Achieving Enterprise Agility through Cloud Solutions
By MichaelM-Oracle on Apr 14, 2014
Business leaders are getting serious about how their firms can profit from cloud solutions. Beyond their concerns to economize wherever possible, agility and innovation are becoming the primary drivers of the business case for cloud. According to a recent survey from Gartner, 25% of CIOs are going to be “seriously invested” in the cloud; 51% are buying cloud-based applications for agility and business results. Their challenge is finding the right strategy, and optimizing the use of cloud-based applications across their enterprise.
At Oracle Consulting, we work closely with our clients to proactively respond to their business needs and IT concerns. We make the transition to cloud solutions almost always a part of the conversation. But from my perspective, there are different paths to enterprise agility. All cloud deployment options, private, public, and hybrid, need to be considered.
What should business leaders do and how can they get started? Here are three aspects to consider while evaluating enterprise agility through cloud solutions.
Evaluate the Opportunities
First, it is necessary to determine the business benefits of running applications and services in the cloud. CIOs need to take stock of applications and services vital to key business processes, and compare them to the desired future state. Agility is an important part of the mix.
I’ve seen how firms in the transportation industry need greater flexibility when planning routes and pricing services. Keeping track of customers and having a single source for all customer-related information is often a missing capability. Fortunately it’s now easy to maintain a customer relationship management (CRM) application in the cloud and deliver the information required for dynamic routing as a cloud-based service. These CRM capabilities are well defined and can be integrated into the enterprise environment with light configuration.
The cloud also changes the equation for funding enterprise applications. On premise applications are capital investments, requiring up-front budgeting and financial planning. Cloud-based applications are operational expenses where business units acquire services on demand, and scaled to meet their operating requirements. At times, it makes good business sense to rent the service rather than buy the application. With cloud, I believe there’s a premium on both financial and operating flexibility.
Technology sprawl is an important aspect to evaluate. The different types/versions of database/middleware and the associated server/network/storage configurations are factors that limit enterprise agility. Consolidation of the technology sprawl through private cloud solutions can greatly enhance enterprise agility in addition to lowering cost of operations.
Review the Application Value Chain
Another consideration is the business function for different types of enterprise applications -- what I like to call the application value chain. As Gartner has noted, companies maintain systems of record, systems of differentiation, and systems of innovation.
Some are essential for preserving organization memory while other are useful for running day-to-day operations or ensuring competitive initiatives. I would
also add that some are more readily deployed in the cloud than others.
In most cases, companies already own and maintain their systems of record. These applications are essential for documenting events. Firms need to retain the information for business and legal purposes.
If they’re already functioning efficiently as on-premise applications, they may not be the right candidates for public cloud. In these cases, private cloud solutions offer enhanced operational agility and efficiency through consolidation of the technology sprawl.
- Systems of innovation are a different matter. The underlying technologies are rapidly changing and there’s a premium on agility. Many of the needed front-end capabilities for launching mobile and social experiences are best acquired through the cloud.
I anticipate that many enterprises are going to be attracted to innovative services running in private clouds. I’ve already seen this with application development environments where developers can innovate more quickly with cloud-based services than bringing up the comparable functions as on premises tool sets.
- Systems of differentiation -- the applications required to support day-to-day operations such as ERP, SCM, and HR systems -- are now in transition. Companies have already invested a lot in their backend infrastructure and need to preserve many existing functions. At the same time, with the advent of big data solutions, it’s also essential to integrate with existing enterprise applications to add additional dimensions to customer and market insights that these solutions generate.
I find that companies need innovative capabilities to support business growth. Cloud-based solutions that optimize operations are an attractive option, worth considering on a case-by-case basis.
From my perspective, the application value chain is linked to the delivery of customer, partner, and employee-facing experiences. Not every application needs to be cloud-enabled, but those that are deployed in the cloud can deliver valuable business services. Business leaders should focus on how they can best deliver compelling and valuable experiences.
Operational Readiness and Cloud Maturity
Finally, as savvy CIOs well know, there’s another aspect to ensuring competitive advantage. Even with the promise of the cloud, the underlying enterprise architecture still matters.
I often meet with C-suite executives to consider the operational readiness of their organization, both in terms of IT resources and human resources. These include the technology capabilities of the organization and the skill sets of the people who develop and maintain them.
An application audit can assess the cloud-readiness of current systems and solutions. It’s important for the business teams to help identify the gaps in needed solutions, and then for the IT teams to figure out how to fill them. Just as important is a technology skills readiness audit. Business leaders need to understand the current capabilities of their IT organization and their gaps in know-how for exploiting cloud-based solutions. Often it helps to have an outside perspective from an industry-leading consulting organization.
As I talk to clients, I often encounter situations where companies need to enhance the capabilities of their back end services, in order to deliver the engaging solutions that excite their customers and drive business value. Cloud-powered applications -- whether private, public, or hybrid -- enable these firms to rapidly develop and deploy innovative solutions. Yet to be truly useful to the enterprise, they need to connect, smartly and securely, to the back end applications. This is going to require a lot of IT smarts and business know-how for cloud maturity.
The Promise of the Agile Enterprise
From my perspective, the cloud holds a lot of promise for business agility. Business leaders can now leverage an additional set of capabilities and services. They can ramp up their pace of innovation. With cloud maturity, they can compete more effectively in their respective markets.
But there are certainly challenges ahead. The time horizon is often a big thing when I discuss cloud options with C-suite leaders. They need to be able to capitalize on existing systems and investments, while supporting the future needs of digitally driven businesses. Cloud is part of the opportunity, and can merge seamlessly with existing on-premise applications.