Bread. Whether it is an artisan cob, kneaded by hand and given time to develop its flavours or the processed, sliced rubber loaf sweating in plastic wrapping there are three basic ingredients: flour, water and yeast. What separates them is the time taken to proof before the bake and the quality of ingredients. Digital transformation in the cloud is not dissimilar….honestly. Hear me out.
For large enterprises, digital transformation boils down to three key elements: digital core, analytical core and a big pinch of innovation. However, it’s the time taken in the planning, and the quality of solutions and platforms you use, that determine if it will be a success or not.
What’s driving IT strategy?
The majority of the Fortune 500 companies, no matter how different their business models and industries are, have the same 3 factors shaping their IT strategy: grow the business, reduce IT complexity and drive unrealized insight at a lower cost. There is an obvious answer that will deliver across all three areas: look to the cloud for your digital transformation programme.
In a survey from ZDNet over 67% of IT leaders surveyed indicated that they were considering some sort of public cloud as part of their digital transformation, with over 43% considering private cloud. Those are huge statistics when compared with a few years ago. The cloud has come a long way and I can understand why the industry is getting excited by where we’re heading.
Let’s take a look in detail at the three main areas moving to cloud falls under:
Digital core in the cloud
Moving the digital core to the cloud was pretty much unheard of a number of years ago, but is now becoming increasingly prevalent. Innovative cloud providers such as Virtustream, Amazon Web Services and Microsoft are making great strides to make this possible and, dare I say it, even easy.
Gartner states that by 2019 more than 30 percent of the 100 largest vendors' new software investments will have shifted from cloud-first to cloud-only. This means running EVERYTHING in the cloud, even your ERP. Whilst this may seem daunting the business case for running the digital core in the cloud is quite simple:
Cost control: Bring OpEx under control through the creation of a predictable overall total cost of ownership (TCO)
Agility: the business can scale and flex in a way not possible with an on-premise solution
- Purchase only what you require to run the business currently, rather than paying for 3-5 years of growth in infrastructure costs up front
- Costly infrastructure maintenance programs are significantly reduced
Analytical core in the cloud
This is the most common area that’s moved to the cloud, or at the very least it is the first one considered. The raw power, sheer scale and reduced TCO that the cloud offers in the analytics space automatically creates a business case. With Google’s recent entrance into the SAP cloud arena this has become a fascinating space to watch and customers are reaping the benefits of the additional competition in the marketplace.
When you combine the raw power of SAP HANA on these platforms with other offerings such as Google’s Cloud Machine Learning there is the ability to allow IT departments to offer use cases and data-driven opportunities that have never before been considered.
Moving a company’s analytical core to the cloud is also perceived as low risk compared to the day to day operations of the business. An online commerce giant won’t grind to a halt if the internal reporting system is down, but it will if it’s billing engine is, so many consider this as the less risky option as a first step on the cloud ladder.
Innovation in the cloud
Being the CIO who presided over the “excel” era is not something IT leaders will want to be remembered for. They would much rather be celebrated for consolidating the understanding of what the core business metrics meant and want to be that visionary who made the right business data accessible to the people that most needed it, providing them with real-time dashboards that drive critical business decisions. To put it simply - CIOs want to enable the business to move faster and achieve outcomes that will have a measurable positive outcome.
A big part of this is enabling innovation with company systems and key business data. With the traditional restrictions that go along with SAP implementations, from the transport paradigm through to the UI technologies, it has meant that this has frequently been achieved using excel. This must be avoided.
With SAP’s focus on the cloud and specifically the SAP Cloud Platform (formerly the HANA Cloud Platform or HCP) this barrier has been truly overcome and I’ve witnessed large scale organizations achieve true agility in delivery. Weekly and monthly core functionality releases have dispelled the belief that it's not possible to innovate or move quickly with an SAP system.
Advanced UI and web technologies on the SAP Cloud Platform and the insights derived from other cloud products such as SAP BusinessObjects for Cloud are being embraced to really demonstrate to the business what true business insight can look like.
How does your roadmap get you to the cloud?
The key to get to the cloud is having a well-defined, executable and achievable roadmap. Talking about going to the cloud by 2020 is all well and good, but if you don’t have a clear and detailed plan to do it you’ll be calling the migration of a sandbox to the cloud by that date a success (It's not!).
Break this move up into manageable and achievable chunks, bringing the business over bit by bit. Layer that migration with the commencement of key innovations to exploit the investment and you’ll leave the business stunned and hungry for more!
I’ll refer you back to my bread analogy - serve up a tasty artisan loaf, lovingly crafted and they’ll want more, put a tasteless, mass produced loaf in front of them - it will just go mouldy in the bag!