Businesses without the ability to generate, use, interpret and share data flexibly will soon find they are left behind
The cloud enables many valuable new capabilities but most businesses are still only beginning to explore its true potential.
Streamlining enterprise systems and simplifying business processes are obvious places to start. A good first step in any learning process is to migrate some small-scale, non-critical workflows, says Stuart Orr, a technology partner at EY, the professional services firm.
“A lot of companies are experimenting with the capabilities of the cloud. In many cases they are migrating relatively standard workflows to prove they can make it work,” he explains. “There is lots of learning and trying. I think it is sensible provided there is a fairly rapid plan behind it to exploit the benefits after you’ve proven it works.”
In time, more ambitious cloud migrations will enable businesses to do away with disparate and creaking legacy systems, freeing resources and management time for to invest more productively elsewhere.
Persona Co, which issues more than 1m credit cards in Japan across multiple brands, is using cloud planning and budgeting tools that enable it to be more nimble, compiling management reports in just ten minutes. It can also compare revenues, expenses and other measures of profitability for each card brand. This enables it to make faster and better informed strategic decisions as it no longer has to manually compile such information.
“Any plan for moving to the cloud should be about removing unwanted complexity before migration”
But admin and IT savings are just the beginning. There are deeper opportunities to transform your business processes too, by simplifying and streamlining processes. Any plan for moving to the cloud should therefore be about removing unwanted complexity before migration.
This exercise should help businesses identify ways to standardise and automate as many systems as possible. Less manual input of data and less repetition of work throughout the organisation including in the finance and procurement functions, for example, will enable these teams to focus on more strategic work.
“Cloud also offers the ability to foster much closer and more effective collaboration inside and outside the organisation”
Money transfer company MoneyGram has used cloud services to create a unified human resources system that creates consistent data across borders, speeding recruitment times and stripping out repetitive data entry work through self-service apps for job applicants. Ultimately, the company expects a return on investment of ten times on the system.
Cloud also offers the ability to foster much closer and more effective collaboration inside and outside the organisation.
Working in the cloud can help enable cross-border and cross-functional teams to more effectively share insight and analysis, consider new opportunities, foster wider discussion of options and evaluate results better.
Special effects firm Tippett Studio is using cloud services to host its data-heavy special effects work. This makes it easier for the California-based company to employ artistic talent across the world.
The real-time data it is possible to gather on the cloud and the new ways this offers of working with suppliers and customers can also give deep, data-led insights into new opportunities to sell more, cut overheads and improve profits.
Manufacturer and retailer Berkshire Blanket uses the same cloud e-commerce system to handle a range of applications that serve both direct sales and retailers. This has enabled it to better segment and tailor sales to individual customers, boosting retention levels. It also enables the company to market test products on behalf of its retail partners, who are then able to order key product lines with confidence in larger quantities.
Targeted marketing business DX Marketing wanted to speed up its ability to analyse millions of consumer records to produce better insights in less time for its customers, which include large pharma businesses. By doing its analytics work with a new provider in the cloud it cut the time it took to crunch the data from weeks to days and produced analytics reports 70 per cent faster. This helped it increase its revenues by 25 per cent in the six months after implementing the cloud-based system.
New business opportunities
Perhaps the greatest prize of cloud adoption though is the means it offers for identifying completely new business opportunities by helping companies to better manage and analyse different sources of data. Moving discrete sets of enterprise information out of different systems and into more cohesive cloud solutions will help provide a clearer and more immediate view of business performance.
Mexican airline Grupo Aeromexico uses cloud data analysis tools to take information from disparate business units and databases to help it interpret flight routes and customer profiles. This gives it deeper insights into travel and demand patterns from high-end customers. The company has already identified the high-revenue routes on which it should increase service frequency and new routes it should create to meet untapped customer demand.
“Without well-thought-out systems integration work, the risk is not only that the hoped-for benefits do not materialise but that processes fail, leading to costly downtime”
US-based agricultural business Land O’Lakes, meanwhile, uses big data tools in the cloud to gather and manage data from disparate sources to help grow sales. It combines structured data from the company’s enterprise systems, with unstructured geospatial and agricultural data, such as detailed regional feed and crop-protection data, to drive sales, to promote higher margin products, so improving profitability.
Challenges of the cloud
Moving operations to the cloud poses its challenges, however, and without well-thought-out systems integration work the risk is not only that the hoped-for benefits do not materialise but that processes fail, leading to costly downtime.
“There have been some cases where people have not planned the business case and have not put the controls in, in terms of the use of cloud and have ended up paying more for IT than they budgeted for,” says Mr Orr.
“They have either miscalculated about the amount of computing power they are using, they have migrated more workloads than planned or they have not architected it properly. Defining what cloud architecture, private, public or hybrid, is best suited to your business is key.”
Cloud migration teams in the business will need to develop a close working relationship with the service provider to ensure the transfer goes smoothly from its in-house servers to the provider’s cloud-based servers. Ensuring the data going in the cloud will be portable and interoperable is a vital part of this process.
“Organisations will need to examine the compatibility and consistency of their data ahead of time”
This means organisations will need to examine the compatibility and consistency of their data ahead of time as it may be necessary to reorganise or restructure it before transferring it to the cloud. Disparate systems holding inconsistently defined information may require “cleaning” data and standardising processes across the business before migration.
The new ways of sharing information over the cloud also bring with them significant organisational and regulatory changes that have far-reaching data security, compliance and risk implications that need to be considered. It is often not clear where the data to be moved into and around the cloud actually resides, raising legal, compliance and privacy issues. Does the provider have the necessary controls in place to prevent a data breach?
Processes such as proof of identity, access management and authentication for staff will all need to be re-thought. Companies also need to audit the service provider’s facilities, internal controls and financial health as such factors have a bearing on their own financial reporting and compliance responsibilities.
3 Reasons Finance Automation is the CFO’s Best Ally »