Unlock the Power of Business Agility via Cloud – Part 2

In the last article (Part 1) we focused on what agility is and why cloud can be an accelerator of agility. The fundamental nature of the public cloud can be levied to increase momentum in the operational process at any scale, in any business. More companies are now starting to herald cloud as a catalyst of innovation and digital transformation, especially due to its ability to support speedy product development with limitless on-demand scalability.

In this section, we focus on how to leverage the actual potential of the cloud.

Agility is part and parcel of cloud

In 2014, HBR Analytic Services conducted a survey titled “Business Agility in Cloud.” The results showed that 71% of companies have implemented cloud to reduced complexities in IT and business process management. Cost, quicker DevOps and DevTests, and minimized risk are the obvious benefits of cloud. Yet strategic goals like becoming the market leader, adopting an innovative culture, instilling continuous R&D, and inculcating an engaged and productive workforce are now the primary reasons companies are looking at when adopting cloud.

Let’s deep dive into 5 ways how the above are delivered through cloud.

1. Multi-Cloud Orchestration – Why limit to one when you can unleash your potential using different Cloud Service Providers?

Yes, the push for enterprise agility is strong but there is also parallel effort for applications which require specialized, fit-for-purpose infrastructure. Avoid vendor lock-in while focusing on cost-performance ratio. For example, you may use AWS spot instances to secure compute capacity at the lowest price, but you also have the option of using low priority VMs on Azure or preemptible instances on GCP to get the best price when spot instances become expensive. With the emergence of Artificial Intelligence (AI) and Machine Learning, engineers focus on leveraging large farms of GPUs for data crunching and, therefore, are actively looking at SaaS offerings that can be deployed on different public cloud environments. Standardization is what makes applications and data to be portable and accessible across the cloud.

2. Hybridization – Keep your finance team happy.

Research by VMware and EMC found out hybrid cloud can lower your typical infrastructure cost to as low as 25%. Hybrid clouds offer lower IT spending through virtualization and consolidation, optimized workload sourcing and provisioning, and better throughput in application development and maintenance processes.

Economic benefit of hybrid cloud (Source: VMware).

In Sri Lanka, hybrid cloud deployments are primarily seen in regulated environments like government organizations and the Banking, Financial Services and Insurance (BFSI) sector. This is not only due to rigorous regulatory frameworks around data security and compliance, but also due to massive investments in legacy environments within the data center. With hybrid environments, the inherent benefits of cloud such as scalability, elasticity and availability, are accessible. So, why stop at the gates of legacy datacenters?

3. Understand the Economics – Give your shareholders a good night’s sleep.

During the beginning of the cloud era, it made sense for the IT department to be the gatekeeper and develop its own understanding and measurement of the technology infrastructure and related financials. However, many IT departments today do not know the cost of tech for specific applications or line-of-business usage. This is not possible to undertake in an ecosystem of heterogeneous silos of technology. Cloud technology dictates that IT departments must grow to be better informed and answerable for knowing actual costs, allocation models, correct chargebacks, and other relevant aspects.

4. Cloud and Data – Unlimited storage unfolds a love story like no other.

Data has been growing in an unprecedented manner. While the majority are unstructured, some are unsolicited as well. Businesses have understood the impact of data-driven decisions and the need for utilizing analytics to process these insurmountable sources. Be it a lift-and-shift of a traditional Big Data platform or a modernization of on-prem ERP/ SAP HANA, cloud provides flexibility for your data strategy. Also, maintaining large data pools in cloud has become an effective solution as the cost of maintaining a data lake is becoming cheaper with virtually infinite storage capacity. Also, spot instances in AWS/ Azure (preemptible in GCP) comes with huge savings which is a great perk for data modeling.

5. Focus on Strategizing and Innovating – Leverage the core benefits of cloud.

Cloud allows companies to increase the pace of product development and marketing. In a traditional in-house IT environment, procuring new resources and infrastructure just for testing and development causes delays in monetizing the business; this can also become counterproductive if the resources are too expensive or if the product fails in the market. But on-demand/pay-per-use will eliminate risk and saves time. Plus, OpEx based cost models replace initial up-front costs. Faster upgrades to software, high availability, easy scalability and elasticity, and access to vendor marketplaces for quality-tested software are other unique propositions of public cloud.

Untapped potential of cloud

Cloud has enormous features but its benefits will not automatically appear just because your organization has adopted it. Cloud requires a “well defined, value-oriented strategy and coordinated execution by IT and Businesses” (McKinsey Quarterly, Feb 2021). Simple lift-and-shift of workloads from on-premises to cloud without a cloud adoption framework will miss out on autoscaling and performance management while increasing the cost due to over-provided assets. Also, the business operating model must be cloud-ready and be built for and integrated with the product development life cycle.

Untapped economic potential of cloud from three focus areas Rejuvenate, Innovate and Pioneer (Source: McKinsey Global research).

Let’s see the example of therapeutics company and vaccine manufacturer Moderna Inc. and how cloud-enabled them to deliver the drug in just 42 days, after the initial sequencing of the COVID-19 virus. The original article from HBR can be found here and you will appreciate how a well-defined cloud-based business model cuts across all the corners of an organization.

The drug designing R&D platform is a proprietary web app that used scalable compute and storage infrastructure. The lab used well-integrated cloud-based data-warehousing service to receive insights from other experiments running simultaneously. With details centrally placed, scientists could easily analyze large amounts of protein structures and rapidly design the vaccine. The ability to harness limitless compute power instantly with a pay-per-use pricing model helped in expediting product development cycles without burning time and cash.  Cloud also helped Moderna Inc. to be up to date with compliance and regulatory frameworks, using concepts such as Infrastructure as a Code (IaC), Governance as a Code, and Security as a Code. Automating these ‘Cloud best practices’ not only reduces manual labor, but also brings in visibility through one-click audit reports.    

Your focus as a CxO (or if your career growth will take you there eventually)

As a CxO you already would know what cloud can bring to the table. Yet there can be hesitations in adoption which makes the transition slow, especially if managers have cold feet regarding security, latency, cost, and architecture redesign. These can be counteracted, and, on many occasions, cloud has proven to be the best fit for these problems.

“From now, many future business leaders will be determined by how well they embrace the cloud.”

   CTO
CIO, CTO and CISO (Chief Information Security Officer) are front-lining now and give their utmost during the pandemic to support the continuity of the business. There is no other time such as now to focus on digitizing the distribution/supply chain channels and holistically accelerating your digital strategy. As we saw in Part 1 of this article series, cloud is no longer just a tool to host workloads online or rent out compute power. Defining the expectation of cloud migration too narrowly (for example, hosting new applications) will not capture the real essence of the cloud, as there is no consideration of the company as a whole.

To start off, one can:

  • Picture every single aspect of the business processes and domains in which cloud adoption can bring in efficiency and increase revenue, by looking at how cloud and its surrounding technologies can rip apart the silos in business initiatives.
  • Focus not only on selecting the correct technology but also on sourcing methods that must be aligned with corporate policies to mitigate risks.
   

   CEO
As cited by McKinsey in a February 2021 article, research on 705 public cloud users by AWS and independent third-party (OmnicomGroup and Known) shows that highly matured cloud adopters stand out from their peers on the below four aspects:

  1. They are early adopters of disruptive technologies.
  2. They aggressively focus on innovating.
  3. They view technology as a competitive advantage and an enabler for launching new businesses.   
  4. They pursue excellence in knowledge and skills sets by having catered roles and career progression for cloud experts, while building tailored programs to improve cloud-specific skills.

The role of a CEO is critical as they only can channel different roles like HR Officer, CFO and CTO. The organization’s cloud strategy needs a collective effort and there is no one better than a CEO to orchestrate it because:

  • Moving to cloud needs investment via sustainable financing.
  • Collaborative top management involvement is needed to create a suitable operating model to facilitate business and technology.
  • Talent planning is crucial to attract and retain specialized tech skills.
  • It is imperative to bring in the organizational cultural practice to enhance a cloud-focused operating model and improve employee commitment to sustain overall value.

On the highway to cloud

  • Cloud is no longer used to host apps on the internet; we must move away from our traditional thinking patterns and start creating a business case centering cloud.
  • The agility all companies are wishing for now comes with technology adoption. Cloud is the highway to take you closer to it.
  • To reap the real benefits of cloud, a well-defined business-technology-based operating model must be devised to holistically capture the essence of the company across all functions.
  • CxOs must collaborate to create the cloud strategy and focus on selecting and sourcing correct tech tools, acquiring sustainable funding, and creating a culture with best practices to thrive in the cloud.
  • Lastly but importantly, cloud and its technologies change ever so rapidly. Hence, we should always be receptive to change and be open for learning.
Tharinya Sellathurai
Engineer – Cloud Technologies
MillenniumIT ESP