Online has become a way of life. This new reality is creating significant business opportunities. But to improve digital business outcomes, commercial leaders must restructure their business models to be more agile. This will deliver greater personalization and a more streamlined experience to customers, while shoring up business resilience.
According to the 2021 Gartner Board of Directors Survey, 86% of respondents believe technology has a transformational role in addressing strategic business priorities. This is why the analyst firm believes that most enterprises will create a CDO role to respond to the long-term impact of COVID-19. Almost 50% of the respondent boards of directors expect to change their business models as a result.
Cloud is a crucial pillar of this transformation, offering the building blocks, scalability, speed and agility needed to deliver and scale fast to satisfy the digital economy’s demands. Cloud enables enterprises to bring new products and services to market faster, while increasing resilience and decreasing technology risk.
Defining the cloud opportunity
Cloud demands that commercial leaders adopt a new way of thinking. It needs to be open and holistic, far removed from traditional siloed models, and drive smart, pro-active decision-making through data analysis on a predictive level. Enterprises that harvest real value from their cloud investments are the ones that look at cloud adoption as a business technology transformation, according to McKinsey.
This can be done by following three simple rules: focus investment on business domains where the cloud can grow revenues and increase margins; select technologies that align with business strategy and risk constraints; and work with your operating model to develop a value chain with capabilities that sets you apart from your competition and functions around the cloud-native delivery models.
But still, it is estimated that only 14% of organizations carrying out digital transformation have seen a sustained and material performance. This is primarily due to outdated technology, slow release cycles and a lack of sophisticated analytics. Cloud has the power to overcome all these hurdles to power practical digital business models. Cloud native, for example, can release code into production so much faster than has been possible and can speed up your product teams tenfold. With the proper approach, it also enables enterprises to scale fast and globally.
Keeping pace with innovation
The huge wave of digital innovation makes it paramount for commercial leaders to realign business objectives and target resources to keep pace with change. This means creating an agile, hyperscalable cloud platform alongside cloud-native app development and deployment.
McKinsey goes as far as saying that 75% of the cloud’s predicted value comes from innovation. This puts the value of the cloud as a core component in innovation growth, faster product development, and hyper-scalability at a massive $770 billion. A figure every commercial leader wants a slice of.
Adopting cloud-native services, including advanced analytics, gives CCOs and CDOs new ways to fulfil changing customer demands and respond quickly to developing markets. Organizations that have already increased their funding of digital innovation are 2.7 times more likely to be what it refers to as top performers, as opposed to trailing performers, estimates Gartner.
Partnering to innovate
The increasing dynamics of digital markets mean that it is impossible to innovate in a vacuum, which is why enterprises are increasingly turning to partners to co-innovate. However, the partner landscape is getting crowded, and it is vital that enterprises find the partner ecosystem that will provide new and achievable growth opportunities.
The speed of change in the digital marketplace means that enterprises that don’t disrupt their business models will be disrupted by someone else and find it hard to survive. An innovation partner brings a new creative perspective without taking away from the enterprise’s primary products and services.
A strong co-innovation ecosystem brings a new idea to fruition. APIs in the cloud, for example, allow enterprises to create service networks, accelerating innovation and connecting businesses in ways that were not possible before. In financial services, for example, open banking ecosystems are emerging. The use of open APIs enables third-party developers to build applications and services around financial institutions.
The journey that never ends
Cloud is a key enabler for business and can be a strategic source of competitive advantage. Cloud and big data analytics are a heady mix that provides unprecedented insight into customer behaviors and buying habits, for example. This provides commercial leaders with much faster access to business intelligence for smart decision-making.
However, cloud requires commitment and continuous attention if enterprises are to harness its real power from their investments. This requires input from all stakeholders so that IT and business are aligned to get the very best business outcomes cloud can offer.
Find out how commercial leaders can help formulate a cloud transformation strategy that embraces innovation, resilience and transformation by downloading our ebook: Making sure the enterprise is digitally ready.
As a Chief Evangelist, Jan Aril focuses on sharing transparent and inspiring knowledge about his areas of expertise, such as public cloud, big data and AI, with the aim of helping companies take on a more sustainable innovation journey. He has more than two decades of experience in the IT-industry and has held positions from full stack development and sysadmin to C-level and board member. He works across the brands of Basefarm and Orange Business.