The Secret To Bringing Innovation To Your Company’s DNA

Oliver Huschke

Part 4 of the “Kick-Starting Innovation” series

Empowering innovation can change everything. It’s what inspired Alexander Graham Bell’s breakthrough work in telephony, optical telecommunications, hydrofoils, and aeronautics. It’s what drove Marie Curie to prove a doubting scientific community wrong when she pioneered radioactivity and discovered two elements that later became the core components of today’s technology. It’s what motivates Elon Musk’s quest to create more environment-friendly cars, light up every home with solar power, and send humans to Mars.

While these innovators’ stories are legendary, innovative ideas also reside in unlikely sources. I was recently reminded of this fact when watching the movie Hidden Figures. The story African-American mathematicians Katherine G. Johnson, Dorothy Vaughan, and Mary Jackson detailed their vital role in the 1962 orbital space launch and safe return of the now-late astronaut John Glenn. Instead of being knocked down by a national culture of sexism and racism, each of these women brought attention to their innovative ideas by challenging the NASA system, breaking social norms, putting their talents on full display, and welcoming the support of an open-minded administrator or two.

Innovation is more than just acquiring a workforce diverse across race and gender. It’s about unleashing everyone’s potential because you never know where the next big idea will come from. Whether the innovator is an accounts payable clerk, field sales person, plant worker, or boardroom executive, businesses need all of their talents to help shape the future.

The empowerment pivot: How to build a business on human power

Many IT teams have internal technical experts on staff who are knowledgeable in traditional methodologies, programming languages, and business processes. While these skills may have served the business well, rapid adoption of cloud technology has created a skills gap, making it more difficult to improve business operations, processes, development, and go-to-market strategy.

Acquiring capabilities such as Big Data management, application security, cloud migration, and virtualization may help businesses solve common technological challenges. But this approach does not necessarily empower talent to use those skills to proactively build the momentum of their digital transformation.

Expert-guided cloud development sessions held throughout the year can provide the training, practical hands-on experience, and remote consulting needed to inspire the entire workforce with the right skills. Interactive and Web-based empowerment sessions use training materials to detail the development process step by step. Then learners can execute the steps on a cloud platform that hosts a digital twin of the company’s IT infrastructure and provides direct access to technology experts through remote support and screen-sharing.

Empowerment sessions can range from foundational skills to emerging trends, including:

  • Basic development on a cloud platform: Navigate tasks such as adding members, assigning roles to users, creating destinations to Internet resources, and connecting on-premises systems to the cloud platform account.
  • Internet of Things: Create IoT applications with cloud platform and IoT enablement technology to capture and store data from connected sensors.
  • Advanced development: Enable native development on an in-memory computing platform and expose data through the Open Data Protocol (OData), allowing businesses to create database tables, insert data, and build calculation and scripted views while adapting the application to evolving business needs.
  • Mobile development: Discover the services and tools available to design, implement, and integrate enterprise applications. From mobile application use cases to end-to-end mobile architecture, employees can explore the characteristics of native iOS apps, SDK frameworks and components, Xcode integrated development environment, and the Swift programming language.
  • Integration: Get acquainted with the cloud system landscape, integration, backend configuration, system connectivity, security, initial data load, scenario extensions, and monitoring capabilities.
  • Cybersecurity: Cover the complete identity lifecycle with provisioning procedures and strategies. Grant, control, and protect secured access to the cloud platform and extend permission to business users, developers, administrators, and technical users.

With the help of empowerment sessions, businesses can solidify their transition to a digital business. Every organization can engage ideas from inspiration to prototype by identifying and testing new business models with minimal investment and risk. More important, quick access to preconfigured technology use cases, an agile development process, proven design-thinking practices, and a training workspace provides the guidance employees need to contribute to the future of the business – and the world. 

Find out how your business can benefit from unlimited access to a showroom, a set of empowering sessions, and an innovation platform. Read the white paper “Achieve Digital Transformation and Create a System of Ongoing Innovation.”  

And don’t forget to check every Monday for new installments to our blog series “Kick-Starting Innovation.” Next week, we’ll explore how cloud adoption is driving innovation.

Comments

Oliver Huschke

About Oliver Huschke

Oliver Huschke is the global head of Solution Marketing for Digital Business Services at SAP. He has worked for SAP since 1997, starting with development where he built up and led the central test organization. Oliver was head of application management and managed marketing activities at SAP Hosting. Further stations include strategic development and Active Global Support with responsibility for global product management of the SAP Premium Engagement Program. Share your thoughts with Oliver on LinkedIn or Twitter.

Making The Strongest Case Possible For Platform Migration

Joseph Msays

Driven partly by the optimistic economic outlook and partly by the increasing maturity of the platforms available in the marketplace today, more companies than ever are planning migrations to digital platforms. By 2020, it’s estimated that 60% of all enterprises will be in the process of implementing an organization-wide strategy.

If your company is among them, you’re probably already shaping a business case to justify the capital expenditures your migration will require. To maximize your chances of success, there are several key topics you’ll need to plan for, including:

  • Digital transformation initiatives
  • Future business models
  • Cutting-edge technologies

Building a new foundation for digital transformation

The business benefits of a technical platform migration are usually not enough on their own to justify the cost. The true value of platform migration comes from the fact that it serves as the core of an organization’s digital transformation efforts, helping them tackle the challenges of a changing business world.

By now, most organizations already have big ideas about how they’re going to approach digital transformation, but all those ideas aren’t worth much without the funding needed to put them into action. According to the Global Innovation 1000 report from Strategy+Business, average R&D intensity – a measurement indicating innovation spending as a percentage of total revenues – reached an all-time high of 4.5% in 2017, with many well-known companies spending significantly more than average. Clearly, many organizations have already recognized the growing importance of shifting more resources toward innovation.

Your business case should show how platform migration will help simplify and streamline your IT environment, including business processes, information flows, and infrastructure. Taking complexity out of your environment can help reduce operational expenses, freeing up new funding to dedicate to innovation. Reducing complexity also paves the way for you to implement new innovations quickly, while limiting disruption to ongoing processes.

Preparing for success with future business models

Many companies have a well-built and well-maintained ERP solution for today’s business, but can’t say for sure that they’re prepared for the future, when they’ll likely face threats from new digital entrants.

Quantifying the benefits of a present-day migration against future business models is easier said than done. However, it’s a challenge that must be overcome in order to build a compelling business case. To do so, companies must be able to define their future business model in concrete terms and understand how the new platform will flexibly support it.

One example of this is enterprise mobility. With a generation of young people who can’t remember a time before smartphones entered the workforce in large numbers, the need for enterprises to adopt a mobile strategy is clear.

However, enterprise mobility can be both a challenge and an opportunity. When adding enterprise mobility to their business plan, organizations must know the investment needed and accurately predict how the future benefits of reinventing work will make this investment worthwhile.

Embracing new technologies

To meet the business requirements of tomorrow, organizations must embrace transformative new solutions like blockchain, artificial intelligence, machine learning, robotic process automation, and cloud microservices. These new technologies will help them work across both structural and skills barriers.

It’s impossible to overstate the potential impact these new technologies could have on the business world, and the transformation is taking place right in front of our eyes. According to IDC, worldwide spending on cognitive and AI will reach US$57.6 billion by 2021, representing a compound annual growth rate of 50.1% over a five-year period.

Building a robust business case requires an organization to look beyond the immediate platform migration itself; they must also consider how these technologies will fit into the new platform. By doing so, organizations can feel confident that when the time comes, they’ll be fully prepared to capitalize on the massive opportunities these technologies present.

This post provides a few examples of the things you can’t afford to leave out of your business case. Working with a migration partner can help you gain the deep business and technical insights you need to make sure you don’t miss anything else.

If SAP S/4HANA is your platform of choice, IBM offers a number of tools to help you build a business case that quantifies and communicates the value it can offer. Request an SAP S/4HANA impact assessment today to get started.

IBM will be at SAPPHIRE NOW and ASUG Annual Conference June 5-7 in Orlando. Visit IBM at booth #612 and talk to IBM experts. Check out our event website to see what we’re doing at the event.

Also, visit our website to learn more about how IBM can help accelerate your migration to SAP S/4HANA.

Comments

Joseph Msays

About Joseph Msays

Joseph Msays is an experienced IBM global executive, currently serving as Vice President and Global Managing Partner for NextGen Enterprise Cloud Applications Center of Excellence. In this role, he is pioneering new ways of engaging CxOs in their digital reinvention agendas, and building and migrating new cloud-based business applications. Joseph has experience managing many IBM professional services units and large strategic systems, integration and outsourcing relationships, and has lived and worked in virtually every major market across the globe.

Blockchain Accelerates From Infrastructure Into A Platform

Jennifer Horowitz

Blockchain is evolving across industries, accelerating from a digital currency infrastructure into a digital transformation platform. A new Gartner report reveals the practicalities, efficiencies, readiness, and integration of use for executives.

Acceleration is occurring everywhere, with blockchain technology increasingly in use by companies worldwide. While there are both opportunities and challenges, CIOs and executives should inform themselves of the awareness involved in developing and expanding digital business. Gartner’s report “Blockchain + WAN Edge = Leading the Digital Transformation” provides insight into the practical realities facing business leaders, adopters, and developers of blockchain.

According to the Gartner report, “Business leaders should take caution when anticipating blockchain in regard to its evolution and ability to become a game-changer.” Gartner also highlighted uncertainty, legality, legitimacy, and a confusing set of messaging from vendors and promoters as concerns.

The report also cited board-level insights on the extent to which digital currencies and blockchain represent opportunities and risks: blockchain opportunity – 36%, Bitcoin opportunity – 43%, Bitcoin risk – 12%, and blockchain risk – 21%. In total, the executives perceive them to be 54% opportunities; 28% risks; and 11% mixed.

“Many boards of directors will call upon their CIOs to brief them on blockchain due to the current market hype. CIOs should focus on three main points: a description of blockchain, frictionless markets, and the cross-industry business impacts of a programmable economy,” according to Gartner. “By 2022, at least one innovative business built on blockchain technology will be worth $10 billion.”

Accelerating digital currency infrastructure to transformation platform

The report went on to consider the role of wide-area networks (WAN) in cloud digital transformation as it relates to blockchain infrastructure and business agility. Experts see agility as a top priority for business leaders, making WAN for the enterprise even more pressured to meet expectations to satisfy application usage as change occurs rapidly.

Gartner also noted, “CIOs should undertake a ‘SWOT’ and digital readiness assessment to ensure that the organization is capable of adopting radical changes to its business model, processes, appetite for risk, and existing technologies.”

It is important to remember how immature blockchain technology still is. For executives, it is crucial to use the technology in the best way possible. According to Gartner, usage of immature technology such as blockchain means that executives and their peers are considered pioneers of a sort. “Just like any pioneers, executives must realize they are entering a world where new rules, new risks, and new opportunities can be found.”

In conclusion, the potential for businesses is significant to develop flexible digital blockchain platforms. It is a challenge to get up to speed. In the next 10 years, blockchain platform selection will have a significant role in setting the tone in dominating the future. In the 21st century, executives should focus on having an agile and smart flexible infrastructure on a blockchain.

Learn more about how The Blockchain Solution is evolving from a digital currency infrastructure into a digital transformation platform.

Comments

Jennifer Horowitz

About Jennifer Horowitz

Jennifer Horowitz is a journalist with over 15 years of experience working in the technology, financial, hospitality, real estate, healthcare, manufacturing, not for profit, and retail sectors. She specializes in the field of analytics, offering management consulting serving global clients from midsize to large-scale organizations. Within the field of analytics, she helps higher-level organizations define their metrics strategies, create concepts, define problems, conduct analysis, problem solve, and execute.

Hack the CIO

By Thomas Saueressig, Timo Elliott, Sam Yen, and Bennett Voyles

For nerds, the weeks right before finals are a Cinderella moment. Suddenly they’re stars. Pocket protectors are fashionable; people find their jokes a whole lot funnier; Dungeons & Dragons sounds cool.

Many CIOs are enjoying this kind of moment now, as companies everywhere face the business equivalent of a final exam for a vital class they have managed to mostly avoid so far: digital transformation.

But as always, there is a limit to nerdy magic. No matter how helpful CIOs try to be, their classmates still won’t pass if they don’t learn the material. With IT increasingly central to every business—from the customer experience to the offering to the business model itself—we all need to start thinking like CIOs.

Pass the digital transformation exam, and you probably have a bright future ahead. A recent SAP-Oxford Economics study of 3,100 organizations in a variety of industries across 17 countries found that the companies that have taken the lead in digital transformation earn higher profits and revenues and have more competitive differentiation than their peers. They also expect 23% more revenue growth from their digital initiatives over the next two years—an estimate 2.5 to 4 times larger than the average company’s.

But the market is grading on a steep curve: this same SAP-Oxford study found that only 3% have completed some degree of digital transformation across their organization. Other surveys also suggest that most companies won’t be graduating anytime soon: in one recent survey of 450 heads of digital transformation for enterprises in the United States, United Kingdom, France, and Germany by technology company Couchbase, 90% agreed that most digital projects fail to meet expectations and deliver only incremental improvements. Worse: over half (54%) believe that organizations that don’t succeed with their transformation project will fail or be absorbed by a savvier competitor within four years.

Companies that are making the grade understand that unlike earlier technical advances, digital transformation doesn’t just support the business, it’s the future of the business. That’s why 60% of digital leading companies have entrusted the leadership of their transformation to their CIO, and that’s why experts say businesspeople must do more than have a vague understanding of the technology. They must also master a way of thinking and looking at business challenges that is unfamiliar to most people outside the IT department.

In other words, if you don’t think like a CIO yet, now is a very good time to learn.

However, given that you probably don’t have a spare 15 years to learn what your CIO knows, we asked the experts what makes CIO thinking distinctive. Here are the top eight mind hacks.

1. Think in Systems

A lot of businesspeople are used to seeing their organization as a series of loosely joined silos. But in the world of digital business, everything is part of a larger system.

CIOs have known for a long time that smart processes win. Whether they were installing enterprise resource planning systems or working with the business to imagine the customer’s journey, they always had to think in holistic ways that crossed traditional departmental, functional, and operational boundaries.

Unlike other business leaders, CIOs spend their careers looking across systems. Why did our supply chain go down? How can we support this new business initiative beyond a single department or function? Now supported by end-to-end process methodologies such as design thinking, good CIOs have developed a way of looking at the company that can lead to radical simplifications that can reduce cost and improve performance at the same time.

They are also used to thinking beyond temporal boundaries. “This idea that the power of technology doubles every two years means that as you’re planning ahead you can’t think in terms of a linear process, you have to think in terms of huge jumps,” says Jay Ferro, CIO of TransPerfect, a New York–based global translation firm.

No wonder the SAP-Oxford transformation study found that one of the values transformational leaders shared was a tendency to look beyond silos and view the digital transformation as a company-wide initiative.

This will come in handy because in digital transformation, not only do business processes evolve but the company’s entire value proposition changes, says Jeanne Ross, principal research scientist at the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT). “It either already has or it’s going to, because digital technologies make things possible that weren’t possible before,” she explains.

2. Work in Diverse Teams

When it comes to large projects, CIOs have always needed input from a diverse collection of businesspeople to be successful. The best have developed ways to convince and cajole reluctant participants to come to the table. They seek out technology enthusiasts in the business and those who are respected by their peers to help build passion and commitment among the halfhearted.

Digital transformation amps up the urgency for building diverse teams even further. “A small, focused group simply won’t have the same breadth of perspective as a team that includes a salesperson and a service person and a development person, as well as an IT person,” says Ross.

At Lenovo, the global technology giant, many of these cross-functional teams become so used to working together that it’s hard to tell where each member originally belonged: “You can’t tell who is business or IT; you can’t tell who is product, IT, or design,” says the company’s CIO, Arthur Hu.

One interesting corollary of this trend toward broader teamwork is that talent is a priority among digital leaders: they spend more on training their employees and partners than ordinary companies, as well as on hiring the people they need, according to the SAP-Oxford Economics survey. They’re also already being rewarded for their faith in their teams: 71% of leaders say that their successful digital transformation has made it easier for them to attract and retain talent, and 64% say that their employees are now more engaged than they were before the transformation.

3. Become a Consultant

Good CIOs have long needed to be internal consultants to the business. Ever since technology moved out of the glasshouse and onto employees’ desks, CIOs have not only needed a deep understanding of the goals of a given project but also to make sure that the project didn’t stray from those goals, even after the businesspeople who had ordered the project went back to their day jobs. “Businesspeople didn’t really need to get into the details of what IT was really doing,” recalls Ferro. “They just had a set of demands and said, ‘Hey, IT, go do that.’”

Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants.

But that was then. Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants. “If you’re building a house, you don’t just disappear for six months and come back and go, ‘Oh, it looks pretty good,’” says Ferro. “You’re on that work site constantly and all of a sudden you’re looking at something, going, ‘Well, that looked really good on the blueprint, not sure it makes sense in reality. Let’s move that over six feet.’ Or, ‘I don’t know if I like that anymore.’ It’s really not much different in application development or for IT or technical projects, where on paper it looked really good and three weeks in, in that second sprint, you’re going, ‘Oh, now that I look at it, that’s really stupid.’”

4. Learn Horizontal Leadership

CIOs have always needed the ability to educate and influence other leaders that they don’t directly control. For major IT projects to be successful, they need other leaders to contribute budget, time, and resources from multiple areas of the business.

It’s a kind of horizontal leadership that will become critical for businesspeople to acquire in digital transformation. “The leadership role becomes one much more of coaching others across the organization—encouraging people to be creative, making sure everybody knows how to use data well,” Ross says.

In this team-based environment, having all the answers becomes less important. “It used to be that the best business executives and leaders had the best answers. Today that is no longer the case,” observes Gary Cokins, a technology consultant who focuses on analytics-based performance management. “Increasingly, it’s the executives and leaders who ask the best questions. There is too much volatility and uncertainty for them to rely on their intuition or past experiences.”

Many experts expect this trend to continue as the confluence of automation and data keeps chipping away at the organizational pyramid. “Hierarchical, command-and-control leadership will become obsolete,” says Edward Hess, professor of business administration and Batten executive-in-residence at the Darden School of Business at the University of Virginia. “Flatter, distributive leadership via teams will become the dominant structure.”

5. Understand Process Design

When business processes were simpler, IT could analyze the process and improve it without input from the business. But today many processes are triggered on the fly by the customer, making a seamless customer experience more difficult to build without the benefit of a larger, multifunctional team. In a highly digitalized organization like Amazon, which releases thousands of new software programs each year, IT can no longer do it all.

While businesspeople aren’t expected to start coding, their involvement in process design is crucial. One of the techniques that many organizations have adopted to help IT and businesspeople visualize business processes together is design thinking (for more on design thinking techniques, see “A Cult of Creation“).

Customers aren’t the only ones who benefit from better processes. Among the 100 companies the SAP-Oxford Economics researchers have identified as digital leaders, two-thirds say that they are making their employees’ lives easier by eliminating process roadblocks that interfere with their ability to do their jobs. Ninety percent of leaders surveyed expect to see value from these projects in the next two years alone.

6. Learn to Keep Learning

The ability to learn and keep learning has been a part of IT from the start. Since the first mainframes in the 1950s, technologists have understood that they need to keep reinventing themselves and their skills to adapt to the changes around them.

Now that’s starting to become part of other job descriptions too. Many companies are investing in teaching their employees new digital skills. One South American auto products company, for example, has created a custom-education institute that trained 20,000 employees and partner-employees in 2016. In addition to training current staff, many leading digital companies are also hiring new employees and creating new roles, such as a chief robotics officer, to support their digital transformation efforts.

Nicolas van Zeebroeck, professor of information systems and digital business innovation at the Solvay Brussels School of Economics and Management at the Free University of Brussels, says that he expects the ability to learn quickly will remain crucial. “If I had to think of one critical skill,” he explains, “I would have to say it’s the ability to learn and keep learning—the ability to challenge the status quo and question what you take for granted.”

7. Fail Smarter

Traditionally, CIOs tended to be good at thinking through tests that would allow the company to experiment with new technology without risking the entire network.

This is another unfamiliar skill that smart managers are trying to pick up. “There’s a lot of trial and error in the best companies right now,” notes MIT’s Ross. But there’s a catch, she adds. “Most companies aren’t designed for trial and error—they’re trying to avoid an error,” she says.

To learn how to do it better, take your lead from IT, where many people have already learned to work in small, innovative teams that use agile development principles, advises Ross.

For example, business managers must learn how to think in terms of a minimum viable product: build a simple version of what you have in mind, test it, and if it works start building. You don’t build the whole thing at once anymore.… It’s really important to build things incrementally,” Ross says.

Flexibility and the ability to capitalize on accidental discoveries during experimentation are more important than having a concrete project plan, says Ross. At Spotify, the music service, and CarMax, the used-car retailer, change is driven not from the center but from small teams that have developed something new. “The thing you have to get comfortable with is not having the formalized plan that we would have traditionally relied on, because as soon as you insist on that, you limit your ability to keep learning,” Ross warns.

8. Understand the True Cost—and Speed—of Data

Gut instincts have never had much to do with being a CIO; now they should have less to do with being an ordinary manager as well, as data becomes more important.

As part of that calculation, businesspeople must have the ability to analyze the value of the data that they seek. “You’ll need to apply a pinch of knowledge salt to your data,” advises Solvay’s van Zeebroeck. “What really matters is the ability not just to tap into data but to see what is behind the data. Is it a fair representation? Is it impartial?”

Increasingly, businesspeople will need to do their analysis in real time, just as CIOs have always had to manage live systems and processes. Moving toward real-time reports and away from paper-based decisions increases accuracy and effectiveness—and leaves less time for long meetings and PowerPoint presentations (let us all rejoice).

Not Every CIO Is Ready

Of course, not all CIOs are ready for these changes. Just as high school has a lot of false positives—genius nerds who turn out to be merely nearsighted—so there are many CIOs who aren’t good role models for transformation.

Success as a CIO these days requires more than delivering near-perfect uptime, says Lenovo’s Hu. You need to be able to understand the business as well. Some CIOs simply don’t have all the business skills that are needed to succeed in the transformation. Others lack the internal clout: a 2016 KPMG study found that only 34% of CIOs report directly to the CEO.

This lack of a strategic perspective is holding back digital transformation at many organizations. They approach digital transformation as a cool, one-off project: we’re going to put this new mobile app in place and we’re done. But that’s not a systematic approach; it’s an island of innovation that doesn’t join up with the other islands of innovation. In the longer term, this kind of development creates more problems than it fixes.

Such organizations are not building in the capacity for change; they’re trying to get away with just doing it once rather than thinking about how they’re going to use digitalization as a means to constantly experiment and become a better company over the long term.

As a result, in some companies, the most interesting tech developments are happening despite IT, not because of it. “There’s an alarming digital divide within many companies. Marketers are developing nimble software to give customers an engaging, personalized experience, while IT departments remain focused on the legacy infrastructure. The front and back ends aren’t working together, resulting in appealing web sites and apps that don’t quite deliver,” writes George Colony, founder, chairman, and CEO of Forrester Research, in the MIT Sloan Management Review.

Thanks to cloud computing and easier development tools, many departments are developing on their own, without IT’s support. These days, anybody with a credit card can do it.

Traditionally, IT departments looked askance at these kinds of do-it-yourself shadow IT programs, but that’s changing. Ferro, for one, says that it’s better to look at those teams not as rogue groups but as people who are trying to help. “It’s less about ‘Hey, something’s escaped,’ and more about ‘No, we just actually grew our capacity and grew our ability to innovate,’” he explains.

“I don’t like the term ‘shadow IT,’” agrees Lenovo’s Hu. “I think it’s an artifact of a very traditional CIO team. If you think of it as shadow IT, you’re out of step with reality,” he says.

The reality today is that a company needs both a strong IT department and strong digital capacities outside its IT department. If the relationship is good, the CIO and IT become valuable allies in helping businesspeople add digital capabilities without disrupting or duplicating existing IT infrastructure.

If a company already has strong digital capacities, it should be able to move forward quickly, according to Ross. But many companies are still playing catch-up and aren’t even ready to begin transforming, as the SAP-Oxford Economics survey shows.

For enterprises where business and IT are unable to get their collective act together, Ross predicts that the next few years will be rough. “I think these companies ought to panic,” she says. D!


About the Authors

Thomas Saueressig is Chief Information Officer at SAP.

Timo Elliott is an Innovation Evangelist at SAP.

Sam Yen is Chief Design Officer at SAP and Managing Director of SAP Labs.

Bennett Voyles is a Berlin-based business writer.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.
Comments

Tags:

Cloud Computing: Separating Myth From Reality

Misa Rawlins and Krishnakant Dave

Across industries, many enterprise leaders believe and understand that cloud computing is here to stay. Globally, public cloud services market revenue is projected to reach US$411 billion by 2020, compared with $260 billion in 2017, according to research firm Gartner, Inc. Cloud technology in all its forms—software, platform, or infrastructure as a service—is rapidly becoming essential to the needs of business today. With cloud computing, organizations can simplify IT, save costs, scale rapidly, drive standardization and user adoption, and start getting ahead of tomorrow’s needs when it comes to customer engagement, the supply chain, the workforce, a simplified finance function, and more.

Despite the short- and long-term advantages, some executives remain uncertain about the next steps or have lingering questions about the benefits of moving to the cloud. For many leaders, separating the cloud myths from the facts can prove daunting. Start here, with these insights that can help you bust big myths about the cloud and start moving confidently toward a cloud-enabled transformation of your organization.

Myth No. 1: Moving to the cloud is too costly. “Costly” is a relative term. The cloud can be costly – but costs should be weighed against benefit and return once requirements and migration plans are in place. Rapidly evolving business demands, for example, can dramatically alter cloud-related requirements. Meanwhile, new technologies are dramatically redefining the art of the possible with the cloud. Because migrating to the cloud is not a true “plug-and-play” proposition, and many enterprise leaders underestimate what a migration or implementation involves, some organizations can be surprised by the costs of a cloud transformation. Without a clear understanding of the potential benefits—without a clear business case for moving to the cloud—the focus on costs can overshadow the return on investment. Knowing the value that cloud solutions can bring—not just the costs—can help manage expectations.

Myth No. 2: The benefits of the cloud aren’t substantial enough. As vendors adopt a “cloud-first” stance for many solutions and product updates, organizations that move to the cloud may have a competitive advantage—no matter the size of the enterprise. Cloud solutions continue to offer abundant and increasing functionality. And with the help of an end-to-end solution provider, you can configure cloud solutions to the specific needs of your industry and your business. For larger organizations, rapidly deployable cloud solutions can help support growth or the unique needs of certain business units, such as new acquisitions or foreign subsidiaries, for example. For smaller organizations, the cloud can help you position your organization to tap new opportunities and tame growth challenges.

Myth No. 3: Cloud is too risky. All digital technologies and all business models come with inherent risk. In a hyperconnected world, no system is immune from cyber attacks, insider threats, data leakage, or related risks. No transformation project is a guaranteed success. Market changes, new competition, regulatory issues, and other factors can require you to change your cloud strategy overnight.

Because the risks are real, take advantage of resources and capabilities that can help reduce risk and ensure that your technology investments align tightly with clear business objectives. The maturity of the software goes a long way toward mitigating risk with cloud projects. You can add an extra layer of capabilities such as managed cloud services to provide active, hands-on oversight of cloud applications and infrastructure—helping you to avoid service interruptions and address issues proactively.

Myth No. 4: Cloud computing is still an immature technology. Like other evolving technologies, cloud is advancing every day. Those who wait for the next generation of cloud offerings may find themselves missing out on tangible benefits as competitors leverage cloud technology to sharpen their edge. Across industries, leading organizations are not waiting. Many view cloud technology as evolving but necessary, and they are leveraging it effectively today. Some, for example, are tightly integrating cloud software solutions to streamline supply chain processes, boost information transparency, and improve decision-making across the board—all the while tapping the cloud benefits of cost savings and scalability. Others are confidently turning to infrastructure solutions delivered and running solutions in a private or hybrid cloud. Still others are turning to cloud platform solutions to extend the power of existing applications, build modern analytics platforms, or support new Internet of Things business models. Turning the cloud to your advantage may depend less on the maturity of the technology and more on the power of your imagination.

Myth No. 5: Moving to the cloud will be easy. Cloud technology can help organizations streamline and simplify their IT landscapes and their business processes, reducing needs around capital expenses and infrastructure while helping to save costs. But migrating to the cloud requires more than simply plugging in technology. It requires an ability to address a host of considerations—data migration, the business-specific capabilities of solutions, change management, governance, systems integration, security, and more.

A cloud transformation is more than a plug-and-play project or a traditional system implementation. It requires progressive thinking and an ability to align technology with your business needs and processes— for today and for the future. Migrating to the cloud is a journey. Moving forward with the cloud will require a vision of your “to be” state—your destination—as well as a strategy for getting you there.

To learn more, and to find out what IDC thinks about the future of the cloud, please read this study that presents a strategic blueprint for enterprises on their digital transformation journey.

For more information on how to simplify innovation with cloud technology, learn more about SAP Cloud Platform.

Ready to reimagine the potential of the cloud? Contact us to get the conversation started.

Contact Krishnakant Dave at kdave@deloitte.com and follow him on Twitter: @kkdave

Contact Misa Rawlins at mrawlins@deloitte.com and follow her on Twitter: @misa_rawlins

www.deloitte.com/SAP

SAP@deloitte.com

@DeloitteSAP

This article originally appeared on Deloitte.com and is republished by permission.

Comments

Misa Rawlins

About Misa Rawlins

As a senior manager and consultant in Deloitte’s SAP practice, Misa Rawlins enjoys helping her clients not only to figure out how to solve their current business problems, but also to envision how a modern cloud platform can transform their organizations moving ahead. Within the practice, she has specifically chosen to take a leadership role around the sales and delivery of SAP S/4HANA Cloud because she considers it the wave of the future. She has made it her mission to deeply understand this technology to better advise clients on what moving to a cloud infrastructure really means.

Krishnakant Dave

About Krishnakant Dave

As a principal in Deloitte’s global SAP practice, KK Dave is a consulting leader for Deloitte’s largest clients; part of the U.S. SAP leadership team where he spearheads Deloitte's cloud offerings; and leader of global go-to-market efforts in the wholesale distribution and manufacturing sector. In these roles, he assists clients in their business transformation journeys using the absolute latest SAP toolset, which presently comprises SAP S/4HANA, SAP Cloud Platform, and SAP S/4HANA Cloud, among other technologies.