The 5 Things Every CEO Needs To Know About The Cloud
By now, you have heard, read and seen more about the Cloud than you probably ever wanted. And, for those of you who live in corner offices - you are almost certainly wondering why everyone keeps bothering you with something that surely belongs in the dark realms of your IT department. But from Amazon's new self-serve super computing platforms, Google's low cost enterprise productivity tools to Apple's vision for online entertainment - the Cloud is a business revolution that no CEO can ignore. Here is your cheat sheet on the top 5 strategic issues that you need to know about.
1. Cure Yourself Of Cubicles
A client of mine wanted to transform their staid bank headquarters into an office of the future. Most offices are designed to a simple formula - 70% desks and 30% communal spaces. The bank, to their credit - flipped the equation, replacing traditional cubicles with cafe style public spaces and meeting areas. Even better, in lieu of desks every employee was given a locker for their personal possessions and a Macbook Air to do their work. Staff loved the new offices - but there was just one problem. IT had installed old school productivity software on all the new Macbooks which ran unbearably slowly and at times, failed to work properly at all.
Just as important as rethinking the spaces you work in, is challenging the tools you work with. Meeting in cafes to discuss projects is great - but you have to go one step further. When your teams can easily collaborate on documents, projects and presentations by simply accessing a Web browser or mobile application - you can start really creating a culture of innovation and disruptive thinking.
2. Reboot Your IT Department
IT departments, until very recently, believed that their manifest destiny was to defend the fortress at all costs. The outside world was full of threats - hackers, viruses and malware - and their role was to build high walls that kept marauders out, and some of the wayward employees in. Things have changed. Instead of a fortress, the role of IT is closer to managing a marketplace. And more importantly - as any CEO or business leader will admit these days - the suits really need the geeks to make their innovation agenda a reality. Open digital platforms, data sharing with strategic partners or the adoption of new 'software as a service' tools are the mark of a 21st century company. And that requires a new type of IT manager.
Moving forward, you may no longer need massive server rooms in your building or teams of technicians to keep your fleet of devices and systems running. What you will need are smart, young technology innovators who can identify the best global enterprise platforms to partner with, assess the new generation Cloud based security risks, and help educate your people on how to manage passwords and their personal identities online. Put simply - this is a shift from ‘no’ to ‘know’.
3. Win On Customer Experience
How easy is it for your customers to do business with you? How many pieces of paper, forms, approval processes and other impediments to getting deals done has 'traditional business practices' put in the way of winning on customer experience? One of the great advantages of new Cloud based platforms is that they offer companies a chance to fundamentally transform how they engage, serve and ultimately delight their customers.
Here's a simple example. Some time ago my company moved to Freshbooks - an entirely Cloud based invoicing platform. The benefits to my customers were immediate. Rather than paper invoices, my clients were emailed electronic invoices, which displayed in real time the status of payments as well as the entire history of prior billing transactions. From my perspective, there were also some unexpected benefits. The moment one of my clients receives and opens my invoice, I am informed - forever ending those infamous 'cheque is in the mail' or 'your invoice never arrived' conversations. Further, using clever comparative data analytics, I can also see how my business is performing on payment collections compared to other companies of my size and billings.
4. Disrupt Your Industry
If you could create a new product or service, at a fraction of the normal price but with a better service proposition for your customers - would you do it? Or would you wait for one of your competitors to disrupt your industry first?
Last week I was speaking to the CEO of an accounting software company. For many years they had enjoyed a comfortable business selling practice management software to accounting firms. However in recent years, new Cloud based platforms had made life difficult - not just for them, but for many of their clients. When I asked the CEO to explain - he said that the problem was not that their competitor was giving away partner editions of their software away for free but rather the existence of a cheap Cloud based solution had led to the creation of thousands of cut price accountants, working out of cafes who were now making life difficult for traditional, high cost bean counters. Take this as your warning - from professional services, to healthcare, finance and retail - the disruptive impact of the Cloud on your industry is only just beginning.
5. Move To A New Cost Curve
The final, and perhaps most important thing you need to know about the Cloud is its impact on costs. In a traditional IT based organisation, costs are a step function. Launching a new division, adding more people or planning a new product or service will in the short term dramatically shift your cost base to a new level, which over time is hopefully amortised over new revenue growth.
The Cloud offers leaders a very different calculus. Even the smallest of companies or startups can access world class applications, storage or computation services on a per user basis, allowing them to ramp up very quickly as demand increases. Think about it. Could Instagram have scaled to millions of users and sold for a billion dollars in twelve months on a traditional technology development model? And even if you can't imagine how your organisation could innovate as nimbly as an Internet startup - what would happen if one of your competitors did?
The Cloud is not just a topic for technology types - the broader implications of on-demand, web delivered services is a strategic discussion that belongs in the boardroom, not in the basement.
Here's my advice - plan an executive team meeting in the near future to brainstorm the issues raised by these five points, and while you are at it - put the most important question of all on the agenda. Can new technology not only change, but help you re-imagine the way you do business?
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