August 15th, 2017
Our CEO, Chris McNabb, recently wrote in a blog post that adopting a “cloud-first” strategy is a business imperative. Organizations must become experts in managing their cloud applications and data to compete in our hyperspeed and brutally competitive age of digital transformation.
I want to follow up on Chris’ key insights with some practical considerations for how organizations can set themselves up as cloud-first businesses. By doing a little bit of homework, your company can more effectively take advantage of SaaS, IaaS, PaaS and other IT management innovations.
A cloud-first strategy requires that you develop a cloud-first culture, establish a disciplined business approach, and ensure interoperability across hybrid IT environments.
Hybrid IT has emerged as the new normal for enterprise computing. More than 80 percent of organizations run on-premise systems in tandem with cloud applications and infrastructure, a study by the IT software management vendor SolarWinds found.
As Chris wrote in his blog post, we can expect the hybrid IT model to prevail for the foreseeable future, at least five to seven years. Over that time, the percentage of cloud systems will continue to grow. Just 32 percent of applications will be entirely on-premise by 2019, a survey by 451 Research found.
So if everyone is moving to the cloud, won’t all your competitors reap the same cloud-first rewards of business agility, customer focus and cost-efficiency? How can an organization gain a competitive edge?
In helping hundreds of Dell Boomi customers move to the cloud, I’ve observed several factors that can make or break success.
Create a Cloud-First Culture
Creating a cloud-first culture should be driven from the top down, typically by the chief information officer and backed by other C-level executives. Depending on the size of the organization, steering committees at the line of business or product level can be useful for devising strategy and putting it into action.
Unfortunately, lots of businesses don’t formalize their cloud strategies. As a result, their decision-making is tactical and not consistent. That’s one reason behind the surge in “shadow IT” cloud applications deployed independently by business users without IT involvement or oversight.
So now, IT teams have to wrestle with interoperability, security and compliance issues involving shadow IT. It’s a costly diversion that can be avoided with a high-level framework for guiding how an organization approaches its cloud transition.
In shaping a cloud strategy, I’ve seen companies take two main approaches. First is a loosely defined incremental approach: “We think cloud is good, we’ll make our moves as opportunities arise.”
The second approach is more aggressive…and more effective: “We want to go all-cloud as soon as possible, we’ll manage by exception.”
Exceptions refer to instances in which it may make sense to leave a mission-critical on-premise application in place, often for security or compliance reasons. Funding commitments for renewed application licenses or server deployments may be other factors. Otherwise, it’s full speed ahead.
A cloud-first culture thrives on knowledge and inspiration. Think about ways to expose your key personnel to the latest in cloud best practices. Attending cloud technology conferences, like Boomi World coming up in September, is a great way to galvanize the organization and accelerate your payback.
Manage the Business Case
But what exactly is your payback from getting on a cloud-first fast track? Many organizations simply don’t know.
They may have anecdotal evidence of savings here and efficiency gains there. But it’s impossible to quantify ROI. They didn’t baseline their previous systems and didn’t closely track their improvements.
Organizations that do manage a cloud business case have insights into results. Those can be critical as the transition evolves. A good measurement system highlights payback and raises red flags if results don’t match expectations. That way, you can accelerate, slow down or otherwise refine your strategy. It provides clarity and helps you eliminate second-guessing.
The pharmaceutical giant Novartis is a great example of a company that documented its ROI from replacing two on-premise middleware integration systems with the Boomi integration platform as a service (iPaaS). With Boomi, Novartis realized cost savings of 75 percent while deploying twice the number of interfaces in one-sixth the time previously required.
As Novartis illustrates, the cloud business case is a dynamic organism that needs to evolve over time. Cost, speed and economies are three main factors to account for.
Cost. Document costs of on-premise systems in terms of software licensing, server and storage costs, IT personnel to handle upgrades and maintenance, and any third-party consultants used.
Speed. Size up time needed to deploy a new application on-premise vs. a cloud model. Factor in workforce time savings achieved with anywhere, anytime system access, as well as efficiency gains seen through process and workflow automation.
Economies of scale. Extrapolate cost and speed factors across the organization, over multiple years, to approximate your ability to scale operations in a cloud-first environment.
Hybrid IT poses a big challenge in ensuring interoperability between cloud applications and on-premise systems. So does an all-cloud environment. Applications need to integrate and share data to function effectively. Otherwise, you’re left with silos that leave your personnel to manually piece together information.
Integration isn’t a new challenge. For decades, IT teams have used on-premise middleware like extract, transform and load (ETL) tools and enterprise service buses (ESBs) to connect systems and exchange data.
That outdated middleware doesn’t cut it for the cloud-first enterprise. A recent Boomi ebook, “7 Warning Signs You Need to Replace Your ESB,” outlines the reasons why — most of them around cost and speed factors.
Cloud-based iPaaS has overtaken on-premise middleware as the approach of choice for new integration projects. And for good reason. It’s faster, less costly and more flexible.
iPaaS speeds and simplifies cloud-to-cloud integrations, such as connecting Salesforce and NetSuite. You don’t want to try doing that with on-premise middleware. Custom-coding is always an option if you don’t mind months of labor-intensive development — and having to start from scratch for your next integration project.
And iPaaS flexibility lets you connect on-premise and cloud applications, offering cloud-native connectivity not present in on-premise middleware. That same iPaaS flexibility equips you to pursue innovations with mobile, Internet of Things and social systems.
As cloud adoption continues to grow, we’re seeing big gaps emerge between more agile businesses buoyed by the cloud and those that remain stuck in an on-premise status quo.
Gaps are also emerging among cloud-first organizations, based on the path they choose. The long and winding road may be nice for a Sunday drive, but it’s no way to transform your business.
An aggressive fast track to the cloud, based on smartly conceived strategy, execution and technology choices, gives you a much better chance of success at fulfilling your business objectives in the near term and beyond.
About the Author
Michael Morton is Dell Boomi’s chief technology officer.