Is your company suffering from "cloud indigestion"?
For many organizations, the competitive advantages of cloud services -- being able to deploy a ready-made IT solution that is cheaper than what they could produce internally -- is game changing. But there are also many companies that are starting to make their way past the initial blush of cloud enthusiasm. They are finding themselves mired in operations and workflows that don't really work with the cloud solutions they have adopted. Hence, they have cloud indigestion.
What are the causative factors?
The No. 1 culprit is old workflows and habits that refuse to die -- yet must. "Some of our customers buy our cloud solution and then immediately start trying to replicate manual processes within … the cloud," lamented one supply chain cloud services CEO.
The prevailing thought in companies like this is that the main reason you're buying into cloud is so IT doesn't have to develop or continue to support an internal system. No one realizes that a cloud computing model also changes how people work.
A successful cloud environment is based upon networking and information sharing, coupled with a system of permissions that gives different people in the cloud different levels of access to the information. Many companies fail to understand that this approach to shared information eliminates any need to "transfer" information via hard-copy invoices, computer spreadsheets, or files.
"We find many of our customers totally caught up in this initial replication of paper-shifting and operations that they have always had," said the supply chain cloud services CEO. "They even follow the same user-unfriendly file naming conventions that they used before they went to the cloud!"
The way that most organizations solve technology transformation issues like this is with a management team that explains to employees why workflow revisions are needed, how the revisions will benefit the company -- and then provides support and training while operations are revised.
Herein lies culprit No. 2, because in many of these companies, it is management, which grew up with the same tried-and-proven procedures and workflows, that is most resistant to operational adjustments due to cloud.
How can companies break the cycle that keeps them from taking full advantage of their cloud investments?
First, vendors need to demonstrate use cases when they sell services. If you are providing a cloud service and you want your customers to still be with you when contracts come up for renewal, you should be doing more than just selling a solution, installing it, and performing basic training on how the solution works. The cloud service providers that will be most successful in retaining customers long term will be those who stand in the shoes of their clients, dig down into client work processes, and work alongside their clients to assist them in operational adaptations so clients can gain all of the benefits.
Second, management needs to understand the tactical as well as the strategic implications of cloud. Often, the facilitation of this process falls to the CIO. It is the CIO who must articulate that cloud computing is not just substituting on online IT system for an in-house one. Cloud will also transform company operations. The more that C-level executives and high-ranking managers understand and buy into this, the more cloud-enabled the company is going to be.
I agree with culprit #2 that senior management needs to understand the solution as well as look past what's on the surface. I think sometimes companies try to keep up with the latest technology or try to do what the competitor is doing without fully understanding how the solution impacts the business. That's why I feel it is so important that end-users along with IT support staff are fully engaged or at least have a voice when deciding on a new solution since they are the ones that will work with it on a daily basis. They can provide much insight on how the solution would fit their current business processes or how they could improve the process. This way, senior management could get rid of or at least minimize indigestion when making a decision.
True, Kim. It makes sense to scrutinize processes and procedures fairly regularly. It's not necessarily comfortable, but typically just because we've done something a particular way for years, doesn't necessarily mean it's the 'best' way to do it! With new technologies becoming available, chances are we have new tools at our disposal that can save time, remove paperwork, eliminate manual processes, or improve profits--but only if we look for them.
It's also great, when moving to a new approach, to use a consensus-building approach that allows a department or organization to reconsider existing practices and procedures, especially if it's moving from a paper-based to digital process as you mention. Ownership can help prevent people from relying from tried-and-true, but often unwieldy and antiquated, methods!
It seems that to succeed, vendors of cloud services need to not just focus on technology, but also on redesigning customer business processes. Not the first time this has happened with enterprise technology, and probably not the last.
Very apt way to describe an enterprise's lack of adjustment to cloud services, Mary. It never occurred to me that indeed, using cloud isn't the same as using services that are simply located elsewhere. The underlying connections and updates make it a new paradigm for day to day tasks.
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