The Covid-19 pandemic has pushed countries into recession and transformed the way businesses operate.
As governments continue to encourage remote working and social distancing, organizations have tasked their CIOs with implementing a wide range of digital tools to facilitate communication, collaboration, remote access, and enterprise backends. To maximize productivity and efficiency in this digital environment, organizations will need to combine technology with innovation.
And as economies continue to contract and revenue remains difficult to come by, companies will need to find ways to run operations digitally, while also cutting costs.
Cloud computing can help tackle this; businesses can use it to improve operations while lowering cash burn rates and reducing total IT expenditures by up to 10 percent. But in order to do so, it must be used correctly.
Improving remote access
In an era of social distancing, employees need to access their corporate environments remotely to keep the business cogs turning.
Traditionally, companies have provided this remote access through virtual private networks (VPNs), but they have inherent security and efficiency issues. In addition, most existing appliances were neither designed nor provisioned to support the current needs associated with a fully remote workforce.
Companies need rapid, efficient, highly scalable, and device-agnostic remote access solutions that can cope with the new demands of entire workforces working remotely.
Cloud-based solutions meet all these requirements while offering a pay-as-you-go model that eliminates the need for capacity planning, upfront CAPEX costs, and all of the maintenance expenses associated with traditional solutions.
Adopt cloud native devices
Our analysis projects that companies can save 2 percent of their total IT expenditures by transitioning from fully-fledged PCs to cloud-native thin-client devices.
At many companies, purchasing and maintaining laptop and desktop hardware for end-users is both expensive and time-consuming. Thin-client PCs offer a modern, flexible solution. These devices are designed to work effectively with the cloud-based business applications allowing both remote and office workers to stay productive.
Because they are so affordable, thin-client devices are easily replaceable. This allows organizations to treat end-user hardware less as a precious commodity and more as a useful appliance that should be wherever it can add value.
Cloud-native devices such as Google’s Chromebooks and Chromeboxes are inexpensive, easy to deploy, simple to use, and highly secure.
CIOs should define a clear management strategy for these devices and review the application landscape to see whether specific end users may need supplementary solutions to access non-web clients on their devices.
Lift-and-shift to lower burn rate
Shifting to the cloud may seem like a massive undertaking that requires application refactoring to facilitate total business transformation. That approach typically requires years to implement, plus heavy investments of time and resources.
But executives responding to Covid-19 need to make big decisions right now to reduce cash burn rates.
Companies can quickly reduce their total IT expenditures by up to 4 percent within three months by migrating non-critical workloads to the cloud using a ‘lift-and-shift’ approach. Lift-and-shift means rehosting workloads in the cloud without additional transformation. Cloud providers offer several off-the-shelf services to turn off unused workloads and begin the application refactoring process through advanced cloud-managed services.
Once they have demonstrated the value of cloud migration through quick-win initiatives, CIOs can develop standardized metrics and processes. These should assess which portions of the business workloads should be moved to the cloud, as well as how to implement the migration at scale while tracking its successful progress.
Cloud migrations will likely have ripple effects throughout IT workflow and planning. The cloud also offers built-in redundancy and ease of rebuilding that could reduce the need for costly infrastructure-based disaster recovery mechanisms.
To fully benefit from the savings, CIOs will need to implement a strict decommissioning plan on existing parts of their company infrastructure. In the long run, cloud migrations can help organizations cut infrastructure costs significantly, while also accelerating reporting times, improving platform stability, enabling rapid scale-up of capacity as needed.
Making the most out of data
In addition to helping enterprises become more efficient and productive, a cloud migration can also make companies more effective at leveraging the full potential of all the data they collect and generate.
Today, data sits at the core of every industry, where it represents a key source of profitability and competitive advantage.
The first step is to identify and prioritize business use cases for using data while considering factors including data availability and regulatory compliance requirements.
Once CIOs know how they want to use data to improve business processes or introduce new operating models, they can then define and build data governance rules, data infrastructure and data lakes. These structures enable the creation, ingestion, and processing of massive data flows at an industrial scale. If necessary, a data mapping program can be useful in homogenizing data in preparation for cloud migration.
Cloud computing providers offer off-the-shelf automation and other data-oriented managed services that help CIOs get to market faster with a fully functional data platform.
A roadmap to success in the ‘new normal’
While the Covid-19 pandemic caught many businesses off guard, the pandemic has also accelerated the adoption of digital tools and new ways of working.
At a time of great fluidity, CIOs have an opportunity to explore the ways in which a cloud migration can reduce costs, improve efficiencies, lower cash burn rates, and ultimately even lead to the discovery of data-driven insights that improve competitiveness and uncover new business opportunities. It has opened opportunities for a more hybrid style of working in future.
There are risks and challenges associated with cloud migration that are unique to each company depending on its industry, its stakeholders, its legacy technologies and its strategic goals.
Amid all the uncertainty and risks caused by Covid-19, success depends on being flexible. Cloud migration can help companies improve their resilience by improving their efficiency and effectiveness.
For CIOs, cloud migrations can offer important near-term savings and benefits, while also reinvigorating progress toward the long-term goal of digital transformation.
Norbert Faure, Managing Director, BCG Platinion