Why a Clear, Comprehensive Cloud Strategy Is VitalBy Samuel Greengard
Why a Clear, Comprehensive Cloud Strategy Is Vital
Digital business frameworks demand a fast, agile IT infrastructure. That much is indisputable. But how to reach the promised land of innovation and business disruption is a question that confounds business and IT leaders across industries and entire sectors.
At the center of the equation: "As innovation cycles are compressed and demands on businesses grow, organizations must move beyond legacy and on-premises IT," states Jack Sepple, senior managing director at business and IT consulting firm Accenture. "The opportunity to advance revolves around the cloud."
This requires a major shift in thinking. It's also a journey fraught with challenges, including deciding what applications, services and infrastructure to place in the cloud, and what type of clouds to use for various tasks. Private, hybrid and public clouds have different implications for an enterprise.
"Relatively few companies have the luxury of adopting a greenfield approach, along with cloud-native thinking," says Ranjit Bawa, U.S. technology cloud leader at Deloitte Consulting. For everyone else, "It's important to move beyond a piecemeal approach and develop a clear strategy for migrating to the cloud."
The Challenges of Migrating to the Cloud
Industry studies show that upward of 90 percent of organizations use the cloud in one form or another. But this breadth of adoption doesn't necessarily reflect a depth of adoption. Some companies have four or five enterprise applications in the cloud, and others have dozens or hundreds.
"Most organizations are moving to the cloud in a somewhat haphazard and chaotic way," Bawa says. "They are migrating application by application or business product by business product." The approach is cumbersome, time-consuming and resource intensive. In the end, "Many of these companies find the task overwhelming."
The challenges of migrating to the cloud aren't lost on anyone. For many organizations, it's challenging enough to map business processes and workflows, especially when mainframes and other legacy systems remain in use. But there are also vendor issues to consider, security concerns to address, and overall strategic issues to tackle, including what type of cloud to use.
"It can be a very long and drawn out process, so it's important to consider how best to make the transition to the cloud," Bawa explains. In some cases, an enterprise may want to tackle the process incrementally over months or a couple of years. In other instances, it may want to move operations over to the cloud en masse.
A CIO must examine the issue closely and carefully, Accenture's Sepple advises. A company may still require certain legacy IT systems for internal reasons, or to interact with partners or others in a supply chain. Regulatory issues might also play role in formulating a strategy. Of course, there are also OPEX and CAPEX factors to consider.
"The reality is that almost no organization, other than a cloud-native company, is going to move completely into the cloud anytime soon," he says. "The most progressive companies at present are perhaps 60 percent to 70 percent of the way into the cloud."
Why a Clear, Comprehensive Cloud Strategy Is Vital
The Cloud Is a Mature Technology
One thing is clear: CIOs and others have become far more comfortable with clouds, including public clouds, over the last few years. There's a growing recognition that the cloud is more than a way to trim expenses and manage costs effectively. It can deliver strategic and practical gains. Operating faster and better may lead to greater innovation and disruption.
In many cases, cloud providers deliver higher levels of service and better security than many organizations can muster internally. These capabilities, in turn, support initiatives such as DevOps and agile, faster app iterations, and the real-time digital framework that unlocks innovation and ultimately value. Clouds also unlock opportunities to use leading-edge technologies, such as artificial intelligence (AI) and deep learning.
"The technology has matured to the point where it's apparent that the cloud offers a superior solution," Sepple argues.
Developing a comprehensive plan requires a CIO and other business and IT leaders to examine—and often reexamine—everything from business processes to standards. Sepple says that it's important to step back and view business and IT operations in a broad and comprehensive way, all while looking for specific ways to unlock value and gain a competitive edge. This may lead an organization closer to software-defined networking or enable the use of APIs that redefine the business or the consumer marketplace.
Deloitte's Bawa says that CIOs should consider three broad strategic approaches for cloud adoption. The first is to build out a cloud environment in parallel to a current legacy environment, thoroughly test it, and then switch systems over. One Canadian insurance company he worked with recently shifted about 50 percent of its operations to the cloud using this approach, which required about nine months of planning and execution.
A second method, Bawa says, is to identify specific products or services and move all systems associated with them into the cloud. If an organization opts for this approach, he suggests prioritizing different groups of products and services based on complexity, cost and risk.
The third approach involves establishing new products, business lines and operations natively in the cloud, or adopting an M&A-as-a-Service model for mergers and acquisitions.
To be sure, today's highly competitive business environment is pushing organizations to move more assets into the cloud. Digital tools and technologies demand fast, agile and flexible IT frameworks.
"The cloud is redefining the enterprise," Bawa says. "It represents a truly efficient operating model. As the pace of innovation accelerates and organizations look to become disruptors, they must find ways to drive change into production on a daily basis."