Hello and a very warm welcome to our latest edition of smartCIO EMEA – the magazine for Chief Information Officers and other IT leaders across the region.
CIO, Bupa Asia Pacific
A culture-first approach framing business technology
Cloud is the perfect match for CIOs seeking hybrid-working value
How CIOs are redefining value in the post-pandemic world
How IT can flip the business case for cloud computing
Defining cloud value
in the post-pandemic world
Why cloud is leading to a renaissance of IT infrastructure
Three vital insights for delivering great service from cloud
Hello and a very warm welcome to our latest edition of smartCIO EMEA – the magazine for Chief Information Officers and other IT leaders across the region.
Regular readers will know that our mission is to share the latest technology and leadership insights to help create and educate a community of current CIOs, and those aspiring to move into the role.
In this issue we’re taking a look at a couple of acronyms that are never far from the mind of the CIO: ROI and TCO. And the other term that always surfaces during the same conversations: value.
With the ongoing maturation of cloud technology, it’s perhaps not surprising that, as Martin Veitch of IDG Connect contends, the time to put forward a strong ROI case for cloud projects has never been stronger. There are hugely compelling arguments to move to a cloud environment across deployment times, payment models, scalability, integration, infrastructure and yes, security. So, showing hard ROI from deploying cloud technologies in your business seems a no-brainer now. No longer is this about ‘canaries in the coal mine’ (as one very early Workday customer described moving to the cloud!), this is now the safe, strong and secure direction every CIO should be moving towards.
But what about value? This is always a bit more of an esoteric, intangible measure for IT. I mean, the ROI case outlined by Martin proves one interpretation of value – lower costs, lower overheads, faster delivery, etc. But as the role of the CIO becomes ever more about demonstrating strategic business value rather than just cost savings and keeping the lights on, this may not be enough for the CEO.
I was privileged to spend some time in the last month with a couple of senior consultants from McKinsey. We discussed the five top priorities for EMEA CEOs in 2022. Many organisations have been talking about how cloud technologies are firmly on the radar of most CEOs, but McKinsey believes that the conversation is now about how you transform your business in the cloud, not just about moving to the cloud.
It’s an interesting distinction and one that’s really focused on business value. Moving to the cloud is a simple technology shift and can definitely show ROI. But if you just lift and shift technology to a cloud environment you’re not going to deliver an ability to transform the business in the cloud. You’re potentially not delivering business change, just a technology name badge change.
I think Clare Hickie, CTO EMEA at Workday, sums this up well: “The cloud isn’t a final destination, it’s the foundation for change, adaptability and future innovation.”
As well as this interview with Clare, you will find BUPA and LGI discussing their transformation journeys and the value they bring to the organisation; articles from Accenture and Deloitte on the value that the cloud can bring to companies; and a round-up of recent research around this topic.
As always, our aim for smartCIO EMEA is that it provides you with insight, opinion and discussion around the key leadership, business and technology topics that are relevant to you and your role in modern business.
We look forward to you joining the conversation. Please give us feedback, suggest new ideas, offer your own expertise and insight. We can’t wait to hear from you.
*Cloud is the perfect match for CIOs seeking hybrid-working value*
By Martin Veitch, Editorial Director, IDG Connect
Smoke and mirrors remain part of IT: there are false turns at every corner, mirages and plenty of purveyors of snake oil and silver bullets. No wonder that ROI remains tricky to define but justifying costs is one of the many jobs of the CIO. And here’s the good news: with cloud, making a compelling business case is easier than ever.
Quite understandably, the CFO would like to know for what reasons the CIO is purchasing achingly complex technology that chews up hard-earned budget. The answer is usually supplied by an ROI calculator that nobody implicitly believes in but has become a useful accessory: closer to a ready-reckoner or informed estimate perhaps, but useful all the same.
Such are the vagaries of IT investment that it’s hard to say that your ERP upgrade, enterprise software licence agreement or fleet of VR headsets are going to pay for themselves by, say, March 2023, after which it’s all profit, upside and gravy. We don’t know specifically what will happen about user adoption, nor what the impact of the IT investment on revenue will be, or if a better mousetrap will be invented.
Neither do we know what the weather, geopolitics or next lockdown will bring to stymie our best-laid plans. So, our ROI calculations should really come with various asterisks, addenda and details of a lorry load of risk factors to be factored in.
Making a case
But what we can do is to what every CIO does, and that’s to use our common sense. Take cloud... and you probably are taking it as the pandemic has seen adoption soar again. Cometh the hour, cometh the platform, to adapt the old saying, and cloud is a very good fit indeed for our times.
Various lockdowns, stay-at-home orders and now the ongoing shift to hybrid working demand a matching change in ICT infrastructure. To work effectively from our studies, shed offices and on the road, we need an adaptive structure. It needs to let many people share resources at the same time and must offer ample scope for virtual collaboration. It will have to be capable of being managed remotely. Security and access to elastic processing, storage and network resources are non-negotiable. We’re going to need to support a range of mobile devices from laptops to smartphones at least, maybe with VDI streaming too. It will help if we can pay for services in a flexible way, based on usage patterns that are currently unknowable. And it would be great if we could easily switch on and off user licences anywhere in the world because the economy is unpredictable. That list is, pretty much, a job description for cloud computing.
This makes building a strong business case for cloud a relatively simple exercise. And, over the past 20 years, many of the perceived negatives of cloud have been resolved and can even be seen as positives. For example, security and data governance were once seen as major blockers to cloud progress. Today, they’re often reasons in favour of adopting cloud because the big clouds have highly efficient SecOps teams, panoramic overview of incoming dangers and best-in-class defensive tools. Similarly, loss of control was once seen as a cloud demerit; today, most companies don’t see the need to own all the administration overhead of IT and are very happy to farm it out to a responsible partner. Concerns over the solidity of key players have also been assuaged as companies like Salesforce have developed towering valuations while the cloud superpowers are some of the world’s largest organisations.
Of course, cloud is no universal panacea and businesses need to play their part and accept that areas such as potentially dangerous misconfigurations require attention. There are also persistent concerns over tariffs and Ts and Cs that can be knotty and slow down the ROI calculation process. But we’re in a mature period now where CIOs have embarked on many projects, learning best practices along their ways. Some may not be so bullish as they were in proudly describing themselves as ‘cloud-first’, having experienced the testing challenges of moving legacy applications online, but that too is part of the maturation process.
Even relative laggards such as financial services giants are now very keen to adopt cloud, although in many cases more than half their estates remain traditionally on-premise. Any CIO roundtable may still feature a naysayer or sceptic but today they are usually outliers, often in highly regulated sectors with extraordinary levels of governance required.
“Unless you’re a Raytheon [defence contractor] or in the secret service, I can’t see any reasons why you wouldn’t want to be embedded in cloud today,” says a veteran CIO. “It’s just the default setting where the best software is being written; it’s the room where the smart people are.”
Another CIO makes a related point: “If you want the smartest people to work for you, you can’t give them the old software. I’m not going to be able to hire top programmers if I’m sitting on applications from the dark ages. You’ve got 30-year-old apps on mainframes and the people who know how to administer them are literally retiring and dying. Do you need to get off the horse? Yes, and onto the cloud!”
Progressive CIOs use cloud as a large, and usually prevalent, part of the IT mix. In Gartner terms, the hype has died down, we know how to architect and handle pesky integration issues, and we’re sailing towards ‘the plateau of productivity’.
So, where does that leave the ROI document? Probably looking something like this, in abstract form:
Value begins immediately
Upfront + annual tax
Value is easily controllable
Support for mobile devices
Excellent UX with optimisation
Multiple device types supported
Scalability and business flexibility
Highly elastic and global
Limited and local
Offers a good fit for changing needs and usage patterns
Cost savings from fewer admins
Requires good connectivity and client devices
Requires datacentres, servers, mass storage, cooling, power management etc.
Enormous savings on upfront costs and running costs
Dependent on local staff expertise
Risks are mitigated
Very good with other cloud services, via open APIs with on-prem
Can be challenging and require point-to-point custom links
Faster time-to-market for systems and workflows
I don’t know any CIO who has openly offered the view that making an ROI case for cloud (or any other technology choice) is the most exciting part of their job. It’s a necessary evil that will usually require the help and experience of partners. But if ever there was a time to set out why cloud’s time has come and what that can do for the organisation, that time is surely now.
*A culture-first approach framing business technology*
By Christina Johnson, EMEA Staff Writer
In a world where technology is king, many companies are looking at how it can help guide business culture. But for global health insurance and healthcare group Bupa, culture is the starting point for harnessing the power of technology.
Most organisations are aware that a strong business culture is pivotal for agility and sustained growth. Leadership and business values play a key role in developing culture as well.
With the impact and influence of technology, there’s no denying it’s a valuable force for cultural change. So, what role can the CIO and technology play in creating a space for culture and values to thrive?
While many companies may focus on the latest technology to create a vibrant culture, Bupa has a different perspective. Headquartered in the UK, the international company focuses on health insurance, healthcare services and aged care, with over 18.5 million customers globally.
Regardless of the size and complexity at Bupa, culture remains the starting point for technology design. Culture encompasses both employee and customer experiences, with the aim of optimising both aspects.
“When you are designing something tech-related, start with your customer – who might also be your employee – and the business environment,” said Sami Yalavac, CIO at Bupa Asia Pacific. “Think about their level of knowledge, capabilities and what they actually need.”
Choosing technology with culture in mind
As Yalavac emphasised, technology should be introduced based on a need and purpose. Even if the purpose is to foster a thriving culture, one can’t simply think in terms of introducing the latest technology and hoping it will work its magic. Bupa is advocating a shift from ‘which technology?’ to ‘the problem I'm solving’, with a focus on the business cultural landscape.
“Our job is not delivering technology, our job is delivering the best experiences, both for the customer and our own people to do their jobs. Tech is just a vehicle for it,” noted Yalavac. This approach means that user-centric design principles are utilised in the adoption of technology.
A key example is the change in Bupa’s operating model. Rather than a function made up of teams that are specific to their expertise, the technology teams at Bupa are cross-functional and include testers, developers and designers.
The technology team works together with their business colleagues to roll out the product, learning from each other and making tweaks as they progress. “This way, more people are thinking about the customer employee experience on the ground, and then designing tech accordingly,” said Yalavac. Another factor to bear in mind is cultural differences within the same organisation. “The way people communicate is completely different based on their culture, whether they’re in Hong Kong versus England, Chile or Brazil,” Yalavac observed. “So, you have to design the technology based on how different demographics will utilise it.” He warns that careful thought must be put into the technology. The same solution might not work for different regions and their culture. Yalavac likens it to choosing menus around the globe for McDonald's.
“What they put in Chicago, India, Istanbul or Melbourne has to be influenced by how people eat and what they can eat versus what they can’t,” he said. “The same goes for technology, as many use it differently based on where they’re from.”
New isn’t always better
When it comes to technology, what’s shiny and new may not always be what works. “If people don’t understand how to use the technology, even the most advanced system is useless,” Yalavac said.
He cites one of Bupa’s experiences as a learning point. The aged care team based in New Zealand was on the hunt for a good telephone solution for customers. They introduced a state-of-the-art system with many best-in-class features and numerous functions like video conferencing.
“However, our elderly customers couldn't even answer the phone. They didn’t know which button to push out of the 25 ones available, and they just couldn't call people,” recalled Yalavac. Eventually, Bupa replaced the product with a much more primitive model that was 10 times cheaper. “We learnt that you really need to understand your audience and their experiences,” reflected Yalavac. “It’s not about the best technology, but what fits your purpose.”
Keeping employees connected
Cultural shifts in working expectations also have to be factored in when deciding which technology to use. Since the beginning of the pandemic, Yalavac observed that a majority of employees expect a mix of remote and on-site working arrangements. “When we did surveys, we found that only a minority, around 5%, of employees wanted to come to the office five days a week,” he said. “So, we needed to think about engaging employees working from home.”
This is where technology plays a key role, with the need to design products that support and connect remote employees. Keeping employees connected is especially important for Bupa. After all, the company has over 500 working locations in the Asia Pacific region alone, such as optical stores and dental clinics. Its technology team also comprises employees from locations in five different countries.
As such, Bupa is intentional about connecting with employees beyond a transactional level. Even if it’s reaching out to them over a screen, the company organises activities and games to foster bonds. Also, providing health services like meditation sessions, one-to-one coaching and psychological support based on employees’ specific needs.
The CIO as a cultural change agent
Given the importance of leadership in establishing a strong business culture, Yalavac has some advice for CIOs looking to pave the way. “If you keep talking about the technology, KPIs and timestamps, nobody will believe you when you say that the customer and business culture is important,” he said. “It has to be consistent messages from you.”
One way to foster a thriving culture is by working in tandem with your CEO and Head of People. “As a team, think about what culture you want to have and how you’ll support it through your processes and technologies,” Yalavic advised. “I proactively work with my Head of People and we develop strategies to do so.”
His second piece of advice for CIOs is to act as a business leader, rather than a technology leader. Besides understanding the technology, you need to understand the customer and business. Give direction and attempt to resolve the problems of employees and customers.
Lastly, be an advocate for change within the company. “The definition of CIO is changing for me − it's no longer Chief Information Officer, but Chief Influencing Officer,” Yalavac said. “Once you know your company’s needs, influence your board and executive team to procure the right investments and solutions.”
Based on his observations, many CIOs aren't good advocates for what they need. Consequently, they can’t introduce solutions to benefit the company.
“If you can articulate their needs and how proposed solutions will benefit employees and customers then you will have a chance to attract funding. The most effective way to articulate these needs is letting culture, and how it relates to business and customers, guide you,” said Yalavac.
*How IT can flip the business case for
By Steve Dunne, EMEA Staff Writer
With more than 5,000 employees in over 40 global locations, Logistics Group International GmbH (LGI) provides highly complex supply chain solutions to multiple industries. In this article, Christoph Frank, Head of Process and Technology Solutions and Strategy at LGI, talks about the organisation’s shift to the cloud and how making the business case is often about internal trust and making decisions as if you were the owner of the business.
Can we start by getting some background on you, your career journey and your current role with LGI?
In my current role, I’m the Head of Process and Technology Solutions and Strategy. We decided to combine process and IT, so I wear a number of hats. I’m responsible for IT overall, and for a small digital team. My role also includes managing our process and factory planning team, our lean team and our learning academy. So that's my current job, managing approximately 90 people. Previously, I spent three years at a large truck and bus manufacturer. There, I was responsible for something called the ‘House of Digital’, where we completely transformed process and IT for the entire sales and aftersales process worldwide. For example, we deployed salesforce.com and moved a lot of old applications into the cloud.
Before that, I spent five years leading Amazon’s entire transport logistics operations for central Europe. Anything happening outside of the logistics centres was basically mine or my team's responsibility. And before that a couple of years at Boston Consulting and at Daimler for five years. My role at LGI has brought everything together, from automotive and e-commerce, through to logistics and the supply chain. In short, the IT process and the supply chain have been focal points in my entire career so far.
For our readers who aren’t familiar with LGI, could you explain what the business does?
LGI is what we call a complex contract logistics company. We have roughly 5,000 employees. Every day, we serve customers in multiple segments. We’re seeing huge growth in what we call lifecycle management and end-to-end services. This is not only supporting the logistics side but delivering value-added services around the logistics, bringing goods to and collecting from the customer, and steering the supply chain for our customers. That's our growth area through to 2025.
For example, in our automotive and industrial division, with customers like Daimler or Porsche, we manage the logistics to their production lines. We even support pre-assemblies to support what they do with certain parts of their supply chain.
The second division is electronics/healthcare. We serve large customers, like HP, bringing products, such as laptops and printers to Europe. Here the value-added services we offer, include updating firmware, exchanging parts and moving them to redistributors.
Our third division is focused on fashion/lifestyle and e-commerce, where we deliver goods to companies’ stores, but also directly to e-commerce end customers. On top of that, we have an air and sea freight division serving our customers in this domain.
LGI is experiencing consistent growth, and you have 5,000 employees across more than 45 sites globally. How do those factors influence your IT infrastructure and how you approach the delivery of technology across your business?
When I joined, IT was in something I would call hibernation mode. IT was viewed purely from a cost perspective. Do everything as cost effectively as possible. With our new CEO, Bernd Schwenger, this has changed, because we really know that we have to be an enabler and a driver for our business. We have over 40 sites, we have plenty of customers, and we are very good at being very customer centric. What we lacked was standardisation and digitalisation. I inherited a zoo of applications, a zoo of different processes.
One of the key examples is the HCM space where, due to mergers and acquisitions and organic growth, we didn't even have one HR system and process in place. When we started the journey, that's actually where we said: "Look, I can only automate in IT and be efficient if I have one central tool for HR.” This mindset has carried forward and having a vision for how IT should be delivered is quite a powerful thing.
When did the journey to the cloud start and what were the main considerations for the business?
At a fundamental level, before my time, we actually moved to Office 365 because the on-prem version was out of service, and it was the most efficient way. The challenge that we have is that in this logistics space with warehouse management systems and transport management systems, it’s still very much an on-premise world. Many software application providers are probably 10–15 years behind the curve. There's no cloud native or anything like that.
The challenge we had in 2019 was that our data centres were growing old and there was a real need to upgrade the hardware. And secondly, our customers require 100% uptime. Some sectors can be very unforgiving about downtime and there are huge fees attached for unplanned outages. At that point our team has actually said: "Well, you know what? Hosting hardware is simply not our core competence as a logistics provider."
So, we started the journey to look for, first of all, an infrastructure-as-a-service provider. Next, we looked at software-as-a-service (SaaS) for our key applications. From O365 and now Workday. I see a lot of value in the SaaS product delivery methodology, such as feature updates. I don't even have to worry about what's coming in the next release and keeping software up to date. This frees the team up to spend their time more strategically.
How do you approach the business case for cloud technologies and how does that differ from the traditional on-premise software world where you're trying to make the business case for those deployments?
One of the reasons I joined LGI was that I have been at other large enterprises where these kinds of budgeting processes take up a lot of time. You have to make business cases that are sometimes complete guesswork. At LGI we fortunately are more entrepreneurial. It doesn’t mean we are loose with cash or simply throw it around. What's great is that the senior management team is very open and they understand there’s an enabler and there’s a driver, and you can make a case for that. That’s not to say we have to plan for every Euro saving we need for the project because that’s often guesswork. The important thing is to make decisions as if it were my own company, and that’s what we did with the HR system from Workday.
By the same token, you have to be able to account for, and drive the benefits of, any IT decision. What are the savings, the value and the added benefits from moving to the cloud – and the knock-on impact to the business? That’s how we think about it.
In the end, you have to do it, and you have to then make sure that you get the benefit out of it, and that's the hard part. But I would rather spend time on getting the benefit out of it rather than arguing for the benefit for five years and the next wave is already over.
What are the added-value benefits and improvements that cloud computing drives further down into the business?
I’d start by saying having accurate data is key. If you have one system and one process across the entire group, then you have the same process, the same data, and you can actually rely upon it. Some might say you can get those with on-premise but it’s certainly more difficult. The second point I alluded to earlier is upgrades and maintenance. I have spent such a lot of time in my logistics career, thinking about upgrades, bugs, fixes, patches etc. How do we deploy them? How do we test them? What’s the business impact? SaaS just goes such a long way in eradicating those problems. Because of the way new versions are delivered, there’s an appetite for innovation internally. It wasn’t like that before. If something worked, people didn’t really want the new release because of the work involved in pushing it out.
The third point would be that in the logistics software space, if I want a feature, I need to pay for it. I then pay the software supplier to deliver that feature. That’s just not the case in the SaaS world. Whether it’s salesforce.com or Workday, my subscription buys me innovation, it provides me with a roadmap for the future. Even if I don’t turn on all of these features, the fact that someone else is thinking about that software development, testing it and rolling it out, that’s so powerful. Hopefully we’ll see more of this in the future in the logistics space as software vendors catch up.
Wrapping up, for IT leaders still early in their cloud journey, how should they be thinking about that business case and defining the value of cloud to their organisation?
Start by asking: “If this was my own money, would I put a bet on it?” I think if you follow that rule, you can shortcut many of the decision-making processes. The second question would be is it a one-way door or a two-way door? In other words, is it so costly I can’t get out of it if it turns out to be the wrong choice? Because very often if you do a two-way door, it's no problem actually correcting yourself after a year. If it's a one-way door, you should be very, very comprehensive in analysing what it means.
I think making that case, and also trying to get business leaders to understand what the decision will help the business do better; where they could create value; and where they could also work with their own teams to configure and maximise the value of the solution is how businesses should be thinking about the cloud and its value.
value in the post-pandemic world*
By Christina Johnson, EMEA Staff Writer
In this article, Clare Hickie, CTO EMEA at Workday, discusses how COVID-19 has heightened the demand for a shift to the cloud and how CIOs should be thinking about proving its value to their organisation.
What are you hearing from customers in relation to how the pandemic has impacted their progress in moving to the cloud?
I’ve been massively impressed with how technology leaders accomplished all that they did during the pandemic. In a nutshell, we’ve seen a big shift in cloud adoption over the last two years. The uncertainty over what would happen next really forced CIOs to seize the day and push through on their investment in cloud computing.
I remember Microsoft CEO Satya Nadella said that the company had seen two years of digital transformation in two months. We’re seeing and hearing that from many of our customers. Of course it was borne from necessity, but we’ve really seen the blue touch paper lit when it comes to digital transformation. There’s still work to do for many companies, and not all businesses can accelerate at the same pace, but I’ve been inspired by how CIOs have embraced change to deliver innovation for their organisations.
I wanted to ask you about making the business case for cloud. What are the first things CIOs should be thinking about, particularly when the landscape is as uncertain as it is today?
When talking to many CIOs, one question that resonates is: “Is it too late to move to the cloud?” The answer is clearly no, but I can’t help highlighting how we saw companies move their entire workforce to a remote model overnight. Much of that was only made possible due to the power of the cloud, its delivery model and those all-important data insights that enabled critical and timely decisions to be made. If CIOs, and even CEOs, were ever in doubt of why cloud computing is the future, then COVID-19 has put that into perspective.
To your broader point, there are a few ways to think about making the business case, but a fundamental question should be: “What happens to my on-premise costs if I don't migrate to the cloud?” It’s about understanding the total cost of ownership, such as the costs to run your environment today – what are the power costs? Resources costs? What do I need to budget for the next hardware refresh? And what other services are needed to keep the lights on?
Businesses shouldn’t just be thinking about the cloud from a hard-saving perspective. When you deploy Workday, for example, there are a much broader set of benefits when it comes to defining business value.
Can you elaborate on the other value elements you were talking about?
I’d start by figuring out what return on investment actually means to your business. If it’s just how much you’re saving on IT and how it impacts the time it takes to achieve ROI, then that’s fine. But what we’re seeing is a bigger picture. Comparing costs is important, but think about the cloud’s impact on revenue. How will it drive customer KPIs? Think about how the tool will increase employee productivity and ultimately, how they’re empowered to work smarter.
All of these things have numbers behind them, they all impact the bottom line and should be considered in the mix. Similarly with system availability and business continuity. Planned and unplanned maintenance cost money – and cloud can significantly reduce that.
Value is also directly aligned with innovation. How can IT teams be re-deployed to focus on innovation once they have had the burden of infrastructure management removed from their roles? That’s a hard one to put a euro or dollar amount on, but in getting the business focused on future innovation, I’d argue it’s priceless.
I know you’re involved with the CIO Advisory Council with Workday customers. What are the key investment areas for those IT leaders and where are they looking to bring more value to the business?
I don’t think CIOs have ever been under the spotlight as they are today, and that gives them a real opportunity to shine. One thing I’m hearing is that many CIOs are not worried about being too cautious, but it’s actually the opposite – they’re driving bold decisions. They’re driving their businesses hard to ensure full value from their investment. I also hear from our CIO Advisory Council that they’re supporting a cloud-first approach and partnering with their business peers in doing so. On the other hand, I also hear how some companies are looking at the cloud as a source of IT productivity improvements, rather than a driver of real transformation – but that’s where the real value is. The cloud is great for improving efficiency, but it’s also about driving real innovation and new sources of revenue that cloud either enables or accelerates.
I’ve read recently from McKinsey about how cloud is about much more than being a mechanism for migrating from on-premise, and how ‘transforming in the cloud’ is actually a critical component for business innovation. How do you see that?
It’s a follow on from the above answer really. The cloud isn’t a final destination, it’s the foundation for change, adaptability and future innovation. McKinsey sums this up really well. Speed and scale are two vital attributes for innovation and cloud delivers both in abundance.
The work from McKinsey that you’re referring to looks at transforming ‘in’ the cloud, through rejuvenation, innovation, acceleration and the creation of new business models. What this relates to is how cloud delivers the speed, scale, innovation and productivity that digital businesses need today and as they grow into the future.
To my earlier point around value and ROI, some businesses take an overly narrow view of cloud value and where they can extract maximum value from the cloud – which can hold them back from identifying its true potential.
What advice would you give CIOs trying to sell the value of the cloud to other business leaders?
I think most IT leaders are on the page, but it isn’t just an exercise in moving systems, processes and data into the cloud. Businesses have to buy into the broader transformation agenda, otherwise all you’ll end up doing is shifting on-premise challenges onto a different delivery model. Going back to one of my first answers, what happens if the business doesn’t move to the cloud? Not just from a cost perspective, but from an innovation standpoint, from a customer perspective, and from an employee point of view?
The pandemic totally changed the landscape, but there will be future challenges, and IT must get ahead of how the business will respond to such uncertainty. In some respects, COVID-19 has already created the business case for cloud. It’s really about how deep organisations want to go on delivering true digital transformation and innovation.
*Why cloud is
leading to a
By Karthik Narain, Lead, Accenture Cloud-First
One of the biggest misconceptions about cloud? That it somehow makes IT infrastructure less important. Nothing could be further from the truth. In fact, infrastructure has never been more critical to the success of the business.
That’s because technology itself has never played a greater role than it does today – helping companies deliver profitable growth, create innovative experiences and operate in a responsible, sustainable way.
Infrastructure is the backbone of the modern ‘ever-ready’ digital enterprise. As discussed in our research on the Cloud Continuum, cloud is no longer just a single, static destination, but an operating model for innovation across a continuum of capabilities and technologies – everything from public cloud to smart devices, digital factories and connected vehicles.
Infrastructure is the foundation that allows companies to seamlessly operate this vast extension of capability. It provides the compute, network, workplace and database platform capabilities needed to run the applications that run the business. It also provides the foundation on which exceptional customer and employee experiences can be built.
New infrastructure, new challenges
However, as the technology continues to evolve and accelerate – and the demands placed on it continue to grow – IT departments are under ever-more-intense pressure. Traditional approaches are increasingly limiting their ability to adapt, innovate and compete.
What’s changed? As Marc Andreessen famously said, software is eating the world. And this is particularly true in infrastructure engineering. The shift to infrastructure-as-code is creating huge new opportunities for rapid and agile innovation.
At the same time, enterprises are recognising that ‘cloud’ does not simply mean public cloud. The evolution of the Cloud Continuum requires organisations to dynamically balance public, private, hybrid, co-location, multi-cloud and edge to support the ever-changing needs of the business.
Plus, consider the distributed nature of today’s workspaces and workloads. In the past, an enterprise typically had a limited number of sites and a finite number of connections to worry about. Now – and especially because of the pandemic – connectivity is required anywhere and everywhere.
For a large global organisation, this can mean hundreds of thousands of new locations that need continuous connectivity to the cloud, which dramatically increases the need for modern enterprise networks. These networks must meet a wide and rapidly changing set of business requirements and provide seamless, secure connectivity to data, applications and platforms.
A renaissance in infrastructure
It’s clear that IT infrastructure has become a much more complex environment to orchestrate. If you don’t rethink the way you architect in that environment, you risk ending up with a ‘spaghetti soup’ of complexity – which can have serious real-world consequences.
In the worst cases, IT performance can actually deteriorate in the cloud. Despite the world-leading infrastructure, the high-quality assets, and the more democratised innovation you get from the cloud providers, an enterprise can still struggle to match the level of performance the organisation achieved in its on-premises data centre. Why? Because the infrastructure and processes, and the skills supporting them, aren’t able to keep pace with new digital business requirements. This need to re-architect for the cloud is why we say there’s a renaissance in infrastructure. And a renewed recognition of its criticality to the modern enterprise.
This renaissance is also evident in the availability, sophistication and scalability infrastructure can now deliver. In fact, this is now the single biggest differentiator for a digital business. Winning companies architect their infrastructure for competitive advantage across this wide and expanding array of capability.
This is one of the key reasons the digital natives have had such huge and disruptive success. Modern IT infrastructure enables enterprises to do new things, create new products, develop new offerings, enter new markets, and conduct new experiments at a pace that was previously unthinkable.
Stabilise, optimise, transform
How should enterprises respond to this infrastructure renaissance? Having a modern infrastructure is key, even if your organisation isn’t ready to move heavily into cloud. Successful enterprises will still need to run in a more ‘cloud-like’ fashion.
But how? At Accenture, we help organisations modernise their infrastructure at a pace that suits their unique needs through a three-step stabilise–optimise–transform approach.
1. Stabilising the existing environment first is critical. If you don't, the organisation’s bandwidth will inevitably be taken up with outages and other fire drills. Automation is an essential part of this – especially for repetitive issues and failures.
2. Then you can think about optimising infrastructure for the cloud. This includes shifting the organisation towards an infrastructure as code approach and, in turn, creates a gateway for DevOps teams to start accelerating the innovation cycle.
3. The transformation stage involves properly rearchitecting the environment and expanding the infrastructure footprint across the breadth of the Cloud Continuum. Whether it’s public, private, on-prem or edge, the goal is to ensure each workload ends up in the landing zone that will let it deliver the most value.
A renaissance in infrastructure engineering
Of course, this is not about just the infrastructure itself, but also the talent, skills and career opportunities that go with it.
For infrastructure engineers, the last decade or so hasn’t always been easy. There’s been a persistent nagging feeling their craft was being chipped away, as each part of the stack was abstracted into the cloud.
This has all changed. Infrastructure engineers are now at the centre of designing and architecting the new systems upon which exceptional experiences are being built. And because the work is increasingly tied to strategic business objectives, it’s more interesting, iterative and collaborative.
Thanks to renewed emphasis on infrastructure capabilities and hybrid architectures, infrastructure engineering is again a place to build a long-term career in enterprise IT–provided IT leaders are ready to create the environment and invest in the training infrastructure engineers need to thrive in the future.
It’s a massive change, and one we understand first-hand at Accenture. Our organisation is also embracing this renaissance of IT infrastructure. As part of our $3 billion investment in Cloud First, we’re revitalising and refreshing our solutions, skills, assets and partnerships to help organisations address these critical needs.
Time to get serious about infrastructure
Alan Kay’s much-quoted view is that “people who are really serious about software should make their own hardware.”
The cloud, of course, is somewhat different. You don’t need to make – or even own – your own hardware. But you do need to re-architect it if you want to capture the transformative opportunities created by the Cloud Continuum and by the digital economy. So perhaps today we should say that companies who are serious about software should be serious about infrastructure. And now that every company is a software company, this means everyone.
You can learn more about Accenture’s views on the infrastructure renaissance here.
*Cloudy with a chance of excellence: Three vital insights for delivering great service from cloud*
By Tony Burton, Garry Carpenter
and Sean Dunne at Deloitte
So, you’ve bought into the benefits of migrating to cloud and you know some of the things to look out for. How do you move to successfully designing, building and managing a comprehensive cloud solution, capable of exploiting the full possibilities of this incredible technology and maximising the return on your investment?
From a C-suite perspective, this challenge is very similar to the issue facing a consumer who buys the latest smartphone but doesn’t understand how to use all those fancy apps and that super functionality: they end up treating it like a nicer-looking version of their old 1990s clam feature phone. It’s a sobering thought that nearly a third of enterprises don’t have the necessary skills or resources to secure their cloud infrastructure.
Delivering great service actually happens in two stages. First, you need to be clear about what great cloud-based service actually looks like for your organisation. And second, having done so, you need a clear roadmap for getting there – one that avoids all the speed bumps, detours and traffic jams along the way.
From your customer’s perspective, great cloud delivery offers all sorts of benefits but the big three are: agility, scalability and speed to market. Let’s look at them a little more closely:
One: Your cloud infrastructure can effortlessly keep pace with all changes in demand from your customers and clients, evolving rapidly so that it is effectively always state-of-the-art and never out-of-date.
Two: Capacity is always optimised as cloud technology instantly scales up and down to meet those unpredictable spikes and dips in demand. An outage, even momentary, is a cardinal sin in the minds of the modern customer.
Three: The modern customer demands excellence and expects an always-on, 24/7 seamless customer experience. Clients don’t want version 1.0 when everyone else is on 4.0.
Those are the compelling headline benefits, but they have to be earned. The typical cloud journey has a steep learning curve and, for those organisations who grew up in the data-centre era, it requires a huge change of mindset and a very particular set of skills.
That can sound daunting but investing to create a Cloud Centre of Excellence, or working with a cloud managed services(CMS) provider who understands your business, can make all the difference. It will flatten that almost vertical learning curve, accelerate your journey to great cloud service and make it a much more pleasant ride.
Essentially, bringing in proven cloud expertise is the equivalent of parents getting their tech-savvy, digital native kids to show them how to make a TikTok video. The kids grow up with it and understand it innately while happily posting away and keeping up to speed with all the latest app features. They have the whole family at it so teaching you isn’t going to be a problem.
This analogy rings very true in practice. Gartner estimates that organisations that have done little or no cloud cost optimisation may be overspending by 70% or more, largely by learning on the job what an experienced team, who understand born-in-the-cloud solutions, could easily do for them.
When you get the TikTok dance routine wrong, you just look silly. But getting it wrong as an enterprise can leave you saddled with technical debt, increased risk and a loss of competitiveness as you start to go backwards rather than progressing.
Avoiding typical roadblocks to great cloud service is straightforward, if you know what the potential problems are and how to address or even avoid them. Here are the three classic cloud barriers to delivering great service along with the fixes that will keep you straight.
One | The DIY disaster:
Anyone who has ever tried to cut their own hair or rewire their own house knows that the initial sunny optimism of ‘how hard can it be?’ quickly gives way to remorse, regret and an urgent appointment with experts who really know what they’re doing. Your in-house IT team has many skills, but cloud is a whole different approach and a different mindset. Often, the end result of this DIY approach is that you end up with a cloud solution that simply isn’t ready or fit-for-purpose for the workloads it needs to bear.
You need cloud native smarts from the outset. True, cloud is about automation, but it also depends upon people, very specialised people. You will need strong leaders, cloud architects, compliance experts, security specialists and cloud engineers that all have hands-on experience of operating in public cloud. The roles are similar in name to the data centre, but the mindset and the approach is very different. Talk to a fresh thinking provider early on in the process so that they can set you off in the right direction. Getting advice from a cloud professional services and managed services provider who truly understands public cloud from the outset makes delivering and maintaining great client experience much easier in the long run. Even if you’ve made the move and it isn’t delivering on your business case, they should still be able to help you steer the ship back in the right direction.
Two | Don’t know what you don’t know:
The business case is approved and you’ve started the cloud journey, however it’s taking ages to get to market and ramping up your overheads in the process – that’s not a good look for a cloud-enabled business. Lack of familiarity with the governance issues could lead to you spending a lot of money later on in costly remediation work. Your cloud operations are cumbersome and you are feeling slow and stiff rather than fast and agile.
Work with veterans, not rookies. A CMS team who have a proven track record of success and who have been there and worn the t-shirt can help you avoid the pitfalls and get it right first time rather than eighth time. If they partner with you successfully, focussing on supporting your business outcomes, you can learn from them for as long as you need and you should be able to bring it back in house when you are ready. They will work to make the machines and the code take the strain. Automating your cloud infrastructure deployments and embedding best practice ways of working.
Three | Observability:
Designing a cloud infrastructure that has improvised, lashed-up security, is full of holes and flunks its security and regulatory exams can do your organisation more damage than good. And the threats and risks don’t just come in the traditional guise of hackers and black-hat bad actors. The very ease and simplicity of doing business with leading Cloud Service Providers can backfire if your internal protocols and processes are not robust. You need strong policies as well as technical guardrails in place to ensure that the blank canvas of a cloud provider is tailored to how you and your organisation wish to use it, or you could be looking at a major security risk of your own making. Without proper management, the flexibility of a cloud platform can be your own downfall. It’s possible to spin up a server that’s inadvertently open to the world in literally seconds. Within 15 minutes, you could be looking at a major security risk.
Just as you need to keep an eye on that digitally-savvy 10-year-old to stop them maxing out your credit card on every new game release, an expert CMS provider can help you gain that panopticon view of cloud safety, security and cost management. The classic panopticon is a central observation tower that allows guards to keep an eye on everyone all the time. The cloud equivalents are the digital guardrails, which stop people inadvertently causing risks and impacts to your business.
Understand what the required standard security and compliance procedures are, adopt them from the very start, and integrate them into your architecture.
Choosing the right CMS provider is the basis for a powerful partnership that will deliver success. The most experienced and expert CMS teams have already fixed every problem you are likely to encounter and know how to tune your cloud for customer experiences that are optimal rather than just adequate. What’s more, a successful CMS partnership will boost your innovation culture by freeing up your IT team from the tyranny of tickets to working on added value customer experiences.
This forms part of a series of articles written by Deloitte’s Cloud experts to help you get to grips with the opportunities, and some challenges, associated with Cloud Transformation. View the full series of articles here.
*How CIOs are redefining value in the post-pandemic world*
By Christina Johnson, EMEA Staff Writer
As we know, the pressure on technology leaders has never been more intense, and COVID-19 accelerated the adoption of new tools and practices in completely new ways. In this article I’ve rounded up some recent research related to the value CIOs can get from adopting new technologies – and how advanced technology uptake has a significant impact on revenue growth and operating margins.
When we look at McKinsey’s annual IT survey, they asked nearly 700 CIOs about various transformation initiatives. And more than three-quarters of the initiatives their companies pursued have produced some, or significant, cost reductions and improvements to employee experience. What’s more, over two-thirds of respondents say these change efforts increased revenue from existing streams, and more than half cite the creation of new revenue streams such as a new product line or new business (see Figure 1).
It does go without saying however that simply adopting technology will not deliver optimal value. But when automation is deployed effectively – and sometimes alongside hybrid cloud and AI – it can create substantial benefits.
IBM’s ‘The CIO Revolution’ study explores how CIOs are driving transformation and business value in the midst of uncertainty. And one thing it looks at is the ways in which technology leaders are delivering business value. IBM surveyed 5,000 C-suite CIOs and CTOs, and assessed them on three measures of their technology function:
Technology maturity – the stage of their cloud, AI, automation and security journeys
Technology effectiveness – their agility, data management, governance and resilience
Technology ROI – the return on their technology investments, normalised by industry
And the results make for an interesting read. They indicate that organisations reporting higher technology maturity, effectiveness and ROI achieved better business performance. In particular, financial gains accelerated during the pandemic – and organisations with higher technology measures enjoy a substantial advantage over their peers.
A strong CIO-CTO partnership is key
IBM also found that organisations enjoyed additional financial gains based on the strength of collaboration between CIOs and CTOs. Companies in which the CIO and CTO both work together and define each other as ‘strategically critical’ had operating margins 32% higher than those that didn’t.
What’s more, businesses with strong collaboration and high technology measures reported operating margin improvements that averaged 39% above organisations with low levels of collaboration and low technology measures.
So, it’s clear that combining an advanced technology function with a strong CIO-CTO collaboration has a significant impact on revenue growth and operating margin (see Figure 2).
Gartner forecasts that by the end of 2022, the share of workers working remotely will increase to 47% (up from 27% in 2019). And if you’re looking to attract and retain the necessary IT talent, it recommends:
Designing a human-centric workplace: This allows innovation and performance to thrive, and that focuses on what impacts employees’ ability to perform and be productive – wherever they may be.
Harnessing the power of business technologists: According to research, 41% of employees identify as business technologists, meaning they report outside of IT departments and create technology or analytics capabilities for internal or external business use. Organisations that successfully enable business technologists are 2.6 times more likely to accelerate digital business outcomes than those that don’t.
Building an internal talent marketplace: Internal talent marketplace platforms use AI and skills data to support business demand for reskilling and flexibility in connecting workers to roles and short-term assignments. These marketplaces identify what talent exists in the business, what the talent knows, what they have worked on, and with who. This gives access to a broader talent pool, and provides more growth and development opportunities for employees.
CIOs can’t go it alone, so IT leaders should focus on three types of partner connections: one-to-one, one-to-many and many-to-many.
A one-to-one connection can be taken to the next level where the enterprise and technology partner work together to create and build a solution that doesn’t currently exist. The resulting assets are co-owned and produce benefits and revenue for both partners.
Beyond one-to-one connections lies the formation of ecosystems of multiple partners. One-to-many partnerships work best when a single enterprise needs to focus many players on jointly solving a single problem – such as a city bringing together public and private entities to serve residents.
Many-to-many partnerships are created when a platform brings many different enterprises’ products and services together, to be offered to a host of different customers. Often called platform business models, these marketplaces and app/API stores enable the many to help the many at ecosystem scale.
3. Reach beyond the ‘where’
When the ‘where’ of work, innovation and business value shifts, it allows CIOs and IT executives to reach beyond the constraints of current thinking.
Daryl Plummer, Distinguished Research Vice President and Gartner Fellow, says: “CIOs need to reconsider how they think about value, and how they get to that value. They need a more expansive view of the role technology plays in doing so. And they must be bold to reach beyond the ‘where’ to discover freedom.”
Gartner analysts say that technology can help CIOs gain freedom from historical insights, legacy business practices and bias. And freedom from historical insights allows CIOs to use technology to solve world-class problems which may help uncover new sources of value.