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3 strategies to ready your organization for cloud-based innovation

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strategies cloud-based innovationAfter years of heeding warnings about being disrupted, giant corporations are now behaving like startups. At Allstate, for instance, projects that used to take a year are now turned around in a week.

The cloud is driving this agile approach from the inside and the outside. Internally, cloud technologies have made it possible to try new ideas almost immediately with only a modest investment. Externally, the cloud has fostered consumer expectations for brands to offer mobile interfaces that integrate seamlessly with a brick-and-mortar presence.

All this frenzied activity can yield hit-or-miss results. Failure is inevitable, even laudable. Silicon Valley’s “fail fast” mantra has companies betting on new ideas and concepts, with the belief that not taking risks is the biggest risk.

This agile workplace is as much about mindset as technology. As companies evaluate strategies for cloud-based innovation, here are three strategies to keep in mind:

Adopt a “hurry-up offense”

Moving some, most or all on-premises computing into the cloud often hastens a company’s pace.

A cloud platform layer that enables companies to pick from a menu of options helps create a “hurry-up offense.” Choices include the ability to jump-start mobile, cognitive, social and big data services.

For instance, if you want mobile, analytics and social, the cloud platform enables you to pick those options from a catalogue, quickly select, provision and instantly run them with those services. Previously, such provisioning took months.

Being able to do things faster isn’t necessarily a recipe for success, though. Companies dive in without a strategy or a road map. If you are going to increase your speed, it’s even more important to know where you are going. Companies should make sure enterprise agendas and goals are in sync.

Many companies don’t realize the full benefits of the cloud because they aren’t investing in a holistic approach. Imagine, for example, that a medium-size financial services firm is feeling competition from a fintech startup that has created a smart robo adviser. Simultaneously, it’s nervous about a regional bank that has developed high-end mobile apps as part of its banking experience.

The instinct might be to push business units to start creating new mobile apps using whatever tools they want, then have another group explore cognitive robo advisers. When everything is thrown together, the IT department is left to figure out a back-end integration strategy and hope that it all works.

A more strategic approach would be to step back and take eight weeks to develop a plan. For the millennial market, you want to organize in DevOps style using decision makers from business and IT. That group would come up with app clusters and a wave plan to move legacy apps to the cloud, then pair them with new, millennial-focused apps.

When linked with a cloud security and infrastructure strategy, the apps could be deployed after two or three weeks of testing. At that point it’s not a matter of hoping it all works. You know it all works.

Challenge systems and structures

While a cloud-based framework helps a company become more agile and innovative, it must also shift to a more agile mindset.

“When was the last time you talked to a CFO who said we’re actually budgeting on a monthly basis?” asks Peter Burris, head of research at the tech consultancy firm Wikibon. “There’s a mismatch between how money gets allocated and how the corporation’s trying to build out some of these systems.”

The result is that the head of IT is torn between imperatives to build faster while still drawing funds from budgets created annually.

“Sometimes, agile succeeds and it’s able to drive the flywheel of finance, but often finance succeeds and the gears of annual planning cycles will impede upon development activities,” Burris says.

Such practices are at odds with the pressing need to improve customer-facing systems and keep technology current. In a September 2016 Forrester Research report, 63 percent of respondents considered upgrading those customer-facing websites — desktop and mobile — a critical or high priority.

Embrace a start-up mentality

To sync up agility and financial structures, companies must weave in elements of a lean, startup mentality into the fabric of business units within the company. Often, companies should create the titles of chief digital officer or chief innovation officer to start the process of instilling those elements into the culture.

Another strategy to empower innovation is to employ design thinking. This user-centered approach to solving problems focuses on outcomes and employs a minimum viable product with high ROI. Also, consider adopting jump-start development services in the cloud via platform services that use cognitive, analytics, mobile and social.

Companies also need mental and physical space for experimentation. For some companies, that’s an innovation lab. For others, scaled-down solutions are the better option. IBM, for instance, invites enterprises to its Bluemix Garages, which are physical spaces where people can try new ideas without creating a full-blown innovation lab.

Budgetary realities often clash with aspirations, notes Dave Bartoletti, principal analyst at Forrester Research. “Although most companies acknowledge that innovation labs are important, they are often tight with funding,” he says.

Innovation labs have the potential to disrupt employees. They can undermine morale and create another divide as some employees are selected for the lab while others get left behind.

“If you pull an innovation team out of your organization and bless them as the cool kids, they get to work on the exciting stuff and everyone else keeps the lights on,” says Bartoletti. One solution is to pair people from traditional development teams with people on the business side.

Whether it’s a garage or an innovation lab, the idea is the same: give employees resources and room to experiment. For enterprises that use technology to iron out inefficiencies, this can be a cultural shift. In an age when every other competitor is also experimenting, it’s also a requirement.

Read this study to learn more about how companies are making use of hybrid cloud as an enabler of innovation.

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Neil Raden

It reminds me of of what Hamel and Prahalad said in “Competing for the Future” 20 years ago, describing the budgeting/planning cycle as a “ritual rain dance.” But more importantly, in their work on strategic intent, they pointed out that western companies focus on trimming their ambitions to match resources and, as a result, search only for advantages they can sustain. By contrast, Japanese corporations leverage resources by accelerating the pace of organizational learning and try to attain seemingly impossible goals. We see both approaches in tech companies, but still predominately the former.

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