Here, first movers stand to gain a unique strategic value and advantage.19 For example, in 2019, Mayo Clinic and Google Cloud announced a decade of collaboration to transform the future of health care.20 Since then, the Mayo Clinic platform business has announced three strategic initiatives focused on creating ecosystem-driven platform businesses. First, the Clinical Data Analytics Platform was designed to improve health care through data-driven insights by allowing ecosystem participants to analyze scientific literature and build common AI models without sharing data sets.21 Second, Mayo’s “advanced care at home” model combines technology, innovation, and clinical expertise to deliver high-touch virtual care.22 Third, and most recently, a Remote Diagnostics and Management Platform with clinical support tools infuses AI into existing clinical processes to improve diagnostics and patient care.23 In each of these examples, Mayo Clinic recognized a strategic opportunity. It then used its dominant position to shape the future of the industry, not just for the company but across its ecosystem. Mayo embraced a platform business model to advance that strategy. It will automate and accelerate the development of the digital platform by using industry clouds to bring together clinical workflows, diagnostic capabilities, data-rich and distributed environments, and specialized tools like image and speech recognition. In doing so, they’ve advanced strategic use cases. They’ve directed the innovation budgets and resources of strategic partners toward their shared benefit. They’ve also transformed business processes in ways that set new industry benchmarks while considering data interoperability and risks across ecosystem members.
Similarly, Morgan Stanley and Microsoft Azure announced that they would partner to build industry cloud solutions to advance digital transformation in the financial services industry. They’re developing and codesigning new application infrastructure with common data models, cross-cloud connectors, workflows, application programming interfaces (APIs), and financial, industry-specific components and standards. This is in alignment with the bank’s cloud-first and multi-cloud strategy to provide better service, insights, and connectivity to clients and to enhance employee and developer experiences.24 This, too, is another example of both organizations benefiting from a solution that can strengthen the bank’s entire business ecosystem and leave the vendor with a valuable, new offering.
These examples demonstrate that when organizations move first to create new industry clouds, they can have greater control over key business and strategy decisions.25
Start your engines
Ultimately, adopting existing industry cloud solutions and potentially cocreating new ones can allow organizations to focus time, energy, and resources on the areas where they differentiate. Doing so frees up engineering capacity. It allows you to run the core business with custom tools that unlock the ability to continuously innovate new products and services and test strategies at the speed of a hyperscaler. It can remove structural costs by distributing them across the ecosystem of creators. It allows organizations to move away from the traditional “time and materials” thinking toward an “outsource to transform” model, which can free up capital for reinvesting into the business.
Digital transformation requires a balance of business, technology, and organizational strategies. Industry clouds are creating a new model to accelerate that strategic collaboration.
As your organization taps into the full potential of an industry cloud, consider the following:
- Set your digital strategy and know where you plan to differentiate. Understand what differentiates your digital strategy and embrace industry cloud anywhere your organization isn’t differentiating to deliver core systems more effectively. Layer unique points of differentiation on top of this core to hypercharge value. When doing so, think through how business processes occur today and how they might change when digitized. Look for tailored solutions at the sector level. Viable industry clouds won’t focus on financial services payments. They’ll reengineer business processes with modular components for digitized commercial banking payments, property and casualty insurance payouts, or wealth management’s cross-border payments.
- Understand the industry’s vision and shifting contexts. The organization’s strategic North Star should be a fixed, long-term strategy, but digital strategies can and should be expected to change and evolve as contexts shift. Organizations should sense market, technology, and cultural risks and opportunities to keep a pulse on what’s still differentiated and what’s become commoditized. If your industry transformation strategy gives you exposure to another organization or industry, understand the associated risk. Bring cyber leaders in to develop build strategies early to minimize risk and enable client experiences that build trust.26
- Embrace an engineering mindset and work in a partnership model. Business and IT leaders should cultivate an engineering culture. This means establishing vertical engineering pod teams that are agile, innovative, and product-focused. Think about the best path to creating adaptive solutions even if that means looking outside of your organization to cocreate and explore new business models. Set up shared goals and measures for business and technology functions both internally and outside the organization.
At the end of the day, industry clouds are gaining traction, and harnessing their potential starts and ends with strategy. Your competitors will be using them. The race is on. Ignore the opportunity, and you might get lapped.