For decades, a CIO’s responsibility was to reduce costs and keep the a company’s IT infrastructure running. Now, CIOs and IT departments are tasked with driving business innovation, writes CAMERON BEVERIDGE, Director: Cloud at SAP Africa.
Businesses acknowledge they are buried under mountains of inefficiencies and missed opportunities. CEOs understand that digital is an opportunity or a threat. So, the question is not about awareness, but how to unleash the power of digital transformation while finding a balance between maintaining a healthy business and current infrastructure, and innovating without disruption.
The mandate from business to IT has shifted. For decades, a CIO’s chief responsibility was to reduce costs and keep the lights on just enough to run mission-critical processes. Now, CIOs and IT departments are tasked with driving business innovation. To stay competitive in a digital economy, it is no longer sufficient to have a system landscape whose primary role is to keep records.
Most organizations invest a great deal to maintain and customise their IT landscapes to meet their unique business needs. Today, nearly every organisation has some level of cloud presence, typically for customer relationship management (CRM), human capital management (HCM), or procurement. The question we hear most often from customers is not how to make their first foray into the cloud, but rather how to design a comprehensive enterprise cloud strategy that:
- Protects existing investments
- Accelerates innovation
- Keeps an organization’s unique business processes intact
Moving to the cloud does not mean breaking off some parts of the business in a piecemeal fashion or taking a rip-and-replace approach.
Cloud is one of the key drivers of digital transformation. Cloud has disrupted the traditional IT model by drastically reducing time to market and TCO for innovative solutions. With its ease of use and ubiquitous access, cloud has democratised the decisions about software purchasing, access, and usage.
Cloud computing offers immense opportunity for companies to improve their business operations, regardless of sector. Modern cloud offerings reduce IT infrastructure complexity and free up resources that can be better applied to driving innovation. And with security topping the list of concerns among business and IT leaders, cloud providers today invest talent and energy into ensuring their offerings are able to meet even the most stringent security requirements.
According to the IDC, cloud spending is expected to surge by 25% to reach more than $100bn, with cloud data centres expected to double in number. In a separate study, analysts found that an astonishing $237bn in profits were lost by the top 200 global companies alone, mainly due to the hidden costs of complexity.
Despite these clear signs, cloud migration of key business applications is still met with reservations and, often, resistance. IT leaders list concerns such as possible downtime, security, potential loss of control over key business processes, and cost.
Managing increasing complexity
As technologies like artificial intelligence, predictive analytics, AR, VR, and the Internet of Things become mainstream, enterprise IT systems and the digital processes they drive are getting more complex every day. Companies need to find new ways to reduce complexity while ensuring that their IT systems are flexible enough to adapt to the requirements of a shifting technology and business landscape.
Many organizations choose to migrate some or all their mission critical applications to the cloud to increase flexibility. To do this efficiently, it is critical to understand some of the key success factors for a cloud model. The high ground in any mission-critical application cloud solution comes down to four promises:
- A comprehensive, end-to-end SLA approach that avoids unproductive time-wasting by disparate service providers.
- Integration across your application landscape.
- Access to industry and engineering experts and best practices to support ad hoc and ongoing needs.
- Ability to leverage new skills and resources across infrastructure, technical management and cross vendor application management.
SAP’s cloud offerings provide companies with the global expertise and local knowledge needed to free up internal resources and shift focus away from IT management – i.e. ensuring systems are up and running – and to innovation, the driving force of all successful businesses in today’s digital economy. The benefits of this are clear:
The cost benefit of cloud
Running business applications in the cloud means less maintenance, especially in comparison to on-premise solutions, as many subscription models include company-specific maintenance and support in addition to hosting. Investments to replace outdated hardware are also no longer necessary, as these are already included in the monthly fees and service agreements.
Using managed cloud services allows companies to scale the scope of applications they pay for to what they really need. While existing on-premise solutions might have numerous functionalities that companies pay for (although they are often unnecessary), companies in the cloud only pay for what they really need and for what they use. When business requirements change, companies can flexibly adapt their services and applications in the cloud as required.
Unlocking business value
By partnering with a leading cloud provider such as SAP, companies can accelerate business processes that were previously limited by the performance of their on-premise systems. In addition, they can swiftly replace outdated applications with new ones and make sure that different company locations with previously diverging software releases are all upgraded at the same time, reducing the overall complexity of their IT landscape.
Support is similarly simplified: by moving insulated business applications to the cloud, companies are able to work with a single provider that assumes total responsibility. With a comprehensive, managed cloud offering such as the SAP HANA Enterprise Cloud, organisations can further optimise their IT landscape to future-proof their business. This allows them to focus on the functional and business layer of their stack – driving innovation, business value, and growth – while handing off the technical aspects of system and application management to a reputable cloud partner such as SAP.
With 125 million cloud subscribers and 44 state-of-the-art data centres in 27 locations around the world, isn’t it time you spoke to SAP about how the cloud can fit into your company’s digital transformation journey?
Gadget goes to Hollywood
Gadget visited the Netflix studios last week. In the first of a series, ARTHUR GOLDSTUCK talks to CEO Reed Hastings.
Netflix CEO Reed Hastings is no stranger to Africa. He has travelled throughout South Africa, taught maths in Swaziland for two years with the Peace Corps, and visits close family in Maputo. As a result, he is keenly aware of the South African entertainment and connectivity landscape.
In an exclusive interview at the Netflix studios in Hollywood, Los Angeles, last week, he revealed that Netflix had no intentions of challenging MultiChoice’s dominance of live sports broadcasting on the continent.
“Other firms will do sport and news; we are trying to focus on movies and TV shows,” he said. “There are a lot of areas that are video that we are not doing: sports, news, video gaming, user-generated content. We don’t have live sport.
“We’re not replacing MultiChoice at all. Their subscriber growth is steady in South Africa. They serve a need that’s independent of the Internet, via low-price satellite. There is no intention of capturing that audience. If they’re growing, it’s because they serve a need.”
While Reed ruled out any collaboration with MultiChoice on its satellite delivery platform, despite its collaboration with another pay-TV service, Sky TV in the United Kingdom, he did not close the door. He stressed that Netflix saw itself as an Internet-based service, and would pursue the opportunities offered by evolving broadband in Africa.
“If you look in other markets like the USA, how Comcast carries us on set-top boxes with their other services, it could happen with MultiChoice, the same as with all the pay-TV providers.
“We’re really focused on being a service over the Internet and not over satellite. Our service doesn’t work on satellite. Where we work with Sky is on Internet-connected devices. We’re happy to work on Internet-connected devices. We tend to work on smart TVs, but need broadband Internet for that.
“Broadband is getting faster in Nigeria, Tanzania, Kenya and South Africa – we can see the positive trendlines – so it’s more likely we will work with broadband Internet companies.”
Hastings is a firm believer in the idea that one content provider’s success does not depend on pushing another down.
“HBO has grown at the same time as we have, so can see our success doesn’t determine their success. What matters is amazing content with which the world falls in love.”
Click here to read on about Hastings’ views on international expansion, and how the streaming service selects content for its platform.
Take these 5 steps to digital
By MARK WALKER, Associate Vice President for Sub-Saharan Africa at IDC Middle East, Africa and Turkey.
Digital transformation isn’t a buzz word because it sounds nice and looks good on the business CV. It is fundamental to long-term business success. IDC anticipates that 75% of enterprises will be on the path to digital transformation by 2027.
However, digital transformation is not a process that ticks a box and moves to the next item on the agenda – it is defined by the organisation’s shift towards a digitally empowered infrastructure and employee. It is an evolution across system, infrastructure, process, individual and leadership and should follow clear pathways to ensure sustainable success.
The nature of the enterprise has changed completely with the influence of digital, cloud and the Fourth Industrial Revolution (4IR), and success is reliant on strategic change.
There is a lot more ownership and transparency throughout the organisation and there is a responsibility that comes with that – employees want access to information, there has to be speed in knowledge, transactions and engagement. To ensure that the organisation evolves alongside digital and demand, it has to follow five very clear pathways to long-term, achievable success.
The first of these is to evaluate where the enterprise sits right now in terms of its digital journey. This will differ by organisation size and industry, as well as its reliance on technology. A smaller organisation that only needs a basic accounting function or the internet for email will have far different considerations to a small organisation that requires high-end technology to manage hedge funds or drive cloud solutions. The same comparisons apply to the enterprise-level organisation. The mining sector will have a completely different sub-set of technology requirements and infrastructure limitations to the retail or finance sectors.
Ultimately, every organisation, regardless of size or industry, is reliant on technology to grow or deliver customer service, but their digital transformation requirements are different. To ensure that investment into artificial intelligence (AI), machine learning, knowledge engines, automation and connectivity are accurately placed within the business and know exactly where the business is going.
The second step is to examine what the business wants to achieve. Again, the goals of the organisation over the long and short term will be entirely sector dependent, but it is essential that it examine what the competitive environment looks like and what influences customer expectations. This understanding will allow for the business to hone its digital requirements accordingly.
The third step is to match expectations to reality. You need to see how you can move your digital transformation strategy forward and what areas require prioritisation, what funding models will support your digital aspirations, and how this tie into what the market wants. Ultimately, every step of the process has to be prioritised to ensure
The fourth step is to look at the operational side of the process. This is as critical as any other aspect of the transformation strategy as it maps budget to skills to infrastructure in such a way as to ensure that any project delivers return on investment. Budget and funding are always top of mind when it comes to digital transformation – these are understandably key issues for the business. How will it benefit from the investment? How will it influence the customer experience? What impact will this have on the ongoing bottom line? These questions tie neatly into the fifth step in the process – the feedback loop.
This is often the forgotten step, but it is the most important. The feedback loop is critical to ensuring that the digital transformation process is achieving the right results, that the right metrics are in place, and that the needle is moving in the right direction. It is within this feedback loop that the organisation can consistently refine the process to ensure that it moves to each successive step with the right metrics in place.
There is also one final element that every organisation should have in place throughout its digital evolution. An element that many overlook – engagement. There must be a real desire to change, from the top of the organisation right down to the bottom, and an understanding of what it means to undertake this change and why it is essential. This is why this will be a key discussion at the 2019 IDC South Africa CIO Summit taking place in April this year. With this in place, the five steps to digital transformation will make sense and deliver the right results.