Want to outcompete? Think Cloud Continuum

When they talk about “cloud adoption”, organisations are often targeting a number they seem to have pulled out of the air – being 80% in the cloud, for example. Or maybe 95%. This is not necessary an issue as we see adoption at scale generates more value over the long term, however it’s just one of several metrics they need to track. Migrating applications in the cloud can deliver some form of cost savings and greater efficiency. But it doesn’t provide access to all the benefits cloud offers.

Moving to cloud doesn’t automatically mean the business will be able to speed time to market, create amazing new products and services, or transform how it interacts with customers, partners, and employees. It’s just the migration part of the story, the first step.

The underlying issue is that most companies still look at cloud in a siloed way. Enterprise IT, the domain of the CIO and CTO, is often focused on how much of their estate to shift to public cloud and how much to keep on-premise, while keeping the lights on. Then there are lines of business seeking to migrate, say, their customer engagement systems to cloud, often with not enough IT engagement. The result? Pockets of cloud without standardisation, non-aligned with any overarching enterprise strategy.

It can get even more complicated. Take a retailer, an industrial company, or a bank, for example. They have applications and want to cloudify them, or they’re building new applications at the edge to take advantage of the data or offer better customer experiences. Typically, this means more silos. And because they are not linked back to the rest of the organisation, that means the broader business doesn’t benefit from the large amount of data that’s being generated.

Think holistically, think continuous reinvention

So how do you avoid these pitfalls? For businesses to tap into cloud’s transformational power – beyond cost savings and efficiencies – IT leaders need to work closely and productively with a broader set of stakeholders including the C-suite and functional leads. The focus needs to be on moving needles for the business, whether in efficiency, agility or revenue growth. This means being able to measure the benefits of cloud across several different dimensions spanning the logical and physical capability landscape.

How organisations view their cloud migrations, and the competitiveness that’s unleashed through a more holistic approach, are areas we’ve focused on in a recent research. We found that while all the companies in our survey recognize the cost benefits, resiliency and scalability that cloud provides, only around 10% of APAC organizations are taking advantage of what we call the “cloud continuum.” ?That describes a range of cloud capabilities – from hybrid, private, public and multi-cloud through to edge – operating together seamlessly to support and power continuous innovation and business agility.

This select few – “continuum competitors” – share some common characteristics. They don’t see cloud as a single, static destination. And they’re not adopting cloud in siloes. Crucially too, they’re switching the focus from cost to value, viewing cloud as a continuously evolving future operating model for transforming the whole organisation: how they interact with customers, partners and employees; how they make and market products and services; how they build and operate their IT systems; how they reimagine the role of data. The whole thing. One interesting finding is that cloud continuum competitors who target new value creation or extraction on the cloud realise more cost savings than peers focused solely on cost savings.

Whereas companies once stored their data and apps on public cloud or in their data centres, there’s now a multitude of options including these and everything in between. And the continuum competitors are taking full advantage. Recognizing that no single cloud environment can give them the full gamut of services they need, they can realize far more value for the whole business from cloud by using it as a continuum of seamless capabilities – from private to public, hybrid to multi, edge to data centre.

Harnessing constant change

Cloud competitors apply a coordinated approach that cuts across all these capabilities. Here’s an example of why this matters so much. In one company we’ve been working with recently, the IT group had defined a cloud strategy for the key applications in its data centres. And its primary focus was on moving these across to the public cloud. When it started discussing this data centre-to-cloud approach with its people in local production sites, and looking at what their requirements were, IT realised the strategy wasn’t aligned with their needs.

Why? Because they hadn’t taken the requirements for edge computing into account. Onsite engineers had systems in place, of course, but because they were working in another environment, with different physical constraints and objectives, the wider business was missing out on hugely valuable data and the insights that it could provide to inform their future decisions. ?

Unlocking the full power of data

We know the vital role played by data and AI-driven decision-making in powering an organisation’s transformation. But to get to that stage, companies need to build their foundation in the cloud – taking advantage of new capabilities located there to become truly data-led.

KDDI, one of Japan’s largest telcos, is one business that has got this right. Operating in a saturated sector, it knew it needed to find ways to grow revenues per user and stand out from the competition with new, hyper-personalised, customer services.

We worked with KDDI to develop an interlocked data and cloud strategy, built a new platform, sitting on AWS (with all the powerful AI/ML and analytics it provides), and enabled it to start tapping into the mass of data at its disposal, including customer lifestyle data from user apps. The result? “Single Brain”, an integrated customer care engine, hosted in the cloud, delivering tailored customer experiences that have boosted conversion rates and significantly reduced churn.

Getting it right…

It might sound straightforward to set a strategy that views cloud as a value-enabler. But it becomes a lot more difficult to implement if you don’t have the right operating model. The reason? Success on the cloud continuum requires a close alignment between the business and IT.

Top-down leadership is key to set the vision and the business needs to drive the initiative forward. Bottom-up, people across the business should be given the freedom to adopt new ways of working and collaborating – small groups of people working in pods will help to drive advocacy for cloud focused on value.

The other critical component: culture and skills. Up to this point, companies have been geared to stability and resilience. Now the business is asking for speed and agility. In an era of compressed transformation, the emphasis is on launching new features fast and getting products to market as soon as possible so developers can get feedback, iterate and improve. Without compromising on resilience, it’s vital to have an agile, experimentation-led operating model, backed by the right culture, people and skills.

…and getting started

So what’s the first step? Absolutely key upfront is knowing where you want to go, setting a north star vision, defining the strategy, and then staying committed to it with top-down sponsorship. There are a lot of moving parts to coordinate, so don’t expect it to be an easy journey. The key is to make sure you have a coordinated approach that’s agile enough for the organisation. You need a level of standardisation to keep costs down, but without being too prescriptive so you always have enough flexibility to accommodate what the business needs to do.

Next, establish the right cloud practices to augment your technologies. But don’t try to introduce a new operating model overnight. Change needs to happen over time, with continuous experimentation, gradually introducing new ways of working as teams get upskilled and cross skilled. We observe taking specific businesses that are a bit more agile in the first wave, using them as showcases is effective in building momentum.

Once you’re underway, the magic of the cloud really starts to happen. I’d love to hear your views, so please get in touch.

To get to know more about Accenture’s Cloud Continuum research, download the full report here.

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