Cloud Adoption – Who is Responsible?
Appears, if you read news reports, that phenomenal percentages of companies have started, accelerated or have completed their Digital Transformation during the last 15 – 18 months due to COVID. Similarly, COVID certainly has dramatically accelerated the pace of cloud adoption .
But, these reports need an extent of skepticism. Some other survey reports, including one from Accenture, paint a different and interesting picture. This particular one finds that just 35% of APAC companies have fully achieved their expected outcomes from the cloud. This isn’t surprising. Most companies jumping on the cloud bus are reacting to a business continuity driven stimulus. Their approach is seldom an integrated part of an enterprise transformation, but is a point solution.
There are two prominent reasons to adopt cloud, among the people we have interacted with. They are a desire to reduce IT spend or creating IT scalability, based on unilaterally created business projections. What is missing is cognition of the transformational impact that cloud adoption can have.
This understanding needs to start from the very top to capture the full value. It needs an enterprise wide, and multi-dimensional view of things. Cloud is the bulwark behind not just increasing operational efficiency but also energising innovation and growth.
The CIOs and CTOs will do a good job of reducing IT spend and freeing up investment. The executive C-Suite needs to use their understanding to use this investment to achieve their organizational ambitions by scaling cloud to a wider business purpose.
Seeing the Larger Cloud Adoption picture
It is a matter of relative scale. IT budgets are usually up to 5-6% of revenue. A cost saving from this budget can only have a miniscule overall impact. Whereas, a 5% impact on top line revenue, would be dramatic for the enterprise. So, how about looking for an impact on sales, for example?
Now, cloud enables digital transformation. Cloud, as a platform, provides the ability to tap into a vibrant and capable growth-focused eco-system. Harnessing these capabilities, can help an organization reach the customer with new abilities, experiences and products; better, and quicker. But, how many of these companies claiming to be on the cloud actually do this? As a result, cost savings in IT is all that you achieve, and even that erodes over a period of time, and rapidly so.
Consider some simple examples from laggard sectors. Quick starts of close to real-time analytics for a supply chain provider, can have dramatic results in areas including transport, or warehouse status. Same for spotting trends from historical data to understand capacity requirement.
How about understanding what sales mechanism or sales flow works (or not) for a sales agent in case of a life insurance company. And then being able to custom configure a product for a customer (within IRDAI boundaries, of course).
Similarly, reconfiguring (or resetting) machinery in a plant remotely through the cloud for, say, a food consumer products company running multiple plants across the company.
Or for an airline, it not only enables new proximity to the passenger but a host of operational benefits.
The Differentiator
Cloud can be a major competitive differentiator if one knows how to use it. Most surveys say that organizations which adopted cloud were more likely to obtain double-digit revenue growth compared to the non-adopters.
While adopting a cloud strategy, organizations must also revisit /reimagine their operating models, environments, and the type of skillsets they will need across the organization. This is necessary to maximise cost efficiency, enhance performance and deliver to the cloud’s huge innovation potential.
Many organizations still muddle up their relationship between cloud transformation and talent transformation. This is a people transformation enabled by cloud and data. It is about enabling those people who run the company and not the other way around.
Finally, it is about people, innovation, growth, efficiency and equally about planning to be a sustainable organization with lower carbon emissions by reducing energy consumption.
The impact of true cloud adoption is too wide, for the advocacy to be just the traditional CIO / CTO’s responsibility. The CEOs must take part to ensure they don’t miss out on the opportunity to reinvent and reimagine their businesses.
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