What is holding many companies back from achieving the full benefits that cloud applications can offer is the piecemeal approach they take to its adoption.
Cloud applications, now a widely accepted part of the technology spectrum in New Zealand organisations, have the potential to deliver real transformation to companies. At present however, that potential is far from being realised.
It is not for lack of interest or an unwillingness to adopt cloud technologies. In fact, New Zealand companies have embraced cloud-based applications and their appetite for them is increasing.
Research firm IDC predicts a compound annual growth of between 17 and 25 per cent for cloud applications in New Zealand through until 2019 at least.
Companies offering cloud-based applications which support human capital management, Workday for example, are experiencing rapid growth and Salesforce, the CRM, has reached 1600 New Zealand clients recently.
What is holding many companies back from achieving the full benefits that cloud applications can offer is the piecemeal approach they take to its adoption.
Commonly known as ‘seed and grow’ this is when companies test a technology by applying it to one specific issue and then, if successful, gradually applying it to other situations across the organisation.
The upshot of this is that companies, particularly larger ones, end up with pockets of innovation and siloed work practices which too often replicate each other.
Few organisations have, as yet, worked out how to effectively manage their cloud activity to bring it up to the scale that will deliver the real transformation it is capable of.
So what can organisations practically do to change this situation – to make their use of the cloud truly ‘enterprise grade’?
A key component is to develop an IT strategy harnessing cloud-based innovation without stifling it. This is particularly important when you consider that what makes the use of cloud applications so exciting is precisely the rapid innovations and change that they bring for example; the ability to procure and deploy new technologies at greater speed.
For this reason, the fundamental component of any IT strategy, namely a clear vision of what value it can deliver, the problems it will solve and how it supports and adds to the overall business strategy, is essential.
The pace of innovation today however means that the vision needs to be pragmatic. More than likely it will have no more than a two to three-year horizon and a relatively broad view on the outcomes and the capabilities required. And, the journey is likely to be more important than the destination – a tricky concept to get across to other parts of the organisation unused to this pace of change.
The roadmap describing the journey needs to line up and gain control of cloud-based initiatives wherever they are occurring, most typically in sales, marketing, analytics and talent, and tell a coherent story around the transformation that will be delivered.
It also needs to demonstrate how this will complement traditional IT and set out clearly the principles that will guide the transformation. All of this also needs to take into account the organisation’s digital strategy, another area where overlap can easily occur.
Four step model
Another key component of an enterprise grade cloud operation is the development of a model that will drive value creation whilst maximising efficiency and productivity. Our view is that this will typically include four distinct capabilities.
Delivery Factory - The foundation of the operating model should be a reliable and cost effective ‘Delivery Factory’ that delivers enhancements and supports the platforms as they evolve. With this in place organisations can stop ‘sweating the small stuff’ and focus instead on delivering the strategy.
Business Architecture - Overlaying this should be a ‘Business Architecture’ function that pools resource into a centre of excellence while providing expertise across key business areas and delivery needs. This ensures consistency and good practice throughout the organisation.
Value Creation Office - A ‘Value Creation Office’ should be established to work in concert with the business to assess and realise value from the cloud platforms.
Governance & Training - With the right levels of corporate governance and training, organisations can look for opportunities to build value based on insights from throughout the organisation’s ecosystems.
Cloud-based applications are, of course, just one aspect of a dynamic technology landscape. But what makes them particularly valuable is the ability to generate new levels of value at speed for both employees and customers. The enormous opportunity they offer however, has to be managed to be fully realised.
Daniel Lund is Head of Cloud First at Accenture New Zealand.
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