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Study highlights pitfalls of failing to integrate cloud migration into core business strategy

Study highlights pitfalls of failing to integrate cloud migration into core business strategy

“You have to look at the business end to end. Otherwise, you don’t get the benefits that are expected,” says Leon Sayers of Unisys

Credit: Photo ID 135213514 © Valerii Brozhinskii | Dreamstime.com

Rather than a ‘lift and shift’ approach, successful cloud implementations require the right framework in place at the outset, with continual innovation and updates over time

More than half (58 per cent) of New Zealand organisations say they have failed to realise notable benefits from cloud computing, mainly because they have not integrated their migration plan into their broader business transformation strategy, according to a new study by Unisys.

The first Unisys Cloud Success Barometer study explored the impact and importance of cloud by surveying 1,000 senior IT and business leaders in 13 countries around the world. 

The study, conducted in August and September this year, had 88 respondents from New Zealand - 61 IT leaders and 27 business leaders, according to Unisys.

The study found that New Zealand organisations for which cloud is a core part of their business strategy are twice as likely (55 per cent) to say organisational effectiveness had changed for the better, compared to only 25 per cent of those who said cloud was a minor part of their strategy.

“One of the challenges we see is if you don’t make cloud part of your core business strategy, you do not look at the whole business processes that you need to change, the culture that needs to change, the way people do business,” Leon Sayers, regional consulting lead, Unisys Asia Pacific, tells CIO New Zealand. “The functions and applications need to change as well.”

“These results show why cloud transformation is not just an IT issue, it’s a business issue,” says Sayers.

 “New Zealand organisations recorded the second-lowest level of success for cloud implementations meeting expectations,” he says on the survey which also interviewed business leaders from Australia, Belgium, Brazil, Chile, Colombia, Germany, Malaysia, Mexico, Netherlands,  Singapore, UK and the United States.

Credit: Unisys

These results show why cloud transformation is not just an IT issue, it’s a business issue

Leon Sayers, Unisys

“However, Kiwi organisations that integrated cloud as part of their business strategy saw the greatest positive gains to help boost revenue, gain competitive advantage, improve productivity and manage costs,” he states.

“Rather than a ‘lift and shift’ approach, successful cloud implementations require the right framework in place at the outset, with continual innovation and updates over time.”

“It is not just doing technology change,” says Sayer. “You have to look at the business end to end. Otherwise, you don’t get the benefits that are expected. All that comes from looking at it from an end to end business conversation.”

He says CIOs have to be prepared to make this conversation with the CEO and the board, based on a business case on the benefits of moving to the cloud.

“While no cloud migration is the same, there are several core building blocks that many successful migrations share,” says Sayer.

“First, organisations must do a thorough planning assessment that looks at anticipated ROI, staff training needs, security risks and identifies where outside expertise is needed. 

“Next, they need to establish a continuous integration/continuous delivery framework leveraging microservices, containers and DevOps. 

“Lastly, having a cloud management portal is critical to providing end-to-end visibility for better monitoring and performance.”

Don't be afraid of bringing a third party in, he points out.

“If you look at the results around the success of cloud, New Zealand organisations that used third-party support to help with their cloud adoption were approximately 50 per cent more likely to realise organisational improvements for the better compared to organisations that handled cloud migration in-house."

Where NZ leads

Of the 13 countries in the study, New Zealand reports the highest use of legacy systems and mainframes, and the fourth-lowest use of public cloud, says Unisys.

Even so, nearly all New Zealand respondents (94 per cent) say they have migrated to the cloud to some degree. 

And New Zealand leads in adoption of multi-cloud, used by 61 per cent of Kiwi respondents, compared to just 28 per cent globally.

The study finds Kiwi organisations using multi-cloud are more likely to see the cloud as being essential to staying competitive and attracting the best people.

For instance, nine in 10 New Zealand multi–cloud users say that if they didn’t move to the cloud, they would be somewhat to extremely concerned about employees being frustrated by old technology (92 per cent) and being able to attract and retain top talent (91 per cent) – compared to 46 per cent and 51 per cent of all New Zealand organisations surveyed.

Meanwhile, 91 per cent of multi-cloud users are concerned about a competitor innovating first and 89 per cent are concerned about being outperformed by a competitor, if they did not move to the cloud - compared to 52 per cent and 53 per cent of all New Zealand organisations surveyed.

“A multi-cloud strategy offers flexibility and choice, and recognises that not all data and applications need to be treated in the same way,” says Sayers.

“It helps organisations gain greater sovereignty over their data, spread their risk in case of downtime and increase the negotiating leverage to shop rates for different service needs from multiple vendors.”  

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