The wisdom of Clouds: Four compelling reasons to adopt the Cloud | Deloitte UK has been saved
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With the COVID-19 pandemic disrupting normal ways of working and doing business, boards will be keener than ever to get their heads around the benefits, advantages, costs and risks of Cloud Transformation. But these factors can often be difficult to verbalise and even harder to measure. To help, we’ve set out a powerful four-point business case below that highlights the compelling benefits while flagging up any potential barriers.
How’s this for a Cloud Transformation business case? Innovate and prosper.
It may not be expressed in classic management speak but that bold statement sums up your choices around Cloud Adoption in a nutshell. That’s not because Cloud itself is a panacea, but because of what it enables: business agility, cost savings, efficiency, better data insights…oh, and optimised customer or citizen engagement and experience.
In the hyper-competitive, high-expectations business environment of the 2020s, leveraging Cloud services isn’t an option, it’s a necessity. Large and mid-sized enterprises will either be in the Cloud or they will not exist. Organisational history is littered with the debris of companies that lacked agility, failed to adapt and resisted embracing new technology and ways of working.
Public bodies aren’t insulated from the effects of innovation either; as companies strive to find new, better ways to satisfy consumer demand, this is increasing the expectations that citizens and communities have of public sector organisations as well.
However, a robust business case demands an analysis of the benefits, risks, advantages and costs of Cloud Adoption so that the senior leadership team can make informed decisions when it comes to devoting serious time, resource and budget to the project. We’ve broken them down into the most compelling drivers.
Greater business agility and faster speed to market:
Cloud transformation confers competitive advantage largely from the modern, agile working practices that it enables and encourages. Building Cloud capability compels your organisation to challenge and disrupt itself in terms of its structures, processes, controls and ways of working.
Both customer knowledge and budget typically resides with customer-facing lines of business, who can be hamstrung in their ability to innovate if they can’t access the valuable information resources of the organisation. By using the power of the Cloud to allow anywhere, anytime access to the organisation’s valuable data and applications, IT can become a partner for those lines of business and a crucial enabler for them to unleash their full potential.
Access to state-of-the-art technology – particularly advanced services like AI and machine learning – sharpens competitive and quality edge. It allows speedier development of products or applications, more rapid decision-making and therefore quicker time to market.
Cloud transformation also gives you instant access to global markets and allows you to quickly scale up or down in response to demand and opportunity. The major Cloud Service Providers are present in almost every country on earth. They are pervasive. Even the largest IT departments cannot typically compete for geographic reach.
Watch out for: While you’re in the process of migrating to the Cloud, there will be a need to run your existing IT alongside. But this doubling up will be a short-term phenomenon, akin to the move from analogue to digital broadcasting a few years ago. Nobody is watching telly using 625 lines and cathode ray tubes anymore and the viewing experience is all the better for it.
Positively disrupt yourself:
As with other inexorable trends, it is important to get with the programme. Being a Cloud refusenik today is like clinging on to your typing pool when the desktop PC was introduced. Proudly obsolete is not an epithet you want attached to your organisation. The Cloud is becoming a core element of IT service-delivery and your employees may already be accessing Cloud-based solutions on their own initiative.
As your existing technology vendors transition to the Cloud, it is a brave organisation that remains resolutely loyal to its in-house data centre, despite the understandable human appeal of having a physical and tangible asset on which to run your business. As software companies move to SaaS and away from physical on-premise installations, the latter will become as anachronistic as a video store in the age of streaming content.
Cloud Adoption does present new risks to face into, but it is highly effective in addressing existing risks such as operational resilience. Using a multi-disciplinary model, which fosters collaboration across all the relevant areas of expertise, is the best route to solving these issues and achieving the desired transformational impact.
Watch out for: While Cloud Transformation beats IT business-as-usual every time, board members who came of age in the golden era of mainframe computing or desktop IT may have certain prejudices, based on poor past experiences, that need to be overcome.
However, by doing your homework and being realistic about timelines, a well-conceived Cloud Migration will transcend these issues and be a positive experience.
Modern businesses generate colossal amounts of raw data, which is not much use on its own. It has to be processed into information and then again into insight.
Big data comes in high volumes at high velocity. It also comes in many varieties and needs to be verified. That’s a lot of Vs already but the one that really matters is value. Processing all this data requires huge storage, warehousing and analytic capabilities. Most individual companies will struggle to keep up with the massive infrastructure needed to process the sheer torrent of gigabytes and petabytes coming down the pipeline at them. Migrating to the Cloud can address the first four Vs and really deliver on the fifth.
Every board member can benefit from data-driven insights, enhancing the quality and speed of decision-making on everything from improved customer experience to supply chain management.
Watch out for: The only problem with vastly improved insights is that you might have to act on them in order to boost competitivity and profits.
Cost savings and demonstrable ROI:
Existing business models are running into the sand in terms of their ability to generate ROI. Automation through the Cloud can substantially cut IT and compliance costs.
But its real value is the new channels and services it makes possible. For public bodies that can mean delivering simpler and/or more effective services creating improved public trust and confidence, while for businesses that translates into access to exciting new revenue streams.
Finding the sweet spot between innovation and complexity is the secret. Balancing the two can get you 10 times ROI over a two-year period* if you focus on reducing complexity while building capability.
Watch out for: Cloud services are scalable and open-ended so, as with kids and their mobile data, you need to keep an eye on operating costs and set up specific Cloud expenditure processes.
ROI takes time but, done properly, the long-term value of Cloud Adoption will greatly outweigh the short-to-medium term costs.
*Source: Deloitte Consulting LLP, November 2019, (specifically, David Linthicum, Chief Cloud Strategy Officer Deloitte Consulting LLP)
Paul is the UK Cloud Leader and leads the Cloud Engineering business globally. He is also our AWS Market Leader in the UK. Paul has more than 25 years of technology advisory and delivery experience, shaping and delivering large, technology-enabled business transformation programmes, principally working with clients in the Manufacturing industry.
Adam is a Director in Deloitte’s Technology practice with a background in Cloud computing, IT strategy and architecture. Adam’s strength is in helping clients articulate their strategy and build consensus on transformation roadmaps across technology, people and processes.
Steve is a specialist in cloud integration and APIs. He develops and implements integration & API strategies to help the most complex organisations create and leverage reusable assets that enable them to unlock their valuable information and maximise their return on technology investments. An experienced integration architect with a proven track record of agile solution delivery and assurance, he has extensive experience spanning 13 years across public and private sector. With a background in software design and development, Steve facilitates smooth, clear communication from board level to the development team and back again to ensure immediate project priorities align with strategic business objectives.