Published on the 19/12/2016 | Written by Chris Chelliah
Cloud is a technology that’s come of age, delivering clear benefits to the organisations that opt for it. But are APAC businesses doing so effectively, asks Chris Chelliah...
That’s the finding of a new Oracle-sponsored report by Harvard Business Review (HBR), which looked at enterprise cloud computing worldwide. According to HBR, new cloud leaders are emerging: organisations that have embraced cloud to deliver ultimately targeted and personalised engagements with their customers or subscribers. And the reasons as to why they have done that are clear: HBR reports that these cloud-first operations are more likely to have launched new products and expanded into new markets than companies with an ad hoc approach. These are enterprises with a strong partnership between IT and the business, and a decisive CIO leading the charge.
These are, in short, the agile organisations that are going to thrive in the digital era.
But while the technology may have come of age, what companies are seeking to adopt cloud? Where do Asia Pacific (APAC) businesses stand from an international perspective? Are they adopting cloud-first models, or are they still tinkering with cloud at the edges of the enterprise?
The shape of cloud adoption
Cloud adoption in the region is characterised by a ‘U’-shape. At one end are developed countries such as Australia, New Zealand, Singapore, South Korea and Hong Kong. Firms in these countries have been quick to grasp the competitive benefits of cloud leadership and are transforming into digital enterprises.
At the other end of the ‘U’ are ‘extreme’ emerging markets such as Myanmar, Cambodia and Sri Lanka. The majority of businesses in these countries are free from legacy technologies and are able to leapfrog into cloud-first models.
The bottom of the ‘U’ represents the cloud laggards. These are organisations in fairly developed countries, which are often burdened by legacy technology, and they have no real appetite for change. These are also geographies where the perceived barriers to cloud adoption often hold the greatest sway.
Overcoming barriers to cloud adoption
HBR’s report shows that globally, security continues to be the biggest barrier to cloud adoption, and this is also the case in APAC. In our increasingly connected and digital world – in which, according to IDC, by the end of 2017, 60 percent of APAC 1000 enterprises will have digital transformation at the centre of their corporate strategy – it is obvious that security will be a core consideration around cloud; but it should not be a barrier.
As the saying goes: a chain is only as strong as its weakest link. In the case of the cloud, a business is only as secure as the weakest of the ever increasing number of cloud providers it uses. It is therefore essential that businesses have in place clear metrics, governance policies and Service Level Agreements (SLA)s around security. With the right vendor, and a cloud platform that spans all layers of SaaS, PaaS and IaaS, the cloud can actually be more secure than on premise systems; but it is up to the business to ensure that their vendors put sufficiently robust security capabilities in place.
In HBR’s research, 25 percent of global businesses surveyed cited compliance requirements as a barrier to cloud adoption. From my experience, I believe this figure to be much higher in APAC. This is particularly true of businesses based in countries with stringent data residency regulations. Many of these regulations are worded vaguely, and have not been updated for the cloud era. As a result, we’re seeing businesses in heavily-regulated parts of APAC crying out for cloud services, but unable to act.
Governments across APAC need to revaluate data residency requirements to fit our digital world. In the meantime, businesses concerned about data residency should look to deploy solutions that bring the public cloud on-premise, as these will enable them to transform to a cloud-first model without risking non-compliance.
The digital champions
Returning to the cloud leaders, HBR found that it is usually the CIO that leads the move to the cloud in these organisations. While I agree that is often the case, I’d add a caveat. In APAC, there are increasing occasions where the CIO is too busy with business as usual, running the organisation’s legacy infrastructure, and the cloud agenda is championed by another change agent within the business.
One is the Chief Digital Officer (CDO). The role of CDO is often a new one, and the people filling these positions tend to be young and more comfortable with looking at new solutions to business problems. We’ve also found that these leaders typically succeed because they put in place clear goals for the organisation. They have a clear cloud plan and outline exactly how the business is going to execute on it.
Perhaps surprisingly, the CFO is also increasingly taking on a more important role in advocating for cloud adoption in APAC businesses. Often perceived as conservative and averse to risk and change, the ‘digital’ CFO is more often driving change as a result of recognising the financial case in organisations where the CIO cannot be convinced of the operational case of moving to the cloud.
Among the great examples of CFOs taking a cloud first approach is David Watkins, finance GM at Australia-based APN Outdoor. Its adoption of a cloud-based platform has allowed the company to radically streamline its financial systems. In addition to reducing the time required for month-end processing and enabling more timely access to business information, a big driver for the move was to gain sufficient flexibility to support the organisation’s growth strategy.
As he said: “We were coming from an environment that was very customised and so, as we grew, the changing dynamics of the business were challenging to accommodate. By moving to the cloud, we have been able to transform our workflows and ensure we are ready for new opportunities.”
Transforming to cloud-first
If businesses in Asia Pacific want to become more agile and outcompete in the market, HBR’s report validates that they should be looking to adopt cloud-first strategies. Take a look at your business and ask yourself whether you are ready for cloud-first. Do you have a cloud strategy that spans on-premise and public cloud? Can you integrate cloud infrastructure, platform and software across the entire organisation? Can you continually build and create new services and scale them with ease?
If you can answer ‘yes’ to these questions, you’ll soon find your business well ahead of the competition.
Chris Chelliah is group VP and chief architect for core technology and cloud, Oracle APAC.