As we continue into our second year of Rise with SAP, the list of accomplishments we’ve helped garner for thousands of businesses and their customers worldwide continues to grow.
But as many companies find themselves still in the early adoption phase of their digital transformation, it’s easy to forget that significant enterprise-wide changes like these require a well-defined digital strategy and conversations around more than just the bottom line. Your digital strategy must account for how cloud-based solutions can impact culture, behavior, even sustainability.
I’d like to insert some nuance back into these conversations and help you redefine the particular benefits to your organization’s move to the cloud in less technical terms.
What does it mean to have a cloud mindset?
Over the years, we have heard many individuals with unique definitions of what the “cloud” is and what it means to have a “cloud-mindset.” For businesses, this evolving list of definitions has done little in the way to offer strategic guidance and even less for evaluating the systems most at risk. A cloud-mindset today should be defined less by where it will be implemented and more by its enterprise-wide significance and the possibility for continuous insights to optimize all business processes, holistically.
First, let’s be clear about what it means to run in the cloud.Historically, companies hosted their data servers at their facilities and hired staff to maintain these servers. This proved costly for non-value-added tasks, as discussed by Gartner in the following article about cost optimization. To be ready for the cloud means, you are ready to let another organization maintain your servers which contain your data and applications for you. Hence, to run in the “cloud” means you are no longer hosting your servers in your facility; rather, you are leveraging the expertise of organizations that specialize in hosting and maintaining servers for you, thereby freeing up your time, money, and people for other value-added tasks that will be more profitable and aligned with your organizations’ values, aspirations, and ultimate mission.
Why is cloud the way to go?
Being cloud-based allows you to focus on the fundamental operations of your organization while letting other technical experts maintain your servers for a fee. Customers need to focus on their expertise, creating competitive differentiation, increasing their market share, and thus profitability, and let go of non-value-added tasks like maintaining servers 365 days a year. Maintaining your own private infrastructure is costly and time-consuming; from the initial purchase of the servers to hiring the skilled staff, to performing ongoing maintenance and upgrades. These costs can be slashed drastically by moving to a cloud-based service where the cost is reduced to a recurring subscription fee that includes the use of the hardware, the support of maintenance staff, and all ongoing upgrades and continued monitoring. Allowing your organization to obtain the industry-specific capabilities it needs, and the cloud benefits you want.
To “run cloud” essentially means you are running the latest and greatest in technology because of the automated system upgrades to the newest version. In the cloud, the intent is for you to keep the software at the most current version, keeping up with the software’s monthly, quarterly, or bi-annual upgrades and maintenance schedule without waiting years for innovations to become available in your applications. Whether you are on a public cloud, where the upgrades occur at set dates and everyone on the shared server is upgraded at the same time, or you are on a private cloud where you select your preferred upgrade dates, the goal is the same: by staying current and up to date, you are getting the MOST of your business’s technology solutions.
An everyday example of a cloud-mindset in the non-computing world is car leasing, as opposed to purchasing your car. You're moving away from making a large payment upfront for an asset, to a recurring fee for the term of the lease; this is very similar to the server on the cloud concept. Additionally, with car leasing, many manufacturers are now offering servicing included in the lease, hence the “maintenance” is no longer your concern. Also, when the terms of the lease are over, you simply return the keys of the leased car and get a brand-new car with the latest and greatest in-car technology. See the resemblance?
What are some other non-computing world comparisons you’ve heard your colleagues use to explain a cloud-mindset?
Are you fit to standard?
This should be on the list of questions organizations ask each other before going into business with one another. Why? Because we know that organizations that leverage best practices, adopting standards as much as possible for non-differentiating functions and processes, leverage their enterprise software the way it was designed to operate, which means running with best business practices. When running with best business practices, you drastically reduce the risk of a process breakdown because you’re no longer relying on modifications of the enterprise software’s logic. Software logic has a long list of attributes that tend to increase the risk of process failure.
But wait, will ‘fit to standard’ squander me my competitive advantage?
Many customers find that it’s the complete opposite – they run more efficiently and capture their ‘secret sauce’ in how they use their analytics by focusing on developing predictive skills and other emerging technologies.
Pre-configuration with a cherry on top?
It’s about speed and efficiency. Cloud software offers an easier and faster implementation because the intent of the cloud is not only to run standard but to also offer options that are pre-configured for the customer. The question is, how fast do you want to be live and running in your new enterprise software? If the answer is ASAP, then you’re looking to adopt the vanilla configuration which refers to using the software without modifying it specifically for your needs. However, there are some minimal setups usually available to personalize your software for your organization. Vanilla software doesn’t have to be flavorless! In Cloud computing, the vanilla software is anything but vanilla! Over the last several years, cloud software has become more flexible which allows you to choose all sorts of toppings to make your enterprise software run how you like it, all-the-while keeping the foundation as vanilla (or standard) as possible.
Cloud software goes well beyond just handling your operational needs. It can provide a full suite of capabilities that tie your operations to the experience of your customers, employees, suppliers, etc. using the best in software analytics, artificial intelligence, machine learning, and more, depending on your selected software provider.
Would You Like some OpEx or CapEx?
Why does it matter? It matters a lot because of the financial impact it has on the bottom line. OpEx means Operating expenses, whereas CapEx means Capital expense. These terms are explained further in this article. This consideration matters because technology is always changing, so investing a large sum of money upfront for a server (in other words, making a capital expenditure) is not the best use of your money in the forever-changing world of software. When an asset is changing at a rapid pace and requires skilled labor to maintain it, it is most often less costly to simply outsource to the experts. By outsourcing, you are making an operational expenditure by paying a recurring subscription fee for a service that you are receiving, month to month, rather than making a large up-front purchase for something that will depreciate very quickly.
Which cloud is my cloud?
Yours is the one that works best for your business. That’s the biggest benefit of the cloud there is – it’s 100% complete and customizable to your organization. What makes your cloud, yours? Let’s do the always-helpful recap:
The subscription model is where cost is spread equally across the term of the contract, therefore no huge upfront investment(s).
Freedom means if you’re unsatisfied, you can walk away if it doesn’t meet your needs.
Focus and invest in your core competence(s) rather than wasting efforts and costs associated with infrastructure-related upkeep.
Be a VIP. All cloud customers become VIPs because, in a subscription model, the customer’s satisfaction is of the utmost importance for recurring contracts.
Never be out of date, never stop improving. You’ll always be running the most optimized version of your systems, and the insight gained from an always-current operating model means you’re not only running the latest and greatest, but you’re also running at your best.
Resiliency in a changing world
The pandemic and its buffeting economic effects have given us more than a little nudge into a cloud-ready world, they’ve catapulted us into a new cloud-driven era where big changes happen faster than ever before. The cloud has allowed businesses to embrace remote work, face down supply chain disruptions, and turn data of all kinds into a wellspring for growth and innovation. It’s no longer simply about the bottom-line, in this new cloud era run on continuous improvement and optimization, growth potential is top-line, bottom-line and green-line.
Have questions? Want to know more? Let’s further the conversation together.