Drivers for Change

Drivers for Business Transformation

Regulation Competition 5th September 2019

First Principles of Cloud Adoption

Outsource whatever does not add value your business and use a “Pay as You Go” model where you only pay for services that you use and conversely – if you don’t use something, don’t pay anything for it.

The Well Architected Framework establishes 5 pillars for cloud adoption

  1. Operational excellence
  2. Security
  3. Reliability
  4. Performance efficiency
  5. Cost optimisation

Experience has shown that cost savings by themselves are insufficient cause to move from on-premises to cloud infrastructure.

What then are the real drivers to Cloud adoption by business?

The answer usually comes down to a need or desire for organisational transformation. This is a look at some of the pressures and approaches to cloud adoption. In Australia a Royal Commission into the Banking and Financial Services industry exposed serious malpractice and breach of law and poor governance. Companies highlighted in the Commission’s findings have been forced to actively pursue business transformation.

Healthcare providers, telecommunications providers and businesses at the bleeding edge of technological change have likewise been forced to change, not because of poor business practice necessarily, but because the way their customers do business has radically changed and they need to adapt to a new reality or face extinction. Other businesses have found market realities have forced them to look for new approaches as their existing approach has exposed failings.

It is fascinating to hear business leaders share their experiences of cloud migration at AWS Innovation Day events and other forums. If you wish to be informed about these please contact us and we will curate appropriate events and keep you advised.

Some practical examples follow.

Optus, who were exclusive live streaming providers of the 2018 World Cup football competition in Australia, found that the spikiness of demand overwhelmed their capacity to provide. Rapid deployment within 48 hours onto infinitely scalable services via cloud was required i.e thinking outside the box of their traditional approach as a telecom provider.

Medibank in 2016 were notorious for complaints about poor customer service and delays in refunds for medical insurance claims. Their problem was that they were running their business on a legacy of multiple disparate “hard wired” interconnected and dependent applications. Business transformation by focussing on small, quick changes that provided high value to customers gave them the momentum to turn their business satisfaction approval rating around and re-engineer the way they did things. Medibank embraces cloud

Boral, Australia’s largest building construction materials supplier, had a plethora of applications to maintain that did not work efficiently together. This limited their capacity to deliver improved services such as real time updates on the location and estimated arrival time of wet concrete deliveries by their fleet of 2,400 trucks around the country. They were able to move to paperless dockets for procurement, customer orders and invoicing over a two year journey of transformation into a cloud based business with an agile service culture. Boral moves to cloud

Lion Nathan Brewery, Australia and New Zealand brewery has undergone an overhaul of its business systems as part of a business transformation that allows supplies and customers to have real time updates on logistics. Instead of taking a graduated approach starting with non critical services, they went "all in" and shifted everything to the cloud which caught attention

Lion shakes it up

Let's look at some global players

Nike, like many global businesses that want to run video clips on demand to advertise new product releases, have made extensive use of static websites hosted on S3 buckets to cope with millions of users at effectively unlimited scale.

Coca Cola goes serverless

Coca Cola is rolling out a serverless solution to its vending machines. When a customer wants to buy a drink from a machine an API call is made to the payment gateway to process the payment, then a trigger call is made by the payment gateway to AWS API Gateway (an AWS managed service) to invoke AWS Lambda which does the business logic of updating stock and processing the backend logistics data. Up until 2016 they had been using 6 EC2 T2.Medium machines that cost them $12,864/year to operate with all the support services but the serverless approach reduced cost down to $4500/year.

AWS has a video on demand series on Business Transformation available here

Academic studies

Gartner case study on Swiss companies’ cloud adoption

Advantages of cloud adoption

Acknowledgment - Photo by Annie Spratt on Unsplash

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