The cloud is everywhere and the cornerstone of future business strategies. According to Gartner, the cloud is the centerpiece of creating digital experiences resulting in global cloud revenues totaling $474 billion by the end of 2022.
As cloud investments grow, organizations are experiencing challenges and are focusing on people, processes and technology to get adoption right.
What do we mean by cloud adoption?
Cloud adoption is when an organization moves existing workloads and legacy estates to the cloud, while using the virtual environment to innovate and build new products and services that would not be possible on-premise or utilizing traditional technologies.
Solving the cloud adoption challenge
In pursuit of successful cloud adoption and resulting innovative products and services, organizations will face several challenges.
According to Ryan Seaman, Global Head of Transformation Strategy and Programs at AWS one challenge stands above the rest, “The main challenge is a lack of alignment on the target business outcomes.
“When large organizations move to the cloud, there's lots of people who have a vested interest. This means any adoption will have multiple stakeholders that are expecting multiple outcomes. A single cloud strategy can't serve everyone.”
Seaman expands on this illustration. "We often see customers build a single strategy to meet a variety of business outcomes. The reality is that building one strategy to satisfy this typically doesn't work, because they require different approaches.
According to a McKinsey report, this misalignment in coordinating cloud adoption efforts has contributed to 75% of projects going over budget and 35% being behind schedule.
To overcome this, organizations need to focus on their core objectives. Some core objectives include creating new revenue streams with new and innovative products, improving data and analytics capabilities, moving into new markets, growing sustainably, enhancing the customer journey, managing inflation in the current climate and reducing the cost of business operations and the IT environment.
Organizations need to consider and prioritize which business outcomes are going to be improved and which area of the business will be impacted.
Sarita Borgenicht, Partner Program Lead – AWS Enterprise Transformation, adds: “Customers really need to focus on connecting cloud adoption very directly to business outcomes. They can do that by identifying the business’ key objectives and then creating product teams to solve those objectives through cloud adoption.
“The goal is to create connective tissue between the technical work that must happen and the outcomes that the business really cares about. That way the business is crystal clear on how migration and modernization can help them achieve their goals.”
Another ubiquitous cloud adoption challenge surrounds talent. Insufficient skills and resources have been cited by industry analysts as the main challenge for both infrastructure and operations leaders.
A lack of technical skills will lead to cloud adoption pain points.
“The skills gap can be solved with training and certifications, but experience adds another layer of complexity. There's no compression algorithm for experience. That’s why organizations are turning to partners like HCLTech and AWS professional services to work side by side with customers and embed skills into the customers’ product teams,” says Borgenicht.
Instilling a new mindset for successful cloud adoption
To maximize value in the cloud, organizations need to think and do things differently. They need to adopt a nimble, proactive, and innovative digital-first mindset. This includes embracing new organizational structures and new operating models.
“When we look at customers that successfully adopt the cloud, they have a very different profile than customers that do incremental migrations and modernizations,” explains Borgenicht.
She continues: “Traditional firms take one to two years to get new products to market. With firms on the other side of their cloud transformation, they do this much faster in between eight and 12 weeks.”
These high performing companies are structured differently to traditional organizations. They’re nimble, efficient, more focused on the customer and constantly making changes to address customer requirements.
In addition to embedding a digital culture and reorganizing operations, these businesses have also focused on building and investing in the right engineering processes that drive automation in terms of how they're building their cloud capabilities.
There is a transition period for these traditional organizations wanting to adopt the cloud successfully and Borgenicht advises that “customers shouldn't try to reinvent new ways of working on their own”.
Instead, they should look at success patterns of other end user organizations who’ve done it well, while leveraging support from cloud providers, managed service providers and other partners who can support the entire journey of continuous modernization in the cloud.
"Organizations should instill a mindset shift that embraces success stories from other use cases and focuses on adopting cloud to solve customer pain points, as well as meet the business’ objectives,” she adds.
The AWS Enterprise Transformation Program
As mentioned, when organizations adopt a cloud operating model, they experience outsized benefits—such as faster time to market, increased innovation, cost reduction, greater business efficiency and even improved cyber resiliency.
“To facilitate transformation and cloud adoption we looked at customers that were already being successful and use these noticeable success patterns to build our transformation solutions, because we wanted to provide a meaningful and real experience journey to our enterprise customers,” said Seaman.
He adds: “There’s a list of customers who have been through this cloud journey successfully. We’ve taken the lessons learned—skills gap analysis, organizational restructuring, new team development and so on—from these experiences to calm the fears of other enterprises wanting to walk down this transformation path. We partner with HCLTech because they have the capacity to help our enterprise customers embrace the necessary changes for cloud adoption success.”
These types of partnerships are crucial for successful enterprise cloud adoption, which is why HCLTech and AWS announced the launch of CloudSMART for AWS, Continuous Modernization Experience to help enterprises worldwide accelerate their cloud business transformation journey.
According to Seaman, all three of those enterprises carefully planned their transformation journey in manageable chunks.
“They didn’t just think about getting off their old technology stacks and modernizing their technology, but also thought about how they could do different things with data, analytics and innovation,” he says.
Cloud transformation success in action: A global insurance company
Taking one of the world’s largest insurance companies as an example. It started its cloud journey with the goal of saving money on technology costs by displacing data centers. This resulted in the majority of the insurer’s footprint moving to AWS.
- At first, the insurer’s core assets, such as Guidewire Footprints which is used to manage back-office processes, were modernized
- Next came a project to make better use of the data that sits within those assets. AWS built an enterprise data lake that spanned the insurer’s footprint to increase access to data that was previously untapped.
- Finally, the global insurer took that data layer and laid analytics, AI and ML intelligence on top which led to new services, such as usage-based insurance products.
By making a modernization plan, the global insurance company was able to transform its business. It was able to save 30% on cost or 100’s of millions annually and improved the page load time on its website by 3x-10x, while migrating and modernizing 850 apps. This enabled the development of new products that used historical data to provide more personalized solutions to small and medium businesses. The organization even started going to Amazon Prime business customers with insurance recommendations based on data from its almost 100-year history.
"Once the global insurer experienced success with the modernization plan and cloud adoption, their ambition kept evolving. Modernization introduced many possibilities like utilizing data and analytics and AI and ML powered products that provide direct benefits to their customers. This resonated with the line of business and the CEO and launched the current cloud strategy that touches most of their IT footprint,” explains Seaman.
He adds: “The cloud adoption journey done right, with new innovative working models in the right parts of the business, meant that the insurer could modernize in a way that's useful for the business outcomes, but also set them up to innovate in the future.”
