For companies to unlock cloud computing's true potential, business leaders need to adopt an agile approach, targeting innovation and business transformation.
For many businesses, cloud solutions such as Software-as-a-Service have significantly increased efficiency and lowered CAPEX costs. But companies truly seeking results from cloud technology often miss the big picture precisely because they’re too focused on lowering costs.
Embracing cloud is a long-term strategy that requires long-term investment and considerable planning. And, a critical part of any cloud strategy should be dealing with legacy IT estate while facilitating innovation (and, yes, lowering costs).
Companies focused solely on cost takeout are missing an opportunity. As leading-edge technologies and concepts such as automation, machine learning, artificial intelligence, big data analytics, the Internet of Things, and agile development gain greater prominence, the moment may be ripe for your CIO and their team to reinvent the entire IT estate. Forward-leaning companies understand that IT is far more than a simple business support function -- it can be a powerful engine behind true innovation that drives dramatic business growth.
Two paths forward
Based on our experience, Accenture sees two essential paths forward to wring the most value out of cloud-based innovations:
Path 1: Organic. Evolutionary in nature, the organic path typically entails a company implementing or reconfiguring cloud for back office functions to reduce costs, lure talent, and finance future cloud initiatives. To be sure, the organic approach is a highly conservative strategy companies can conduct at their own cultural pace, but it usually only leads to moderate transformation.
Path 2: Agile. An agile approach, among other benefits, allows companies to start from scratch with far fewer legacy challenges. The flexibility built into agile allows teams to focus on speed-to-market, building solutions faster and offering products that will drive growth. An entrepreneurial start-up culture and a venture capital-based operating model are critical to execute cloud-based initiatives under the agile model. Even century-old companies are embracing this startup, venture capital mentality. It’s no surprise that agile organizations often find recruiting talent less challenging because they’re committed to innovation and leading-edge technology.
First things first
To be sure, the challenges associated with migrating from a legacy model to an agile model are not inconsequential. But neither are they insurmountable. Most fundamentally, how do you retain the best parts of your legacy estate while shedding the superfluous?
Seizing cloud’s full potential means having cloud-centered operating and organizational models. It means taking a determined approach to profound transformation, beginning with the most basic business functions. And companies will have to ask themselves some sobering questions to start:
How do we balance our legacy structure with a new, agile structure?
Will this transition require new roles and skills?
What specific technologies can enable true agility?
Simply uprooting the entire IT estate and starting from scratch is not an option for most companies. Within your legacy IT lies the heart of your company’s process flows, the very nuts and bolts of your business’s day-to-day functions.
But most companies’ legacy systems lack capacity and elasticity. Rarely can existing processes be rolled back. A cloud-enabled, agile organization, however, has capacity to spare. Needs and requirements are measured in nanoseconds under an agile cloud model, providing IT with rapid access to the leading technology and building in greater flexibility.
One critical aspect of building a successful cloud-based operating model is to establish a truly collaborative environment. Companies that can successfully navigate between the old and the new thrive largely because they recognize that cloud will require different talents and skills than legacy. They take an approach to cloud migration that considers how the new technology interacts with the business and its overall strategy. In these cases, the CIO melds the various requirements of the legacy estate with the new, agile cloud estate.
Managing the legacy…
At this point, you’ll be forgiven for saying, “All of this sounds great, but how do I move to cloud while managing my legacy IT estate, with as little disruption as possible?”
Again, collaboration is critical here. Arguably, while most companies’ organizational structures are built with the best intentions -- multiple teams connecting and cooperating to plan, build and deliver services -- the model usually does not work. Inevitably, silos arise throughout every step, all but halting the innovation these models were designed to achieve.
Companies with a start-up, venture-capital mentality create linear, self-directed service teams that work creatively and flexibly without organizational hindrances. To smooth out a journey to cloud, organizations can begin with a transitional service-oriented structure within the legacy IT organization. Once this provisional group is up and running, migration can evolve more fluidly over time. One major advantage of this strategy is that it creates far fewer traditional silos that impede collaboration. Another clear advantage is heightened agility and the chance to experiment with new ideas that can fail fast, so the team can move forward, enabling and executing new ideas more rapidly.
Whichever path your company chooses -- organic or agile -- it is absolutely imperative for leadership to establish the organization’s ideal pace of innovation pace looking through a competitive lens. To unlock cloud’s true potential and value, business leaders must recognize that their company’s commitment to becoming agile is the essential guidepost to the speed at which it innovates and ultimately transforms the business.
Siki Giunta has worked more than 20 years in international operations, marketing and sales, building a comprehensive knowledge of global software, cloud and the internet of things services marketplace. As a Senior Infrastructure Consulting executive, she plays a lead role in Accenture's Journey to Cloud offering, helping clients with deep technical expertise in leading enterprise software development teams—from idea inception to global distribution. Siki has also served as senior vice president of global Cloud Business and Connected Solutions for Verizon Enterprise Solutions; vice president of Cloud Computing and Software Services at CSC; and CEO at both Managed Objects and Fortisphere.
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