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Cloud computing: Five ways to make the most of the move to on-demand

Cloud computing can't fix everything but it can be a key element of business transformation if handled well.

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Business leaders need to establish a competitive advantage through cloud computing. That was the conclusion of a recent leadership roundtable held by non-profit organisation the Technology Business Management (TBM) Council.

The event discussed the role of the CIO in business transformation. Here, five experts present their best-practice tips for making the most of the cloud.

1. Take a strategic view of the cloud

Jūratė Lingienė, CFO of the business support division at Nordic corporate bank SEB Group, says constant digital transformation has become the new normal. She recognises the importance of client-focused strategies and says every IT leader faces a similar challenge.

"The ecosystem is changing -- everything in IT is focused on delivering the best customer experience," she says. "We don't use technology in the back office just to satisfy ourselves, we implement technology to help serve the client."

SEE: Digital transformation: A CXO's guide (ZDNet special report) | Download the report as a PDF (TechRepublic)

Lingienė says this focus on meeting customer demands means technology strategies need to be focussed on relevance, flexibility and efficiency. "That means looking at the cloud and embracing agility in order to support the work of the business," she says, before suggesting CIOs must carefully assess how on-demand IT will work in their businesses.

"You must think of the future costs and you must deliberate on the alternatives. The cloud is not the medicine for everything -- you must focus on data and how it will be used across different solutions. You must think about how that data will be used and the potential for change. Taking a strategic view is crucial."

2. Give people tools to change their behaviour

Daniel Schmutz, COO of the chief technology office at investment bank Credit Suisse, agrees that CIOs must avoid seeing the cloud as cost-effective cure for all ills. "Cost reduction might have been one of the big drivers for the cloud but it isn't always cheaper," he says. "You need to very cautious, especially as moving legacy operations to the cloud can be very expensive."

Schmutz says his technology team aims to ensure its activities add value for internal and external customers. As part of those efforts, Schmutz says his organisation wants to move from a product-oriented to a service-oriented view of technology resources.

"We've started to align all our internal services to create an integrated approach and we want to create a seamless experience," he says, because being able to measure how technology is used across the business is crucial to success. Credit Suisse uses TBM frameworks to help boost its decision-making processes and is keen to do more.

"Today, we have classical IT reporting -- and it's product- and application-based. With the cloud, we want to move towards a full consumption-based model and change our reporting, so people across the business have the drivers to change their behaviours and therefore the costs," he says.

3. Be more agile than your competitors

Dirk Ehrhard, head of IT collaboration and document management at pharmaceutical giant Boehringer Ingelheim, says the value proposition of moving certain applications to the cloud is directly related to the total cost of ownership and potential gains from an increased speed of technology implementation.

Ehrhard says quick service deployment could be crucial for firms in a fast-moving sector like pharma. "The challenge is the whole industry is watching the snake -- that's all about what will happen in the next few years and how digitalisation will eat the traditional way of operating in pharma," he says.

"Right, now the direction of travel is unclear. The one thing that is clear is that our motivation is changing: we must be more agile than other pharma companies because then we will be upfront when things change. We must lead transformation when it becomes clear which direction the industry is moving."

4. Continue to interact with legacy systems

Anil Cheriyan, chairman of the TBM Council  and ex-CIO at banking firm SunTrust, says client expectations are changing the way customers interact with businesses, regardless of organisation or sector. Successful IT leaders think carefully about which systems should move to the cloud.

"Everyone's building more and more apps and the older ones are the toughest to get rid of," he says. "The migration strategy to the cloud is crucial but you can't just transfer disparate applications. You've got to understand the whole strategy and compare elements from a cost perspective."

SEE: Cloud v. data center decision (ZDNet special report) | Download the report as a PDF (TechRepublic)

Cheriyan says the mix of newer and older assets means CIOs must manage a huge technology ecosystem. "You need to continue to interact with your legacy -- digital transformation is not just about connectivity to the client," he says.

"Effective transformation is about dealing with legacy, too - and that's a big change. You not only need to change your legacy environment, you also need open APIs to help your business interact in whatever shape and form is required. Flexibility is becoming crucial."

5. Use governance to avoid creating the Wild West

Phil Armstrong, global CIO at  finance firm Great-West Lifeco, says finance firms using both old and new kit create a hybrid mix of resources, where multiple cloud arrangements co-exist with in-house data centres. Armstrong says augmenting in-house facilities with the cloud creates agility, speed and flexibility -- but it also creates added risk, particularly in terms of today's heavily regulated environment.

"In our organisation, we've spent a lot of time ensuring that, when we move services, we think about how those cloud implementations will interact with current in-house systems," he says. "You must think about data flows and ensure systems are connected. That means technologies must be created to sit in the gaps between cloud and in-house systems."

Armstrong says an on-demand service is useless without data, so CIOs must ensure governance around what information goes into the cloud and standards around how that data is used. He advises other CIOs to use a cloud brokerage function or an internal committee to ensure moving services and data to the cloud is the right choice for the business.

"Otherwise you end up with a Wild West scenario, where you don't know when services are being spun-up or spun-down and retired when they're not used, which could lead to a nasty surprise in terms of finances," says Armstrong. "There's a fine balance between a light governance that's required to help with self-service in terms of agility and flexibility, and the right level of data security."

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