Deployment of cloud-based solutions is exploding. However, most companies achieve only 20% of their cloud-related goals. How to avoid disastrous mistakes and learn from the best-in-class companies, like Netflix?
IDC estimates that global companies’ expenditure on cloud computing will be growing 6 times faster in 2020 than investment in other IT areas and, according to a recent report by Radar, the usage of cloud in Sweden will explode from 3% to 30% in the coming 3 years. Cloud computing became a popular topic among many entrepreneurs and managers because of the Saas Solution, which proves highly effective in case of back office, HR and marketing.
However, in some key areas, such as customer service, a hasty jump onto the cloud may fail. The outcomes fall short of leaders’ expectations in terms of fast savings and easy handling. All because of the fundamental mistakes they made:
“Many companies forget to do their homework before investing in the cloud. While implementing new solutions the quality of an organization’s culture plays the key role. They perceive the switch to the cloud as a temporary or technical process, as a kind of modernization or following the trends. However, the cloud requires a strategic approach and comprehensive understanding of the company’s operations, where cloud computing becomes the central part of the entire ecosystem”, says Andreas Södermark, MD Euvic Sweden.
Research conducted by McKinsey & Company shows that most companies achieve on average 20% of their cloud-related goals, measured not only in terms of savings, but comprehensive benefits, as for instance the quality of particular processes. They fall short of expectations because of a failed approach to the implementation and lack of proper preparations necessary to face the cloud-related challenge.
Mature approach to the cloud requires preparations
Before implementing a cloud-based solution each company should create the right organizational culture. Be conscious of the role of modern IT, capable of acquiring talent, including representatives of the “digital natives” generation. It should also design mechanisms facilitating the exchange of knowledge and experience among employees.
Infrastructure – related preparations should include adjusting software and internal systems so as to ensure their coherence with cloud-based solutions. In order not to continuously adapt IT resources “manually” to the new conditions in the cloud – they should be “cloud ready”.
Learn from the best!
Netflix – a company typical of the “digital natives” generation is a great example of an organization which represents the new generation of cloud-based infrastructure. Netflix needed 7 years for digital transformation, during which time – using a cloud-based approach – it reshaped its entire operating technology. It was that process that enabled its global expansion and let it increase accessibility of its own services. Netflix considers its mission 99,9% complete!
Companies, which realize how much they can gain if only they choose a mature approach – follow the path of aggressive digital transformation. This also applies to the companies not typically associated with the technological sector, digital revolution or focused on the young generation. Capital One runs a mobile banking services cloud-based app, GE Oil&Gas is in the midst of transferring most of its computing capabilities and mass memory to the cloud, while Maersk is modernizing its legacy systems and implementing advanced analytics to streamline its operations.
How to reap the full benefit of the cloud
If you seriously consider moving to the cloud and want to achieve more than 20% of your goals, you’d better consider the 4 tips below.
- Check your resources. Having a good knowledge and documentation of your current assets is crucial. Perform a review of your infrastructure to find out what you really have now. This way, you will find it easier to assess what remains to be done. This applies also to the competence of your IT staff.
- Define the goals. Draft a precise plan identifying how and when you want to achieve particular goals through digital change. Adopt a long-term approach and account for the changes in the company’s revenues.
- Build a culture. Make a plan of changes in the organization to facilitate the development of the right organizational culture. People and processes must be ready for the digital transformation. Remember to regularly measure the readiness of different parts of the organization.
- Manage the change. Ensure smooth transition, remembering that human resources are a crucial element of every organization and that everybody is likely to react differently to the announced “revolutionary” changes. This is an element of each company’s organizational culture that the management board should pay particular attention to. Ensure effective internal dialogue and smooth flow of information. The people delivering the Change (IT-Staff) have to be onboard.
Euvic is one of Europe’s leading IT-companies with 1700 highly skilled system-engineers and system-developers. It provides a full range of IT-services like software development, application testing, integration projects, IT Service desk, cloud migrations and IT out-sourcing. We are expanding into the Swedish market thanks to the confidence from customers within the transportation industry, production industry and service industry.