Flexibility of the cloud now allows for a wide range of solutions—"anything as a service" or "XaaS"—delivered through infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS) models via hybrid (public and private) clouds. Along with substantial cost savings, cloud's game-changing agility allows an enterprise to do things it never could before, be it entering a new market, creating a new product or inventing an entirely new industry.
Deriving insights from data: With every credit card swipe, Facebook "like" and move of the assembly line, organizations generate data — or Code Halos — that holds clues to where it can reduce costs, improve customer service and fine-tune its products and services. Cloud-based services can often provide data management and analysis infrastructure at far less cost, and far more quickly than deploying them in-house.
Entering new markets: The globalization of commerce, widespread adoption of mobile devices, the rise of social media and rapid growth in emerging countries are continuously creating new market opportunities. Entering these new markets is easier with cloud's scalable and flexible IT infrastructures that can quickly and easily grow to support new market requirements, or shrink if conditions change.
Shifting from maintenance to growth: For decades, IT has been trapped by the need to spend as much as 80% of its budget maintaining existing systems. By turning to the cloud for "on-demand" purchases of infrastructure and services, organizations can use more of their tight IT budgets on new initiatives that grow the business.
While benefits of shifting to the cloud are undeniable, organizations need to have a clear vision of why they need the transformation — and what they aim to gain from it. To help companies on their transformation journey, we developed the Cloud-Enabled Enterprise Transformation Fabric (illustrated in Figure 1), which incorporates a methodology, tools (including accelerators), services and best practices for cloud-enabled transformation. This approach has enabled hundreds of companies in the U.S., Europe and Asia/ Pacific to quickly adopt public, private and hybrid cloud services, while lowering risk, often in one to six months' time.
Cloud-enabled business process transformation, leveraging cloud models to optimize fundamental processes through simplified, harmonized and innovative industry and functional activities that enhance core business value.
Cloud-enabled business innovation, leveraging cloud-based social, mobile and analytics technology (typically SaaS, PaaS and BPaaS) for mobile enablement, device updates and monitoring; big data analytics; and collaboration.
A cloud-enabled application platform rationalization methodology that leverages cloud models (typically SaaS, PaaS and IaaS) to build agile applications that are extensible, technologically advanced and able to take on evolving business requirements.
A cloud-enabled data center modernization methodology in which cloud models (typically IaaS) are used to untangle and replace the organization's complex and costly legacy infrastructures with data centers that are more efficient and flexible to meet fluctuating service demand.
Cloud in Action
Cognizant Cloud Steps constitutes:
A tested transformation process: This eases the enterprise's journey to a future-state cloud model.
Pre-built solution blueprints: Pre-defined components accelerate the adoption of cloud in high-traction use cases. For example, the blueprint for the collaboration cloud would contain the necessary rationale for adopting collaboration solutions, approaches for how the cloud resolves typical pain points, a model architecture for the solution, identification of Cognizant and third-party tools that have been evaluated to address these challenges and form a part of the solution architecture, and expected benefits from implementation of this solution.
Best-in-class tools: These tools cover cloud assessment, governance, migration and management of cloud-based systems.
Cloud "landing zones:" Support for hybrid cloud landing zones is provided, including building a cloud at the client's premises, using third-party cloud services, or leveraging our best-in-class cloud infrastructure.
Determining the Business Value from Cloud
Cost saving: To determine IT cost savings, companies can compare the cost of their current infrastructure, facilities, utilities, software licenses and maintenance fees etc. with the equivalent infrastructure in a cloud model. With cloud, IT operating costs must take into account the provider fees for compute, storage and network requirements, licenses and internal IT labor costs.
Cap-Ex to Op-Ex: On-demand, pay-as-you-go models maximize the leverage of capital available to acquire IT and business services while minimizing the risk to the business in the capital used for initial investments and ongoing maintenance charges.
Improvements in business agility: Measuring improvements in business agility usually depends on the unique key performance indicators (KPIs) that enterprises track for themselves such as:
- Percentage reduction of development cycle time is a measure of productivity.
- Ratio of development cost to annuity revenue and growth in market share for existing channels could indicate ROI on IT.
- Percentage gains in average operating cost per employee, per business transaction, or number of transactions per support full-time equivalents (FTEs) are all measures of productivity.
- The rates of customer retention and renewals might quantify product/service quality.
- Percentage gains in growth rate of new channels/client acquisition could quantify business growth.
As enterprises explore the use of cloud models in their transformation journeys, it will be crucial for them to understand the business value of cloud adoption. Only after clearly understanding their own needs should organizations begin the tactical efforts of migrating data and applications from the current environment to the cloud.
Continuing economic uncertainty and unforeseen business conditions require operational flexibility to support growth, whether organic or via acquisition, while enabling innovation. The cloud provides the infrastructure and pay-as-you-go consumption model to contend with — and thrive under — today's fast-changing business environment.
For detailed pre and post-transformation scenarios, and examples from Cognizant's work in transforming businesses of international clients, read our white paper Cloud-Enabled Enterprise Transformation: Driving Agility, Innovation and Growth [PDF]. For in-depth recommendations about implementing your cloud strategy, read our whitepaper Beyond Cost Savings: Driving Business Value from the Cloud Through XaaS [PDF]. Please visit Cognizant's Cloud Computing Services Practice for more information.