Cloud transformation is imperative
Line of business (LOB) leaders and application owners within a business recognize that they urgently need to pivot their model to cloud—and not just to save cost or to get out of a data center. They own the apps that drive revenue for the business and modernizing them is critical to continued competitiveness.
The following graphic from Innosight illustrates the ongoing decline in corporate longevity. In the 1980s, companies tended to stay on the S&P 500 for an average of 35 years. By 2027, that tenure is projected to drop to just 12 years. 50% of companies on the S&P 500 are projected to be replaced in the next decade. These changes are largely due to disruption by rapidly growing new entrants. The lifespan of companies that fall behind the digital curve continues to drop.
Looking to the past for growth strategies doesn’t work as well as it used to. We’re living through a paradigm shift requiring a broader vision and true leadership that accepts being accountable for adapting to change.
Figure 1. Declining longevity of tenure on S&P 500. Source: Innosight, 2018 Corporate Longevity Forecast
Properly applied, cloud technology can enable organizations to become more competitive and achieve lasting success. In the case of LOB apps, it increases agility and allows you to take advantage of new technologies. In doing so, it can help you:
- Stay relevant: Meet customer demand for relevant products and services, delivered anytime, anywhere.
- Reduce costs: Do more with less to meet internal benchmarks and fund innovation while improving return on investment (ROI). Starting with pre-built solutions, designed for automation, helps drive down operating costs.
- Maximize the value of skills: Combining cloud technology with managed services enables your talented people to focus on value-added areas of the business, especially applications, data, and services that improve experiences for your end customers.
- Improve performance: Provision capacity as needed with the flexibility to match demand.
- Enhance security and compliance: Protecting data and ensuring uptime are critical to success in a digital economy—and meeting regulatory requirements. Starting from a certified cloud platform with Security by Design built in helps you ensure you meet high standards.
The risk of doing it alone
Economic disruption and changes in customer behavior due to the COVID-19 pandemic have only increased the need to move fast. However, LOB leaders face special challenges that slow things down—especially when trying to pivot to cloud without outside assistance. Often, the IT department has other priorities, or is engaged in company-wide transformation projects, forcing LOB leaders to “wait in line.”
In some cases, the company lacks people with the specialized skills and experience necessary to succeed with cloud adoption. When projects do get off the ground, they are often managed using traditional, manual approaches that prevent agile execution. More broadly, LOB organizations may face difficulty getting executive alignment on the goals of a particular project or may lack the data necessary to make a strong business case for change.
The power of partnership
By working with a managed services provider, such as AWS Managed Services (AMS) or similar outside partner, LOB organizations gain an ally with the expertise and experience to help overcome such obstacles. This includes technical skill, but also extends to include the overall process and approach. For example, at AMS, we help AWS customers:
- Bring the right people together and build consensus on a vision, which can often be easier for an outside organization to accomplish.
- Use data from our previous engagements to build a strong and measurable business case.
- Rapidly lift and shift applications to a well-architected landing zone that is pre-optimized and primed to enable rapid modernization.
- Overcome the challenge of scaling scarce cloud skills to operate a production solution.
- Understand which skills you should invest in to further your competitive advantage, and which can be effectively outsourced.
LOB can be the foundation of broader change
Many LOB organizations find themselves unable to quickly adapt legacy applications, such as those running on mainframes. Moving to cloud-based solutions allows them to introduce and improve new services quickly and easily.
One AMS customer built on the success of its LOB organization to enable broader transformation. An LOB group within a large insurer wanted to succeed in a changing market by reaching a new, digital-native demographic with different needs and wants than its traditional customer base. The group’s customers demanded better, more personalized experiences, especially on mobile devices.
However, the group’s offerings were limited by the core insurance platform, which ran on a mainframe and required expensive hardware upgrades and long lead times for changes. The LOB worked with AMS to accelerate the initiative and was able to launch its first customer-facing application in just four weeks while getting a compliant landing zone and an effective long-term operating model. They also migrated more than 200 servers supporting 2 core applications. They were able to do all this without rearchitecting the mainframe application at the core of the company’s operations. The company saw the value in the new platform and has started moving more brands to the cloud using a similar model. It started with one brave LOB.
The power of the flywheel
Stories like this are made possible by what we call the “transformation flywheel”—a self-sustaining cycle of cloud optimization and modernization that continually liberates money and time for innovation. The graphic below of the transformation flywheel operated by AMS shows the process begins with an initial migration—“starting by doing.” Getting an application to the cloud quickly enables you to take advantage of cloud-native optimization and modernization possibilities. This frees up IT resources to work on differentiating products and services so you can bridge the skill and experience gaps rapidly.
Optimization and automation follow, helping to fund the next steps. Leveraging patterns and reusable automation at scale can drive massive efficiencies while ensuring security and compliance. In doing this, teams move rapidly to modernization, where monolithic applications can be broken down into microservices and where modern application development practices take root. This leads to an environment of insight-driven innovation, creating new apps from products and services available only in the cloud-native world.
Figure 2. The transformation flywheel.
Together toward transformation
Using the skills of a service provider such as AMS helps you reduce risk and maximize security while achieving your business goals faster. Whether it’s creating a secure, compliant landing zone for a migration, automating operations to save time and money, or enabling your team to focus on differentiating factors in your offering, we help LOB organizations create more value. In today’s fast-moving world, the opportunity cost of delaying cloud agility can be significant. Luckily, achieving it is often more straightforward than it first appears. All it takes is the right combination of experience and tools.
Learn more at AWS Managed Services.