While the democratization of IT by adopting public cloud has been discussed ad nauseum, the bigger objective is democratization in terms of business models. Hence, the cloud strategy is not just a crucial IT consideration, but a broader business conversation. The cloud agenda must be driven top-down throughout the enterprise, with a new operating model to ensure that the cloud journey is successful.
Democratization of business
Cloud conversations are as ubiquitous as cloud itself. Computing and storage are available on-demand and are elastic, besides being inexpensive. However, the biggest benefit offered by the cloud is the democratization of businesses. In the past, large enterprises used their scale to create barriers to entry in terms of access to capital, cost competitiveness, stitching of the value chains, etc. The large companies were also able to deploy expensive, enterprise-grade software for ERP, CRM, PLM, SCM, etc. to automate business processes and gain six-sigma efficiency. SMBs and startups had to work within their limitations and deploy the poor man’s software, which clearly lacked the richness of features, the availability of industry-specific versions, or even the needed bells and whistles.
With the move to the cloud, all these barriers have disappeared. Starting cloud-native businesses is now much easier. Startups have the option of leveraging enterprise-grade software from the get-go, pay on a usage model, and thus be even more cost-competitive than the big kahunas of the industry. They are disrupting businesses, shifting form, and altering time-honored industry practices and operating models. The elasticity of IT is making businesses more flexible, and, as the enterprise leaderships drive their cloud agenda, their focus has to be firmly on improving collaboration between business and IT.
Evolution of the operating model
This is a wake-up call for large enterprises. While they have started to slowly move to the cloud, a clear cloud strategy is often found missing. They retain systems, data, and compute both on-prem and on the cloud. This hotchpotch is being euphemistically called the “hybrid model” by some. For a truly hybrid model, you need to plan your on-prem and cloud investments strategically and ensure that you navigate these domains seamlessly.
A move to the cloud and finding success on the cloud are poles apart. “Lifting and shifting” of a few systems to the cloud is an IT opportunity. The person helming the cloud journey needs to be savvy to understand that the move to the cloud is a necessary but not a sufficient step to success. The business needs to progress to data analytics (and IoT to collect and process even more data) and use the insights to create new business models and unlock revenue opportunities.
While businesses want agility and flexibility, IT emphasizes security and stability. With the recent cyber breaches, businesses have accepted the IT team’s position on security. However, the imperative for business agility remains, and the only way to break the conflict between business and IT needs is to build on a secure and stable foundation that the leading hyperscalers provide. So, both security and agility come built in.
Besides getting caught up in semantics and a glut of cloud terminologies, the operating model needs to be tailored differently. One cannot move to the cloud and retain legacy practices. Generating comprehensive requirements, and then waiting for a final delivery of a perfect product a few months down the line is too time consuming. The MVP approach is in. Businesses and teams that operate in rigid silos in a waterfall model are on their way out. Collaborative and iterative modes of working are in. Organizations need to adapt to the dynamics of the cloud, instead of fettering it with outdated practices that they have become comfortable with. They need to look at people who can lead with new practices and in establishing new models and support them in the journey.
Call to action
The size of the cloud opportunity is massive. Businesses cannot afford to miss the bus or not leverage the cloud’s capabilities. Leading cloud adopters have over 50% of their estates on the cloud and have put in place business and IT metrics to measure success.
Organizations may struggle by understating the cloud or by not having the skilled resources to transition to the cloud. However, they need not be disheartened. An experienced knowledge partner like HCLTech Cloud Smart can help them in this journey. They should boldly move forward and set aggressive targets for leveraging the full potential of the move to the cloud. HCLTech’s Cloud Smart is a set of foundational business and IT building blocks that can help clients navigate this landscape, and adopt cloud at scale.