Why cloud insights are more important than a quest for innovation

Innovation has become the buzzword of the decade, with many organisations seeing it as an end in itself - but sometimes without defining what they really mean by it.

Business leaders have become familiar with easy, conference-stage mantras such as ‘Fail fast and move on' or ‘Move fast and break things'. But such aphorisms are inimical to security by design, because they suggest that what businesses need is a world full of broken, disrupted things that need to be fixed before customers trust them enough to use. In a world where reputations can be won or lost overnight, that's a high-risk approach.

What businesses really need is greater insight from their data, and - from those quantifiable and verifiable discoveries - the ability to capitalise on new market opportunities and customer behaviours before their competitors do.

Just as importantly, they also need real insight into how their organisation is operating internally, including against metrics such as staff productivity, efficiency, sustainability, growth, and profitability.

IT leaders are increasingly in the front line of such intense demands and processes as front-office product development and back-office maintenance are often brought together under the same umbrella. All technology decision makers are now expected to be much more focused on supporting the business - strategic and operational enablers rather than leaders of a mere maintenance and repair function.

The call of the cloud

This is one reason why organisations of every size and type are turning to cloud platforms, infrastructures and services to help deliver critical business processes to their customers and partners. Some are transferring functions and data wholesale, recognising the advantages of scalability, cost reduction, predictable finance, and seamless upgrades, while others are creating hybrid environments that allow them to retain their organisation's legacy.

In a recent survey of IT decision makers, Computing Research found that scalability was identified as either a major or significant motivation for moving operations to the cloud by nearly 80 percent of respondents, greater agility and competitive advantage by 74 percent, cost reduction by 73 percent, and cost predictability by 68 percent.

Asked how successfully those motivations have been turned into business results, 79 percent said scalability has been achieved, 73 percent that agility and competitive advantage have been realised, 63 percent that costs have been reduced, and nearly 75 percent that cost predictability is greater. Overall, that's a good match between ambition and results.

But while shifting functions to the cloud can produce measurable benefits, many users remain concerned about risks to data security (42 percent, with 38 percent of respondents believing their fears were justified). However, rather more see the cloud as holding out the promise of greater security: a total of nearly 70 percent saw improved security as either a major or significant motivation for moving business functions to the cloud.

Moving the back office

As IT leaders increasingly combine front office development with ‘keeping the lights on', the cloud also offers a path to integrating business functions such as Finance, Human Resources (HR), and Business Planning into a seamlessly managed whole - one that offers unprecedented levels of insight into those processes.

Computing Research found that Business Intelligence is the most popular application for hosting in the cloud: 38 percent have already moved this function to a third-party platform, with a further 34 percent planning to do so. This is followed by Human Capital Management (HCM, 36 percent and 38 percent), Customer Experience (35 percent and 34 percent), Enterprise Resource Planning (ERP, 35 percent and 34 percent), and Payments (34 percent and 36 percent).

Meanwhile, 33 percent have already moved Accounting into the cloud, 32 percent Payroll, 32 percent Supply Chain Management (SCM), 30 percent Financial Planning, and 28 percent Financial Services Automation.

Cloud dashboards offer decision-makers windows into internal processes, efficiency levels, productivity, and staffing that were simply not available before. Computing found that achieving better employee insights in the cloud is seen as either a major or significant motivation by over 57 percent of IT leaders, just behind extracting new customer insights (identified by 60 percent of respondents).

However, other factors are seen as even more important, including new product features and technical abilities coming seamlessly on stream, identified by over 81 percent of respondents as a key motivation.

Forward-looking back office

The business environment is changing fast and IT and business decision makers now demand even further depths of knowledge and efficiency from their data - even to the extent of predicting what might happen in the near or medium term. New levels of insight are promised from applying artificial intelligence (AI) to internal and external data in the cloud, maximising the advantages of AI's pattern recognition abilities.

Meanwhile, replicable processes can be farmed out to virtual machines via automation, turning regularly used employee skills into on-demand digital workforces in their own rights.

IT leaders certainly see the promise of AI and automation to improve internal processes, with nearly 63 percent identifying then as major or significant motivations for shifting data and processes into the cloud. But these technologies are not without their risks, which will be explored in a separate report on this site.

This article is from Computing's Cloud ERP Spotlight, hosted in association with Workday.