The global pandemic has accelerated the shift to cloud computing this year, but businesses have been transitioning toward cloud-based solutions since the early 2000s.
Early moves to the cloud were predominantly ‘lifted and shifted’, a term that describes how applications and data are moved to the cloud without stopping to redesign the app, operational process and ways of working. Alternatively, it could be a business unit experimenting with a new SaaS tool.
These often achieved cost savings or local value, but also created disruption and did not have the effect of being truly transformational or moving an organization toward becoming ‘cloud native’.
What does it mean to be a cloud native company and why bother?
Using definitions from the Cynefin framework, in a ‘complicated’ world a company makes annual plans and strategies, and everybody understands everything about how they work; things may be difficult, but methods to solve problems are understood and can be planned. However, in today’s fast-moving and more ‘complex’ world, the ways of working need to change and we need to move faster. Planning must occur more regularly, perhaps on a quarterly, rather than annual basis, and be more adaptable to direction and action required.
Being an adaptable organization means you can thrive in a ‘complex’ world. It involves sensing and responding to what your market is doing, provoking it and hearing what it does, and then finally tuning your direction. It must then be done iteratively and continually.
Being ‘cloud native’ helps remove constraints, allowing a company to be more adaptable. It means moving the infra and apps from legacy IT stacks to the new capabilities available in the cloud. Cloud native technologies support adaptability. They’re quick to stand up and change, and you can connect your technical innovation to your business innovation much more effectively.
Beyond the tech, most organizations today struggle to adapt to change, and even big change programs often resist what is needed to become truly agile, as it can be uncomfortable. To achieve this, you need to think differently about organizational structure and governance, your processes and ways of working, and your supporting technology.
Making the change
Cloud modernization in businesses starts in one of two places, although sometimes in both. It could begin in the IT department with a cost-driven business case – for example, existing data centers. Or it could start as a business experiment within a business unit, or sometimes joining up a number of experiments to drive a bigger change in the business. To achieve a full cloud-driven transformation, IT transformation and business experiments need to be joined up.
Turning a business into a cloud native one is a conversation for the Chief Executive and the leadership team, which should include the Chief Information Officer, as it involves so many aspects of how a business is run. The change needs to be strongly sponsored at that level.
To begin the change, we recommend creating a lighthouse experiment around a particular product to try something really different, and then take learnings from that. Then it’s all about adapting to those learnings. When you feel like you’ve got a model working, you can begin to scale that model out within the organization.
A key consideration is the governance structure of your organization: who can make what decisions over what subjects? Can they implement those decisions within their own teams quickly, supported by the appropriate process, like DevOps or Agile? Then, underneath that, how is it supported by the appropriate technologies of a cloud provider that's innovating fast enough to provide you with functional uplift to use for business advantage?
The cloud ripple effect
The moment businesses start to implement the underlying technology and different ways of doing things, challenges emerge around governance, finance, processing and technology.
The way to get optimal results is not to push back on the changes, but to accept them as new ways of working. For example, if you want to initiate 50 releases a day of a product on a consumer-facing platform to provoke your market, then the person who leads the team around the platform needs to have the decision rights to make those releases and respond to the market feedback.
That person probably needs to have full stack control of that release, which means being close to or part of their business innovation group. They need access to the technology innovation group, and they need the people in the development team, or the DevOps team, to implement those changes. This will almost certainly break existing governance structures, traditional IT release processes and many other things. Make no mistake: cloud modernization has profound ripple effects across the business.
Unmanaged, all of those impacts can be experienced as unconstructive disruption: everyone gets annoyed and thinks that the big transformation is creating lots of noise, with the organization resisting the change. There are other risks of doing this badly – it can cost too much money if you do it without a clear strategy, and you can expose yourself to operational or security risk.
To deal with this, it’s important to get a partner that has been through it before. They can help business leaders, Chief Information Officer, and leadership teams be aware of the scale of the challenge they’re about to take on, the implications, and plan a track through it. This makes it very transparent to the rest of the organization, so they all know what they’re getting themselves into.
One success story in terms of chief information officers converting their legacy company to a fully modernized IT organization, is BP. This multinational energy company is currently navigating a large-scale digital transformation journey, with the goal of modernizing its IT organization, becoming more innovative, adopting agile methodologies, and creating a world-class engineering team.
Over the past seven years, BP has adopted a ‘cloud first’ strategy. This has involved building brand new applications and workloads in the public cloud, as well as moving, transforming, and modernizing existing applications and services from its data centers to the public cloud.
This year has accelerated many companies to becoming cloud native, and it’s a trend that we will continue to see as we move into 2021. As long as businesses know exactly who is in charge of the operation, understand the risks, and have a clear strategy alongside it, becoming a cloud native business will be a success.
Dave Chapman, Head of Strategy and Professional Services, Cloudreach