Today, multinational corporations with both the will and the resources to adequately fund in-house IT operations are at the front of the queue for cloud solutions. For example, Hong Kong-based Kerry Logistics Networks does logistics, freight forwarding and supply chain solutions, with 20,000 people in 32 countries. "The cloud could be very important for us. It is critical to make the right decision—because of the geographical spread of the business, one wrong decision would be very costly," said Wilson Lee, IT director, Kerry Logistics Networks.
The cloud is also perfect for scalability. "We used to meet our IT budgets," said Lee. "Now, when we acquire a new company, our boss may ask us to integrate IT for 5,000 staff in three months. If we build that capacity in-house, there will be a lot of wastage. With the cloud, I buy bandwidth for client devices and then scale it up."
Perhaps Neville Burdan, general manager for virtualisation and Microsoft solutions at Dimension Data summed it up well. The success an organisation could reap from cloud computing lay in its ability to align its technology and business needs. "Cloud is a business model, not just technology. It does not provide all the answers, but will make the business more efficient if utilised properly," he said.
Achieve cloud economics
According to Forrester Research, cloud computing has reached a point where a comprehensive strategy for its use is now required. Until now, most companies had adopted cloud services in an ad hoc fashion, driven mostly by business leaders and developers looking to deliver new systems of engagement they felt could not be delivered by corporate IT, or in the time frame required.
These ad hoc experiences prove that cloud solutions are now ready to be strategic resources in enterprise business technology portfolios. CIOs can help the business strike the right balance between the agility, efficiency, security, compliance, and integration that's required for a successful cloud strategy.
"Cloud computing in its various forms is helping many CIOs drive greater business responsiveness," said John R. Rymer, vice president and principal analyst at Forrester Research. "Enough so that most enterprises have adopted cloud computing in some form—usually a collection of software-as-a-service offerings. But cloud solutions now offer cost optimisation, security, and quality of service for the full range of enterprise requirements, not just tactical needs."
Thus, it is time to make cloud strategic, rather than a disconnected set of initiatives. CIOs need a playbook to create, implement, and optimise an end-to-end cloud strategy, he added.
Rymer also said that the cloud strategy must achieve three goals:
- Establish the measurable business value of the new technology. "Obviously, we believe cloud's primary role should be to ramp up the IT organisation's business responsiveness via 'systems of engagement,' which are separate from your systems of record," he said. "The business value of systems of engagement is found in revenue growth, customer retention, lifetime customer value, and similar measures—not in IT metrics."
- Make space in your portfolio for cloud capabilities. "Start by recognising cloud computing as an additional set of IT solutions and platforms, not necessarily a replacement for your existing portfolio," Rymer said. "Think back to the advent of Web technology during the mid-90s. Enterprises had to open up their IT strategies to make space for new types of applications, talents, technologies, and vendors. Cloud is a similar change."
- Start the organisational change management. "Adoption of cloud as a strategic technology will require changes in the way a CIO's domain operates—in every dimension," Rymer said. "The IT organisation will emphasise consultative service delivery rather than rigid controls to ensure integrity and efficiency. Notions of openness and freedom of choice will evolve. The organisation's relationships with business leaders will be more collaborative than they've ever been. The strategy should identify the most critical changes as top priorities and sequence broader changes over time to avoid chaos.
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