Digital technologies have opened up new and exciting opportunities for businesses to deliver more value to their customers through immersive experiences with innovative products and services at very compelling prices. Born-in-the-cloud enterprises are doing this very effectively. They function like start-ups, with technology as the key enabler. As a result, business models of traditional large enterprises are getting disrupted and to remain competitive, they must transform to be more adaptive, innovative, and agile.
However, to leverage the same cloud technologies that the start-ups use so effectively, traditional enterprises need to consider certain critical elements:
- The strength in their existing business models and the IT systems supporting them
- Specific areas of disruption and targeted opportunities for optimization
Unlike start-ups, these traditional enterprises have a lot of valuable assets built over a period of time with significant investment. Their ability to change, the extent of change, and the cost of change play a key role in laying out the transformation journey.
The utopian state for IT in large enterprises would be consumable “as a service” across all portfolios, much like the start-ups. However, considering that most legacy organizations are well established in managing their current IT setup, moving to an “as a service” model may be challenging or may not be required.
The cloud continuum is commonly defined as:
- Datacenter, private cloud, public cloud, hybrid cloud, and edge computing
- IaaS, PaaS, SaaS and BPaa
These definitions focus on the different types of technology adoption and do not necessarily define the extent of adoption and how it is being used. For example, SaaS does not mean a higher maturity level, nor does IaaS mean a lower maturity level. An enterprise might choose to adopt SaaS for commoditized business processes (core or non-core) while building custom applications with IaaS and PaaS technologies for differentiating business processes.
Cloud transformation for enterprises should look at how existing assets can be transformed, and new capabilities developed across the following five categories.
- Modernize the Infrastructure – Backup & Data Recovery (DR) on the cloud, Non-production on Cloud, Application re-hosting on the cloud, Software-defined Infrastructure, Flattening & homogenization of infrastructure (Containers)
- Improve developer and operator productivity – self-provisioning, infrastructure as code, DevOps with continuous deployment, homogenized operations with SRE, DevSecOps, NoOps constructs.
- Refresh the Application – Service enablement of legacy applications, application decomposing for cloud-native, SaaS adoption, application as a service
- Engage better with partners and customers – Digital marketing, omnichannel experience, new channels like voice-based services, deep process integration with internal systems & partners through API services, API based economy.
- Make more with data – Data collection, visualization, ML and insights, cognitive services, data monetization & data as service
Under each of the above categories though moving towards the right implies higher abstraction and sophistication levels, enterprises do not necessarily need to reach the highest level in each of these categories. Similarly, across application portfolios, namely core business applications, business support applications, end-user computing and productivity, data, and analytics, the journey on a continuum in these categories would vary.
To define the journey on the continuum, enterprises need to look at business objectives, current state, opportunities, threats, cost of implementation, and benefits.
- Understand the current impediments and the business goals from a point of view of the key stakeholders
- Assess the current landscape, its current value, and alignment towards the business goals
- Create a target state with considerations on the criticality of individual components in meeting the goals. Journey on the continuum need not be the same for all components/ portfolios in the landscape.
- Adopt an agile execution model with benefits being delivered on a continuous basis.
- Governance should adopt a guard rail (suggestive with boundaries) approach and not a gating (restrictive) approach.
Like the start-ups that are continuously evolving, enterprises should also incorporate a model for innovation into their journey with an option to relook technology and market changes at defined intervals say every six months, to recalibrate solutions.