Consult most major cloud computing studies, and you’ll find the biggest driver for cloud adoption is to cut costs. And, for quite a significant chunk of the Australian mid-market, possibly even your own organisation, this is also true.
However, it’s not until you get to number three or four (or even further down) on the list, do you see ‘innovation’ listed as a core driver. For all its ability to cut costs and create efficiencies, the cloud was built for innovation. It enables companies to remain competitive, getting new products and services to market quicker than ever before.
And it’s somewhat strange that more businesses don’t take advantage of this. Afterall, innovation is a vital focus for Australian mid-market organisations. KPMG’s Growth 2.0 report, highlights ‘adaptability, agility and innovation’ as one of five major priorities for the growth and success of this sector. Yet, few organisations are using cloud to its full potential as an innovation enabler.
The cloud – An innovation enabler
It’s often said that in increasingly commoditised markets, innovation is the only form of differentiation. Innovate or die. Traditional business models are being replaced in the face of continued market disruption. And, the mid-market is not immune to this. Business strategies and value propositions are quickly becoming obsolete, as someone arrives with a better, faster and cheaper alternative.
Cloud is the best way to keep pace with this. As development and innovation cycles grow increasingly shorter, shifting to a cloud environment will keep you in the game. Cloud technology has matured hugely over the years, making the creation of workloads extremely easy. Gone mostly, are fears around security and reliability as Australian organisations embrace its benefits.
And, the Australian mid-market is ripe for this new way of working. In the same KPMG report, almost 40 percent agreed the mid-market is nimbler and more ready to adapt to change than larger, corporate “dinosaurs”.
So, if the organisational conditions are right and the strategic priority is evident, why aren’t more Australian mid-market businesses using cloud as an innovation enabler? The answer lies in getting the right foundations in place.
Operational backbone
A strong operational backbone is needed to realise the full benefits of cloud innovation. And, developing that requires a number of capabilities to make that shift. Here are three we think are vital to get right if you want to take advantage of cloud innovation, namely a new mindset, talent and new ways of working.
Mindset
The starting point for many an established mid-sized business is to simply get their heads around the changes needed – and this is not often easy. Ingrained systems, process and ways of thinking make change very hard. But innovation requires a dramatic shift in mindset. And, based upon the current desire to implement cloud as a cost-cutting exercise, this could prove challenging for many.
Mid-market organisations must shift their mindset from removing cost, to a values-based approach. One that places innovation and agility at the very centre of the organisation. IT strategy is now the business strategy. It can no longer default to a traditional support role. When you consider the vast amount of time taken up with IT operational or support functions; automation for example is essential.
The business relies upon IT to be an enabler of competitive advantage, driving transformation. As such, the types of conversations IT has with the business has to change.
From, “How do we keep things running?”
To, “How do we work together to drive greater customer experiences and boost revenue?”
IT needs to understand and help set the business agenda.
Talent
According to a report by Deloitte Access Economics and The Australian Computer Society on Australia’s ‘digital pulse’ in 2018, demand for ICT workers is expected to grow by 100,000 between now and 2023. This places even more strain on mid-market organisations. You’re likely already struggling to find great people to simply ‘run’ your IT, let alone consider the innovation-led initiatives you want to undertake.
Attracting, developing and retaining talent requires more time and effort than ever before given the current skills shortage climate. However, a number of options exist, one of which is working with a trusted managed service provider. Due to the wide variety of projects they work on, managed service providers bring great talent to the table. Not only this, but they also gather deep insights based upon their work with other organisations in a similar position to yourself.
As part of your long-term hiring strategy however, you need to consider that great people want to work on great projects. As such, rather than wait for innovation, you may simply wish to just get on with the job of innovating as best you can. And moving to an agile working methodology is one way towards achieving short term milestones, which could ultimately attract long term potential to the business.
New ways of working – Agile
Agile is very much ‘in vogue’ with many of Australia’s larger enterprises. The major banks and telcos have made very public showings of their agile capabilities. And, there’s no reason why mid-market organisations can’t take advantage too.
Agile provides a far greater level of flexibility to support new innovation models. And, automation tools for example are a great way to help support a more agile approach. Again, a managed service partner can prove to be worth their weight in gold, supporting the underlying operational infrastructure with automation to help drive your new values-based approach.
Yet, before these benefits are realised, consideration has to be given to what needs to happen at an operational level. What does your agile framework look like? Who will run it? And, how will you reengineer what your staff currently do as you move towards a new way of working?
You also have to take into account your legacy environment too. Ripping everything up will likely kill the business. There has to be a happy medium between the new organisation you’re creating and the legacy one. The one containing all the knowledge, processes and understanding. How will that knowledge transfer? And, how do you reskill and find the balance between the old and the new?
Lay the foundations
As with any major shift in organisational direction that uses technology, you can’t simply expect to implement it and realise the promised benefits instantly. The mistake many organisations make when seeking to drive a fairly dramatic shift in how they go to market is to think technology has all the answers. Core operational foundations, the right processes and great people have to be in place to realise the true benefits of innovation that cloud technology can bring.
