Cloud, from its inception as a server network service, has grown to be a business integrator and now a business innovator. In the first segment of this two-part article, we discuss why businesses should focus on being agile, citing industry-use cases, and how well cloud can create a dynamic and flexible IT culture.
Cloud has evolved and so have businesses
Cloud has moved from being a ‘nice-to-have’ technology to an essential piece of IT infrastructure for any and every organization. Just within the last decade, it has progressively evolved not just to be an infrastructure service, but an enabler of businesses. Now, it is becoming the centerpiece of corporates, holistically integrating into every aspect.
Cloud is everywhere and it’s empowering everything: Amazon Web Services (AWS) has over 200 fully featured services; Google Cloud (GCP) thrives on its unique cloud offerings centered on Big Data and AI modeling tools. These testify that compute, storage, network, and database services aren’t the only benefits of cloud.
“Cloud is not just for hosting apps on the web”
Cloud has evolved, so has the need for adopting it. When companies outline their business plan for public cloud migration, they typically focus on cost reductions and efficiency. Questions are always in line with “How much CapEx and OpEx can I cut?” Comparisons are made to understand savings from hardware, licenses and human labor to name a few. Yes, cost and convenience were the main market drivers for cloud but business priorities have drastically changed now. Thus, shouldn’t we too start asking different questions now?
COVID-19 didn’t just drive us into remote working; it changed the way we consume products. Consumers are demanding better services that are quick, efficient, easy to use, and customized. If businesses don’t keep up to their users’ pace, they will fail. In today’s saturated market, consumers have zero cost when switching from your service to a competitor’s. Hence, time to market is key and so are functional and stable product releases with continuous uptime.
What is business agility?
To keep up with the exponential advancements in consumer technology and the surge in digitalization adoption, businesses need to focus on being agile.
What does this mean? Business agility is the ability of an organization to be flexible and adaptive to the changing market conditions and take quick responses in a cost-efficient manner. For organizations to appear agile, they must be a powerhouse in innovation, learning and R&D. An effective top-down approach in capturing ideas, testing, deploying and/or scraping projects and knowledge sharing is needed. These companies should also balance speed and stability across organizational processes.
“Agility is quickly adapting to market conditions and not getting lost in the competition.”
McKinsey & Company identified benefits of business agility as:
- Faster revenue growth
- Prolonged reduction in costs
- Effective management of threats and reputational risks
A survey conducted for VMware® by independent market-research firm AbsolutData from over 600 respondents, has found that extremely agile companies outperform others in:
- Recognizing shifts in customer trends/demand
- Launching new products or functionalities
- Managing the execution of programs and scaling resources in order to meet demand
How cloud enables business agility
Agility brings dynamism which in turn enables organizations to approach markets and operational changes routinely. Continuous testing, greenfield deployments and rapidly engaging new distribution channels are part and parcel of seizing potential opportunities quickly. Cloud computing models are ideal for this purpose due to the ease in provisioning and scaling workloads and pay-per-use models. Cloud also embraces organizational agility by supporting mobility, collaborative communications and real-time feedback loops with continuous data insights.
“If your R&D strategy is to fail fast and fail cheap; then cloud is your fast track.”
In a cloud computing context, agility is the ability to rapidly develop, test and launch applications that deliver business growth. Cloud enables data driven insights allowing you to focus on strategizing your unique value proposition, instead of focusing on provisioning and maintaining the infrastructure.
“Variety for business is more valuable than cost savings.”
The primary reason for leveraging cloud in this era shouldn’t necessarily be a monetary benefit, even though it can be a catalyst. With cloud supporting flexibility and scalability, the thinking mindset of cloud-economics must go beyond Total Cost of Ownership (TCO). Therefore, a new set of questions should follow; “How will cloud improve my revenue or the competitiveness of my business?”
The hype around cloud is waning with more industry-use cases and facts on what it can deliver to both IT and business. Trailblazing CTOs first think about business transformation and then how technology will enable it. Now the real talk among CXOs is how cloud helps them create a tighter connection between IT agility and business agility.
Industry stats and use cases
The same survey referred above reveals that business and IT leaders believe that infrastructure and technology are the key drivers of agility. In non-agile companies there is a fundamental disconnect, where the IT department cites money and skills as the problem while non-technical partners focus on the lack of infrastructure and tech to support business demands. Nevertheless, 63% of respondents say,
“Cloud can make the entire organization more business agile, with flexible architecture to support changes and be responsive.”
“Companies with enterprise-wide cloud deployments are 300% more likely to achieve business agility much better than its competition.” – VMware® survey results
The public cloud is a wake-up call because of the on-demand, low-cost, self-service computing power with appealing rate cards, and customer-focused service level agreements (SLAs). Businesses must now evaluate a range of cloud options, including public, private and hybrid models, each with its own set of cost reductions.
Cloud for banking
Banks are forced to adopt technology due to increased pressure from tech-native start-ups providing convenience and control to the users. Retail banks seek to grow their customer bases and revenue by delivering new mobile services faster to the market. Cloud technology provides swift use of a compliant, secure and regulated test and development environment to provide production apps for end-users on any device, at any time and from any location.
Cloud for health
The health sector is one of the industries that rapidly underwent digitalization and digitization within the past year. Internationally, hospitals are moving towards Electronic Health Records (EHR) to improve patient engagement and continuously track the clinical care and record keep for safety. Healthcare companies benefit from cloud computing by receiving on-demand and cost-effective distribution of records to any hospital in any location, with improved patient data dependability, resilience, and security.
Cloud for governments
Governments, public sector and even schools are highly regulated with stringent cost structures which are mandated. Cloud computing delivers a dynamic, secure and compliant alternative, significantly reducing the time it takes to supply technology solutions.
Cloud for retail and manufacturing
Retail and manufacturing industries deal with insurmountable data from inventory to customer behavioral details. Therefore, cloud is vital to store these details but also to analyze and manage them to gain needed visibility about the business. Leveraging data, retailers can understand the customer buying behavior, trends, brand interaction and then use advanced modeling tools for predictive insights and automation. Cloud with its dependable security and dynamic scalability of workloads, large data can be safely stored and SaaS AI and ML tools can be instantly utilized from the cloud service provider’s marketplace.
Cloud = Constant change
Cloud and its technologies are constantly changing; new and newer tools are being introduced by cloud providers constantly. When the core technology evolves, so does our journey with it. Thus, the key strategy here is to be open and constantly revisit our approach when adopting cloud.
If your interest is piqued by reading up the above information on cloud, its elements and applications and now you want to know more, don’t fret. The part 2 segment of this discussion will focus on the features of cloud to create business agility, visualizing the real organizational potential (elaborated with the use case of vaccine manufacturer Moderna Inc. as cited by HBR), and lastly on the actions CEOs and CIOs should collaboratively take to strategize for the future aligning with the cloud. Stay tuned for next week’s release!