De-bunking ‘The Cloud’: Is it the be-all and end-all in the future of IT?

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Jean Pierre Green, Partner Executive Search, Business Transformation & Technology, Eton Bridge Partners, recently met up with Ed Hutt to talk about the connotations of ‘The Cloud’.

Ed Hutt, Chief Information Officer, is passionate about digital transformation, innovation, and leadership in the technology world. He is an experienced IT, business and digital change leader who has had responsibility for, and has delivered against, big numbers and big organisational challenges.

With 20 years of experience in his field, he accepts and delivers on business and technology transformation change, with experience in different cultures and countries.

Ed has been responsible for the transformation and management of IT and digital services within major organisations across the globe and has worked on challenging and complex transformation programmes implementing business and technology change.

According to Investopedia; ‘the cloud’, also known as ‘cloud computing’, is the delivery of different services through the Internet. These services include tools and applications such as data storage, servers, databases, networking and software.

Rather than keeping files on a proprietary hard drive or local storage device, cloud-based storage makes it possible to save them to a remote database. As long as an electronic device has access to the web, it has access to the data and the software programs to run it.

The phrase ‘the cloud’ has the ability to conjure up all sorts of connotations, and it can cause CEOs and IT/ HR leaders alike concern they’re not migrating to it quickly enough. Many leaders simply need to take a step back to consider it more carefully.

It goes without saying that anyone setting up the IT infrastructure for a brand new business simply wouldn’t entertain the idea of installing old-style legacy systems, or non-standard, non-integrating function-specific bolts-on that do one specific job well but don’t talk well with the rest of the platform. It just isn’t done anymore. They probably couldn’t do it anyway. Most offerings to businesses are now only available ‘on the cloud’ – be it SaaS (Software as a Service), the provision of a  complete business application and infrastructure package over the internet, PaaS (Platform as a Service),infrastructure as a service plus the infrastructure software, or IaaS (Infrastructure as a Service), which is what used to be referred to as  ‘hosting’, but not in a data centre that is physically accessible to the client.

But while that’s fine for start-ups, for practically every other established large organisation, there are years of old-school IT roll-outs (some of which went well, others not-so-well), featuring tired-looking software, or quick-fix alterations that are frankly sucking up time to maintain and get data from, rather than unleashing insight and strategic value. It’s prompting people from the CIO, FD and CEO communities to consider their entire digital transformation strategy. But herein lies a problem – when it comes to ‘the cloud’, there is a great deal of misunderstanding about what it actually is, let alone what it can do.

For a start, while useful, the cloud has never been something organisations have ever really demanded themselves. It’s always been a sales-led concept – sold to organisations by providers as the next big thing. It’s often why leaders can feel they’ve got no choice but to go for it. After all, it all feels so easy – automatic upgrades, ongoing support, fewer in-house resources needed, data safely off-site where it’s much more secure. What’s not to like? It’s tempting stuff.

However, even though the cloud has obvious plus-points, for example, instead of being locked into providers for many years, the cloud ‘pay as you use’ model makes severing ties with them easy – it can present worries of a very different kind. Leaders are rightly fearful, for example, of being sucked into deploying very standardised technology templates that don’t quite address their  particular business need, and which still require modifying. As one commentator I know recently observed, ‘competitive advantage does not derive from standard systems alone.’ The systems landscape comprises 80% standardisation-able and 10% competitive advantage with 10% floating about in the middle (maybe some configuration from standard).

Then there’s arguably the biggest issue organisations really struggle with – which systems could be migrated to the cloud and how to migrate them? A recent employer of mine reached 26% penetration of business functions being supported by, or provided for, in the cloud. Their aim is to reach 90% by mid-2021, but I would say they are   more advanced in both thinking and planning than most.

In the chase to get switched over to the cloud, it’s the basics that can be forgotten, so think carefully. Ultimately, whatever’s put in ‘the cloud’ needs to make clear business sense – be it making the organisation more efficient, or providing tools for it to be more strategic than it currently is.

Companies  with IT bolt-ons that work perfectly fine (and will continue to do so for some years ahead), need to ask themselves whether they actually need to change, and whether there is a reason to change in the face of pressure to do so from providers. An ideological CEO might just want everything moved, but what the business needs to do is push back on whether it is sensible, makes financial and technical sense and how this would create competitive advantage for the business.

It’s worth noting that any cloud (or other) migration needs to be meticulously planned, based on solid ROI and technical rationale. It should also be noted that the bigger a project becomes, the bigger the potential for failure. Too many Commercial Leaders, Operations Directors, Human Resource Directors (HRDs), CFOs, or CIOs have painful memories of enterprise-wide mega technology rollouts from the past that failed to deliver on their promises. It would be irresponsible to tar ‘the cloud’ with these same failings should these shortcomings have had more to do with poor planning than anything else.

One thing the move to the cloud allows is scale. Keep projects short, small and focused. Deliver.

So my advice is simple: do your homework about what cloud solutions most suit you and your business. Factor in technology obsolescence rates that might already be known. Plan the timing (don’t rush to meet the salesman’s goals).  These might better inform which processes you might switch to the cloud.

Remember, there’s no point blindly replacing something that has plenty of useful years left in it (and have expensive break-clauses with other suppliers to exit from). Make sure you work out the whole value moving elements to the cloud will bring. Sometimes benefits might come from unusual places – for instance, if the cloud also creates improved employee or customer experience, this could have a positive impact on staff, customer retention rates and recruitment. Working through the business case options is vital to success.

Most importantly of all though, with any consideration about the cloud, just take a step back. See it for what it is. The cloud is but a building block of the digital landscape (Cloud. Mobile. Social. Analytics. Mobile. Etc). What’s certain is that it’s not the only digital conversation you’ll soon be having. The ‘Internet of Things’ (where everything can be in contact with everything else), will no doubt be a development organisations will need to grapple with next, so don’t make ‘the cloud’ the be-all and end-all. It is a Digital Fundamental but it will not make you a Digital Business.

But don’t ignore its huge potential.

There’s so much the cloud can assist firms to do. It can mine data better; it can present trends better; it makes strategic decision making faster and potentially more accurate and accessible. It’s a safer option in many ways – many providers offer ‘try before you buy’ subscriptions, and firms can even scale up as they go along. ‘The cloud’ just needs putting into context and needs controlling in a different way and different style to provider management.

It’s a great innovation – just be sure you’ve given it the thought it deserves.