3 Steps to Keep Cloud Growth and Business Value in Step3 Steps to Keep Cloud Growth and Business Value in Step
Cloud is delivering growth for companies. However, companies risk losing control over cost, security, and management as usage expands. Here are ways to address this.
October 9, 2023
On paper, enterprises show signs of cloud maturity. They believe cloud is the engine of growth and transformation and are committing very significant investments to it. However, Infosys’ Cloud Radar 2023 research unveils a more sobering reality of unfulfilled cloud commitments and struggles with security and governance.
Consequently, business organizations are losing money and negotiating power, besides grappling with unseen security threats and management challenges. Some of these are growth pains; with rising adoption, cloud, which used to be a single, neat solution in its early years, has sprawled into a complex, robust, and at times unwieldy system. To navigate this, a new approach that maintains cloud growth and sustains cloud’s business value is urgently required.
We believe that the approach should be a 3-step process, as follows:
Master Monitoring and Prediction
Shifting consumer preferences, new competition, emerging regulation, evolving value sources, new technology and innovation, unexpected risks, or reorientation of business goals – today’s enterprises live in an environment of constant change. Naturally, that applies to their cloud agendas as well.
As cloud adoption evolves and grows in response to enterprise context, it raises the specter of cost management, cybersecurity risk, and complicated governance. The 2023 Cloud Radar survey found a 75% increase in the number of respondents using three or four providers compared to the 2021 edition. More than half of the 2,500+ respondents admitted to struggling with monitoring costs in this environment. Perhaps most worrying of all, more than 40% of the participants said their organizations’ cloud governance policies were lax.
Rapid growth is of course a factor, but paradoxically, a cloud “advantage” can sometimes be part of the problem. For example, a cloud subscription enables business to provision infrastructure on demand, independent of IT support. However, without clear guardrails for who can purchase, deploy, or secure cloud, and for what purpose, this convenience can cause all manner of problems, from unnecessary cost, security vulnerabilities, and incorrect provisioning to multiple or inconsistent vendor relationships, and a governance nightmare in general.
Having these guardrails in place will allow enterprises to make better cloud decisions, and have the upper hand, or at least equal footing, in cloud contract negotiations. It is seen that client organizations have more leverage when the contract is negotiated, but the power shifts into the hands of incumbent providers during renegotiation.
That being said, effective cloud management is constant work in progress. It’s not just because cloud providers frequently change their models; enterprises also add to it by adopting technologies, such as generative AI and Internet of Things, bulking up cloud size, cost, and complexity. It is important that both the technology and business leadership work together to monitor their current cloud situation and predict future scenarios. Guardrails for cloud governance and cost are key to mastering monitoring and prediction.
Embed the Business Case Into Cloud
Although most enterprises have moved past the cloud-is-for-cost saving-and-efficiency thinking, many have not reoriented their governance policies to their current cloud situation. The survey underlines this when it reveals that just 21% of respondents add cloud capacity based on an approved business case, and an equally paltry 24% say they always link their cloud deployments to the relevant business unit.
It is difficult to imagine that an organization can quantify or attribute cloud ROI correctly without clarity of business case and ownership. In the high-growth mode that cloud is in, this kind of loose governance could cause a disproportionate increase in risk.
Good governance is necessary, but it cannot come at the cost of speed and flexibility, the fundamental premise of cloud. Governance, which as mentioned earlier, is still trapped in the era of paperwork and procedure in many organizations, must be brought up to date. For that, IT and business silos must give way to transparent, agile, and collaborative relationships, where both parties share responsibility for evaluating, monitoring and reporting cloud business value. One of the survey respondents captures this succinctly by cautioning that the move to cloud must be aligned with business strategy, given that it is such a serious investment. Also, an organization’s cloud proposal should be collectively owned and endorsed by the CIO, CFO and CPO.
Adopt a Value-Centric Cloud Operating Model
Achieving agile collaboration between business and IT is hard work, and certainly needs more than the odd communication and patchy connectivity between the two. Enterprises may have to update their operating models so the teams can track value flows, create alignment, and mobilize to achieve clear goals.
Successful enterprises are adopting a value-centric cloud operating model, setting it up by organizing their cloud teams around customer value streams. The model has six differentiating principles:
Value-based delivery: Develop cloud products and services to deliver tangible business value such as revenue growth, cost savings, scalability, and customer satisfaction.
Customer-centric outlook: Think “customer-first” to understand and meet their expectations. Deploy customer feedback and data into new product development.
Diverse ways of working: Encourage cross-functional collaboration through Agile and DevOps methodologies and bring transparency to cloud ownership.
Strategy alignment: Have a clear vision, goals, and direction for each product and connect product strategy to overall business strategy.
Engineering mindset: Explore how to automate cloud services, products, and delivery to the greatest possible extent.
Innovation: Innovate and differentiate solutions on cloud to stay on top of industry trends and market demands.
By adopting this model, organizations can act as internal hyperscalers delivering big business value to users.
Enterprises have fully bought into the cloud’s value proposition that it is not just an efficiency enabler, but the driver of growth and transformation. But this maturity is marked by growth pangs --a struggle with managing the cost, security, and governance of an expanding cloud landscape. As cloud enters a new era, so must enterprises’ cloud approach. To ensure cloud growth is accompanied by business value, the focus should be on mastering monitoring and prediction, embedding the business case into cloud and adopting a value-centric cloud operating model.
About the Author(s)
You May Also Like