Cloud Transformation:
IT's journey from Cost Center to Strategic Business Unit
IT's journey from Cost Center to Strategic Business Unit
Last week I attended an event hosted by SearchCIO.com and the topic was Cloud Computing and its impact to the Business. Thanks to Scott Peterson, Editorial Director SearchCIO.com and Faisal Hoque, Founder of the BTM Institute, we had great participation and rich discussions.
As the event progressed we discussed and debated about the impact of cloud computing on Business in general and more specifically 1) Opportunities it presents 2) Challenges we need to tackle and 3) What success looks like and how we measure it.
Here is a point of view that I shared in the session... and would love to hear from others!
Opportunities The Cloud Transformation Presents:
Nowadays everyone talks about the Cloud and I am not sure they mean the same thing. So, for our conversation, let us define Cloud for a minute. Cloud is about delivering IT services over a network with the following characteristics: Self-Service - Ability for a consumer to get IT services without having to deal with layers of organizations! Elastic: Ability for the consumer to consume IT services, as they need it when they need it! Pay-Per Use: Ability for the consumer to only pay for what they use!
Now, with this definition, It seems that Cloud is all about "cost control" and "efficiency play". Though this may be true for Small Businesses and some Enterprise Business, it may be a strategic advantage and a key differentiator for many other Enterprises. Leveraged rightly, Cloud Computing could be a "Strategic Positioning" for an Enterprise, where it is performing different activities from its competitors or performing similar activities in different ways, to generate better revenue (Porter, Michael E, "What Is Strategy", HBR, Nov/Dec, 1996)
Cloud computing with its implied capabilities of "Speed", "Automation" and "Predictability" can decrease Enterprises "time to market". Ideas can be transformed from power-points to validation-with-customer quickly and iteratively. And this can be done in droves. All this implies huge revenue opportunity for the company. Though one can argue that this is an outcome of lower-cost IT services, this is about opening the floodgate of an organization to harness its power of innovation and convert them into durable competitive advantage with a perennial revenue stream!
With Cloud's Pay-Per Use model the once unimaginable challenges are a clicks (or an API call) away. For example, analysis of volumes of data, an enterprise has accumulated over period of time can be performed over a weekend and the outcome can be translated into cross-sell and up-sell opportunities for the enterprise driving huge revenue.
Implemented as an Integrated Platform enabling customer facing offerings, Cloud computing can provide features and capabilities that could be an enterprise's durable competitive advantage! Think capabilities such as auto-scaling from the likes of AWS, dynamic content deployment so products/features can reach customers quickly, HA/DR, SDLC Life-Cycle-Automation and more! All of these capabilities takes the cloud conversation to a level beyond "efficiency play"... into a "Revenue Opportunity Play"!
Challenges we need to tackle:
Having been on the leading and sometimes on the bleeding edge of the cloud transformation, I believe, the challenges we need to tackle are not that of technology! Yes, Security is a technology challenge in the Cloud today but, solving it is not a question of "If" but, a question of "when".
The main challenges I think we need to tackle are those that we have seen in all transformations - People & Process. It is about leading an organization through change - (1) Mobilizing the organization by effectively making a case for change, (2) Defining what success would look like post transformation and (3) Motivating and leading talent so that they become change agents and promoters instead of detractors or even passives.
What success looks like and how we measure It:
In my view, after a successful Cloud transformation, IT or at-least some parts of IT would become a strategic advantage to an enterprise. They would be viewed as a SBU and not as a cost-center - CIOs will become trusted strategic advisers for CEO & CFO. Their success will be measured not by the $ they are saving the enterprise but, by the $ they are adding to the top line.
Cloud computing will commoditize IT services for many SMB and some Enterprises but, it will also be a strategic differentiator for many Enterprises. Take a hard look at your business strategy one more time and see how you could leverage the Cloud!
What do you think?
>RV
As the event progressed we discussed and debated about the impact of cloud computing on Business in general and more specifically 1) Opportunities it presents 2) Challenges we need to tackle and 3) What success looks like and how we measure it.
Here is a point of view that I shared in the session... and would love to hear from others!
Opportunities The Cloud Transformation Presents:
Nowadays everyone talks about the Cloud and I am not sure they mean the same thing. So, for our conversation, let us define Cloud for a minute. Cloud is about delivering IT services over a network with the following characteristics: Self-Service - Ability for a consumer to get IT services without having to deal with layers of organizations! Elastic: Ability for the consumer to consume IT services, as they need it when they need it! Pay-Per Use: Ability for the consumer to only pay for what they use!
Now, with this definition, It seems that Cloud is all about "cost control" and "efficiency play". Though this may be true for Small Businesses and some Enterprise Business, it may be a strategic advantage and a key differentiator for many other Enterprises. Leveraged rightly, Cloud Computing could be a "Strategic Positioning" for an Enterprise, where it is performing different activities from its competitors or performing similar activities in different ways, to generate better revenue (Porter, Michael E, "What Is Strategy", HBR, Nov/Dec, 1996)
Cloud computing with its implied capabilities of "Speed", "Automation" and "Predictability" can decrease Enterprises "time to market". Ideas can be transformed from power-points to validation-with-customer quickly and iteratively. And this can be done in droves. All this implies huge revenue opportunity for the company. Though one can argue that this is an outcome of lower-cost IT services, this is about opening the floodgate of an organization to harness its power of innovation and convert them into durable competitive advantage with a perennial revenue stream!
With Cloud's Pay-Per Use model the once unimaginable challenges are a clicks (or an API call) away. For example, analysis of volumes of data, an enterprise has accumulated over period of time can be performed over a weekend and the outcome can be translated into cross-sell and up-sell opportunities for the enterprise driving huge revenue.
Implemented as an Integrated Platform enabling customer facing offerings, Cloud computing can provide features and capabilities that could be an enterprise's durable competitive advantage! Think capabilities such as auto-scaling from the likes of AWS, dynamic content deployment so products/features can reach customers quickly, HA/DR, SDLC Life-Cycle-Automation and more! All of these capabilities takes the cloud conversation to a level beyond "efficiency play"... into a "Revenue Opportunity Play"!
Challenges we need to tackle:
Having been on the leading and sometimes on the bleeding edge of the cloud transformation, I believe, the challenges we need to tackle are not that of technology! Yes, Security is a technology challenge in the Cloud today but, solving it is not a question of "If" but, a question of "when".
The main challenges I think we need to tackle are those that we have seen in all transformations - People & Process. It is about leading an organization through change - (1) Mobilizing the organization by effectively making a case for change, (2) Defining what success would look like post transformation and (3) Motivating and leading talent so that they become change agents and promoters instead of detractors or even passives.
What success looks like and how we measure It:
In my view, after a successful Cloud transformation, IT or at-least some parts of IT would become a strategic advantage to an enterprise. They would be viewed as a SBU and not as a cost-center - CIOs will become trusted strategic advisers for CEO & CFO. Their success will be measured not by the $ they are saving the enterprise but, by the $ they are adding to the top line.
Cloud computing will commoditize IT services for many SMB and some Enterprises but, it will also be a strategic differentiator for many Enterprises. Take a hard look at your business strategy one more time and see how you could leverage the Cloud!
What do you think?
>RV
