Being an early adopter of new technology can often come with more costs than benefits. Because of this, companies across the world tend to be slow on the uptake with digital innovation. The pandemic, which forced hundreds of millions of workers to shelter in place and essentially move all operations and most of daily life online, caught many of us off-guard. Not all companies were equipped with the technological tools they needed to combat these new challenges.
For example, pre-Covid-19, most businesses had just begun their cloud-migration journeys. Research conducted by Accenture in 2019 found that 90% of enterprises had “adopted cloud technology in some form”. On average, those enterprises only had about 20-40% of their workloads in the cloud.
Even these initial steps were significant. Pre-pandemic, market research company Technavio predicted the cloud-migration-services market would grow by US$7.1 billion by 2024. This would result in a compound annual growth rate of 24%.
Post-pandemic, however, these figures are expected to boom. A study conducted after Covid-19’s impact found 87% of “global IT decision-makers” believed Covid-19 would cause organisations to accelerate their migration to the cloud.
Companies need to transform their many distinct processes and functions within their organisation through an integrated cloud strategy and transformation journey. All of these come together to form a “cloud-first strategy”.
Cloud-first strategy, explained
Romain Groleau, the cloud lead (APAC, Africa and Middle East) at Accenture, says the cloud is not merely a “cheaper data centre”. “The cloud has a transformational value to drive innovation,” he says. “It’s not only about choosing how to best consume cloud computing power, but also leveraging new and innovative pre-built features in the cloud, driving speed and the agility to respond to evolving business needs.”
A cloud-first strategy begins with determining an optimal cloud strategy and execution plan, executing a seamless migration and modernisation to the cloud that is secure and cost effective, using the right expertise to use cloud’s diverse tools well, unlocking existing intelligence and insights powered by cloud data models, and finally, reimagining business functions to emerge stronger as an innovation enterprise. All of these components need to come together for businesses to transition from non-agile and capital-intensive infrastructures to cloud-based innovation platforms that align with their industries.
Anders Sörman-Nilsson is a futurist whose client list includes companies such as Apple, Cisco and SAP. He agrees with Groleau, that the cloud became a lifeline for companies during the Covid-19 pandemic which exposed weaknesses in their business models. “The cloud digitally untethers businesses and their workforces,” says Sörman-Nilsson. “They are no longer tethered to particular devices, physical workplaces, in-house bookkeeping and more.”
Sörman-Nilsson’s advice to C-suite decision makers seeking to avoid the panicked application of digital lipstick? “Think strategically about what the cloud can enable – both short and long-term,” he says.
The cloud transformation
Covid-19 caused a global lockdown of workforces, resulting in a digital experiment that nobody could have foreseen. This experiment demonstrated the cloud’s capabilities to business owners and executives. Cloud providers such as Microsoft, Amazon Web Services (AWS), Alicloud and Google Cloud Platform have grown their revenues between 25% and 100%. This growth has shown transformative results including efficiencies and innovations that drive enduring business change at scale and speed.
Accenture is investing in this transformation. Over the next three years, the company will invest US$3 billion along with the formation of a new multi-service group, Accenture Cloud First, which combines the expertise of 70,000 cloud professionals and the power of Accenture’s industry and technology capabilities, ecosystem partnerships and commitment to responsible business.
A major conglomerate turned to Accenture for modernising the order-to-manufacturing process for its chemicals business. With an e-ordering web solution on Amazon Web Services (AWS) that automatically fed data back to SAP in real-time the company can now better track accountability in their end-to-end manufacturing process. The solution flexibly integrated application updates and generated fast and accurate customer quotations. With these efficiencies in its ordering process the company can now schedule manufacturing activities based on a close to real-time view of inventory and its overall sales numbers are steadily rising.
In another success story, a China-based home furnishings chain implemented cloud solutions to integrate its online and offline operations. No longer hindered by siloed legacy systems, the chain – helped by Accenture – was able to embrace an omnichannel solution that helped execute comprehensive marketing campaigns. The result was a 13.3% year-on-year growth in merchandise volume and an expansion from 200 to more than 350 physical stores.
After Covid-19 arrived in South America, a global automaker’s Argentinean subsidiary was forced to bring employees together on a cloud-enabled platform. The platform had to allow them to access their data from anywhere and securely share confidential information with their colleagues. On Accenture’s advice, all staff were equipped with Microsoft Office 365 to work flexibly. Notably, 85% of employees surveyed said having access to Microsoft’s “productivity cloud” made them more efficient and productive.
Cloud and its accompanying data and modern architecture are now becoming a non-negotiable business enabler for the C-suite, says Groleau. “Our view is that the new age of the cloud also demands a new approach to cloud management and optimisation,” he says. “If companies want to maximise the innovation potential of the cloud, they must rethink how they support and run their cloud estates.”
Groleau says by combining cloud-managed services, optimisation capabilities and consumption management, all powered by artificial intelligence for IT operations (AIOps), organisations can drive an improved business case across their infrastructure estate by reducing the cost of managing the environment and of the estate itself while unleashing the full business potential of cloud.
A tool to help you choose wisely
Introduction of cloud services isn’t always enough. Knowing how to use the cloud and its capabilities to create a calibrated strategy for business transformation is key.
Towards this, businesses can use tools to make their navigation of the cloud a smooth and fruitful one. Accenture released one such tool at the end of 2019 – MyNav – which helps their clients identify the right cloud solutions for their specific requirements.
Accenture drew on its experience with 34,000 cloud projects to create MyNav. “MyNav shows customised and optimal journeys to the cloud for every company, irrespective of where its starting point is,” says Groleau. “The MyNav platform enables businesses to discover, assess, design and simulate end-to-end cloud solutions at scale. By providing a bespoke, cloud-migration roadmap, myNav enables enterprises to navigate the complexity of cloud migration with speed and accuracy.”
Businesses that show resilience in the face of these massive behavioural and cultural shifts will need a technology backbone that embraces the cloud. This will allow them to replace their fixed technology costs with software-as-a-service models, reduce their liquidity crunch and invest in future growth with variable cost structures.
Similarly, automation can help build more flexible talent structures and supply chains to tide over shortages, and drive demand led planning and execution. Businesses understand this, and this new realisation is what is driving the rapid adoption of technologies such as the cloud across growth markets.
Bill Gates once famously said: “If your business is not on the internet, then your business will be out of business.” The Microsoft co-founder’s quote can be adapted for this contemporary fork in the road. The data and research all suggest that there will be two types of businesses in the next five years – those that are primarily or entirely on the cloud and those that are out of business.