This post is the first in a series of posts that discuss best practices and provide practical advice for planning, implementing, operating, and evolving in the Oracle Cloud. This post covers the following topics:
Much has been said and written about the role of the cloud in digital disruption and how the cloud is powering digital transformation for enterprises. A vast majority of companies say that the cloud is an important or critical part of their digital transformation strategy, and analysts agree that enterprises will spend trillions of dollars on these business transformations. The only disagreement is about how many trillions will be spent and in how many years. I’m not going to cover the basics of digital transformations here, but let me provide a couple of links with good insights for you to explore:
“There is a difference between knowing the path and walking the path.” – Morpheus, The Matrix
A recent MIT Sloan Management Review and Deloitte Digital report shows that companies are making slow progress in their digital transformation initiatives. The number of companies reporting that their digital transformation projects are at a mature stage rose by five percentage points last year, which is the first meaningful uptick in the four years of the study. But about 70 percent of the companies are still in the early or developing stages of their digital transformation journey. This study and others like it show that progress is slow and we are still scratching the surface; a lot of transformation work still needs to be done across a lot of enterprises.
“He who has a Why to live can bear with almost any How” – Friedrich Nietzsche
Why do you want to transform your business? What are your specific reasons? Start with those reasons and tie them to your business goals as much as possible. Say you want to reduce your technical debt. That’s great, but to sustain and drive the initiative to conclusion, you need to figure out how it would benefit the business. How will you measure success? For example, to reduce technical debt you can start participating in the latest open source projects, and refactor your code and set up R&D and dev teams to contribute to and use the latest open source code. But do these activities align with your long-term business strategy? Is this part of your core competency? Does it add value to your products and services in an effective manner to benefit your customers?
In this example, whether or not leveraging open source aligns with your business objectives, you can still use Oracle Cloud to execute on the strategy. The chances of your project being successful, however, will be largely determined by how closely aligned it is with business outcomes.
The business drivers for digital transformation are as varied as the organizations making the investments. For many enterprises, transformations are about becoming more responsive to customer needs and preferences. For others, they are about becoming more agile as a response to more nimble competition disrupting their business. Some have compliance needs and strive to implement security controls for global expansion or in response to mandates like GDPR. Others want to focus on innovation as their core competencies instead of mundane and undifferentiated work that doesn’t add any direct value to their customers. For some, the main driver is cost savings and replacing capex with opex. Increasing experimentation and reducing the risk of failure are also important drivers. Other drivers include higher revenue, better ROI, decluttering, rationalization, consolidation, modernization, higher employee productivity, and collaboration. After you determine your business drivers, you need to define and quantify what success looks like.
Your business drivers will have a major impact on your cloud strategy, enterprise architecture, and solution design. For example, projects driven by cost savings or increased efficiency will likely have a return on investment target expressed as expense reductions. In this case, a common approach is to increase asset utilization through consolidation of workloads onto less costly virtual machines (VMs). In Oracle Cloud Infrastructure, using VM instances for compute, containers through Container Engine for Kubernetes, or both will likely be suitable choices with applications consolidated on shared infrastructure. On the other hand, mandates focused on business agility, like acceleration of product development and faster response to market conditions, are more likely to introduce higher levels of automation early in the project. Oracle Cloud adoption strategies for your application portfolio include retire, rehost (IaaS), replatform (PaaS), replace (SaaS), and rebuild (Cloud Native). I’ll cover this topic in detail in another post.
The bottom line is that for your digital transformation initiative to be successful, you need to clearly articulate your reasons, business drivers, success criteria, and cloud strategy. Otherwise, your digital transformation initiative runs the risk of being just a buzzword and a one-off innovation project that fizzles out without tangible outcomes.
Digital transformations are about more than just adopting the latest technology. To execute digital transformation successfully, you need to address several important factors, including employee skills and learning, company culture and readiness for change, and commitment to updating old processes and leveraging the latest technologies. Businesses have to want to change and have to commit to doing so in an effective way, by bringing in new skills, adapting roles, encouraging innovation, and instilling confidence in new business models. They must also have the technology and the infrastructure to enable change to happen.
I think there are three essential pillars of any successful digital transformation and cloud adoption initiative: people, process, and technology. A good example of these three elements at play is embracing the DevOps method. While adopting cloud, most enterprises realize that the traditional distinction between application developers and IT operations is often replaced by a practical division of responsibilities that is more situational and less rigid. A DevOps approach that integrates development and operations into a single role or as a shared responsibility makes a lot of sense in the cloud. The transformation to a DevOps approach involves developing skills, possibly restructuring organizational boundaries, updating processes for implementation and operations, and retooling to a common set of tools. In essence, you need to transform people, process, and technology, and you need to be effective with all three elements to be successful. Let’s look at all three in more detail.
The people are all the stakeholders, including employees, leaders, users, and customers. People also includes the company culture and its appetite for change. It is critical for all stakeholders to be onboard, enabled, and aligned, and for the company culture to be conducive for transformation.
The first group of people I want to highlight are the employees. You can empower employees with the agility, scale, and global reach of the cloud to improve their productivity and their impact. Cloud can reduce repetitive work such as racking and stacking servers, provisioning, and patching and backing up databases. You need to enable employees to gain new skills and refocus their time on differentiated work and problem solving. The cloud requires new skills, for which your employees need training and enablement. Oracle University offers good resources for Oracle Cloud training and certification.
Digital transformations need new digital leaders that are cloud savvy. Developing or hiring effective and experienced leaders who can successfully lead such initiatives takes time and must be prioritized. Closely related is developing a culture with a growth mindset, continuous learning, experimenting, and iterating.
Finally, the most important group of people you need to focus on is your end users and customers. You need to seek continuous feedback to improve how well and how quickly you meet your customers' needs. Many enterprises have started following, with success, the approach of building minimum viable products and seeking feedback to either drop them or iterate on them based on user feedback. This approach aligns well with the agile method, and the cloud, with its pay-as-you-go pricing model, ability to scale quickly, and elastic resources, is an excellent way to execute this strategy. In fact, most cloud services are built this way.
The cloud works very well with newer paradigms for developing, deploying, and managing applications. For example, there is more focus on microservices, APIs, serverless, agile, and DevOps. Leveraging these relatively new paradigms requires changes to dev, test, integration, deployment, operations, and incident management processes that many enterprises still use. Continuous learning, experimentation, automation, and agility should be part of the processes used to determine, implement, and operate new products and services.
Security and compliance processes need to be updated. Oracle Cloud infrastructure and platform services operate under a shared responsibility model, where Oracle is responsible for the security of the underlying cloud infrastructure, and you are responsible for securing your workloads. Governance, auditing, pen testing, incident management, and response processes need to be updated as well.
You also need to update your procurement process for the cloud. Cloud offers usage-based metering, so monthly bills might vary. Licensing models are typically different in the cloud with new pricing and service-level options available. Oracle Cloud provides a flexible buying and usage model for Oracle Cloud Services, called Universal Credits. When you sign up for an Oracle Cloud account, you have unlimited access to all eligible IaaS and PaaS services. You can sign up for a pay-as-you-go subscription, or you can save money and pay in advance for a year, based on your estimated monthly usage, which is the Monthly Flex plan. Bring Your Own License (BYOL), metered, and non-metered options are also available.
For successful transformations, you should also re-evaluate your current vendors and partners. Determine which partners have the cloud skills and experience to help you accelerate and be successful with your transformation initiative.
Many of the latest breakthroughs and innovations in technology are being delivered primarily through the cloud. Autonomous services, blockchain, artificial intelligence, Internet of Things (IoT), and microservices are a few good examples. You can use the cloud to leverage these latest technologies. Your tried and trusted technology stacks are also available on Oracle Cloud. As a result, Oracle Cloud enables you to transform your internal IT and your customer-facing products and services.
Oracle Cloud is the industry's broadest and most integrated cloud provider, with deployment options ranging from the public cloud to your data center. You can leverage your existing infrastructure investments by implementing hybrid architectures using services like FastConnect. For data sovereignty or compliance reasons, you can also leverage Oracle Cloud at Customer to run Oracle Cloud in your own data centers.
Oracle Cloud offers best-in-class services across software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS).
Most enterprises pursue their digital transformations and cloud strategies in tandem. In this post, I covered this topic with a focus on Oracle Cloud offerings, and offered a framework based on people, process, and technology to help execute a transformation initiative in Oracle Cloud. The focus of this blog was on the why and the what. In the next posts in this series, I’ll cover the how.