Video: Does cloud make sense for your business?
Moving enterprise applications to a cloud computing environment is a growing trend. At a recent Amazon Web Services (AWS) event in London, some of the company’s customers discussed their decisions around moving to the cloud — why they did it, what worked, and their suggestions for organisations planning to follow a similar path.
The need for speed
“Being conservative has been a huge advantage in our industry until now,” said Andrew Brem, chief digital officer at insurance company Aviva. “But that isn’t going to do for us in the future,” he said. Aviva has migrated a large portion of its IT portfolio to the cloud with AWS.
“Data is our lifeblood. The way to win in insurance is to better predict the risk to an individual or asset than your competitors, and that is a science that has been going on for a long time,” explained Brem.
Even details as apparently trivial as the length of your driveway can help an insurer predict whether you are at greater risk of being burgled, he added.
“All these data points are utterly available to us, so data for us has become the entire business,” said Brem. Using cloud computing services enables the company to move faster.
“We are very aware that the game of accessing non-traditional data and applying very advanced analytical techniques is not just our own, and the speed with which we can set up systems is a huge source of competitive advantage.”
Making it easier to experiment
Fashion retailer River Island has migrated 90 percent of its portfolio to the cloud. “We’re fast fashion, so we’re used to adapting constantly,” said CIO Doug Gardener.
Technology now is deeply embedded in retail and the pace of change is great, he said. “We come from a background of traditional data centres, big iron, mainframes, databases but we’ve been rapidly moving towards the cloud.”
“It’s enabling us to do things in minutes and days that used to take us months and years.”
The retailer had previously tried to modernise its systems but building on top of 15-year-old infrastructure and antiquated ways of working “was never going to work”, said Gardener.
Instead the retailer decided to invest in cloud infrastructure and updating its processes in order to move faster.
“When we hit Black Friday or giant promotional events we can scale up and scale down,and we have resilience. We no longer have any data centers — all of the time and effort that went into worrying about data centre power or air conditioning, I now devote my team to solving problems. We now can experiment much quicker than ever before because it’s cheap to fire things up and throw them away if they don’t work,” said Gardener.
Doing more with less
Anne Boden, CEO at Starling Bank previously held CIO and COO roles running big enterprise systems, but when she moved into the startup environment, she realised the potential of technology had changed with the arrival of the cloud.
“I thought I knew it all; I was very good at running anything with a budget of a billion, but you could be in a small office in a warehouse with a couple of people who said they were building something in the cloud and I didn’t have a clue,” she said.
“I spent my whole career running big big budgets in big banks, and now we are doing with 150 people what I used to do with 30,000 people,” said Boden.
Focus on what really matters
Two years ago Scotia Gas Networks decided it needed a completely new technology strategy which involved mapping corporate strategy against IT services and coming up with a new way to deliver, procure and operate IT.
“The key principle is focus everything you are doing on delivering your corporate strategy. If your business case is focused around running servers cheaper than you were before you’ve completely missed the point,” said the company’s CTO Paul Hannan.
Hannan said the migration to the cloud was based on improving security and durability of services, as well as the ability to use software-as-a-service (SaaS) to start new business opportunities faster.
Based on its modelling and predictions, the company was able to fund pretty much the whole cloud migration programme based on capex avoidance over a three-year period — avoiding operating system refreshes or hardware and storage upgrades, for example.
“The adoption of cloud-based services does introduce new risks absolutely, but on the flip side it reduces others”, said Hannan. But there are other issues to be aware of, he warned.
“Elements of your business like accounts payable suddenly become operationally critical. If you move to a utility computing model where you are paying for services as you use them, if you don’t pay them you will get cut off.”
To help deal with that risk the company has moved accounts payable in-house so it has direct control.
Such a project is about more than just IT, said Hannan.
“When you are coming in and not only changing how IT works, but also finance procurement legal accounts payable, operations, you are asking the business to become IT delivery people. You have to do that with support from the CEO, and the only way you will get that is to demonstrate that the work you are doing will help their corporate strategy.”
Organisations need to take a hard look at the work they do and consider how important it is, he said.
“Lots of people say: ‘We haven’t got the capacity to run that level of transformation, we’ve got a really busy IT department we’re doing lots of other stuff”. My challenge back to them is: ‘Is all that other stuff you are doing really important?’. If it’s not, frankly, stop doing it.”
“There is so much tactical delivery that IT departments focus on, so much tactical change that is clogging up the ability to really start transforming how businesses utilise technology, and you need to take a cold hard look at that.”
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