To optimize, innovate or disrupt?
Organizations shall carefully evaluate the various opportunities available to harness the power of cloud as an optimizer, innovator or disrupt – and find the right opportunity for their particular circumstances or product/service line.
To assist them in this regard, the three key actions to help reap the potential rewards associated with cloud- enabled business models are
- Establish shared responsibility for cloud strategy and governance across the business and IT to help ensure cloud remains a top business priority.
- Place a senior executive business leader, in partnership with the CIO, in charge of the firm’s cloud business strategy development. This collaboration should help clearly formulate an optimal cloud strategy and link it with business and marketing strategies. In the adoption phase, these leaders will communicate and drive cloud as a top business priority, as well as ensure that infrastructure and operational efficiency are optimized and business objectives are met.
- Establish a governing committee of business and IT leaders to oversee cloud adoption and implementation. Determine which cloud business enablers should be leveraged and how they will be used. Develop and oversee the implementation of business changes (e.g., processes, outcomes) that cloud will enable within the organization and throughout industry ecosystem.
- Look within and beyond your organization’s borders to maximize the value derived from cloud adoption.
- Determine how your cloud strategy can impact the industry ecosystem, and identify new partners that cloud can help draw into your ecosystem. In addition, evaluate whether cloud can or should change the role in the ecosystem.
- Use cloud to respond to industry’s end customers more effectively. Explore whether cloud can help enhance the value proposition with the current customers, and examine whether the firm can reach other customer segments by leveraging cloud.
- Identify whether the organization seeks to be an optimizer, nnovator or disruptor and use cloud to innovate business model to realize that potential.
- Consider organizational and market factors – corporate strategy, competitive dynamics, customer strategy, firm’s risk profile, how empowered the customers are, etc. that impact the firm cloud strategy.
- Determine where – if at all – the organization is positioned in the Cloud Enablement Framework today.
- Determine where the organization should be in the next three to five years – should it be an optimizer, innovator or disruptor? In considering this, remember that the framework is not a maturity model – a company does not have to first become an optimizer before becoming an innovator or disruptor. Rather, each company has to evaluate the opportunities and risks inherent within each archetype and determine “who” they want to be and what works best for the company, industry and customer set.
- Build business and technology skills and capabilities to close the gap between your current and future cloud position or to maintain the current position if that is the goal.
- Determine whether the cloud strategy should involve becoming a cloud service consumer or a provider of cloud-based offerings – or include elements of both.
Typically, cloud service consumers use cloud to enhance their business models and drive increased value for their customers or business. Cloud service providers, on the other hand, offer services via the cloud to enhance the business model of other organizations or their own. Cloud service providers might use cloud to engage in innovation within their own value chain or facilitate innovation within other value chains.
Navigating firm’s course in the cloud
As business leaders reflect on how their organizations can best realize the full potential of cloud to optimize, innovate or disrupt business models, they need to challenge existing approaches and realities. They shall imagine the possibilities associated with cloud-enabled business models by considering some questions:
- What if organization had access to unlimited computing resources to scale your business?
- What if the organization had access to previously unaddressed customers or markets and could target them based on their individualized preferences through analytic insights?
- What if the firm could give customers access to the organizations products and services anytime, anywhere and on any device?
- What if the organization could inexpensively and rapidly develop and launch new product and service offerings?
- What if organization could easily and seamlessly connect and collaborate with business partners and customers?
- What if the organization could redefine its role in the industry and change its competitive positioning?