While the cloud has often been described as the lynchpin towards many digital transformation success cases, why are so many organisations still struggling to realise the full value of the cloud?
Accenture has analysed companies migrating to the cloud globally, running the rule over how best to manage complexities, overcome challenges and the best strategies to adopt during this pandemic period.
iTNews Asia speaks to Ryoji Sekido, Cloud First Lead for Asia Pacific, Africa and Middle East, Accenture to find out optimal ways that we can migrate to the cloud and the lessons we can learn from successful adopters.
iTNews Asia: Accenture’s latest cloud outcomes study shares interesting findings that only about a third of companies achieve expected outcomes over the categories of cost, speed, business enablement and service. What do you think are the reasons preventing companies from fully realising the benefits?
Our study points to the immense complexities involved in successfully executing cloud migrations that produce the anticipated business value. 65% of APAC organisations have reported that they had not fully achieved cloud’s expected outcomes. Furthermore, 21% of APAC execs are only somewhat confident their organisation’s cloud migration initiatives will deliver the expected value at the expected time.
From our study, legacy infrastructure and/or application sprawl (45%), misalignment between IT and business (45%), and data sovereignty concerns/regulations (43%) are the top three barriers identified by the regional IT leaders that prevent companies from fully realising the benefits.
iTNews Asia: Some companies have started on greenfield cloud deployments but stopped as they fail to reduce costs or increase flexibility. Often, they face challenges from the thousands of applications that needs to be re-built, they find it difficult to 'lift and shift' and are stymied by legacy and siloed models. What advice can you give as a viable cloud strategy for them?
Many companies struggle with integrating cloud goals with the existing legacy infrastructures, or face application sprawls in the process.
To that, we recommend organisations analyse and formulate clear migration strategies by application, whether to rehost, refactor and rewrite. “Lift and shift”, or rehosting, is best for applications with no future business changes, and who have little to no dependency on other systems and no or little customised database access.
Businesses should also engage in refactoring and migrate onto micro-services platforms so that there is a lesser percentage of dead codes. Companies should, however, not engage in rehosting and refactoring at the same time.
Lastly, rewriting can help organisations address the number of dead codes, and to continue upon future business changes. This will help to increase success and dependency on the greenfield cloud deployment.
iTNews Asia: If costs savings was the sole determinant in moving to the cloud, would this be a right consideration?
In the short-term, cost savings can be a consideration. However, more is needed to develop a successful cloud migration journey. Organisations need to develop an end-to-end cloud goal and modernise and transform applications and data management architecture accordingly in order to enable continuous business innovation.
For organisations worried about the cost factors involved in cloud migration, it is important to understand the critical role that cloud plays in driving digital transformation and that it’s not solely about the cost savings.
iTNews Asia: What advice can you give to the organisation and when should the costs economics of adoption come into consideration?
Success in cloud goes beyond technology, cloud migration will involve fundamentally shifting the business’ ways of working. Companies have seen the rewards for their cloud investments, particularly since becoming “cloud-first” is now recognised as a key to surviving in an era of socially distanced remote work, online commerce, and operating in a generally more challenging environment.
Fortunately, there are ways to effectively maximise the value that businesses can obtain from cloud, and we recommend four key areas that ought to be addressed.
- First, in developing a business value focus and an optimal cloud strategy that is anchored to the needs of the business and organisation.
- Second, it is important to manage the business workforce and culture, by implementing new operating models to evolve culture and transforming how people work in order to meet the rapidly changing needs.
- Third, businesses should look towards unlocking industry and function-specific data insights and intelligence trapped in legacy systems with the capabilities of cloud data models.
- Lastly, it is important that businesses learn to leverage upon the skills and experiences of their partners. Doing so will enable the business to augment their own capabilities. Cloud managed services in this case, is often an option for companies looking to access the right skills while maintaining cost efficiency.
iTNews Asia: What then can we learn from successful cloud adopters?
Globally, 46% of high adopters report fully achieving their expected cloud benefits, compared to 36% of moderate adopters and 28% of low adopters. Those who have successfully adopted cloud have had greater success in navigating them to reap the benefits.
Successful cloud adopters are also able to effectively leverage upon their managed services, they are often ahead of the curve when it comes to working with partners to achieving their cloud results. On average, the larger the business, the more executives see the full value of cloud being achieved.
Some recommendations we have for companies embarking on cloud migration would be to have a clear end-to-end cloud transformation journey with business outcomes such as having clear migration goals, deciding on how to accelerate this journey, and to come up with new innovative ways to adapt to cloud systems.
There also needs to be a redesigning of enterprise data supply chain across systems and changing the operating model to one that is more business-aligned. Lastly, organisations also need to develop their people, and their workforce, in re-skilling employees in order to sustain an agile delivery on the cloud-native environment.
iTNews Asia: How has the pandemic and its impact changed the business landscape? How critical is cloud now as a competitive advantage in companies' digital transformation?
COVID-19 has turned cloud from an aspiration to an urgent mandate — creating a new inflection point that requires every company to dramatically accelerate the move to the cloud. It is the foundation required for digital transformation, enabling resilience, new experiences and products, trust, speed and structural cost reduction that the ongoing health, economic and societal crisis demands.
The move towards cloud outcomes can drastically improve the efficiency and resilience of IT systems, enable businesses to do new things, and to do them faster.
For companies that have already invested in cloud capabilities, the instant availability of IT resources played a business-critical role during the COVID-19 pandemic. Without an advanced cloud technology capability, remote working at scale would not be possible; governments could not provide critical services to citizens efficiently; and healthcare providers could not increase the reach of telehealth services to millions of people during the time of crisis.
It is critical that enterprises place their focus on sustaining operations under severe disruption, in terms of addressing the highly volatile customer demand and managing vastly changing workforce dynamics and increased needs for remote network access as a result of increased isolation.
Decisive adoption of cloud computing in the APAC region is also critical as it is inextricably tied to cloud security. Migrating to and operating in the cloud is a far more secure proposition than operating on-premise, especially for those companies that lack the resources to invest in home-grown security capabilities.
iTNews Asia: Where do you see the future of the cloud?
Cloud is the place to be – the value of cloud is undeniable, and as the world embarks on a journey towards accelerated digital transformation. Becoming “cloud first” is an essential component to digital transformation and to achieve the cloud’s full potential, much more is required than just technology. Currently cloud migration is focused on developing infrastructure-based services to help companies successfully migrate to cloud.
In the future, we foresee a new cloud strategy that will focus on providing technological, business or industry-specific services with cloud as its own model. There will also be a more developed architecture that will help free up businesses from the complexity of its multi-cloud environments from the millions of technical choices from the services of hyperscalers to open sources and independent software vendors (ISVs).
Ultimately, organisations must adopt fundamentally new ways of working, shift towards new operating models and develop new roles and skills. At Accenture, with our Cloud First initiative, organisations are provided with the full stack of cloud services to help clients across every industry become “cloud-first” businesses to innovate faster and create differentiated and sustained value.