Cloud Computing

On the Road, Speed Kills; In the Cloud, Speed Wins

It’s all about changing faster than the competition.

by Rob Preston

September 2016

Time to market. Talent acquisition. Customer feedback loops. If you’re not faster than the competition in all of these domains, your business is going nowhere fast.

That’s what digital transformation is all about—but digital transformation isn’t for wimps. It’s an ongoing technical, procedural, organizational, financial, and cultural challenge, no matter the industry.

François Lançon, senor vice president for Oracle Asia Pacific, understands this challenge better than most, having worked with customers across the region’s 25 countries for more than 15 years. While acknowledging that the term digital transformation is being “abused and overused” by the marketing establishment, Lançon nonetheless sees the transformation itself as a top CEO priority. Modern CIOs, therefore, are taking on the mantle of digital leadership, he says—while old-school CIOs will be left behind and ultimately replaced.

Lançon views digital transformation as the end-to-end digitization of the business processes within an enterprise. It’s not just something the HR or finance or marketing team does in isolation. It’s end to end—from back office (finance, HR, manufacturing, and so on) to front office (sales, marketing, customer service, and the like).

Those processes are generic to most enterprises, he says, and as long as they’re run on legacy on-premises applications, they’re inflexible and expensive to maintain and upgrade, especially when they’ve been highly customized. Moving applications to shared cloud services will improve efficiencies and generate IT cost savings, but more important, it will create consistent, best-in-class processes—ultimately accelerating companies’ ability to innovate.

The real payoff will come when companies tie their front- and back-end applications together and connect them to their sensor-laden devices, machines, infrastructure, and other “things” to get real-time feedback on their products and business operations.

“The cherry on top of the cake is the analytics,” Lançon says, which will generate what he calls the “CEO view” of the financials, operations, and customer experiences of the business.

What’s Getting in the Way?

So what are the main obstacles to digital transformation? Lançon cites three.

“The number one obstacle is emotional—the loss of control, the loss of ownership,” he says. Part and parcel of that were initial concerns about information security, allowing a third party to guard the keys to the digital kingdom. Those concerns have largely gone away over the past 6 to 12 months, as customers now understand that their data is in fact more secure in Oracle Cloud, Lançon says. “That’s a major step.”

This is what the cloud brings you: speed. You can change things faster than your competitors. And if you still have the old stuff, you can’t. This is what it is all about.”–François Lançon, Senior Vice President, Oracle Asia Pacific

The second obstacle continues to be industry regulations, particularly those governing data sovereignty. Cloud providers have responded with “some very creative solutions,” he says, citing Oracle Cloud at Customer, which offers customers the very same services available in Oracle Cloud—compute, middleware, database, and tools—in an integrated system that resides on a company’s premises. Cloud providers are also building data centers in customers’ countries to mollify concerns about data sovereignty, security, performance, and country-specific legal restrictions.

The third and most overwhelming obstacle is inertia, the fact that companies have sunk a lot of investment into their complex, aging IT infrastructure, including tens of millions of dollars of customizations, and their various departments are comfortable with—even complacent about—them. Moving those applications to shared cloud services requires business buy-in and considerable realignment. “This is the one being resolved right now,” Lançon says.

So of all the reasons companies should embrace the cloud, which is the most important one? To lower their operational cost structures? Increase their agility? Free up IT resources for more-innovative work?

“Oh, there’s only one: speed,” Lançon says. Most companies spend only a very small fraction of their total budget on IT, he notes, so the cost savings are “interesting,” not game-changing. The cost part of the equation “isn’t going to change the life of your company,” he says.

But accelerating the speed of innovation will. Lançon points to the gaming industry, where Niantic changed the dynamic overnight when it brought together two established technologies—augmented reality and GPS—to create the blockbuster Pokemon Go application.

“Companies need to react to change at a very different speed than they did five years ago,” he says. “This is what the cloud brings you: speed. You can change things faster than your competitors. And if you still have the old stuff, you can’t. This is what it’s all about.”

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