Rising of the enterprise to the clouds - An adoption approach for the Enterprise
How would Cloud Computing help an Enterprise bring about IT consolidation, an approach that can help reduce ongoing running costs as well as help respond to business needs faster?
Enterprises globally are growing at a rapid pace both organically and inorganically. A few years back IT build systems for businesses which would last a time frame ranging anywhere from 5 to 10 years. Systems used to be built to last. But today, systems have to be designed to handle change. Change, which is inevitable today, is not in years but months and sometimes even days. The IT delivery cycles are expected to shrink and meet the demands of the business faster.
In an organic growth story, enterprises grow at a steady pace and the IT infrastructure can be budgeted and planned to meet such growth, but in an Inorganic story the load which is expected to be handled by the infrastructure in the near future would manifold to as large as 10 times if not more. In such cases, IT is pressed with challenges to operationalize the systems across the different entities with low cost and faster time to market.
The IT systems in the acquired or merged companies will comprise of three main categories of systems:
a. Core
Core systems are the heart of the enterprise and are primarily mission-critical in nature. They often tend to drive the competitive advantage and which the business highly relies on. For e.g.: core banking, billing engines in telecom companies, registry systems in AMCs etc...
b. Supporting
Supporting systems tend to be the next level which may feed into or are driven by the core systems. These tend to be built around the core systems at a tactical level to support the day-to-day operations of the company. For e.g. reconciliation modules, brokerage computations, data analytics etc.
c. Peripheral
Enterprises may also build peripheral systems which tend to be one-off or are used intermittently at irregular intervals but with the anticipation to meet heavy demand. With these systems the “lights have to kept on” leading inefficient utilization of resources in the enterprise. Example of such systems could be Campaigning systems, Survey, Polls, Extranet or Internet portals etc.
Cloud computing is still very young. Lack of standards, security and regulations are some key concerns which are keeping enterprises at bay. Enterprises today are in the very early stages of cloud adoption and would want to test the waters before committing to cloud.
From the above categories of IT systems, clearly with the concerns existing around cloud, core enterprise mission critical systems are not suitable for the cloud. At the next level, support systems based on data criticality to the enterprise and regulations governing it, applications which can be cloud enabled could be identified. Here too not all applications can be migrated completely to the cloud today. One may come across systems which have a deployment mix of part on-premise and part cloud. And enterprises would want to be able to bring about such separation in their existing systems to start the move to the cloud. The third category, Peripheral systems, today seems to be the most probable candidates which have high relevance for moving to the cloud. Being non-mission critical, less restrictive security and regulatory norms to be adhered to, criticality of data not really a concern, being factors which may not worry the IT from moving these systems to the cloud. They would not only bring about efficiencies in operations in terms of cost and time to market but also free up some of the people resources an enterprise holds and align focus in core areas of the business to drive more innovation.
The move forward for Enterprises considering consolidation can begin by identifying peripheral systems from their existing application portfolios. This should be followed by a detail assessment and evaluation of the applications from both a business and technology perspective. Based on the assessment an application can be judged to be fit or unsuitable for the cloud. The application portfolio assessment exercise would also feed into preparing the business case for cloud to get a buy-in from the different stakeholders in the enterprise.
From the above exercise, potential applications can either be migrated or, based on the benefits perceived in the business case, newly developed for the cloud. New development may require some explanation here. What I mean by newly developed apps is, scenarios that would require enriching functionality provided to users in a enterprise/business scenario and which may require re-engineering the app for leveraging cloud capabilities. In some cases the cost of building the app would outweigh the cost of upgrading an existing app possible due to poor design, high maintenance apps etc...
Possible scenarios where an application can be re-developed in the peripheral categories could be:
1. During mergers where each company will have their own applications persisting their own respective data locally. Building a single application which can service the needs of all the merged companies and data can be consolidated in the new app.
2. Enrich the Application with new functionality
3. A legacy app which cannot be migrated to the cloud as-is.
4. Existing legacy applications in the sunset phase which are used by very few people or in the process of being replaced
5. Building a SaaS application with enterprises looking at monetizing the competency delivered by a certain app
In a series of blogs here, I will be walking through one such peripheral application which is a potential app to be offloaded from on-premise to the cloud. The drivers and rationale for the same and its adoption to cloud will be discussed. We shall also cover the technicalities on what it would take to develop such an application on cloud.
Go to MYOC - Make Your Opinion Count - Series 1 to continue reading..
