The great cloud opportunity

Leverage the 3F framework for your cloud journey

All industries are going through a major inflection point partially due to the changes in the business needs driven by Covid-19 pandemic and by the rapid evolution of new technologies.?The gap between those businesses that adopt successfully to the technological changes and those that don’t will decide their future.

While many technologies are evolving including advanced artificial intelligence (AI), internet of things (IoT), 5G, Edge, distributed computing, Metaverse and cleantech, one common denominator is the use of cloud in some way or other. Cloud technologies have been around for over a decade serving many use cases – storage, compute, disaster recovery, platform-based services, SaaS, collaboration, innovation –?and we will see an acceleration of leveraging the known use cases for cloud adoption coupled with those in the emerging areas.

Research says that by 2026, the percentage of IT spend on cloud will be 46%, up from 17% in 2021. And the overall IT spend is estimated to be over USD 4T annually. While organizations may have started their cloud journey in different ways and to solve for specific use cases, it is now important to decide what cloud really means to them in the longer term, and how they should plan the journey while it is still evolving.

It is best to look at cloud as not a single technology for specific use cases but adopt a flexible approach that supports continuous technology evolution. There is no single playbook that applies to all organizations, but one way to do this is to look at cloud from the 3F’s perspective – Foundation, Functionality and Flexibility. The 3F’s are critical for building modern future-proof business platforms powered by cloud technologies.?

Starting with the Foundation, this should cover core aspects at an enterprise level including infrastructure, automation, availability, governance, security and FinOps. The foundation is the most critical component as this forms the basis for all business-related functionalities. This layer also includes providing complete visibility and transparency into the costs by application which can drive organization wide accountability. While many of the business functionalities can evolve, organizations should invest into the Foundation. Most of the components of the Foundation can be built using cloud agnostic techniques. Once this foundation is established, it is important to track how effective this is by measuring various process efficiency metrics including software license optimization, hardware savings, savings in operational costs including backup and recovery, reduction in security remediation, and personnel costs to keep the lights on.

On top of the Foundation, a Functional layer that meets specific business needs becomes important. This could range from document ingestion, OCR to advanced ML functionality that can simply be invoked by business processes. Curated and trusted data sets will be a key part of this layer allowing businesses to draw insights without having to build an entire application from the ground up.?This layer can help the developer experience by providing plug and play software components allowing for a developer to focus on business functionality and compose applications rather than spend most of the time coding. This layer can serve multiple business units within the organization in a “franchise” model allowing them to innovate quickly while also leveraging existing functionality. The governance model becomes critical as business units start to leverage the functional layer. Like the Foundation layer, there are a number of metrics that should be monitored as part of the Functional layer including average time to deliver a new service, number of steps and time taken for a new service request to make it to production, percentage change in delivery time for adding new functionality, and customer satisfaction scores.

Finally, as technology and businesses evolve, it is important to build a Flexible layer on top providing for integrating with the larger business ecosystem through application protocol interfaces (APIs), allow for rapid experimentation with other emerging technologies while still leveraging the functionality and governed by the foundation. For example, as organizations look at adopting new technologies like including Digital Twins, Non-Fungible Tokens (NFT), and Metaverse, this is going to require the ability to experiment rapidly which requires an organizational culture of agility and a platform to support the rapid experimentation. As the experimentation yields results, the outcomes can become part of the Functional layer that can be exposed to the larger enterprise.

Many large enterprises have challenges in prioritizing their cloud transformation journey given their complex and vast existing footprint, and multiple business units involved in decision-making. They also have several decisions to make on not only what to use the cloud for but also how to get there. Approaching the cloud journey by adopting the 3F approach allows you to leverage the best of the cloud as it exists today and provides for the future. Building the Cloud Foundation is non-negotiable, and something the organizations must invest in.

Opportunities with cloud

In addition to this, cloud adoption provides a reason for organizations to adopt automation which is a key aspect of a digital enterprise. It also provides an opportunity for people to learn new skills that can be measured in the context of business value and promote an overall culture of learning. It also enables organizations to re-think their operating models and evolve to one where business and IT priorities are in sync, and the lines between business and IT are blurred for the organizational good. The transparency of operating in the cloud also drives accountability leading to an improved bottom-line. Finally, it gives a good reason to rejig the organizational structure for efficiency, and agility. While all of this can be done without having to adopt the cloud, the cloud provides as good a reason as any to make this great cloud opportunity.

Disclaimer:?The views expressed represent my personal opinions and do not necessarily represent the position of EY.