Cloud computing has dominated new industries while the legacy corporate market has been slow to respond and catch up. While this is natural with in-built conservatism, investment cycles and cost of change, the corporate market is now at a point where the option of ‘doing it the old way’ in many cases no longer exists. As a result, change is not just inevitable but a fact.
The cloud is not a finished product or a panacea to the evils of Corporate IT but is improving and developing at a rapid pace nonetheless.
Constraints that previously existed as blockers to change are rapidly fixed and solutions developed: the cloud is now an alternative to traditional corporate IT. However, bespoke development may still be required if it is to offer a genuine competitive advantage. The challenge is not all on the provider side, however, but also the change required on the customer side to enable the models in terms of business processes, investments, culture, and legacy IT.
Moving beyond the cloud means moving the conversation beyond ‘if’ or ‘when’ and accepting the change straight up, not just being involved but committed at all levels. Understanding the benefits in terms of costs, business outcomes and reliability and how to get there. This is not just about moving your server estate to the cloud, but covers all aspects of IT. Being half in the cloud can create more costs than benefits, like those early companies who first added a website but got overcrowded by ads or those who changed their source of power from stream to electricity but still had to be on call for 24 hours a day.
The key with most change is a well-founded strategy and business case that can shape the future of your business. These strategies typically have three components:
- Diagnosis: analyzing the environment or situation, making a diagnosis.
- Guiding Policy: setting the Policy framework.
- Action Plans: sequencing the tasks and activities.
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Strategy is not a vision
The key point in strategy is not a vision but is the defined action plan based upon the Guiding Policy and the diagnosis of the current issues. The IT strategy for all businesses needs to be based on when and how they will transform their IT to become truly cloud-enabled.
The move to becoming a cloud-based enterprise starts with right to left thinking. What does my business look like at the endpoint? And then working backwards to how you get there.
The diagnosis of the problem needs to cover not just every component of the IT service but also the business change required with a clear focus on the benefits. Analyzing the components of IT will show that very few cannot be cloud-enabled today, including key infrastructure such as firewalls, proxy, AD etc. Even specialist applications often offered as a hosted solution as a stepping stone to delivering it as a pure SaaS.
This breakdown with an understanding of the costs can throw up some unexpected results. Infrastructure as a service (IaaS), Network as a service (NaaS) and Software as a service (SaaS) combined can offer up costs savings in terms of current expenditure but especially so in terms of Total Cost of Ownership.
Legacy components that cannot be moved may need to go in a temporary holding pattern until they can be addressed but should not be a barrier to change. The marginal cost of maintaining the last few components should provide a clear business case as they enable the removal of the remaining infrastructure.
Setting clear policy goals with the business and sticking to them will make the strategy easier: no new bespoke development, cloud-only solutions, only pay once, no further investment in legacy.
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Having a plan of action
The action plan and sequence become a logical conclusion of the diagnosis and policy - a step-by-step road map to transform the enterprise with a clear business case and case for change.
The plan by its nature will be different for each enterprise, though the end goal is the same on the premise that your business is unique, not your IT. This does not happen overnight and will take several years with multiple challenges along the way. Change needs to be managed, particularly on the people front, as much of the change will directly impact the people managing the change. Embedded practices need to be challenged, ways of working changed, and skillsets enhanced. As with the early utilities, we learned to switch off the lights when we were not using them. The cloud will challenge IT to be demand managers and maintain their IT at an optimized state.
Key decisions will need to be taken, such as:
- How can I engineer my network away?
- What business processes can move to SaaS?
- What is my chosen ecosystem?
- What new skills do I need to develop?
- What does my future supply chain look like?
The corporate market is now on a steep learning curve that will necessitate changes in how they operate not just their IT function, but their whole business. The businesses that grasp these opportunities in the right way will benefit themselves and their customers.
Henry Ford pulled the trick over 100 years ago when he started the Ford Motor Company, reimagining the factory using electricity and motors instead of steam. The early dot-com companies repeated this in the dot-com boom, by finding out that adding a website to an existing business seemed to increase costs with little immediate benefit.
Though the cloud will not transform industries in the same way, it will transform the IT function and how business consume IT. The cloud is also enabling new technology from the internet of things to voice-activated automation. Embracing this change will provide opportunities beyond just lower costs and help transform forward-thinking organizations so they can offer real competitive advantage.
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Adrian Davey, IT strategy consultant, Agilisys