Innovation in Business and Technology on Ulitzer

Thank you for your patience while I gathered my thoughts on positioning the enterprise for cloud computing.  In the article, “Silicon in the Cloud“, we discussed the influence of semiconductor innovation, particularly multi-core developments, on systems virtualization, and the resulting business model innovation seen in cloud computing.

And in the 3 part article, “Innovation and Risk in the Clouds“, I wrote about cultural organizational readiness for a more innovative and risk taking enterprise.

Those articles, and others, provide the basis to consider a cultural, and enterprise shift towards Innovation and cloud computing.  Today, I will provide a high level approach with the intent of preparing your organization to become a next generation enterprise (more on Enterprise 2.0 here), and leverage Internet paradigms and business models, such as, cloud computing (SaaS, PaaS, and IaaS) as companies like Salesforce, Google, and Amazon do today.

On February 18th, 2010, I came across this article by ZDNet Asia, IT budget cuts lead to less profit, innovation, and this section caught my attention, “More than half, or 53 percent, of CIOs globally failed to see how cloud computing could save them money, even though the cloud model was designed to reduce capital expenditure by cutting out the need to purchase additional servers or software applications to refresh IT architecture, the report stated.”

Yet, you have probably seen the news of Microsoft betting the entire company on cloud computing.  That’s a good indication of where businesses will be headed in the future.  At least Microsoft recognized that it did not have a viable, long-term alternative.  Sure, it could have taken the GM approach, and keep milking the cash cow, ultimately suffering the same fate down the road, or like Intel, consider cannibalizing its own markets.

It is true that a lot of cloud is just marketing hype, and this could very well be the same (so lets observe, and see if they put their money where their cloud is), similar to the early days of the Internet, so I can understand your skepticism.

Nevertheless, I hope you’ll agree that whether you choose to move to the cloud, have a hybrid enterprise, or just continue with business as usual, it would be prudent to consider preparing your organization, and enterprise systems, to be highly competitive, agile, innovative, and responsive to customer needs.  Customers are becoming used to business at the speed of the Internet – that is, in minutes, hours, and days – not weeks and months.  So at a minimum, your enterprise should keep pace.

If you’re a small enterprise, your consideration set for adopting a cloud computing business model is different.  However, if you’re a large enterprise, the risk proposition changes.  You have an established culture, a successful business, a brand to protect, a large workforce to manage, and other variables to consider.

So how do you make the transition to a new Innovative, Next Generation Enterprise?  Should you?  And if so, when?

I don’t claim to have all the answers (and I would be wary of anyone that does), but I do have a broad idea for a road map to initiate the transition.  After all, no one has made the transition from a legacy enterprise to a next generation enterprise.  Those organizations that are cloud computing leaders today, have their origins as Internet companies.  Legacy enterprises have not made a full transition to a new, next generation, enterprise business model.

The early days of the Internet were similar, though we did not have the benefit of history as a guide back then.  Having been at the forefront of that emergent technological shift, and gone on to join IBM in helping other companies build a presence on the Internet, much of what we see today is familiar to me, and today we have the added benefit of history as a guide.

If you have already answered the question, for yourself and your enterprise, as to why you should make the transition to Enterprise 2.0, and determined that you should transform your business to leverage the cloud computing paradigm, then the next question becomes, “When?”, followed by, “How?”  So lets address those.

First, now is not the time to panic, you have time to do it right – if you begin to take steps toward that end now.

Second, the cloud is not your enterprise mess for less.  If you move a mess to the cloud, it will still be a mess, and in the short run, you may indeed pay less, but who knows what your actual total costs will end up being?  I would not even hazard a guess.

So what should be done?  Develop a strategy, a plan, and execute.  My preference for strategy is a prioritized focus on an innovation infusion model (or models), a shift in corporate culture, and business transformation, all aligned with, and in support of, the chosen strategic focus.

1. Strategy: Inspired Innovation in your products, processes, business model, and customer experience for your markets and the world.
2. Change your corporate culture to a culture of innovation supporting your strategy.
3. Transform your enterprise infrastructure, business units, and processes for a flexible, agile, cloud computing deployment model (public, private, or hybrid).

While it seems simple enough, it is quite a challenging undertaking given the corporate obstacles, politics, overcoming existing culture, identifying the right metrics, and resistance to change, all while continuing to run a business.  You can, however, begin to undertake continuous improvement and efficiency initiatives to rally the organization around the strategy, change the corporate culture, and transform your enterprise. We will cover some of those initiatives in part 2 of this 3 part article.

-Tune The Future-