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Vikas Arora

Vikas Arora, Country Manager, Cloud Business - IBM India & South Asia

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Five Ways the Cloud Can Drive Innovation for Enterprises

By combining multiple cloud initiatives into a coordinated program and in partnership with the ecosystem, organizations can use the cloud to quickly build and test new product ideas, move into adjacent industries or geographic regions, deliver new products and services more effectively, and move ahead of their competition and even disrupt economies.

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Cloud adoption has moved beyond the stage of acquiring technology to powering business innovation worldwide. Cloud models are enabling organizations to embrace the digital transformation necessary to remain competitive in the future. Five years ago, organizations were adopting the cloud primarily to streamline IT infrastructure and cut costs. Now they are working on a variety of goals and strategies.

The most innovative companies are using the cloud as their “go to” platform for driving enterprise transformation. Cloud computing is helping companies to explore new industries, transform customer experience, monetize information to build new sources of revenue and forge new business models.

A new study from the IBM Institute for Business Value, "Beyond Agility: How Cloud is Driving Enterprise Innovation," found out that 71 percent of the companies are using the cloud to innovate. Out of more than 1,000 respondents from 18 industries interviewed around the globe, 76 percent of organizations report that their most successful cloud initiative drove expansion into new industries. Cloud enables these innovators to use skills available throughout their ecosystems in order to develop new operating capabilities that shift industry economics in their favor.

The study uncovered five key ways that the cloud enables innovation for organizations:

  • To expand product and service features while improving the ease-of-use of products and services.
  • To design sophisticated customer journeys tailored to unique customer preferences.
  • To rapidly prototype, develop and deploy new products and services.
  • To reach new customers.
  • To gain entry to a new industry or market.

While disruption is a less common occurrence than five years ago, there are still companies that use cloud initiatives to radically recast the status quo of their industries, create distinct new business models or assemble unexpected value chains.

Enterprises wield cloud to invent a new customer need by creating a revolutionary value propositions. They can confer a first-mover advantage and “own” the market, at least for a time. Let us take a case in point. Talview, a human resources software company, is disrupting the professional recruiting services industry with a cloud-based solution. In the era where conventional approach to applications is still into play, Talview uses cognitive algorithms for impartial behavioral insights acquired from a multitude of structured and unstructured data sources – including information on how candidates comport themselves during interviews and on social media. This has resulted in a broader, more rigorous and objective candidate selection process. Talview’s cloud-based service benefits the HR department immensely and increase the suitability of company hires by up to 40 percent. Hiring cycle times can also be shortened by up to 75 percent and requirements of company recruiting resource, are cut by up to 60 percent.

Partnerships with the ecosystem to drive innovation

If an enterprise wants to be a disruptor, it is better to consider using cloud to invent new customer needs and define newer markets. They should disrupt legacy competitors creating new ecosystems which give way to a new value chain. Enterprises sharing resources, processes and talent among ecosystem partners will achieve critical capabilities which do not reside in a siloed organization.

In organizations where IT departments adopt cloud technology without significant input from various business departments, its effectiveness is dramatically curtailed, the study found.

Almost half of organizations practice another approach in which a dedicated cloud team develops their organization's cloud initiatives. This approach can be advantageous, particularly if the governance team includes C-suite, business department and IT executives who view their organization's cloud strategy as a top business priority and work together to ensure that cloud adoption is integrated with strategic business objectives.

By combining multiple cloud initiatives into a coordinated program and in partnership with the ecosystem, organizations can use the cloud to quickly build and test new product ideas, move into adjacent industries or geographic regions, deliver new products and services more effectively, and move ahead of their competition and even disrupt economies.

How important is integrating cloud adoption with business objectives? 

The study further highlighted that more than half of high-performing organizations were already fully integrating their cloud initiatives as part of overall strategic transformations. This is more than 2.5 times the rate of low performers in the study.

When organizations fully integrate their cloud initiatives, they can be transformative, transcending organization who are building businesses which are future ready, scalable and globally replicable for larger impact.  

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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