Many companies move incrementally to the cloud, with different groups chasing their own dream of simplicity and lower costs using department budgets and decision-making—but instead the overall organization finds itself living with a monster of kludged-together parts that keep the IT department (yet again) focused on maintenance rather than innovation.
“Cloud helps you to simplify, but it does not change the laws of physics,” says Jon Chorley, Oracle chief sustainability officer and group vice president of supply chain management product strategy. “The more unrelated elements you have in a system, the more issues and problems you’ll have in the implementation and operation—and the more headaches you’ll face every time you do an update.”
This complexity beast starts to take shape when an organization doesn’t clearly define its cloud strategy. Without that guidance, various departments and divisions will likely choose their own cloud solutions to address their own functional needs, without consideration of the broader, enterprisewide implications.
In an October 2016 report, McKinsey & Company said that these smaller digital initiatives “are too diffuse to gain momentum and too limited in scope to make a material difference.” Further, the lack of integration between B2B companies’ front and back office processes “can lead to multiple customer handoffs between functions, long turnaround times for quotes, missed delivery dates, and a proliferation of unnecessary technologies, applications, and data,” the report stated.
“Businesses need to have a clear destination in mind—and that vision is what should inform technology decisions,” Chorley says. If the goal is to become a digital, agile company, data must be able to flow across divisions, applications across the organization need to be integrated, and business processes can’t be siloed.
Without a cloud strategy, organizations will find themselves facing the following six modern business dangers:
1. Integrations Trump New Functionality
By 2020, a no-cloud policy will be as rare as a no-internet policy is today, according to Gartner. Most will adapt hybrid cloud environments, with some applications in the cloud and some on-premises.
While one of the advantages of cloud-based applications is a constant cadence of new functionalities that come with each update, companies with a patchwork of cloud solutions from different vendors, connected to a similar mix of on-premise apps, may not enjoy that benefit.
“It’s never what’s in the box that matters, it what you are able to take out of the box,” Chorley says, and integrations may constrain how much new functionality businesses are able to use—especially if the organization has multiple clouds from a variety of vendors. Implementing the new functionality will take a backseat to maintaining those integrations.
“An organization that wants to service the needs of the business and simplify IT should consider more integrated, out-of-the-box cloud solutions,” he advises. “Otherwise, you might find yourself looking longingly at all that new stuff that you just can’t use.”
2. Workflows Are Out of Sync
Companies can no longer think of their operations as a linear process that begins with marketing and ends with the shipment of goods.
“It’s a continuous, circular service process where the results of your order fulfillment activity feed back into your subsequent sales and customer engagement activity,” Chorley says. “Workflows across all of these areas need to be synchronized.”
- Related: Try Oracle Cloud
Problems arise when a business process needs to span multiple clouds but each cloud uses a different technique to manage workflow. For example, if you have one cloud application for tracking sales opportunities and another for managing sales quotes, and their workflows don’t mesh, it adds a layer of complexity.
3. Data Management Gets More Complex
The foundation of a data-driven, digital company is data that is consistently defined and integrated across the organization. That presents a range of challenges. For example, two departments might each have a database of customer information, but if the two don’t use common definitions and aren’t integrated, customers are likely to get marketing materials about a product they just ordered rather than helpful information about add-ons and accessories they might need.
“Different clouds use different definitions for their master data, so that would need to be synchronized across cloud applications,” Chorley says. “A coherent master data management (MDM) strategy has to be part of any journey to the cloud.”
Another wrinkle in the world of data synchronization comes when a division extends an application and adds additional data. Every cloud might have a different technology for creating these extensions, so passing that extended data from one cloud application to another becomes an intricate endeavor, and one more area of focus at each update.
4. User Interfaces Run Amok
When employees need to navigate several applications in order to do their jobs—which is often the case in smaller companies, where roles are broader—using applications with a range of interfaces and approaches can mean a longer learning curve.
“The difference between a small company and a large company is not complexity; small companies can be just as complex,” Chorley says. “The difference is small companies have fewer resources so each person must do lots of different things.”
For example, someone who interacts with a sales application may need to check on accounts receivable or may need to check inventory availability. Varied approaches in each of those applications will slow productivity—especially in those applications an employee doesn’t use often—and will likely mean frustration, mistakes, and more training for employees.
5. IT Works on Updates Constantly
With multiple cloud vendors, frequent updates could put the IT department on a never-ending update treadmill.
“If you have cloud applications from six vendors, each upgrading twice a year, you’re dealing with an upgrade every month,” Chorley warns. “It’s a gift that keeps on giving.”
That’s why he recommends selecting a limited number of cloud partners as part of the overall cloud strategy and keeping in mind how the update process will affect IT.
“You don’t get to dictate when your cloud updates, but you may have some latitude,” Chorley says. “But when you’re coordinating updates across 6 or 10 different cloud vendors, the advantage of any latitude evaporates.”
6. There’s No One-Stop Support
Most faults in computer systems exist in the interfaces, and those are also the most difficult to diagnose, Chorley says.
“If the interfaces are between products from different companies, your likelihood of having problems is higher, and you’re less likely to have a vendor take ownership and help you resolve them,” he says. “Vendors spend a lot of time trying to eliminate these types of issues in their own applications, but if you’re creating your own cloud topology, you’re the one who will have to deal with that.”
The combination of applications, clouds, extensions, and interfaces in your specific environment are likely not going to be documented anywhere. The more consistent the environment is, the easier it will be to diagnose issues.
“What it comes down to is, do you want it to be your issue to resolve or the vendor’s?” Chorley says.
