that are transforming the enterprise business strategy:

Let’s dive deeper into how cloud computing creates tangible value for enterprises.

Reducing operating costs and capital investments

Cloud computing services encompass applications, systems, infrastructures, and other IT requirements. By adopting the cloud, companies can save an average of 15 % on all IT costs. Cost optimization is the main reason why 47% of enterprises have opted for cloud migration.

Cloud services provide natural economies of scale allowing businesses to pay only for what they need. Businesses can achieve cost savings with the cloud as it optimizes both software licenses and hardware or storage purchases both on-premise or within the data center. A cloud strategy allows businesses to reduce upfront costs and shift to an OpEx model.

Pay-for-use models enable businesses to access services on-a-need basis. Cloud lowers IT costs and frees up time to focus on optimization, innovation, and more critical projects. Enterprises could prune their IT operations and allow CSPs to manage all operating responsibilities using cloud solutions that sit higher in the stack.

Access to finer-grained IT services

Cloud eliminates multiple barriers that stand in the way of small enterprises. Small enterprises often don’t have the resources to access sophisticated IT infrastructure and solutions. Cloud allows small enterprises to access IT solutions in small increments depending on their budget and business goals without compromising efficiency and productivity. The biggest advantage of cloud models is that they open up access to flexible solutions that are otherwise economically not feasible. Cloud computing solutions, before, level the playing field for small businesses and allow them to compete with larger enterprises.

Eliminating IT complexity for end users

Cloud can simplify IT systems making it easy for businesses to operate. With the cloud, users don’t have to bother about upgrades, backups, and patches. Cloud providers can handle all these functions so users are ensured of seamless access. Cloud’s open approach architecture paves way for new IT outsourcing models. So far, cloud models primarily catered to large enterprises with large IT requirements and at times had lesser scope to accommodate the IT requirements of smaller enterprises. However, the advent of the cloud has enabled small companies to access quality IT services at affordable rates. Mobility and data security are the two key areas where businesses will benefit from the cloud.

Leveraging the pay-per-use cost structure for cloud IT services

Cloud has transformed IT costs from fixed costs to variable costs. That means enterprises with varying IT requirements can safely rely on the cloud. Enterprises may have varying storage needs and the pay-per-use cost structure is highly beneficial for such enterprises. Large enterprises can expand or contract capacity for select applications if they already have existing IT infrastructure.

As updates are included in the cost, enterprises don’t have to deal with obsolescence. An organization’s overall IT requirements determine to what extent the IT costs will transform into a variable cost structure. The cloud allows businesses to trade fixed expenses like data centers and physical servers for variable expenses and only pay for IT services as they are used. The variable expenses are much lower compared to the capital investment model.

Standardizing applications, infrastructure, and processes

Digital transformation and cloud adoption are foundational to standardizing applications, infrastructure, and processes. A ‘lift and shift’ approach where legacy applications are simply moved to the cloud will not yield benefits. The dynamic features of the cloud help replace current processes with industry best practices to eliminate process bottlenecks and high costs. Standardization helps tame the complexity of modern infrastructures and their potential pitfalls. Cloud-driven solutions can also replace non-core applications that greatly improve business processes and provide the level of transparency and standardization that modern companies are looking for. Cloud-based data standardization is driving digital transformation across business functions in multiple industries. Cloud makes applications more scalable and interoperable and opens access to a scalable set of secured solutions.

Organizations in emerging markets have been quick to realize the benefits of cloud computing. Cloud computing represents a paradigm shift; it has transitioned from ‘computing as a product’ to ‘computing as a service.’ Organizations in emerging markets get an opportunity to leapfrog their counterparts in developed countries with cloud adoption. Rather than buying hardware and software and investing in maintenance and configuration, cloud computing services enable companies to use applications and computing infrastructures in the cloud-as-a-service (CaaS).

Capturing the benefits of cloud adoption requires a holistic approach. Even companies that once preferred to have their own IT infrastructure and systems are shifting to the cloud to leverage its scalability and higher-order functionality. Pilots help determine the impact of cloud adoption on core IT operations as well as the business model. An initial assessment of the impact of the cloud is integral to creating a sound cloud strategy.

Businesses that adopt a cloud-first approach will witness a significant impact on their products/services and delivery and sales models. Pilots should be initiated depending on whether cloud adoption will impact the application layer or infrastructure layer in your enterprise. A decrease in time to market for new applications is a crucial benefit of cloud adoption.

While some enterprises have adopted a hybrid approach, others have moved to a private or public cloud solution. Companies have embraced the cloud in one way or another as a part of their digital transformation journey. Moving to the cloud will enable businesses to focus on more strategic problems like accurately forecasting through good data management and automating repetitive business processes.

Though the cloud is no longer in its infancy, many enterprises are still faced with challenges when it comes to starting their cloud computing journey. Conducting a pilot is the perfect way to start the cloud computing journey. You can choose from a variety of products and services to conduct a cloud pilot.

Step 1: Assess your business need

Define the business imperatives and determine key areas where the business needs to integrate with the cloud. Assess the triggers for cloud transformation. If you want to reduce costs or accelerate digital innovation, you will need to conduct pilots accordingly. Cost reduction and performance improvement of business applications will require you to conduct a SaaS pilot.

Step 2: Evaluate options

Take the SaaS pilot as an example. You would have multiple providers to choose from, all with capabilities and experiences that match your requirements. You must evaluate the level of cloud adoption in your industry and assess how various Saas providers match up to that. The evaluation should support the logic used to determine the right type of pilot for your business.

Step 3: Launch the pilot

The final step is to launch the pilot and collect data that will give insights into the road ahead in your cloud computing journey. The data collected at this stage will form the basis for your future cloud strategies and serve as the cornerstone for creating a robust, data-driven, and actionable cloud adoption blueprint for your organization. Once you’ve done a pilot, you can move to the next phase of your cloud journey.

NeoSOFT can help businesses in their digital transformation and cloud adoption journey with its sustained digital capabilities. We leverage the most in-demand technologies, methodologies, and framework components to craft effective cloud strategies that bring substantial value to businesses. NeoSOFT drives stronger business results by taking a holistic approach to cloud integration.

Here is a quick overview of the NeoSOFT strategy to assist clients with cloud adoption:

1. Readiness analysis

A ‘one cloud-fits-all’ approach won’t work for businesses of different sizes and goals. The first step is to pinpoint the areas in dire need of cloud services. This can be achieved by conducting a deep analysis of the business models, goals, opportunities, and weaknesses. The organization’s skills, resources, and capabilities are taken into consideration at this stage. Its ability to adapt to change and ways to minimize potential project failure are key concerns addressed.

2. Formulating strategy

We create an effective IT strategy that maps to business goals and focuses on deriving outcomes that are sustainable, scalable, and secure. Our strategy is based on principles of agility with faster and safer adoption techniques.

3. Creating a roadmap

This step includes prioritizing workloads to target in the pilot. We help develop initial cloud configurations with associated cost analysis. We create a strategic roadmap designed according to best practices and your organization’s policies and standards. This phase is focused on developing cloud strategies that will keep your cloud infrastructure right-sized and cost-efficient over the long term.

Cloud has undoubtedly had a massive impact on the enterprise-technology ecosystem. In 2020, 81% of technology decision-makers said their company already made use of at least one cloud application or relied on some cloud infrastructure. The two key aspects of cloud computing, as with any other technology, are cost reduction and risk mitigation. A well-architected cloud environment is integral to reaping the full benefits of cloud technology. Legacy applications pose risks such as security issues to organizations. A sound cloud strategy takes into consideration cost recovery and risk mitigation. Businesses must prioritize investments in cloud transformation after performing a thorough assessment of their existing business models.

The cloud transformation journey for each organization is unique. The cloud strategy depends on multiple factors such as risk appetite, scope, existing technology stack, and budget. Even organizations planning to start small should consider cloud adoption as a vital part of their IT enterprise strategy to accelerate digital transformation and stay ahead of the competitive curve.

The new data-driven enterprises of 2025 will be defined by seven key characteristics and companies who are agile and speed up to make their progress fast, are the ones who shall derive the highest value from data-supported capabilities.

1. Embedding data within each decision, interaction, and process

Quite often, companies leverage data-powered approaches periodically throughout their organization. This includes various aspects from predictive systems to AI-powered automation. However, these are sporadic and inconsistencies have led to value being left on the table and creating inefficiencies. Data needs to be democratized and made simple and convenient to be accessed by everyone. Several business problems are still being addressed with traditional approaches and can take months or even years to resolve.

Scenario by 2025

Almost all employees shall regularly leverage data to drive their daily tasks. Instead of resorting to solving problems by developing complex long-term roadmaps, they can simply leverage innovative data techniques that can solve their issues within hours, days, or weeks.

Companies will be able to make better decisions as well through the automation of everyday activities and recurring decisions. Employees will be free to turn their efforts to more ‘human’ domains like innovation, collaboration, and communication. The data-powered culture facilitates continuous performance improvements to develop distinctly different customer and employee experiences, as well as the rise of complex new applications that aren’t available for widespread use currently.

Use Cases

⦁ Retail stores offer an enhanced shopping experience through real-time analytics to identify and nudge customers that are a part of the loyalty program, towards products that might interest them or be useful to them, and streamline or entirely automate the checkout process.
⦁ Telecommunication companies use autonomous networks that automatically determine areas that require maintenance and identify opportunities for increasing the network capabilities based on usage.
⦁ Procurement managers frequently use data-powered processes to instantly sort purchases for approval in terms of priority, enabling them to shift their efforts to develop a better and more potent partner strategy.

Key Enablers

⦁ A clear vision and data strategy to outline and prioritize transformational use cases for data.
⦁ Technology enablers for complex AI use cases to support querying of unstructured data.
⦁ Organization-wide data literacy and data-powered culture, allow all employees to understand and embrace the value of data.

2. Processing and delivering data in real-time

Just a fraction of data collected from connected devices is captured, processed, queried, and analyzed in real-time due to limitations within legacy technology structures, the barriers to adopting more modern architectural elements, and the high computing demands of comprehensive, real-time processing tasks. Companies usually have to choose between pace and computational intensity, which can delay more sophisticated analysis and hinder the implementation of real-time use cases.

Scenario by 2025

Massive networks of connected devices shall collect and transmit data and insights, usually in real-time. How data is created, processed, analyzed, and visualized for end-users will be greatly transformed through newer and more ubiquitous technological innovations, leading to quicker and more actionable insights. The most complex and advanced analytics will be readily available for use to all organizations as the expenses related to cloud computing will continue to decline and highly powerful “ in-memory” data tools emerge online. Altogether, this will lead to more advanced use cases for delivering insights to customers, employees, and business partners.

Use Cases

⦁ A manufacturing unit makes use of networks of connected sensors to predict and determine maintenance requirements in real-time.
⦁ Product developers leverage unstructured data and deploy unsupervised machine-learning algorithms on web data to detect deeply embedded patterns and leverage internet-protocol data and website behavior to customize web experiences for individual customers in real-time.
⦁ Financial analysts leverage alternative visualization tools, potentially turning to augmented reality/ virtual reality (AR/VR) to create visual representations of analytics for strategic decision-making involving multiple variables instead of being restricted to the usual two-dimensional dashboards currently being used.

Key Enablers

⦁ Complete business architecture to comprehend the implementation between assets, processes, insights, and interventions as well as to enable the detection of real-time opportunities.
⦁ Highly effective edge-computing devices (eg: IoT sensors), ensuring that even the most basic devices create and analyze usable data “at the source”
⦁ 5G connectivity infrastructure supporting high-bandwidth and low-latency data from connected devices. Optimizing intensive analytics jobs using in-memory computing for quicker and more effective computations.

3. Integrated and ready-to-consume data through convenient data stores

Even though the rapid increase and expansion of data are powered by unstructured or semistructured data, a big chunk of usable data is still structured and organized using relational database tools. Quite often, data engineers spend a substantial amount of time manually exploring data sets, establishing relationships between them, and stitching them together. They must also regularly refine data from its natural, unstructured state into a structured format using manual and bespoke processes that are time-consuming, not scalable, and error-prone.

Scenario by 2025

Data practitioners will work with a wide variety of database types, including time-series databases, graph databases, and NoSQL databases, facilitating the creation of more flexible pathways for organizing data. This will enable teams to easily and quickly query and understand relationships between unstructured and semi structured data. Further accelerating the development of new AI-powered capabilities as well as the detection of new relationships within data to fuel innovation. Merging these flexible data stores with advancements in real-time technology and architecture also empowers organizations to create data products like ‘customer 360’ data platforms and digital twins – featuring real-time data models of physical entities (for example, as a manufacturing facility, supply, or even the human body). This facilitates the creation of complex simulations and what-if scenarios using the power of machine learning or more sophisticated techniques like reinforcement learning.

Use Cases

⦁ Banking and large enterprises use visual analytics to infer data conclusions that are modeled from multiple sources of customer data.
⦁ Logistics and transportation companies leverage real-time location data and sensors installed within vehicles and transportation networks to develop digital twins of supply chains or transportation networks, providing a variety of potential use cases.
⦁ Construction teams crawl and query unstructured data from sensors installed in buildings to glean insights that enable them to streamline design, production, and operations, for example, they can stimulate the financial and operational impact of selecting various types of materials for construction projects.

Key Enablers

⦁ Creating more flexible data stores through a modern data architecture.
⦁ The development of data models and digital twins to mimic real-world systems.

4. Data operating model that treats data as a product

The data function of an organization, if it exists beyond IT, manages data using a top-down approach, rules, and controls. Data frequently does not have a true ‘owner’, enabling it to be updated and prepped for use in multiple different ways. Data sets are also stored, often in duplication, across massive, siloed and often costly environments, making it difficult for users within an organization (like data scientists searching for data to develop analytics models) to detect, access, and implement the data they need rapidly.

Scenario by 2025

Data assets shall be categorized and supported as products, regardless of whether they are deployed by internal teams or for external customers. These data products will have devoted teams, or ‘squads’, working in tandem to embed data security, advance data engineering (for instance to transform data or continuously integrate new sources of data), and implement self-service access and analytics tools. Data products will continuously advance in an agile way to keep up with the demands of consumers, leveraging DataOps (DevOps for data), continuous integration, delivery processes, and tools. When combined, these products offer data solutions that are more easily and repeatedly useful to address various business challenges and decrease the time and costs associated with delivering new AI-powered capabilities.

Use Cases

⦁ Assigned teams within retail companies to develop data products, like ‘product 360’, and verify that the data assets continue to evolve and meet the requirements of critical use cases.
⦁ Healthcare companies, including payment and healthcare analytics firms, dedicated product teams to create, maintain and evolve ‘patient 360’ data products to improve health outcomes.

Key Enablers

⦁ A data strategy that singles out and prioritizes business cases for leveraging data.
⦁ Being aware of the organizations’ data sources and the types of data they possess.
⦁ An operating model that establishes a data-product owner and team, which can contain analytics professionals, data engineers, information-security specialists, and other roles when required.

5. Elevate Chief Data Officer’s role to generate value

Chief data officers (CDOs) and their teams function as a cost center responsible for developing and monitoring compliance within policies, standards, and procedures to manage data better and ensure its quality.

Scenario by 2025

CDOs and their teams act as business units with their own set of defined profit-and-loss responsibilities. This entity, in collaboration with business teams, would be responsible for ideating new methods of leveraging data, creating a holistic enterprise data strategy (and including it as a part of the business strategy), and identifying new sources of revenue by monetizing data services and data sharing.

Use Cases

⦁ Healthcare CDOs collaborate with business units to develop new subscription-based services for patients, payers, and providers that can boost patient outcomes. These services can include creating custom treatment plans, more accurately flagging miscoded medical transactions, and improving drug safety.
⦁ Bank CDOs commercialize internal data-oriented services, like fraud monitoring and anti-money-laundering services, as a representative of government agencies and other partners.
⦁ Consumer-centric CDOs collaborate with the sales team to leverage data for boosting sales conversion and bear the responsibility for meeting target metrics.

Key Enablers

⦁ Data literacy between business unit leads and their teams to generate energy and urgency to engage with CDOs and their teams.
⦁ An economic model, like an automated profit-and-loss tracker, for verifying and attributing data and costs.
⦁ Expert data talent keen on innovation.
⦁ Adoption of venture capital style operating models that promote experimentation and innovation.

6. Making data-ecosystem memberships the norm

Even within organizations, data is frequently siloed. Although data-sharing agreements with external partners and competitors are growing, they are still quite uncommon and limited in scope.

Scenario by 2025

Big, complex organizations leverage data-sharing platforms to promote collaboration on data-driven projects, both within and amongst organizations. Data-powered companies take an active role in a data economy that enables the collection of data for identifying valuable insights for all members. Data marketplaces facilitate the sharing, exchange, and supplementation of data, allowing companies to develop truly unique and proprietary data products from which they can derive key insights. On the whole, limitations in the exchange and combination of data are massively decreased, bringing together different data sources in a way that ensures greater value creation.

Use Cases

⦁ Manufacturers exchange data with their partners and peers using open manufacturing platforms, allowing them to develop a more holistic view of worldwide supply chains.
⦁ Pharmaceutical and healthcare organizations can combine their respective data (for instance, clinical trial data collected by pharmaceutical researchers and anonymized patient data stored by healthcare providers) enabling both companies to more effectively achieve their goals.
⦁ Financial services organizations can access data exchanges to identify and create new capabilities (for example, to assist socially conscious stakeholders by offering an environmental, social, and governance (ESG) score for publicly traded companies.

Key Enablers

⦁ The adoption of industry-standard data models to improve ease of data collaboration.
⦁ With the development of data partnerships and sharing agreements, multiple data-sharing platforms have entered the market recently to enable the exchange of data both within and between institutions.

7. Prioritizing and automating data management for privacy, security, and resiliency

Data security and privacy are often regarded as compliance problems, occurring due to nascent regulatory data protection mandates and consumers starting to become aware of just how much of their information is collected and used. Data security and privacy protections are usually either insufficient or monolithic, instead of being customized to each data set. Giving employees secure data access is preceding manual process, making it error-prone and lengthy. Manual data-resiliency processes lead it difficulties in being able to recover data quickly and completely, running the risk of lengthy data outages that impact employee productivity.

Scenario by 2025

Organizational ideology has shifted completely to include data privacy, ethics, and security as areas of required competency, powered by evolving regulatory expectations like the General Data Protection Regulation (GDPR), greater awareness of customers about their data rights, and the growing liability of security incidents. Self-service provisioning portals handle and automate data provisioning using predetermined ‘scripts’ for securely and safely offering users access to data in almost real-time, significantly boosting user productivity.

Automated, perpetual backup procedures enforce data resiliency, quicker recovery procedures rapidly pinpoint and recover the ‘last good copy’ of data in minutes instead of days or weeks, hence decreasing the risks associated with technological glitches. AI tools are readily available for managing data effectively (for example, by automating the verification, correction, and remediation of data quality issues). When combined, these aspects allow organizations to instill greater trust in both the data and the way it is handled, ultimately boosting new data-powered services.

Use Cases

⦁ Retailers that have a presence online can specify the data collected from consumers and develop consumer portals to get consent from users and offer them the choice to ‘opt in’ to personalized services.
⦁ Healthcare and governmental institutions that have access to incredibly sensitive data can implement advanced data resiliency protocols that automatically create multiple daily backups and when required, identify the ‘last good copy; and restore it seamlessly.
⦁ Retail banks automatically provision credit-card data required to fast-track customer-facing applications, specifically during development or testing, to boost developer productivity and offer access to data more efficiently and securely than what is offered by traditional manual efforts today.

Key Enablers

⦁ Elevating the significance of data security across the organization.
⦁ Growing consumer awareness and active involvement in individual data protection rights.
⦁ The adoption of automated database-administration technologies for automated provisioning, processing, and information management.
⦁ The adoption of cloud-based data resiliency and storage tools enables automatic backup and restoration of data.

Let’s dive into the concepts of open banking and understand the drivers that are fueling this innovation, the challenges and threats it poses, and how banks and other players plan to transform and develop new revenue models through the open banking channel.

What is Open Banking?

Open banking, also known as ‘open bank data’, is a platform-based approach that is destined to stay and evolve. It is a banking practice that provides third-party financial service providers with open access to consumer banking, transaction, and other financial data. The consumer data is captured from banks and non-bank financial institutions through the use of application programming interfaces (APIs).

The Evolution of Open Banking

Financial institutions, since their inception, have been collecting precious information about their customers and their transactions, with little or no knowledge of how to harness this data to its effective value.

Today, financial institutions leverage the data to narrow down customers’ preferred choices and this includes everything from their favorite restaurant or coffee shop to which shops they buy most of their shirts. Financial institutions also capture non-consumer data known as meta-data from cash machines, branch locations, number of loans, mortgages, different account types, and volume of transactions. With all this data captured in heaps, it becomes easier to analyze customer preferences and suggest relevant products and services that could be of their interest.

Due to an increase of around 50% in access to additional customer data and an approximate 70% decrease in time to market, open banking is without a doubt garnering the most interest within the fintech industry.

If we think about the short term alone, open banking is expected to increase financial institutions’ revenue by at least 20%-30%. These numbers are jolting the fintech industry towards renewed innovation of banking and payment services, making it easier and more accessible for customers.

Conventional Banking Vs Open Banking

Driving Forces Behind Open Banking Adoption

Due to the global pandemic, the past few years have been quite challenging for financial institutions. This situation also built opportunities to innovate and introduce solutions that had the potential to drive a positive impact on their future profit goals.

1. Changing Customer Behavior and Expectation

Newer and older generations such as Generation Z or Generation Alpha, have distinctly different behavior and requirements, pushing financial institutions to rethink their process for creating and selling their products and services to them.

For instance, a bank has to consider whether the product or service they offer satisfies the customers’ needs or not. The shift from a product-centric approach to a customer-centric approach is important. This mindset has caused financial institutions to rethink and upgrade their offerings by keeping customer experience at the core of the product development process. Moreover, these days customers enjoy an unprecedented level of market transparency, and their satisfaction level goes beyond accepting a limited choice of products offered by their main bank. With exposure to frictionless user experiences, they can now quickly differentiate between a good and bad CX, and are now not in a state to accept anything mediocre.

2. Technology Fueled Innovation

Radical innovation in digital technology, exponential growth in smart devices, and the shift to instant payments, have opened new opportunities within financial services. Spurred on by the growth of APIs, they have now become the foundation of the entire open banking system. The integration of cloud-based platforms has further enhanced the agility, flexibility, and scalability of financial institutions’ abilities. Additionally, advancements in exponential technologies such as AI, real-time analytics, machine learning, and blockchain have further improved processes, services, and products across all levels.

3. Evolving Regulations

Governments across the globe have been ushered into taking a proactive approach to the “democratization” of financial products and services. Nudged on by EBA in the EU after the adoption of PSD2 in 2015, formally ushers in the concept of open banking. Regulation breeds innovations and naming the concept as ‘open’ denotes its explicit policy goal that the concept must be considered and adopted across all financial institutions. Compelling banks to make their proprietary data available to third-party providers.

4. Increased Competition

A large number of organizations – backed by technology giants like GAFA (Google, Amazon, Facebook, and Apple) – have entered the financial services market. These fintech organizations are providing quicker payment solutions, with seamless integration of cards, e-wallets, and other payment options fueling competition with the banks. As a matter of fact, these organizations are more ready and actively preparing to offer their services within the open banking ecosystem, further ramping up competition with banking institutions.

Unbundling of Banking Models

How Open Banking Will Take the Front Seat in the Financial Ecosystem

Currently, the ‘open revolution’ market consists of both: established financial institutions and new players. The range of applications begins from a ‘minimum approach’ that permits third-party access using APIs for the purpose of sharing selective data to ‘maximum implementation’ facilitates the integration of diverse functionalities by leveraging the Banking-as-a-Service platform (BaaS).

‘True’ open banking goes beyond the exchange of information and impacts the core elements of financial service providers including established processes and legacy core banking systems. They possess tremendous potential and allow players with varying needs to connect, therefore benefiting different bank types and the entire financial industry as a whole. The customers too benefit as they gain access to a wider range of products at a single touchpoint rather than reaching out to multiple service providers.

For some product categories like mutual funds, mortgage loans, or structured products, incorporating third-party products has been a common practice for banks for many decades thus far. This concept has also been applied to deposits, one of the most widely used products by bank customers and a major source of funding for banks.

Flexibility and a More Complex Competitive Environment

Driving Value for Stakeholders

The open banking ecosystem is geared toward a holistic benefit approach that considers its customers as well as the industry stakeholders. Outlined below are a few instances of value created by the innovation open banking platforms have adopted.

1. Flawless User Experience

Due to the potential convergence of open banking and artificial intelligence, user experience is undergoing an incredible digital transformation. The continuous influx of data across several sources enables service providers to determine the exact customer sentiments and requirements resulting in highly personalized financial offerings. Several tedious procedures are also expected to become simplified and automated. Through banking APIs, fintech firms offer users the opportunity to improve their financial lives through financial planning capabilities and insights based on their own data. Essentially, opening banking enables banks and similar financial institutions to create a unique financial profile for each customer according to their financial data. Allowing them to predict their consumption patterns and behavior to execute product customization more efficiently.

2. Real-Time Payments Facilitating Easier Treasury and Cash Management for SMEs

Open banking facilitates near-instantaneous payments, as third-party providers can bundle all payments within a single digital interface. Typically, SMEs don’t have their own treasury departments, unlike their bigger counterparts. Real-Time Payment (RTP) transforms treasury management services, driving value for SMEs through increased visibility of their cash flows and liquidity positions. RTP also speeds up the Peer to Peer (P2P) payments, bill payments, and e-commerce payments ecosystem.

3. Data Sharing Prompting Product Innovation and Financial Freedom

Open banking ensures that banks only share their customer’ data with authorized third parties. This will lead to the development of better financial products as organizations can leverage the data to extract customer insights and subsequently become more innovative and customer-centric.

4. APIs Enhancing Cross-Selling and Cost Optimization Opportunities

Open Banking offers banks the opportunity to blend product and service features offered by third-party providers to create their own offerings using APIs as a plug-and-play model. Tying together such readily available services from third-party providers and vice versa, banks can quickly improve customer service, boost customer loyalty, create new revenue streams, and decrease bank operating costs. Moreover, banks can mitigate the risk and expenses of experimenting with newer products simply by adopting the plug-and-play model of integrating APIs of third parties along with their core products on their digital platform.

5. Data Transparency

The need for building transparency might seem obvious, but each platform and disruptive technology comes with its own story and unique set of challenges. For open banking platforms, these challenges have given credence to the regulatory and similar competent authorities to focus on the need for building transparency by ensuring that the customers’ interests and rights are at the heart of all focus areas.

The potential impact of open financial data on GDP and how it varies according to different regions.

Risks and Challenges Banks Need to Consider to Succeed in the Open Banking Ecosystem

Although the advent of open banking has been largely positive for the financial sector, it has also opened up several new challenges and risks for banking institutions. Many of these will have far-reaching consequences for their business prospects, possibly reaching the point of existential crisis.

Let’s consider some of the key points:

1. Rise of New Competition

Leading banks are now being challenged by pure digital entities like GAFA. These fintech are attracting customers in heaps by providing unbundled, innovative, and engaging financial products and services. Meanwhile, many leading banks are still relying upon legacy systems, and if the threat is not addressed soon, will risk the prospect of losing their market share, greater customer churn, and increased pressure on margins.

2. Data Security

Sharing financial data through APIs to third-party providers bears the inherent risk of data security and breaches. The absence of industry-wide technical standards and data sharing protocols might leave operating processes vulnerable to security breaches and fraudulent activities. Using complicated interconnections of data access, banks need to invest heavily in security initiatives and risk mitigation, which often heavily impacts their bottom line. At the same time, banks cannot afford to miss out on the potential revenue generated by these data streams within the open banking ecosystem.

3. Risk of Commoditization

Due to open APIs, leading banks will face the risk of being commoditized. Reason: The elimination of several existing barriers to switching accounts and shopping around for other products based on price only. Banks face the likelihood that a significant portion of their customer base might turn to the convenience of digital aggregators, resulting in the migration of their accounts and the profit pools tied to them.

Sustaining Long Term Growth Through Business Transformation

The business transformation gained from adopting a platform-based open banking ecosystem will foster an environment that goes beyond incremental change and value delivery. It incorporates strategic choices that affect financial institutions’ growth – how they operate and the kind of improvements they can expect going forward.

Listed below are a few imperatives for creating long term growth for financial institutions:

• Improve the existing range of offerings by reinforcing the core through collaboration with third-party providers.
• Build new value propositions by incorporating customer needs and financial position within service integration. This will allow credit scoring, pricing of loans, and other products to be refined and curated on a more personal, almost one-to-one basis.
• Collaboration and partnership between banks, third-party providers, and merchants will create a marketplace-like ecosystem. Allowing financial products to be bundled along with other non-financial products leads to newer cross-selling opportunities.
• Diversify the traditional service portfolio by building strong API portfolios, boosting engagement with the developer community, and promoting cross-collaboration across marketplaces.
• Concentrate on the adoption of the Banking-as-a-Platform (BaaP) model with an API-enabled network of partners, allowing core services to be bundled with third-party providers – facilitating advisory, business management as well as traditional banking services.

It is clear that open banking is set to fundamentally alter the financial service landscape through innovative services and new business models. The emergence of fintech will bolster collaboration as well usher in a new ecosystem that will change the role of banks significantly. Also, there are several issues surrounding regulation and data privacy causing a varied approach toward implementation across countries. However, irrespective of their geography, the momentum gathered by open banking is high, requiring banks and other fintech institutions to increase collaboration with each to ensure success within this new emerging ecosystem.

NeoSOFT’s Use Cases

Financial institutions across the globe leverage our expert open banking capabilities to enhance their customer experience, boost innovation, and improve adherence to data security and governance. Take a glance at how our solutions have impacted clients…

Helping a leading bank enter new markets, extend its customer base and increase the volume of transactions.

NeoSOFT was tasked with helping the bank meet changing customer expectations by leveraging alternative tech solutions that help the client address their money management requirements. Our engineers devised solutions to establish fintech partnerships, facilitating an increase in account acquisition through APIs and growth in transaction volume

Facilitating high-velocity innovation through banking APIs and an API management platform for a renowned financial services provider.

The client wanted a defined organization-wide API strategy that aligns with overall business goals while maintaining autonomy. Our solutions enabled the client to build a single developer portal for all their branches to provide insight into API adoption patterns. Our team of engineers were also able to balance organization-wide governance and cross-geography oversight for better management.

Amplifying the API Management platform for one of the largest and most popular BFSI clients.

The requirement was to lay the foundation for loyalty-driving open banking services, increase compliance and accelerate internal integration to a secure API platform. Our solutions enabled the client to adhere to its regulatory obligations while delivering an innovative customer-facing service. Additionally, it also delivered a notable uptake in operational efficiency across the organization.

Decades of research into pervasive and ubiquitous computing techniques have led to a seamless connection between the digital and physical worlds. Facilitating an increase in the consumer and industrial adoption of Internet Protocol (IP)-powered devices. Several industries are now adopting creative and transformative methods for exploiting the ‘Code Halo’ or ‘data exhaust’ that exists between people, processes, products, and operations.

Currently, there are endless opportunities to create smart products, smart processes, and smart places, nudging business transformation across products and offerings. Smart connected products offer an accurate insight into how customers use a product, how well the product is performing, and a fresh perspective into overall customer satisfaction levels. Moreover, companies that previously only interacted with their customers at the initial purchase can now establish an ongoing relationship that progresses positively over time.

Future Promise – Business Transformation through IoT

Let’s begin with considering the immediate future – in the next few years, the term ‘IoT’ will cease to exist in our vernacular. The discussions will instead shift to the purpose of IoT and the business transformation that is realized. We will see the emergence of completely new business models, products-as-a-service, smart cities, intelligent buildings, remote patient monitoring capabilities, and industrial transformational models. Order-of-magnitude improvements will be at the forefront as business intelligence boosts efficiency, waste reduction, predictive maintenance, and other forms of value.

The capturing of ambient data from the physical world to develop better products, processes, and customer services will be a core aspect of every business. The conversation will shift from how things are to be ‘connected’ and focus more on the insights gained from the instrumentation of large parts of the value chain. IoT technologies will become a commodity.

The real value will be unlocked through the analytics performed on the massive streams of contextual data transmitted by the ‘digital heartbeat’ of the value chain. IoT will form the crux of how products operate and the way physical business processes progress. In the future we expect the instrumentation-to-insights continuum to become the standard method of conducting business.

Layers of an IoT Architecture

Incorporating connectivity, computation, and interactivity directly into everyday things is dependent on organizations and requires an in-depth understanding of industry business problems, new instrumentation technologies and techniques, and the physical nature of the environment being instrumented.

Generally, IoT solutions are characterized by three-tier architecture:

IoT Architecture

• Physical instrumentation via sensors and/or devices.
• An edge gateway, which includes communication protocol translation support, edge monitoring, and analysis of the devices and data.
• Public/private/hybrid cloud-based data storage and complex big data analytics implemented within enterprise back-end systems.

Successful business transformation initiatives leverage these IoT tiers against a specific industry challenge to gain a market advantage. Lastly, these IoT integrations should be configured to the actual physical environments in which the instrumentation technology will be deployed and aligned with the business focus areas for each organization. This usually requires organizations to leverage third-party expertise or various other complementary sets of ecosystem partnerships.

Scalability Challenges in IoT

With the explosion in market share, aspects such as network security, identity management, data volume, and privacy are sure to pose challenges and IoT stakeholders must address these challenges to realize the full potential of IoT at scale.

Network Security: The explosion in the number of IoT devices has created an urgent need to protect and secure networks against malicious attacks. To mitigate risk, the best practice is to define new protocols and integrate encryption algorithms to enable high throughput.

Privacy: IoT providers must ensure the anonymity and individuality of IoT users. This problem gets compounded as more IoT devices are connected within an ever-expanding network.

Governance: Lack of distinguished governance in IoT systems for building trust management between the users and providers leads to a breach of confidence between the two entities. This situation happens to be the topmost concern in IoT scalability.

Access Control: Incorporating effective access control is a challenge due to the low bandwidth between IoT devices and the internet, low power usage, and distributed architecture. This necessitates the refurbishment of conventional access control systems for admins and end-users whenever new IoT scalability challenges occur.

Big Data Generation: IoT systems carry out programmed judgments leveraging categorized data gathered from numerous sensors. This data volume increases exponentially and disproportionately to the number of devices. The challenge of scaling lies in large silos of Big Data generated as determining the relevance of this data will need unprecedented computing power.

Similar to most technology initiatives, the business cases are realized only when these technologies are implemented at scale. The connection of only a few devices isn’t enough to harness the full potential power of IoT for developing more meaningful products, processes, and places to elevate business performance.

What Companies Get Wrong About IoT

Avoid a fragmented approach to IoT

Typically, companies, especially large multinational corporations that have global footprints do not have a clear owner of IoT within the organization. This leads to a fragmented and decentralized decision-making process when it comes to IoT.

For example, consider a company that has many factories across the world. Each factory has a bespoke application and a bespoke vendor for providing a single discrete use case. Each factory works well when we consider its individual silos, however, it is very difficult to gain an aggregated view across the entirety of the company as a whole. This leads to problems with scaling as the company is structurally limited, resulting in the company having to scale back to begin implementing and reengineering the process from the ground level.

When it comes to the IoT agenda, multinational companies need to be mindful of the short term and long term, at a global and a local level, to effectively capture IoT value. It is imperative to unite the business processes with technology as well as instill a change in mentality towards IoT value to derive real change within these companies. This includes having a completely different approach towards KPIs, incentives, and the performance management of people on a very practical level.

Overcoming the Challenges of IoT Scale

To rapidly progress from prototyping to real-world deployment, it is essential to focus on the challenges of scaling IoT:

1. Zero in on the underlying business problem or opportunity.
Change the mindset surrounding IoT with regards to technology experimentation leading to business transformation, starting with the company’s most valuable assets. A well-orchestrated engagement between the COO and CIO, a CFO-ready business plan, product, delivery, and customer service is a prerequisite for effectively scaling IoT.

2. Learning how IoT amplifies value.
Whenever an object is integrated into an IoT system, it acquires a unique persistent identity along with the ability to share information about its state. As a result, the value of an intelligent object is amplified throughout its lifecycle – from creation, manufacturing, delivery, and subsequent use, till its demise. This also includes its network of suppliers, producers, partners, and customers, whose interactions and access are handled by the IoT. During IoT exploration, whenever a product’s lifecycle and network are taken into account, it paints a clearer picture of the potential for structural transformation of processes, networks, and even the product itself.

3. Consider the Physical Nature of the Environment.
IoT provides connectivity to everyday objects that are rooted in a physical place. This leads to two critical dimensions of IoT scaling:

• An understanding of the interplay between objects, between objects and people, and between objects and the environment (which further necessitates a deep understanding of the setting and inner workings of the physical place).
• An understanding of how the physical environments themselves might affect the connectivity and successful interaction of objects. As IoT is reliant on wireless radio waves to transmit data from objects, any radio interference in a physical environment can impact transmission and must be considered during system design.

IoT scale aims to ensure that individual systems communicate with each other within the physical world and become invisible, blending seamlessly into the workplace. This requires a deep understanding of the inner workings of the physical place and the ability to translate technology within said environment. For instance, a “digital oilfield” IoT concept might foster a relationship between oil and gas consultants that understand industry pressures, drilling rig personnel that know the physical nature of day-to-day operations, and IoT technology experts capable of calibrating and connecting the devices within the environment.

4. Embrace the concept “it takes a village” to unite all IoT ingredients.
IoT is a “system of systems” composed of several different ingredients and expertise, dependent on end-to-end systems integration. These elements can fuel a transformation within a business model and develop coordinated initiatives designed for scale. Enrolling partners with the necessary domain expertise, and with a reputed history of integrating IoT technologies, will be key for establishing a long-term roadmap for IoT strategy and implementation.

An Integrated Approach Is Necessary For Driving End-To-End Transformation Across Business, Organization, And Technology

Realizing Full IoT Value

Adaptive organizations will quickly transcend IoT workshops and pilots to establish a long-term roadmap that is fueled by their business’ vision for the future and not technology. IoT can be incredibly disruptive and valuable across an industry, meaning that early adopters helping companies understand how to bring basic connectivity within their organization, will often fall short of unlocking the underlying business value that can be realized at scale. To make a meaningful impact on the business model, the product, and/or operational processes, businesses must implement IoT in a coordinated effort – across functions – at scale. This necessitates vision and leadership, outside expertise, and an ecosystem of partners for delivering a successful IoT journey.

NeoSOFT’s Use Cases

All over the world, businesses are looking to scale their IoT processes from different perspectives; some start by exploring new sensing technologies and how they can be applied to their processes, others search for ways to enhance and advance their existing data sources through new data mining techniques. As their products acquire new characteristics through IoT instrumentation, businesses have to re-imagine their products and develop ways to deliver new and value-driven services for their customers.

Listed below are some of the highlights of our work in providing innovative and scalable IoT solutions:

Developing futuristic, robust, and reliable smart home security solutions

Engineered a home security solution that makes it easier and convenient for customers to monitor their household security remotely. Our engineers developed an intuitive hybrid mobile interface capable of integrating multiple smart guard devices within a single application. The solution leveraged remote monitoring, home security, and system arming/disarming managed via AWS IoT services.

Taking retail automation and shopping convenience to the next level with AI and IoT-powered solutions

A fully automatic futuristic store that leverages in-store sensor fusion and AI technology. Our goal was to leverage and connect all store smart devices, including sensors, cameras, real-time product recognition, and live inventory tracking. Data analytics on smart devices led to the creation of personalized and customer-driven marketing efforts.

Exploring new possibilities in human health analytics

The client is an innovator in the field of medical imaging for the detection and spread of cancer and other abnormalities. Our task was to leverage advanced technologies to accurately detect its presence and spread within the lymph nodes using IoT, AI, and 3D visualization.

Stay tuned, as we get more interesting IoT insights for you. Till then, take a look at how IoT can be leveraged for your business.

To achieve this your DevOps teams, structure & ecosystem should be well-oiled. Therefore it is critical to understand how to build an ideal CI/CD pipeline that will help to deliver features at a rapid pace.

Through this blog, we shall be exploring important cloud concepts, execution playbooks, and best practices of setting up CI/CD pipelines on public cloud environments like AWS, Azure, GCP, or even hybrid & multi-cloud environments.

HERE’S A BIRD’S EYE VIEW OF WHAT AN IDEAL CI/CD PIPELINE LOOKS LIKE

Let’s take a closer look at what each stage of the CI/CD involves:

Source Code:

This is the starting point of any CI/CD pipeline. This is where all the packages and dependencies relevant to the application being developed are categorized and stored. At this stage, it is vital to have a mechanism that offers access to some reviewers in the project. This prevents developers from randomly merging bits of code into the source code. It is the reviewer’s job to approve any pull requests in order to progress the code into the next stage. Although this involves leveraging several different technologies, it certainly pays off in the long run.

Build:

Once a change has been committed to the source and approved by the reviewers, it automatically progresses to the Build stage.

1) Compile Source and Dependencies The first step in this stage is pretty straightforward, developers must simply compile the source code along with all its different dependencies.

2) Unit Tests This involves conducting a high coverage of unit tests. Currently, many tools show whether or not a line of code is being tested. To build an ideal CI/CD pipeline, the goal is to essentially commit source code into the build stage with the confidence that it will be caught in one of the later steps of the process. However, if high coverage unit tests are not conducted on the source code then it will progress directly into the next stage, leading to errors and requiring the developer to roll back to a previous version which is often a painful process. This makes it crucial to run a high coverage level of unit tests to be certain that the application is running and functioning correctly.

3) Check and Enforce Code Coverage (90%+) This ties into the testing frameworks above, however, it deals with the output code coverage percent related to a specific commit. Ideally, developers want to achieve a minimum of 90% and any subsequent commit should not fall below this threshold. The goal should be to achieve an increasing percentage for any future commits – the higher the better.

Test Environment:

This is the first environment the code enters. This is where the changes made to the code are tested and confirmed that they’re ready for the next stage, which is something closer to the production stage.

1) Integration Tests The primary thing to do as a prerequisite is to run integration tests. Although there are different interpretations of what exactly constitutes an integration test and how they compare to functional tests. To avoid this confusion, it is important to outline exactly what is meant when using the term.

In this case, let’s assume there is an integration test that executes a ‘create order’ API with an expected input. This should be immediately followed with a ‘get order’ API and checked to see if the order contains all the elements expected of it. If it does not, then there is something wrong. If it does then the pipeline is working as intended – congratulations.

Integration tests also analyze the behavior of the application in terms of business logic. For instance, if the developer inputs a ‘create order’ API and there’s a business rule within the application that prevents the creation of an order where the dollar value is above 10,000 dollars; an integration test must be performed to check that the application adheres to that benchmark as an expected business rule. In this stage, it is not uncommon to conduct around 50-100 integration tests depending on the size of the project, but the focus of this stage should mainly revolve around testing the core functionality of the APIs and checking to see if they are working as expected.

2) On/Off Switches At this point, let’s backtrack a little to include an important mechanism that must be used between the source code and build stage, as well as between the build and test stage. This mechanism is a simple on/off switch allowing the developer to enable or disable the flow of code at any point. This is a great technique for preventing source code that isn’t necessary to build right away from entering the build or test stage or maybe preventing code from interfering with something that is already being tested in the pipeline. This ‘switch’ enables developers to control exactly what gets promoted to the next stage of the pipeline.

If there are dependencies on any of the APIs, it is vital to conduct testing on those as well. For instance, if the ‘create order’ API is dependent on a customer profile service; it should be tested and checked to ensure that the customer profile service is receiving the expected information. This tests the end-to-end workflows of the entire system and offers added confidence to all the core APIs and core logic used in the pipeline, ensuring they are working as expected. It is important to note that developers will spend most of their time in this stage of the pipeline.

ON/OFF SWITCHES TO CONTROL CODE FLOW

Production:

The next stage after testing is usually the production stage. However, moving directly from testing to a production environment is usually only viable for small to medium organizations where only a couple of environments are used at the highest. But the larger an organization gets, the more environments they might need. This leads to difficulties in maintaining consistency and quality of code throughout the environment. To manage this, it is better for code to move from the testing stage to a pre-production stage and then move to a production stage. This becomes useful when there are many different developers testing things at different times like QA or a new specific feature is being tested. The pre-production environment allows developers to create a separate branch or additional environments for conducting a specific test.

This pre-production environment will be known as ‘Prod 1 Box’ for the rest of this article.

Pre-Production: (Prod 1Box)

A key aspect to remember when moving code from the testing environment is to ensure it does not cause a bad change to the main production environment where all the hosts are situated and where all the traffic is going to occur for the customer. The Prod 1 Box represents a fraction of the production traffic – ideally around less than 10% of total production traffic. This allows developers to detect when anything goes wrong while pushing code such as if the latency is really high. This will trigger the alarms, alerting the developers that a bad deployment is occurring and allowing them to roll back that particular change instantly.

The purpose of the Prod 1 Box is simple. If the code moves directly from the testing stage to the production stage and results in bad deployment, it would result in rolling back all the other hosts using the environment as well which is very tedious and time-consuming. But instead, if a bad deployment occurs in the Prod 1 Box, only one host is needed to be rolled back. This is a pretty straightforward process and extremely quick as well. The developer is only required to disable that particular host and the previous version of the code will be reverted to in the production environment without any harm and changes. Although simple in concept, the Prod 1 Box is a very powerful tool for developers as it offers an extra layer of safety when they introduce any changes to the pipeline before it hits the production stage.

1) Rollback Alarms When promoting code from the test stage to the production stage, several things can go wrong in the deployment. It can result in:

• An elevated number of errors
• Latency spikes
• Faltering key business metrics
• Various abnormal and expected patterns

This makes it crucial to incorporate the concept of alarms into the production environment – specifically rollback alarms. Rollback alarms are a type of alarm that monitors a particular environment and is integrated during the deployment process. It allows developers to monitor specific metrics of a particular deployment and that particular version of the software for issues like latency errors or if key business metrics are falling below a certain threshold. The rollback alarm is an indicator that alerts the developer to roll back the change to a previous version. In an ideal CI/CD pipeline these configured metrics should be monitored directly and the rollback initiated automatically. The automatic rollback must be baked into the system and triggered whenever it determines any of these metrics exceed or fall below the expected threshold.

2) Bake Period The Bake Period is more of a confidence-building step that allows developers to check for anomalies. The ideal duration of a Bake Period should be around 24 hours, but it isn’t uncommon for developers to keep the Bake Period to around 12 hours or even 6 hours during a high volume time frame.

Quite often when a change is introduced to an environment, errors might not pop up right away. Errors and latency spikes might be delayed, unexpected behavior of APIs or a certain code flow of APIs doesn’t occur until a certain system calls it, etc. This is why the Bake Period is important. It allows developers to be confident with the changes they’ve introduced. Once the code has sat for the set period and nothing abnormal has occurred, it is safe to move the code onto the next stage.

3) Anomaly Detection or Error Counts and Latency Breaches During the Bake period, developers can use anomaly detection tools to detect issues however that is an expensive endeavor for most organizations and often is an overkill solution. Another effective option, similar to the one used earlier, is to simply monitor the error counts and latency breaches over a set period. If the sum of the issues detected exceeds a certain threshold then the developer should roll back to a version of the code flow that was working.

4) Canary A canary tests the production workflow consistently with expected input and expected outcome. Let’s consider the ‘create order’ API we used earlier. In the integration test environment, the developer should set up a canary on that API along with a ‘cron job’ that triggers every minute.

The cron job should be given the function of monitoring the create order API with expected input and hardcoded with an expected output. The cron job must continually call or check on that API every minute. This would allow the developer to immediately know when this API begins failing or if the API output results in an error, notifying that something wrong has occurred within the system.

The concept of the canary must be integrated within the Bake Period, the key alarms as well the key metrics. All of which ultimately links back to the rollback alarm which reverts the pipeline to a previous software version that was assumed to be working perfectly.

Main Production:

When everything is functioning as expected within the Prod 1 Box, the code can be moved on to the next stage which is the main production environment. For instance, if the Prod 1 Box was hosting 10% of the traffic, then the main production environment would be hosting the remaining 90% of that traffic. All the elements and metrics used within the Prod 1 Box such as rollback alarms, Bake Period, anomaly detection or error count and latency breaches, and canaries, must be included in the stage exactly as they were in the Prod 1 Box with the same checks, except on a much larger scale.

The main issue most developers face is – ‘how is 10% of traffic supposed to be directed to one host while 90% goes to another host?’. While there are several ways of accomplishing this task, the easiest is to transfer it at the DNS level. Using DNS weights, developers can shift a certain percentage of traffic to a particular URL and the rest to another URL. The process might vary depending on the technology being used but DNS is the most common one that developers usually prefer to use.

DETAILED IDEAL CI/CD PIPELINE

Summary

The ultimate goal of an ideal CI/CD pipeline is to enable teams to generate quick, reliable, accurate, and comprehensive feedback from their SDLC. Regardless of the tools and configuration of the CI/CD pipeline, the focus should be to optimize and automate the software development process.

Let’s go Over the key Points Covered One More Time. These are the key Concepts And Elements that Make up an Ideal CI/CD Pipeline:

• The Source Code is where all the packages and dependencies are categorized and stored. It involves the addition of reviewers for the curation of code before it gets shifted to the next stage.
• Build steps involve compiling code, unit tests, as well as checking and enforcing code coverage.
• The Test Environment deals with integration testing and the creation of on/off switches.
• The Prod 1 Box serves as the soft testing environment for production for a portion of the traffic.
• The Main Production environment serves the remainder of the traffic

NeoSOFT’s DevOps services are geared towards delivering our signature exceptional quality and boosting efficiency wherever you are in your DevOps journey. Whether you want to build a CI/CD pipeline from scratch, or your CI/CD pipeline is ineffective and not delivering the required results, or if your CI/CD pipeline is in development but needs to be accelerated; our robust and signature engineering solutions will enable your organization to

• Scale rapidly across locations and geographies,
• Quicker delivery turnaround,
• Accelerate DevOps implementation across tools.

NEOSOFT’S DEVOPS SERVICES IMPACT ON ORGANIZATIONS

Solving Problems in the Real World

Over the past few years, we’ve applied the best practices mentioned in this article.

Organizations often find themselves requiring assistance at different stages in the DevOps journey; some wish to develop an entirely new DevOps approach, while others start by exploring how their existing systems and processes can be enhanced. As their products evolve and take on new characteristics, organizations need to re-imagine their DevOps processes and ensure that these changes aren’t affecting their efficiencies or hampering the quality of their product.

DevOps helps eCommerce Players to Release Features Faster

When it comes to eCommerce, DevOps is instrumental for increasing overall productivity, managing scale & deploying new and innovative features much faster.

For a global e-commerce platform with millions of daily visitors, NeoSOFT built their CI/CD pipeline. Huge computational resources were made to work efficiently, giving a pleasing online customer experience. The infrastructure was able to carry out a number of mission-critical functions with substantial savings resulting in both: time and money.

With savings up to 40% on computing & storage resources matched with an enhanced developer throughput, an ideal CI/CD pipeline is critical to the eCommerce industry.

Robust CI/CD Pipelines are Driving Phenomenal CX in the BFSI Sector

DevOps’ ability to meet the continually growing user needs with the need to rapidly deploy new features has facilitated its broader adoption across the BFSI industry with varying maturity levels.

When executing a digital transformation project for a leading bank, NeoSOFT upgraded the entire infrastructure with an objective to achieve continuous delivery. The introduction of emerging technologies like Kubernetes into the journey enabled the institution to move at startup speed, driving the GTM 10x faster rate.

As technology leaders in the BFSI segment look to compete through digital capabilities, DevOps & CI/CD pipelines start to form their cornerstone of innovation.

A well-oiled DevOps team, structure, and ecosystem can be the difference-maker in driving business benefits and leveraging technology as your competitive edge.

Begin your DevOps Journey Today!

Speak to us —let’s Build.

Digital innovations are disrupting the marketplace and the continuous evolvement and spurt of technologies have now radically put these legacy systems back in the race. New players are beginning to enter the market without the burden of outdated technologies.

The rise of Fintech startups, teeth-gritting competition, and the fast-paced digital momentum have exponentially elevated consumer expectations and have forced banks to modernize their digital assets.

What is Core Banking Modernization?

Core banking modernization is the replacement, upgrade or outsourcing of a banks’ existing core banking systems and IT environment, which can be scaled and sustained to perform mission-critical operations for the bank, empowering it to harness the power of advancements in technology and design.

Banking Yesterday, Banking Today, and Banking Tomorrow

The core banking solutions of the future shall accommodate global perspectives so that it gets easier for the banks to deploy systems across multiple geographies. In comparison with the legacy systems, these new systems shall be more lean, scalable, process-centric, economical, and deployed over the cloud which shall empower banks to be agile and meet the changing business requirements.

EVOLUTION OF CORE BANKING SYSTEMS BY DECADE

In pursuit of embracing innovative features and scaling customer experience, the banks are at a disposition where they seem to be keen on accepting data-driven and cutting-edge technologies, and lean and agile processes. This transformation is disruptive and banks need to strike the right balance between revitalizing their core systems vis-à-vis creating new products and services to thrive in a digital society.

To address the challenges of the near future and the next normal, it is necessary to conduct a thorough assessment of the current core banking platform and external environments. Modernizing legacy applications is a critical process and it requires a disciplined and well-thought approach. Banks will need to understand whether a full replacement or a systematic upgrade will offer a better value-to-risk ratio.

Modernization Objectives and Drivers

Core banking modernization is driven by the need to respond to internal business imperatives such as growth and efficiency as well as the external ones such as regulations, competition, and customer experience expectations.

As new banking products, channels, and technologies enter the marketplace, the complexity and the necessity to modernize old legacy core banking systems becomes more crucial. The internal and the external drivers pushing the banks to transform are worth consideration.

Internal Drivers:

• Product and Channel Growth
  Managing high volumes of product-channel transactions and payments demand scalable and sustainable modern core banking systems. The introduction of ever-increasing custom solutions/products to satiate a wide segment of customers which is further amplified with multifarious channels creates an opportunity for banks to re-strategize their old digital assets.
• Legacy Systems Management
  With technologies that had been used to build the legacy systems getting obsolete, finding resources to manage these outdated systems also gets difficult. Moreover, introducing new technologies into the systems benefit the banks in staying relevant, achieving flexibility and cost-effectiveness.
• Cost Reduction
  Modernizing core applications involves consolidating the other stand-alone applications that stand peripheral to the core. This subsequently optimizes the overall cost and helps banks in reducing the high maintenance costs associated with legacy systems.

External Drivers:

• Regulatory Compliance
  It is imperative for the banks to enhance their IT infrastructure and operations in order to comply with increasing regulations such as Basel III, Foreign Account Tax Compliance Act (FATCA), and the Dodd-Frank Act, all of which are aimed at 1) Enhancing risk management 2) Governance procedures and, 3) Improving transparency of banking operations that also involves customer interactions.
• Increasing Competition
  The competition pressure compels banks to innovate and embrace new core banking platforms. The new entrants in financial services are speculated to give banks a tough run and start questioning their purpose of existence.
• Customer Centricity
  Customer experience is a derivate of many components and banks need to re-strategize their positioning. Moving from a product-centric to a customer-centric approach is highly necessary. Focus on customer service, relationship-based pricing, and digital experience shall be the crucial elements in the transformation journey.

OBJECTIVES OF CORE SYSTEMS TRANSFORMATION

Best Practices in Core Banking Modernization

• Evaluate Technical Debt: Banks should be able to closely identify and calculate their technical debt so that they can properly prioritize the debt and its impact on the legacy system processes. To get an accurate assessment, banks will need to factor in the prospective cost of adding or altering features and functionality later.
• Outline the Organization’s Objectives and Analyze Risk Tolerance: When going for legacy system modernization, the bank must assess various business variables like customer satisfaction levels, modernization objectives, cost savings, business continuity, and risk management. These thorough assessments will help to provide context for the selection of the most efficient and effective modernization approach.
• Choose Futuristic & Advanced Solutions: Technology refinements are taking place at an unprecedented scale, which demands organizations to be agile in the adoption of future technologies. For this, it is critical to build solutions that support future adaptability.
• Define the Post-Modernization Release Strategy: The most crucial modernization practice is to create a follow-up plan that includes successful training of employees, ensuring systematic and streamlined process, timely update schedule, and undertaking other maintenance tasks.

Legacy modernization will empower traditional banks in performing a wide range of modern banking services which shall be robust and scalable. Moreover, the digitalization of traditional banks shall address the changing needs of customers through seamless digital services and drive excellent customer experience.

Legacy Modernization Benefits

• Faster Customer Onboarding: Deploy cutting-edge technologies such as Artificial Intelligence, Blockchain, Data Science, etc. to speed up the customer onboarding process. Remember, that the customer experience is a derivative of the way banks engage with them and makes their life easier and better.
• Omnichannel Banking Experience: Your online and mobile banking software should not only match but supersede the banking experience drawn at your physical banks. This simply means that the virtual banking experience of your customer should be seamless, personalized, and secured.
• Scalability and Flexibility: Your banking application should be able to onboard any number of users and be fit for massive user access at the same time. Cloud adoption is proving to improve efficiency, security, and reduced costs.

IMPACT AREAS OF LEGACY MODERNIZATION

The Way Forward

As the world tunes in to the new normal, the solution to legacy systems is the modernization of core banking systems. Banks looking to enhance their IT efficiency are sorting to innovative technologies of AI/ML, IoT, Cloud Computing, Blockchain, and RPA. The integration of new technologies shall help in unlocking the growth and revenue potentials of banks whilst building a loyal and satisfied customer base. It also enables real-time systems that are agile, scalable, flexible, and cost-effective.

Now is not the time to mull over the prospect of banking legacy software modernization. It is only the survival of the fittest, and to stay fit, banks and financial institutions must weather the storm and adapt to the new rapid evolution of Fintech. This however can’t be a solitary journey!

Get in touch with NeoSOFT’s Application Modernization Experts to get a free consultation towards your first step in the modernization journey.