How Cloud Computing Is Changing Management
Cloud is fundamentally changing the way management is making decisions, streamlining internal processes and interacting with customers. From small hotels in Kulu Manali to unicorns in Bengaluru, organizations are implementing cloud-based solutions to manage their businesses. As a result, the adoption of SaaS has witnessed a staggering growth in India. Cloud has essentially enabled management teams to centralize and decentralize simultaneously. For instance, Bengaluru based Mobisy Technologies allows mega brands like Pepsi to obtain a real time inventory data of their distributors, thus helping them optimize their distribution strategy. On the other hand, retailers can place orders with Pepsi distributors using their smartphones, bringing predictability and efficiency to their supply chains. As more and more organizations move towards a mobile first vision, cloud infrastructure has become the cornerstone of their digital strategy. There are real benefits to the cloud first strategy:
•Data-driven Decisions: Cloud has made organizations data-rich by integrating data from disparate systems and devices. Managers are now able to use this data to make daily decisions, as they have access to realtime actionable intelligence.
•Seamless Digital Experience: Organizations can provide an identical digital experience, irrespective of geography. For example, a user has a similar digital experience when she uses Uber to book a cab ride in New York or Mumbai.
•Scale: Organizations can achieve global scale in a matter of weeks. In January 2014, Airbnb’s CEO Brian Chesky tweeted, ‘Marriott wants to add 30,000 rooms this year. We will add that in the next two weeks’. This exemplifies what Reid Hoffman means by 'Blitzscaling’ in his latest book.
•Automated Work Flows: Long waiting time in customer support calls are soon going to be a thing of the past. Customer assistance, ticket resolution and support services are now being delivered by cloud-based self service intelligent chatbots.
•From Efficiency to Productivity Gains: The value proposition of replacing capex with opex is now dated. Managers are using cloud solutions to make productivity gains as well. For example, a CRM solution doesn’t just mean an efficient way of lead management it is also a way to potentially increase revenue per user through interactive leaderboards.
Organization leaders are averse to risking disruption on account of long payback periods and as a result, digital transformation is often seen as a marketing gimmick
Besides these tangible benefits cloud technology is driving management to bring about a revolution in organization culture. With massive computing power available, employees are encouraged to innovate; strategies are becoming truly customer centric and ‘failure’ is rewarded. This is best exemplified by big internet companies like Google, Amazon, Facebook, Apple and Netflix. Facebook, for example, runs around 10,000 different versions of the social networking app, at any given point in time. Software engineers are given autonomy to launch and test versions of Facebook to assess changes in user experience. Versions with significant results are adopted and less significant ones are documented as lessons learned. This is a unique and powerful way to empower employees.
Cloud technology is also promising to solve the challenges of digital transformation by providing the essential building blocks for any successful digital transformation journey. Certain industries like BFSI, Education Telecom and Media have been pushed into the early adoption of digital transformation, owing to the evolving, new customer segment called the 'millennials'. Leadership in these industries have responded to this change by investing in the right technologies and people; so much so that organizations now have a new designation, that of the Chief Digital Officer (CDO). In the case of Kotak Mahindra Bank, Deepak Sharma(CDO)is busy building an 'open-banking' platform which will integrate fintech startups that provide superior customer experience.
However, benefits of digital transformation are not being felt enterprise wide, particularly in old economy organizations. Firstly, this is because of a complication called 'legacy' systems which take time and investment to migrate to a cloud environment. Secondly, organization leaders are averse to risking disruption on account of long payback periods. As a result digital transformation is often seen as a marketing gimmick. According to Forbes 2016 report, 84 percent organizations failed at digital transformation.
We believe this is set to change. The biggest indicator is not from a highprofile survey of CXOs, but IBM’s $34 billion acquisition of Red Hat in October 2018. This acquisition has the potential to deliver agile digital transformation using open-source cloud solutions. Additionally, the advent of machine learning is disrupting the way data (DataOps) and applications(DevOps)are engineered and migrated. This will increase the pace of digital transformation, even as we speak. With shorter and less risky payback periods on digital investments, managements will respond positively to these changing dynamics. After all, it was Diane Greene of VMware who articulated a simple and extraordinary vision, ‘We could serve every company in the world, in every geography, in every type of organization’. This ushered in the age of cloud computing. It is now up to the leadership and their vision to drive agile digital transformation.