Efficiency refers to the resource utilization in getting to the desired outcomes. It is unidimensional. Absolute. The mileage on a car, for instance.
Effectiveness refers to how useful something is. It is contextual. A highly efficient car may be completely ineffective in winning you a formula 1 race. A fast car, however, is ineffective during an off-road camping trip.
A bottom-up approach improves efficiency. If you give the middle managers an efficiency target they will achieve it.
On the contrary, a top-down approach drives effectiveness. It starts with the vision. Whether the company wants a car for camping weekends or adrenaline filled, high-speed drives is not a decision that the middle management is paid to take.
So, what has all this got to do with the cloud?
Until recently, organizations bought cloud computing for efficiency. Now, they need to buy it as part of their effectiveness on digital transformation. And that’s the hard part. Digital transformation means different things to different companies. Each journey is unique. There is no single metric for it. There are, however, some hallmarks to identify the digitally mature companies.
For instance, one of the hallmarks of a digital leader is the use of data to drive its decisions at all levels. This means it has a huge appetite for machine learning use cases. By extension, it is testing hundreds of hypotheses. The tools required for such a test-and-learn mindset are only available in the cloud.
Take any digital transformation journey. You will find the tools required for an effective transformation invariably in the cloud.
The cloud spend is a proxy for the digital transformation journey of the company.
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