Five reasons why the cloud can help CIOs close the ‘innovation-execution’ gap
Richard Munro, director, Global Cloud Strategy at VMware, looks at the five key, tangible reasons why the cloud can help CIOs close the innovation-execution gap many businesses are struggling with, and assesses the transformative potential of cloud.
Innovation is king. In the face of rising expectations and disruptive digital competitors, enterprises are desperate to innovate to safeguard their businesses and unlock future growth. Yet how often do we see many struggle to be able to execute? Look at Xerox, Kodak, Nokia. All big names that struggled to adapt to the changing demands of the market. Yet, interestingly, these companies often had “the next big thing” first yet failed to deliver on those innovations and instead found themselves ceding to others. Why?
People are realising that being able to generate ideas and being able to execute those ideas effectively - either in implementing new business models or turning ideas into business outcomes - are two different things. This was identified as the innovation execution gap by Cass Business School and VMware in the ‘ Innovating in the exponential economy ’ report. With fluctuating market conditions and the unpredictability of doing business in today’s global economy, combined with unprecedented speeds in technical innovation, organisations have to move faster than ever before. This has left traditional approaches to executing ideas no longer fit for purpose.
As the report outlines, to bridge that gap organisations need to finely tune their focus on putting the right people, process and technology into play and creating the right conditions for them to succeed.
People is really about the work culture. It’s creating, fostering and enabling an environment where individuals feel empowered to come up with ideas themselves, rather than assume it’s someone else’s job.
Process supports people. Deploying the mechanisms that allow those ideas to be captured, developed and shared effectively with decision-makers.
Underpinning it all is technology. It’s how we deliver, the digital foundation on which everything is built: the infrastructure, apps, services and devices which allow businesses to experiment, to scale, to be nimbler; people to work smarter and in new ways– often at speeds and with lower risk profiles not available before. The role of cloud computing in this cannot be underestimated.
The role of the CIO in transformation
That technology and process piece requires CIOs to be the instigators of business delivery. Many are already aware of this, and their role in delivering innovation. According to a report we developed with Forbes Insight , 46 per cent of CIOs say their function will be essential to fostering innovation within their companies.
How do they plan to achieve this? Even those that don’t realise it are taking steps in the right direction. In the past the questions for a CIO have been about the executional concerns of classic IT, which focused on when hardware could be procured and installed. Increasingly, however, they now are asking ‘when will I see results?’ They are looking for services that can be deployed and integrated quickly, and deliver results and value, even faster.
And this is where cloud environments can really help deliver.
Why cloud delivers the execution of innovation
There are five core ways that cloud is enabling organisations to execute innovation.
Firstly, it delivers. It is ‘sign up and go’ simple. Need additional licenses, servers, functionality, features, applications? If it’s delivered by cloud the acquisition and set up time is minute compared to on-premises classic IT. Speed in delivering new applications and services is now essential to business advantage, and cloud technologies provide a great sand-pit for experimentation. This is exactly why Amadeus, a provider of advanced technology solutions for the global travel industry, is using cloud - to help speed application development lifecycles to realize and respond to new business opportunities rapidly.
Secondly, it empowers users to be innovative. That speed and simplicity, combined with a re-imagined digital workspace, allows access to cloud native applications and delivers the heightened, intuitive experience employees have come to expect from the digital tools they use outside of the workplace. It means the technology is in the background, IT ceases to be an inertial barrier, and users get on with the task at hand.
Thirdly, cloud delivers financial freedom. Traditional IT required upfront investment to be hedged against expected requirements. Cloud changes that dynamic – with most services being subscription based, cash can now flow in the form that best meets the needs of the work being done. That means having the full flexibility of both capital (capex) and operational (opex) expenditure models to have both long-term spend optimisation and venture-style investment backing for trialling new services or applications. In other words, finance is no longer the blocker to experimentation and innovation, but becomes a strategic weapon.
Fourthly, cloud delivers scale. It allows organisations to scale up and down all of their resources as business demands it, quickly and without a high cost of change. This means a wide spectrum of our finite resources, including people and technology, can be aligned to shifting business priorities on a daily basis, rather than in quarterly cycles. This gets more out of investment, making it work harder as opposed to standing redundant, and mitigates the costs of deviation where changing course can result in exponential costs increases.
Finally, cloud offers access to shortcuts. That might be prebuilt platforms or X-as-a-service solutions – whatever it is, and whatever you need, it’s likely that, a version of it already exists. This is what allows digital native companies to scale rapidly. Take Uber – it isn’t all custom-designed code but instead uses other services to get the job done quicker. If you only have to develop a part of your offering from scratch and can augment it with off-the-shelf components that have already been delivered and proven, you will have a much faster, and less risky, time to market.
All cloud is not equal – why hybrid cloud is fundamental
That said, it isn’t as simple as listing five reasons and that being it. Consideration needs to be given to the reality of enterprise infrastructure. Most established organisations have a complex mix of legacy systems and applications, some of which are critical to the business, but simply can’t be moved wholesale. They may need to evolve, they may need to be decomposed, or they may simply have to stay where they are. To support all the ways of working we now need, we need consistency between our different environments and cloud platforms.
This is where hybrid cloud environments, such as VMware Cloud on AWS, come in. They act as the digital foundation that allows businesses to place applications where they function best, but also provide the flexibility to move services around as circumstances change. For the likes of IHS Markit, that has meant developing infrastructure across multiple cloud environments, including Microsoft Azure and Amazon Web Services. By taking a hybrid approach, with seamless connectivity across private and public clouds, it has been able to achieve frictionless IT, in a fast and secure way.
This is vital for CIOs looking to make any sort of transformational business case to their board. The CIO can take a line of business as an example project, use cloud to rapidly transform the necessary elements, and take those results to their leadership to prompt engagement and further sign off.
By being able to action change and deliver results rapidly, the CIO increases relevance. Rather than long term planning to “pilot this” or project plans to do “proof of concepts for that”, they have live use cases. In turn, they become the catalyst to turn the established business model into an innovative one.
Innovation is king, but a failure to execute is the death knell for organisations in all sectors. This gap exists because companies lack the ability to effect, and demonstrate the impact of, change without significant debate, sign off and drawn out decision-making. In these cases, silos are the enemy as more problems and barriers spring up around the things you are trying to change.
Cloud can help overcome the gap by providing the technology enabler people and process need to complete the innovation prism. Yet it cannot be a single cloud, but an integrated mix of environments with a consistency at its core to provide the digital foundation to unlock rapid results using the right technology, in the right location, at the right time. With this, the CIO’s hand is strengthened as they assume their role as the catalyst for transformative innovation.