Dan Scarfe, founder of New Signature UK, explains that without a cloud operating model, how do you know whether IT is really supporting your business?
Until very recently, IT had just been something that the board delegated to the IT department. It was a classic case of a department that did what it says on the tin, but things have changed.
Today, the most successful companies are the ones that have moved the CIO or CTO out of the basement – and given them a seat on the board. They are the organisations that truly understand the difference that new technology such as cloud, can make.
While many industries have embraced the transformative potential of the cloud, due to some of its specific challenges, manufacturing has to a large extent not. Large file sizes and requirements to keep production lines running 24/7 mean that manufacturers have until recently seen a move to the cloud as a step too far.
The tide is, however, starting to turn. With more reliable and higher capacity direct connectivity to the cloud, along with the ability to deploy public cloud technologies on premises, the cloud is becoming a more appealing choice within manufacturing. The amount of data being produced by connected machinery and the power with which the cloud has to crunch this data and offer insights has the potential to revolutionise manufacturing.
In order to fully leverage the cloud, it is necessary to understand what this truly means and how to design and operationalise it. The framework that organisations use to do this is the cloud operating model.
A cloud operating model helps organisations balance the requirements from the business for agility against the controls and security demanded by IT. Encompassing everything from cost savings and profit contribution to how many staff they need to retain, what office or factory space is required and whether it is helping sweat their investment in an IoT-enabled production line, the model should be at the centre of the board’s decision-making process.
Cloud computing is easy and relatively inexpensive to implement, which often makes it attractive to the board. Resources are usually priced by the penny, and charged based on what is used, down to the last minute of server time or megabyte of storage space occupied. It lets CEOs in every conceivable industry, from design to manufacturing, experiment with new products and services while keeping a lid on costs and helps to quickly identify which will have the most positive impact on the bottom line.
That is why, increasingly, innovation is being driven by the business asking, ‘what if…’, rather than IT saying, ‘we could’. Cloud can turn IT back into the innovation hub it should always have been.
Cloud laggard or native?
Few organisations would like to consider themselves a cloud laggard, but in fact it may play to their advantage. The last round of investment was something of an interim step between on-site computing and true cloud. While many equipment manufacturers liked to call it ‘private cloud’ or ‘hybrid’, in that it mixed locally-managed servers with cloud-based back up and file sharing, this was more of a sales tag than anything else. True hybrid cloud runs the same cloud software on-site and off – just on somewhat different scales.
Any company that is only now looking at introducing cloud computing to its manufacturing processes, is in a very good position. Its infrastructure will likely be fully depreciated already, allowing it to jump onboard right away.
Those, whose equipment is just two or three years old, might not consider themselves so fortunate but, even then, the best advice would be for them to cut their losses; they will quickly make it up in cost savings, increased productivity and, often, a better public image once they have moved to the cloud.
Evaluate and amend
Of course, writing a strategy and running with it is not the end of the story. Cloud has redefined the way companies manage their IT budgets – and how they plan future spending. Five- and ten-year strategies are out, in favour of 18- to 36-month plans. What might make sense to do in-house today may be ready for the cloud by the end of next year, which is why a cloud strategy, and the business model it informs, needs to be flexible enough to accommodate swift changes. If not, the potential presented by a move to the cloud will be wasted.
The notion of change is one of the central tenets of cloud computing. Businesses must assess how responsive they are to innovations in technology, and the landscape in which they operate. If they are avoiding change rather than embracing it, something is wrong – and it is time to consider exactly which configuration of cloud from among the myriad of options available, can help them evolve their activity to satisfy both their own needs and those of their customers.
Naturally, this also requires a re-evaluation of the model. Once the technology changes, so does the potential described by the cloud operating model. It will be fuller, richer and more enticing – but still well within reach.