High speed. Real-time. In-memory. Whatever?
The IIJ Europe team recently attended the annual SAP user conference (UKISUG15) in Birmingham. Judging from the messages emblazoned on the 60-plus exhibitors’ stands, this show was all about capitalising on the SAP HANA revolution.
However, it soon became apparent that beneath the HANA-mania emanating from the stalls, the reality of the show’s 400 delegates and that of the suppliers was a pitch or two below perfect harmony.
Now, very few people question the seemingly limitless capability and sheer power of the SAP HANA platform to revolutionise the data landscape for organisations. Evidence of this can be witnessed in the burgeoning global start-up arena where ever more new firms are building their products on HANA.
Yet, the nature of enterprises and their complex corporate structures differs vastly from the blank canvasses enjoyed by the whizz kids. Being an established company often means long-term investments, countless IT systems, thousands of employees, multiple locations, demanding shareholders and so on. Of course, what this really equates to is slow-moving parts and an aversion to transformational change at all levels of the org chart. In short, it’s a big no thank you to risk.
So why specifically are enterprises not guzzling down the Hana Kool-aid? What exactly is the big risk? Well, it’s actually quite straightforward and something that came up time and again at UKISUG15: business case. Businesses across all industries are asking the question of “why” they should adopt HANA. Beyond the advertising slogans, decision-makers remain ill-informed of the tangible benefits as well as the use cases for effective implementation.
Indeed, UKISUG themselves have identified “lack of business case” as the number one barrier to adoption amongst a startling 71% of their membership. While good news does exist in the notable numbers confirming a place for HANA on their three-to-four year roadmaps (31% with a further 63% intending to invest eventually), without clear and relevant business case guidance such roadmaps are destined to either pause or result in expensive failures for many.
For SAP partners, this absence of guidance poses a roadblock but also a significant opportunity with regards to their own HANA aspirations.
The fact is, if HANA is being factored into the plans of so many customers then obviously there is strong comprehension in the marketplace for the platform’s ability to drive efficiency; particularly in reducing the data footprint and fuelling innovation through greater insights gained from transactional and analytical data.
What SAP vendors need to do is help their clients identify and shape the business case that is pertinent to their unique business situation. From here, the roadmap attains clarity: crucially, organisations will know the processes they wish to improve, the skills they must acquire and which of the extensive catalogue of SAP products to start with (often a major challenge in the planning phase).
With the business case established and the roadmap in place, the role SAP partners will play in securing successful HANA implementations is just as vital. During our three days at UKISUG15, delegates continuously cited lack of budget (large investments in current ERP estates), skills (70% of SAP costs are related to talent expenses) and time as major factors contributing to a lagging uptake in HANA. As specialists in the SAP ecosystem, partners can help remove these obstacles; not only by designing the most efficient HANA execution strategies but by bringing their broad skills and licensing knowledge to the table.
Essentially though, widespread market adoption of SAP HANA all starts with sensible, realistic business case guidance. If this is to happen, then an effective triangular partnership must be forged between SAP, its partner network and the customers themselves. IIJ can readily testify to this from our own substantial SAP HANA experience and successes in the Japanese market. Without such vendor, supplier and client collaboration, HANA risks becoming the messiah of an empty church.
So you have actually done it; boldly going where your predecessors dared not. Weeks, months, probably years of planning, researching, testing and deliberating. Everything is in place. The technology is working. All of the crucial arithmetic adds up. Employees are comfortable. Senior management and the Board have endorsed the roadmap.
You have taken your organisation out of the picket-fenced past and into what promises to be a boundless, limitless future.
Welcome to planet cloud.
Only problem, of course, is that once you and the team have landed there, the very thing that determines your long-term survival is – at best – in short and shoddy supply. You see, just like water sustains life here on Earth (and Mars and everywhere else), it is your day-to-day source of easily accessible, fit-for-purpose IT support that really determines whether your cloud strategy lives or dies.
We all accept that the world is full of great and innovative technologies. It is also full of fantastic engineers, world-class companies and the majestic products and services born from their brilliance. However, this all stacks up to a tin of beans when an IT manager wakes up at 4am to discover that the business is unable to access critical data or he/she is in the middle of countering a cyberattack. It is at this precise moment where elaborate solutions cease to matter and basic support becomes paramount.
The fact is that 75% of UK CIOs feel that life in the cloud is synonymous with severe drops in service and support. Slow response times, poor technical knowledge, lack of 24 hour provision and a frustration with automated telephone systems have led to significant dissatisfaction with cloud’s big players. 80% of CIOs have also blasted these vendors for their “advanced support” options with numerous feeling “ripped off” by the mere notion of it.
Lost in the self-contained cosmos of their own hysteria and hyperbole, cloud vendors seem to have forgotten that IT support for consumers used to be akin to water in the civilised world: a basic right, vital for continued existence. Sadly, even those cloud giants who have been stung in the recent past for their inadequate support still do not appear to have learnt from their mistakes.
Perhaps the biggest losers in all of this are the managed service providers (MSPs) who are chomping at the bit to bring quality, value-added cloud-based offerings to market. Like end-users, there are scores of MSPs here in the UK who are investing huge resources into remodelling their operations to take advantage of the cloud opportunity. Yet, while many can grasp the idea of their clients’ key data living off-premise, they simply cannot trust the ability of a hosting partner when it comes to resolving complex issues that threaten their customers’ mission-critical systems.
It now looks quite certain that man will someday soon walk on Mars. The technology, logistics and expertise involved in getting us there may be extremely complicated but once there, human survival seems likely and confidence in this is now justified (ugh, the water thing). If only firms and MSPs considering the leap to cloud could say the same thing of their businesses.
So can the cloud support daily business life? Click here to understand how IIJ Europe is making this possible for MSPs and their customers.
For MSPs, adopting a cloud business model is a little bit like building your own swimming pool in the back garden: we all want one, but it is serious hassle and a tad expensive. So we stick with the neighbourhood public pool or the one at our local gym. This option is handy. You use it when you want to, it’s generally pay-as-you-go and it’s not your job to keep the thing clean.
That said, in a perfect world, any sane person still occasionally dreams of the backyard dipping ground. Who wouldn’t want a pool set at their favoured temperature, with no unwelcome splashes or stray Frisbees spoiling the experience? Seems like a safer option, too. However, without constant care and attention, this private aquatic paradise can rapidly turn into a large bath of floating hell. Oh, and almost forgot – you would usually need to be raking in high 6 figure sums to afford such luxury in the first place!
What we all would really like is the private pool without the upfront expense of building it or the costly grief of daily maintenance. The problem, of course, is that this preference doesn’t exist in the known physical universe; so keep dreaming. As a result, the status quo remains.
This above scenario will ring a few bells with MSPs and VARs who are looking to shift their business models to the cloud. Their alternatives are stark: build the infrastructure yourself (private cloud) or use somebody else’s (public cloud).
Doing what it does best, the IT industry has gone and complicated matters further by offering service providers another choice. It is called “hybrid”. Going back to the swimming pool analogy for a second, hybrid is basically the cloud computing equivalent of keeping your own pool and holding a membership for the 25 metres in one’s locality/gym. While those in vendor-land rejoice in evangelical unison about this “promised land”, the approach – in reality – is potentially as daft as it sounds in the preceding sentence.
What MSPs want from this cloud stuff is actually quite straightforward (er, maybe you just need to be an MSP to see it). They want:
- Less investment risk (a bit of public)
- Something stable and simple to use (a slice of private)
- A high degree of flexibility (another bit of public)
- Proper levels of support (and another slice of private, please)
Until somebody comes along with a credible package that delivers this wish list to MSPs, the cloud dream will remain unrealised. Trapped between two (three, if you include “hybrid”) imperfect options, service providers will never fully commit to a new commercial model that fails to offer a complete answer for them and ultimately, their customers.
For now, it looks like MSPs will inevitably opt for swimming in their existing pool rather than risk drowning in another. Questionable punning aside, you know it’s true.
Previously, we looked at how the world of manufacturing can utilise cloud computing to resolve complex, costly challenges while also driving innovative practices. Despite the key role that cloud plays in transforming the ways in which organisations design, build and deliver products to end clients, it is still ultimately an enabler; a method of providing computational resources.
Converging for success…
In order for manufacturers to realise cloud’s fullest potential, it must work in tandem with other technologies that each possess their own unique capabilities. Today, there are four essential application areas affecting seismic change in the sector: big data, automation, enterprise resource planning (ERP) and mobile.
Traditionally, these four tools would have functioned in silo; each acting independently with severely limited interoperability or cross-site interaction. However, with the advent of cloud computing, more CTOs are grasping the significant operational benefits to be gained when these applications are fully integrated, geographically connected and strategically planned as a single system (rather than as a set of unrelated components).
Bringing big data down to size…
Manufacturing executives are exploiting cloud-based analytics to achieve advances, both in terms of market understanding and insight into existing company-wide processes. Afforded with the ability to attain improvement on a micro and macro level, businesses can combine a better apprehension of current consumer demands and trends with more streamlined internal procedures (including predictive maintenance). Inevitably, this will translate into more relevant products, created in the most efficient manner possible.
Automate to accumulate…
Armed with enhanced market acumen, as well as an awareness of where meaningful internal developments can be made, enterprises must look for the most proficient mode of implementing any changes. Configured in a cloud environment, automation offers manufacturers huge advantages right across the value chain, including:
- Managing the entire ordering and delivery process
- Provision of customer service and support
- Planning, execution and tracking of marketing campaigns
ERP, easy as 1, 2, 3…
While cloud has allowed many industry players to capitalise on analytics and automation tools, it has also facilitated the superior application of ERP systems. In contrast with often cumbersome and expensive to maintain on-premise deployments, hosted ERP platforms are now enabling organisational collaboration on a global scale. Consequently, critical information relating to materials, suppliers and logistics are accessible to those who need to see it, regardless of their physical whereabouts. The end product of this is improved, quicker decision-making.
Though cloud can rightly take a large chunk of the credit for enhancing overall performance of ERP software, it must share this crown with mobility technologies. With cloud supporting plant and system interconnectivity, mobile devices are now letting senior managers monitor and approve key activities, in addition to securely accessing reports from any operational data source. Crucially, mobile removes the locational restrictions one would have encountered as little as three or four years ago.
IIJ’s advice to any CTO currently plotting their company’s IT strategy is simple. Firstly, from our extensive experience in the sector, we urge manufacturers to view cloud and the technologies outlined in this piece as a total, unified system. If these elements are treated in isolation then the obvious synergies which exist between them will be lost. Lastly, management should carefully consider their firm’s entire stack (connectivity, infrastructure. security, etc.) to ensure each layer is fit to realise the best possible output of these powerful applications.
For most of us, manufacturing is a sector synonymous with mechanics, materials, production and process. Naturally, each of these associations contain inherent suggestions of fixed locations and rigid practices: this is slow, physical stuff. In a modern world characterised by accelerated change, unpredictability and complexity, such connotations hardly feel like an ideal recipe for success.
As in most other walks of corporate life, leaders in the manufacturing field are under intense pressure to optimise every aspect of their operations in pursuit of wider profit margins. Simply removing cost, however, will not suffice. Manufacturers must also drive innovation in order to create the added value essential to realising competitive advantage.
Efficiency, flexibility, results…
Ultimately, for CEOs, the goal is to create effectual business models capable of delivering relevant and timely advancements; all in an industry often crippled by complicated, arduous challenges such as machine downtime, product quality and assembly bottlenecks, not to mention supply chain concerns.
In the era of high-tech, achieving this objective is not conceivable without close collaboration between an organisation’s CEO and CTO.
Shedding light on the grey areas…
Great CTOs understand the strong synergies between cost efficiencies and inventiveness: it boils down to greater visibility and the superior levels of insight this permits. The net result of this is a much clearer picture of what is happening on the floor, where the problems are occurring and how to resolve them quickly and effectively. Now imagine all stakeholders in the manufacturing process having access to critical information on a real-time basis, regardless of their location or physical proximity to the issues themselves.
This is increasingly becoming the standard paradigm underpinning the daily functioning of global manufacturers. Driven by existing technology but enabled by advancements in cloud computing, the sector is no longer hindered by the confines of its stationary, rooted nature. The onset of cloud has allowed for critical site and system interconnectivity, from which raw data from a range of places and sources can be gathered, mined, analysed and dispersed to those people who need to know.
Resolving problems, creating value – at once…
Those CEOs whose diaries are void of regular interactions with their CTOs should consider current trends and case studies.
In 2013, Software-as-a-Service (SaaS) applications accounted for almost 25% of all software installed in manufacturing companies. This figure is expected to reach 45% by 2023. Beyond this statistic are examples of entities evaluating and implementing dense cloud-based ERP systems in fewer than 3 months, while also benefitting from enhanced functionality and flexibility at a lower cost (than previous on-premise deployments). Bolstering this evidence of cloud’s ability to slash costs are recent findings that manufacturers are saving an average of £506k per year, per provider.
In fully exploiting cloud computing’s capacity to save substantial quantities of time and money, CEOs are laying the best possible foundation from which to focus their energies on improving their organisation’s output and performance. From here, they can utilise the cloud to centralise and integrate their systems and processes. Aided by easier access to richer, more accurate information, CEOs can not only predict and resolve many of their existing pain points in advance (downtime, bottlenecks, etc.), they can now achieve a number of other strategic goals, including:
- Acceleration of the development lifecycle to reduce time-to-market
- Optimising the methods by which products are being made
- Creation of a smoother, more flexible supply chain
- Better planning and therefore execution of sales and marketing campaigns
While it is clear that adoption of cloud technologies can simultaneously deliver cost-effectiveness and foster innovative practices, CEOs considering a move to this computing model must again consult with their CTOs to identify the best path forward.
Click on the links below to read more about our take on the major IaaS models:
Public: Flexible cloud computing? ‘Computer says no’
Private: Private Cloud: A Case of Like-for-Like
Hybrid: So what exactly is Hybrid Cloud Computing
In our next article, we look at how cloud is maximising the individual and collective potential of mobile, automation, ERP and big data to revolutionise manufacturing practices.
Many of the criticisms and concerns linked with cloud computing are currently levelled at public cloud providers. In the majority of cases, the primary point of contention lies in the perceived security risks of hosting an organisation’s most sensitive data outside the confines of the corporate firewall.
Keeping it in the family…
Anxieties associated with the safekeeping of a company’s “crown jewels” are somewhat understandable. Cloud is still a relatively new concept and decision-makers are under pressure to make sense of the hype which surrounds it. Considering the burden of such responsibility, it is arguably unsurprising when those in possession of a firm’s IT wallet make cautious judgements based on a strong element of fear rather than progressive, transformative thinking.
In the world of cloud computing, a conservative mind-set will frequently result in the deployment of private cloud environments (or, at most, a limited hybrid effort) – essentially an elaborate form of ring-fencing. This decision is ultimately a compromise: a concession that the cloud model is favourable but also a clear declaration that faith in the concept and its immense potential, is limited.
Perhaps faith is not the appropriate word. A lack of understanding? It seems ridiculous to assert that a group of people as bright as the average CTO could fail to grasp the greater possibilities of cloud – true cloud, with all of its scalability, flexibility and related business benefits.
Meet the new boss, same as the old…
It seems – as with most things in life – that scaremongering has temporarily won the day, bringing about a scenario where enterprises have moved from buying and building their own physical IT environments to embracing a private cloud model; an approach that fundamentally equates to retaining the status quo.
One of the most compelling arguments for cloud adoption is the array of short, low commitment contract options that are available: 2 hours, 3 days, 1 week and so on. In tandem with this point is the idea that cloud is intended to facilitate asset free, on-demand computing which removes risk of ownership. Furthermore, thanks to ease-of-deployment, organisations should profit from a reduced strain on technical resources.
We’ve been here before…
In this context, private cloud can simply not be classified as the genuine article. Firstly, with contract terms typically in the region of 3 to 5 years, investment in private cloud requires long term obligation. Moreover, as the infrastructure remains within the jurisdiction of the corporate firewall, businesses fail to fully realise the financial advantages of the shift from capital to operational expenditure.
Compounding this predicament is the severe limit on scalability inherent in private cloud; a model not built to cope with sharp fluctuations in demand. CTOs and IT managers must also acknowledge the maintenance costs associated with hosting their physical assets – not only financial, but also in terms of having the skills available to adequately repair, configure and deploy complex systems.
A new conversation…
As the market begins to mature, it is inevitable that lingering negative debate around cloud computing will begin to diminish, giving way to a bolder, more positive vision on how to utilise it to revolutionise business practice.
However, if enterprises are to fully embrace the concept, then cloud providers themselves must evolve their offerings to marry the benefits of both private and public models. Only then can organisations truly advance their cloud ambitions beyond the group firewall; retaining the technological aptitude, SLAs and security of the private arena while attaining public cloud’s metamorphic powers of elasticity and contractual flexibility.
Tomorrow’s cloud, today…
While the world’s cloud suppliers scramble to refashion their offerings to align with the desires of the enterprise, IIJ Europe are already at the dance. In IIJ GIO – Japan’s market leader for the past 5 years – the company is presenting global firms and business partners with the perfect fusion of public and private cloud.
No more compromises.
An uncertain economic climate. The changing regulatory environment. Building sustainable, transparent business models. Maintaining service and productivity levels with fewer resources.
Any of the above sentences would comfortably comprise a list of the top 10 challenges facing today’s finance industry. In essence, decision-makers must master a complex balancing act, whereby regulatory and security guidelines are strictly observed and spending is tightly controlled; while high levels of innovation and customer experience are achieved.
More with less…
Ultimately, it’s all about quality of service – regardless of whether financial institutions are delivering that to enterprises or individuals. The unpredictability of the landscape obviously creates a plethora of concerns for those charged with shaping the strategic course of their organisations. How do you effectively invest in innovation when even the short-term market conditions in which you compete are so unclear?
Agility, agility, agility…
If the finance industry is to thrive in the coming years, then it is necessary that firms operating at every tier strive to be as agile and flexible as possible. This means being able to react to regulatory changes, market trends and customer demands faster. Inherent in this, are bodies lowering their cost-to-serve, reducing time to market and maintaining world class standards of security and legal compliance.
It is imperative that Chief Marketing Officers (CMOs) take a leading role in assessing their company’s operational aptitude to deliver quickly and efficiently. In 2015, the most crucial aspect to focus on will be the organisation’s technological infrastructure and the current strategy, buying processes and spending patterns associated with it.
Value through technology…
For finance groups to fully realise an agility-based business model, broad adoption of cloud computing systems will essentially be mandatory.
Only the cloud allows for the sort of rapid deployment of services expected by the modern consumer. With the rise of industry-specific software-as-a-service (SaaS) providers, financial entities can now benefit from mobile, web and back-end applications custom-built to provide bespoke amenities for the requirements of individual clients and end-users. Critically, such applications can provide CMOs with invaluable insights via their facility to generate real-time feedback and integrate with powerful analytical tools (as well as with other systems such as CRM).
It is through this concurrent process of customer insight and analysis where answers to key problems can be extracted sooner; allowing for the implementation of valuable, relevant solutions as a result. The net effect of this is both sounder investments in technology, innovation and customer satisfaction and (due to the nature of cloud computing) a delivery model which can be promptly altered to placate changing regulatory conditions.
A quick look at the numbers…
According to Gartner, 2016 will witness a scenario in which more than 60% of the world’s banks will process the majority of their transactions in the cloud. Lending credibility to this prediction are numerous compelling examples from around the globe where finance houses have utilised cloud to transform their corporate practices.
We have seen banks reduce deployment times from days to minutes, while cutting expenditure on maintenance and infrastructure by as much as 75%. Meanwhile, other entities are now completing risk analyses in less than an hour as opposed to full days. Once again, it is this agility innate to cloud computing that is allowing financial firms to get more done faster, better and at a fraction of the cost.
The bottom line…
Undoubtedly, the kingpins of capital have some vital decisions to make this year. If they are to seize the opportunities posed by an improving, albeit fragile, economic arena, then overcoming their lingering security concerns around cloud will be paramount.
Of course, it is critical that finance institutions fully appreciate the commercial and legal risks characteristic of moving to any new IT arrangement. It is also fundamental that they understand exactly what they are buying, its compatibility with existing architecture and its ability to serve and support future business plans while fulfilling expectations of the regulators.
Irrespective of their chosen cloud approach, now is the time for CMOs and those responsible for building customer relations to influence their boards; educating them on cloud’s capacity to integrate systems, cater for sudden change and stimulate innovation and how it has already provided companies across all verticals with invaluable competitive differentiation, for much less.