Fast, Flexible and Scalable. The Cloud Enterprise Is Here
A RESEARCH STUDY REVEALS THE FEATURES OF COMPANIES THAT ARE BEING BORN OR CHANGING THEIR SKIN TO LEVERAGE THE NEW BUSINESS OPPORTUNITIES AFFORDED BY THE CLOUDby Guia Pirotti and Paolo Pasini, Bocconi Department of Management and Technology; SDA Bocconi
Translated by Alex Foti
The world of IT periodically undergoes upheavals because of new technology trends – just think of the PC era or the Internet era. Now it’s the turn of cloud computing, which has changed the whole industry over the last years. The companies that offer these services are called cloud providers, and their supply can range from processing and storage services (e.g. Amazon Web Services), to development and integration services (e.g. Google) to application services (e.g. Oracle, Microsoft). They generally charge a fee based on various consumption and usage drivers. The impacts of cloud computing on IT costs and business organization have been extensively studied and the trajectories of digital change for IT functions are quite clear. On the contrary, the very concept of cloud enterprise and the opportunities it offers are still largely unexplored by research, although they inspire new, faster, more agile, flexible, scalable ways of doing business. A cloud enterprise is more responsive to change, so many ways to design a new business organization with new information technologies are still not studied in a systemic way.
From a research study carried out in collaboration with Dell EMC, we found there were at least five characteristic dimensions in a cloud enterprise. First and foremost, an orientation towards change, which means the willingness to adopt standard application software solutions, to be parameterized and customized as little as possible in order to adapt them to some critical and truly distinctive business processes, and top management must be fully aware of this and must guide the entire company around it.
The orientation to outsource more or less extensive parts of business operations (business processes and applications that support them) is another key feature of the cloud enterprise; this also means being more open towards integration with outside actors and readiness to participate in B2B and B2C ecosystems (e.g. eCommerce, electronic payment platforms, sharing of various resources), where various actors specialize in business service components.
The service perspective is a third characteristic dimension. It means relinquishing the concept of ownership and control of assets to move towards the service logic of pay-per-use assets, and this another fundamental element of the transformation of an enterprise in cloud enterprise.
The consequent move of transforming investment costs into operating costs is another key element of the cloud enterprise that has an impact on the company’s cost accounting systems and on the future valuation of digital innovation, since there is a tendency to reduce the values of assets in play.
Finally, the cloud enterprise is a company that has been implementing a digital transformation roadmap, more often than not in a non-linear fashion, with several "trials, errors and restarts", since it is strongly persuaded that change induced by digitization is to be achieve in a steady and determined manner, but should be approached with caution, with changes that are often incremental rather than disruptive.
Setting up a cloud enterprise therefore means setting clear goals, such as a stronger capacity for digital data analysis, digitizing products and services old and new, as well as customer experience and customer engagement: a cloud enterprise strongly leverages the IT function, which is obviously also changing to adopt new technologies, work practices and organizational model, without forgetting that change is systemic and affects the company as a whole. In other words, the cloud is still marred by old problems but also offers real opportunities to really change the way companies work.
