Cloud for digital business

For a while, busi­ness lead­er­ship con­sid­ered cloud com­put­ing mere­ly as a smarter way to do IT – with smarter most often mean­ing faster, bet­ter and, espe­cial­ly, cheap­er.

The part about the cloud being faster is cer­tain­ly true. Many a com­pa­ny finds their IT depart­ment is able to respond sig­nif­i­cant­ly faster to their needs by using cloud ser­vices. And if not, they gain speed by going rogue, sim­ply bypass­ing their IT depart­ment and going straight to the cloud them­selves.

Cheap­er is a dif­fer­ent ques­tion. Even though cloud providers, such as Ama­zon Web Ser­vices, Microsoft Azure and Google Com­pute Engine, con­tin­ue to low­er their infra­struc­ture ser­vice prices, many com­pa­nies find that the cost of infra­struc­ture is only a very small part of their total IT cost. So the use of the cloud is not nec­es­sar­i­ly mak­ing over­all IT sig­nif­i­cant­ly cheap­er.

In response, per­cep­tion of the cloud phe­nom­e­non is shift­ing from mere­ly a smarter way to facil­i­tate “busi­ness as usu­al” to the best way of mov­ing com­pa­nies into the new age of dig­i­tal busi­ness.

Dig­i­tal has tak­en the busi­ness com­mu­ni­ty by storm. After decades of IT lin­ger­ing at the bot­tom of the annu­al chief exec­u­tive top ten pri­or­i­ty list and cost reduc­tion becom­ing the most dis­cussed aspect of IT in board­rooms across the world, the idea of gain­ing com­pet­i­tive advan­tage through dig­i­tal capa­bil­i­ties is back with a vengeance.

Per­cep­tion of the cloud is shift­ing to the best way of mov­ing com­pa­nies into the new age of dig­i­tal busi­ness

Grant­ed, new imag­i­na­tive capa­bil­i­ties, such as 3D print­ing, smarter deci­sions through big data analy­sis and the poten­tial of reach­ing out direct­ly to mil­lions of con­sumers through social net­work­ing tech­nolo­gies, did more good to the momen­tum of dig­i­tal than IT depart­ments find­ing ways to run their exist­ing enter­prise resource plan­ning sys­tem “in mem­o­ry” or “on Ama­zon”.

This made some argue that dig­i­tal busi­ness should not reside under the cur­rent chief of infor­ma­tion pro­cess­ing and indeed we are see­ing the new role of a chief dig­i­tal offi­cer or CDO emerge in many organ­i­sa­tions. Some old-school chief infor­ma­tion offi­cers (CIOs) may wor­ry that these fast-mov­ing CDOs have the same dev­as­tat­ing impact on IT’s role as that oth­er type of CDO, col­lat­er­alised debt oblig­a­tion, had on finan­cial mar­kets in the wake of the sub-prime cri­sis.

Oth­er CIOs can­not wait to embrace the role them­selves to get back into mak­ing a real dif­fer­ence by using the cloud to run what could be described as “soft­ware-defined busi­ness”.

Over time, dig­i­tal busi­ness will make dig­i­tal resources as impor­tant to com­pa­nies as today’s most men­tioned crit­i­cal suc­cess fac­tor – human resources or HR. And just as busi­ness­es did not con­cede day-to-day con­trol over their human cap­i­tal to a cor­po­rate staff depart­ment, nei­ther should we expect them to do so with dig­i­tal.

Already we see lines of busi­ness tak­ing a more active role in defin­ing their dig­i­tal future. For exam­ple, by bring­ing archi­tects and devel­op­ers back into their line organ­i­sa­tion. That would mean the emer­gence of “rogue” or “cit­i­zen” IT is not a pass­ing fad, but a sign of times to come.

To man­age this change, cor­po­rate IT will need to eschew its tra­di­tion­al ser­vice provider role for a bro­ker­ing role, sim­i­lar to the role of cen­tral HR in cor­po­ra­tions, to pro­vide the cru­cial gov­er­nance, com­pli­ance and busi­ness con­ti­nu­ity still need­ed in the ever-faster mov­ing dig­i­tal econ­o­my.