“I am still making order out of chaos by reinvention.”
If 2020 was the year of chaos, then 2021 is the year of making order out of it.
The source of the quote above is John le Carré, a famous spy novelist and another legend lost in 2020. And his strategy may be as timeless as his work. Reinvention maintains a fierce supporter in Andy Jassy, the outgoing CEO of Amazon Web Services (AWS) and the incoming CEO of Amazon.
“You want to be reinventing all the time,” Jassy told a (virtual) audience of business and IT professionals at AWS’s annual re:Invent conference in 2020.
“All the time” is a lot. But, as 2020 taught us, it’s barely enough to keep up. Alone on the re:Invent stage, Jassy described what it takes to reinvent your organization at today’s pace of change: “Some of it is building the right reinvention culture, and some of it is knowing what technology is available to you and jumping on it to make that reinvention happen.”
Out of all the technology available to you—another kind of chaos—it’s largely the cloud that made reinvention possible in 2020. Remote, on-demand access to services and near-unlimited capacity were a godsend when e-commerce sales jumped 31.8% quarter over quarter, or when grocery order volumes skyrocketed 500%.
But the cloud is not just an enabler; it’s a change agent. If your organization doesn’t adapt to use the cloud, you’re less likely to reduce your time to market, lower your operational costs, and improve your teams’ productivity.
To achieve the most highly anticipated business benefits of cloud adoption, you might want to consider three powerful shifts in both thinking and action.
Moving from a risk-averse culture to a “reinvention” culture
In a traditional on-premises environment, it typically takes 6-9 months after procuring the necessary equipment (or what you predict will be the necessary equipment) before an initiative is operational. On the cloud, organizations can release new features every week or even every few days.
That amount of acceleration unlocks enormous business value. It challenges IT—stewards of the business, watchers on the wall—to suddenly start thinking and acting like a profit center, not a cost center. How do they begin leveraging the cloud to pull new levers for competitive advantage?
To tackle a challenge like this, great leaders across business and IT understand the importance of working together. They form processes, assessments, trainings, and teams that bring business and IT closer together and encourage both sides to think bigger. Building a cloud-enabled culture of reinvention is not as much about “failing fast”—although failure will cost you less—as it is about learning how to see potential value and master “the art of the possible.” Then, it’s about capturing that value faster through strategic use of the cloud.
Moving from minimizing cost to maximizing value
Cloud adoption success requires analyzing ROI as much as any main measure of cloud progress, including total cost of ownership (TCO). Rather than zero in on minimizing costs, successful cloud strategists focus more holistically on managing cloud finances and maximizing the value of the cloud.
Managing cloud finances helps ensure you don’t leave money on the table throughout your cloud journey. In a 451 Research study, 64% of survey respondents stated that they improved their profitability because of cloud financial management (CFM), an AWS-supported discipline. 67% of respondents have used CFM practices to grow revenue.
Measuring how well you’re managing cloud finances or maximizing cloud value is not without its complications. You may need to quantify hard-to-quantify parameters such as business agility—a complex task with no one-size-fits-all approach. An introductory step to start measuring cloud value is to allocate cloud costs back to specific business initiatives, and then carefully monitor their progress. Keep track of how long initiatives take to launch or release, the users they get (and the feedback they give), and the revenue they help generate.
Moving from big, unwieldy projects to incremental wins
In 2020, you were slightly ahead of the curve if your organization linked cloud deployments to a business case. According to IDC analysis, only 47.2% of organizations using the cloud that year had ever done it. In 2021, a massive additional 40.6% of organizations plan to start doing it.
Organizations are quickly getting serious about cloud strategy, and for a good reason. Building a cloud business case is one in a series of best practices proven to help organizations improve their overall business position for the coming 3-5 years.
The third and fourth best practices, walk before you run and use each migration to enhance your cloud playbook, are an excellent defense against that mortal enemy of cloud adoption, inertia. Inertia is such a common barrier to cloud progress that many best practices deal with it head on—or rather, little by little. That’s because trying to migrate and modernize everything simultaneously can create too many challenges to face at one time. AWS aptly calls this an “anti-pattern” of cloud adoption and proposes a way out of it: “gradually chip away parts of a monolith in modular fashion onto a cloud-native architecture.”
“Let’s chip away!” may not seem like much of a rallying cry. But when you walk before you run—making sure to begin with the highest-value, tastiest “chips” that aren’t too hard to break away from the monolith—it starts to catch on. IDC echoes this sentiment in the quote below.
[Innovation] is much more than big breakthrough ideas. More often, it is the cumulative impact of many smaller changes as the business reshapes how it delivers value for customers."IDC
Taking the plunge
Back on the re:Invent stage, Andy Jassy predicted the start of a movement in 2021.
“One of the things that we’ve seen is that enterprises that we’ve been talking with for many years about moving to the cloud—where there’s a lot of discussion and dipping the toes in the water, but not real movement—so many of those enterprises have gone from talking to having a real plan. And that, I think, is going to be one of the biggest changes you see.”
And we have to agree. We only hope that considering the shift from a risk-averse culture to a “reinvention” culture, from minimizing cost to maximizing value, and from big projects to incremental wins will help you take the plunge (and enjoy the swim).