How Cloud-Mature Enterprises Succeed

In this blog, we will discuss the strategies employed by cloud-mature enterprises, examine key pillars of cloud maturity, and contrast how mature and aspiring enterprises operate in these areas. You will leave here being able to answer this question, “What does a mature cloud organization look like?”

The COVID-19 pandemic necessitated a change in the way companies do business. An October 2020 McKinsey survey of global executives found that companies have accelerated the digitization of customer and supply-chain interactions by three to four years. Respondents credited cloud adoption as pivotal to accelerating digitization. That said, some organizations have been more successful than others at realizing accelerated innovation and unlocking cloud-derived business value. It is natural for leaders to be curious about these high-performing organizations: “What is unique about their leadership and strategy?” “How do I compare?” “What pieces of a culture of innovation am I lacking?”

Envision

“It’s not enough to be busy, so are the ants. The question is, what are we busy about?” – Henry David Thoreau

Leadership imperative. Transformative cloud adoption requires a committed and engaged senior leadership. Transformative leaders build alignment across all levels of the enterprise. This includes obtaining board buy-in, which allows the ability to set aggressive top-down goals that mobilize organizations to act and drive both functional and cultural change. Cost reduction is often the initial catalyst for cloud adoption. However, transformative leaders equally prioritize unlocking agility and innovation while setting goals for the organization. Additionally, these leaders remove roadblocks, whether they be funding, contractual, or political. In driving organizational transformation, successful leaders are firm on their vision while being flexible on the details.

Strategic intent. A company’s cloud strategy guides the adoption and use of cloud services across the enterprise. Cloud adoption is often misunderstood as a purely technological initiative; this is a common pitfall for enterprises that struggle to reach cloud maturity. The underpinning of a mature cloud strategy is its close alignment to the organization’s business goals. It will have defined, measurable, and expected business outcomes while clearly articulating “Why cloud?” Mature organizations go beyond cost benefits to focus on broader business outcomes such as customer value, agility, operational resilience, and staff productivity. A mature cloud strategy requires clear answers to strategic questions that will affect the entire enterprise. For example, what cloud model to use and when (e.g., all-in, hybrid, and cloud-first). In setting and communicating a cloud strategy, transformative leaders signal to their enterprise that “this is our future; we have a roadmap to get there, and we will equip you with the resources you need to be successful in this journey.”

Execute

“Success doesn’t necessarily come from breakthrough innovation, but from flawless execution.” – Naveen Jain, CEO of Infospace

The business case. The business case is leadership’s primary input for determining whether or not to green-light cloud initiatives. Broadly, it incorporates the expected value realization of cloud adoption from both the total cost of ownership (TCO) and business value perspectives. Specifically, it includes measurable expected outcomes on cost, risk, productivity, agility, and innovation. This helps with data-driven prioritization and investment decisions. Stakeholders from across the business should understand and buy into the business case for transformation.

The cloud center of excellence (CCoE). Cloud adoption requires focused and organized effort, which a CCoE can facilitate. This multi-disciplinary team will drive enterprise maturity by delivering cloud policies, best practices, training, and architecture in a construct that is repeatable, automated, and self-service. With the requisite support of senior leadership, the CCoE is a mechanism to transform your entire enterprise. A CCoE can start small and scale as needed. It should include both business and technology stakeholders. There is no one CCoE structure that fits every enterprise, but cloud-mature enterprises successfully establish one to accelerate their cloud adoption journey.

Avoiding analysis paralysis. Mature enterprises prioritize speed over perfection. They do not overanalyze every decision for every possible outcome. Teams are empowered to make important decisions and act. Incremental targets and benchmarks are established, measured, and adjusted as necessary and often. Cloud deployments are on-demand and pay-as-you-go, without the need to plan long-term capital expenditures. This enables teams to experiment quickly and inexpensively, allowing them to learn by doing and failing.

Outcome based vs. activity-based delivery. In mature enterprises, business and technology teams work backwards from the customer’s needs and prioritize development activity accordingly. Mature enterprises perceive activity through the lens of delivering a product, not a project. Teams are organized around products. The work (customer requests and requirements) is brought to the product teams, not the other way around.

Agile design and build. Mature enterprises deliver value incrementally and frequently. These organizations avoid long-duration, slowly realized projects that require an upfront investment of significant resources (time, people, and capital). Cloud computing is well-suited to agile development, and thrives on the principles of experimentation, flexibility, and incremental delivery. Cloud-native technologies support fast and frequent changes to applications without impacting service delivery. The agile development approach emphasizes speed over perfection and improves business-technology collaboration.

Cloud financials. Cloud computing allows resources to be scaled up or down as needed. This elasticity is a core advantage of cloud services. Given that the type, size, and duration of cloud workloads are dynamic, so is an organization’s operational expenditure (OpEx) for these services. Mature enterprises ensure dedicated attention to cloud financials and invest in continual spending optimization. Automated guardrails are put in place to ensure the detection and prevention of unwanted spending. By using cloud-native tooling, costs can be controlled, optimized, and forecasted to meet an organization’s financial governance objectives.

IT operations. With the burden of deploying, maintaining, and updating physical hardware eliminated with cloud services, engineering and operations teams are freed to focus on higher-value activities. As opposed to the traditional “reactive” operating posture, cloud-based instrumentation and monitoring tools can detect and “prevent” system failures. Self-healing capabilities automatically shut down underperforming infrastructure or scale up in response to demand. Activities such as patching, backups, replication, scaling, and data tiering can and should be automated. Mature organizations take advantage of fully managed services with built-in capabilities for high availability and resilience, including serverless computing and purpose-built databases. . This allows teams to focus time on business value and innovation rather than managing IT internals.

Skills enablement. Mature cloud enterprises invest in developing emerging skills and cloud fluency at all levels of the organization. They define the roles that will exist in a cloud-enabled future and align existing roles with those definitions. These enterprises provide the resources needed to reskill, upskill, and cross-skill existing talent for success in these evolving roles. Leaders communicate plans early and clearly, alleviating the natural fear, uncertainty, and doubt that can arise during periods of organizational transformation.

Measuring success. Mature firms measure cloud value in business terms, not just IT terms (e.g., cost). They build KPIs to measure productivity, risk reduction, and business agility. In addition to assessing progress towards goals, KPIs help stakeholders understand the value of cloud resources and investments. Mature organizations baseline the current state of these KPIs, allowing for a data-driven comparison to post-transformation metrics as well as industry standards.

Evolve: Final Thoughts

“Continuous improvement is better than delayed perfection.” – Mark Twain

Apart from good strategy and flawless execution, what differentiates cloud-mature organizations is a laser focus on continuous measurement and improvement. Although a “lift and shift” cloud migration approach offers speed, technical debt is often carried over as a byproduct. Mature companies leverage cloud-native technologies to modernize aggressively and exploit the true benefits of the cloud. Rigorous cost optimization efforts ensure spending is explained and controlled. New cloud services are constantly evaluated to come up with innovative solutions. Self-service and automation become the mantra for all initiatives. Metrics are consistently gathered and used to incrementally improve capabilities and make decisions. Last but not least, there is unwavering support from leadership and genuine collaboration among employees as everyone speaks the same language.