Talking with our customers, I keep hearing the same thing "IT management has decided on a Cloud First strategy".
Are we working in a cloud computing bubble? That is, have business leaders (and perhaps some IT leaders) been lulled into assuming that moving or deploying to cloud is as easy as 1-2-3, without any heavy lifting required? So, have at it, spend the money, get cloud for cloud’s sake?
Listening to the cloud vendor messages, one can be forgiven for thinking that cloud deployments are a snap, and will quickly put a business on the path to digital nirvana. However, the history of enterprise software tells a different story. There have been many cases in recent decades of companies slapping expensive technology solutions on top of calcified processes and even more calcified business models, and expecting overnight success — but getting none.
Technology is essential to keep up, and the faster an organization can move to digital, the better. But like the tires on a race car, technology only makes the ride smoother, but is not the reason for success. A scan of the Forbes Global 2000 List of the World’s Largest Public Companies between 2006 and 2016 shows other forces at work that determine business success. The top companies in 2006 were Citigroup, GE, Bank of America, AIG, and HSBC — four US-based, the fifth in the UK. The top companies this year are ICBC, China Construction Bank, Agricultural Bank of China, Berkshire Hathaway, and JPMorgan Chase — the top three based in China, the next two in the United States. The point here is that no amount of advanced technology would have necessarily helped the 2006 leaders hold their leads, as they were knocked off their perches by players that emerged from other parts of the global economy with different models and markets.
Successful organizations understand that underlying corporate culture and business models, led by forward-thinking managers or leaders who nurture a spirit of innovation among all levels of employees, are what matter in the long run. They also understand that technology supports this in a big way, but cannot replace any deficiencies.
This is a point to keep in mind when considering the fact that enterprises may be investing hundreds of thousands or millions of dollars, euros, pounds or rupees in cloud computing solutions every year, yet are still uncertain about how and where this technology is best applied. IDC recently released estimates that up to $96.5 billion will be spent on cloud services worldwide this year alone, a number that will reach $195 billion by 2020. Gartner adds a few billion to the equation, suggesting that the worldwide public cloud services market is forecast to reach $204 billion this year alone.
Is this money being well spent? A recent survey of more than 400 enterprise IT executives, conducted by Wakefield Research and sponsored by LogicWorks, confirms there is general uncertainty of IT and business leaders on how to best leverage the cloud to drive growth and efficiency across their organizations, as well as the need for more thoughtful planning for both cloud migration and ongoing cloud maintenance. Eight in 10 executives believe that their company’s leadership team underestimates the time and cost required to maintain resources in the cloud.
There are issues with staffing for the new cloud and digital realities as well. The need for technically proficient people does not go away when things are shifted to the cloud. Even as the demand for enterprise-level, cloud-based services expands, the LogicWorks survey finds 43 percent believe their organization’s IT workforce is not completely prepared to address the challenges of managing their cloud resources over the next five years. It is a problem compounded by the high demand and relatively low supply for workers skilled in cloud, security, DevOps engineering and other IT positions.
Organizational preparation needs to be the most essential piece of cloud and digital engagements, and according to the LogicWorks survey, not enough is being done. In a compelling read at TechTarget, Mark Tonsetic, IT practice leader at CEB, outlines four ways to tell the “cloud story,” to ensure that the money and time spent on technology is met by appropriate transformation of the business:
Cloud and digital transformation are one in the same. Cloud may offering a compelling cost savings, but this is only one small piece of its value proposition, Tonsetic says. Information technology should be seen for what it is becoming: “an ingredient in corporate growth.” He urges cloud proponents to “stress speed and flexibility gains that can enable enterprise digital strategy,” and elevate this discussion to the board and investor level. Enterprise digitization and growth is today’s corporate holy grail.
Cloud and digital elevates the roles of IT leaders. IT leaders need to shift their focus from governance and policy to advice and education on the technology options available to their businesses. IT leaders need to serve as partners to their business users, making the “The cloud story that IT leaders need to tell their business partners should be about how IT will build new partnerships with the business to explore and exploit cloud opportunities. Relay the case for cloud computing in the language of new business opportunities, new models for business engagement and collaboration, and new opportunities for technology careers.”
Cloud and digital transform IT departments into competitive service brokers. Corporate IT no longer needs to operate as the owners and operators of email, CRM or even ERP systems, Tonsetic relates. These departments are now in a different kind of business — consulting and working with corporate leaders to define and execute transformational digital strategies.
Cloud and digital means new types of career opportunities. As mentioned in the LogicWorks survey, more than four in 10 executives say they don’t have the available skills to move forward with cloud. At the same time,there are highly capable IT staff members still involved in legacy or on-premises systems development, maintenance or operations. This pool of talent shouldn’t go to waste. “Forward-thinking IT organizations are careful to send teams the message that cloud and other technology developments present an opportunity for experimentation, innovation, and growth across IT — a refreshing change of pace for teams that have labored mostly to the tune of efficiency, Tonsetic relates.