Expensive technology used to be a significant advantage for big companies. Large enterprises had the resources to hire consultants, invest in sophisticated systems and collect masses of data to analyze. That gave them better visibility into market trends, helped them automate processes and make better decisions.
The cloud disrupted all that because it meant that world-class technology no longer needed a significant capital investment upfront. Today, anyone with an idea can sit at their kitchen table and access the world's best technology with little more than a broadband connection. That's been a real game changer.
It has also meant larger organizations have had to adapt. Cloud computing is not only much cheaper than legacy systems, it is also more flexible, adaptable and much easier to integrate with new capabilities like artificial intelligence, The Internet of Things and Blockchain. Yet moving your business to the cloud can also be a major challenge. Here's what you need to know to get it right.
1. Be Clear About What You Expect to Achieve
Moving your enterprise to the cloud is more than a just a technology decision, it is a business decision. "In the early days cloud was mostly driven by cost, but the cloud today is about going faster and adding more capabilities and functionality." Jason McGee, VP and CTO of IBM Cloud Platform told me. So it's critical to know going in how you expect it to change your business.
In fact, Deepak Patil, a Senior Vice President at Virtustream, a cloud application management platform lists seven distinct motivations for moving to the cloud, from increasing reliability and scalability to making your workforce more productive. "You have to be crystal clear about your motivations to move to the cloud so that you can verify that your goals are being met."
That's why it is imperative that you don't approach the cloud the way you would, say, a new CRM system. It's something that, if done right, has the potential to transform your entire business, but can also lead you into a technological quagmire. So you need to involve more than just the technology department, you need to get input from the who team.
The best way to start is by asking yourself business related questions, such as "How could better serve our customers through faster, more flexible technology?" or "How could artificial intelligence transform our business?" Once you understand your business goals, you can work your way back to the technology decisions.
2. Choose Technology That Fits Your Needs
One common mistake firms make with the cloud is to approach it as a monolith when, in fact, it is actually a myriad of technologies, including, hardware, software and capabilities that need to be integrated to achieve positive business outcomes. Because every enterprise is, in one way or another, unique, every organization needs to have its own approach to the cloud.
"One common mistake is to try to do everything with one provider," says Patil of Virtustream. "Different cloud providers have different strengths. So a best practice is to use multiple providers and that takes a considerable amount of due diligence to understand those strengths and ensure that the providers you choose can be integrated seamlessly."
It is the potential to integrate capabilities that makes cloud technology so exciting. It's what allows us to, say, take a wealth of customer data stored in servers, analyze it using the latest artificial intelligence software and use those insights to improve decision making in a CRM application. Yet none of that just happens by itself.
"You have to ask yourself, 'Does this cloud play nice with other clouds?'" says Darren Hoch of Stone Door Group, a company that helps Fortune 1000 companies move to the cloud. He also stresses that a successful initiative requires smart planning, especially for applications that are more than five years old and were not originally set up to work on the cloud.
3. Shift Not Only Your Technology, But Your Business Model
While moving to the cloud can help streamline existing operations, there is vastly more potential in leveraging it to create new business models and open up new possibilities. For example, Experian found that cloud technologies helped it solve a problem that had existed for decades at its credit bureau.
Think about what happens when you apply for credit when you go to buy a car. You sit at a desk at the dealership, fill out some paperwork and expect to get approved within minutes. Yet because traditional computing architectures lack the speed and flexibility of the cloud, the reality is that the data used to make those decisions could be as much as 30-60 days old.
That's a serious problem, because the real world is always changing. Factories close and people lose their jobs. Other businesses open up and create new levels of prosperity. With a potential 30-60 day lag, credit approval decisions could be lag behind the business cycle. However, after the move to the cloud, Experian was able to create Ascend, a "data on demand" platform that allows its customers to make credit decisions based on near real time data.
Vijay Mehta, SVP of Experian's Advanced Technology Group told me what's key to unlocking the possibilities of the cloud is leveraging its flexibility to experiment more. "What we found was that we could test new technologies and innovate our business practices much more quickly than we ever thought possible," he said." "By moving our data out of legacy systems and onto the cloud we were able to liberate it."
4. Moving to the Cloud Isn't Just About Technology, But People Too
Perhaps the most important thing to understand about the cloud is that the transformation is about much more than technology. "Don't think you're going to go to cloud, organize your people the same way and see all the benefits of cloud. You going to have to change how you operate" says IBM's Jason McGee.
Mehta of Experian agrees. "One of the business benefits of moving to the cloud has been what we can do with our staff resources," he told me. Moving to the cloud enabled us to repurpose our people from things like maintaining infrastructure to solving business problems for our customers. That not only creates more value, it's also much more interesting and satisfying work."
Every significant technology not only creates value, it also shifts value from one place to another and the cloud is no different. It's involves much more than simply moving data and software from your own servers to a remote resource. You need to think clearly about how you can leverage its possibilities to create more value for your customers, partners and employees.
That's what makes the cloud one of the most disruptive technologies ever. It's not about changing how you manage your data, but transforming how you manage your business.
Disclosure: In the past, Experian has paid for my travel to speak to its executives and appear at its annual conference.