Despite the prevailing wisdom that cloud is disrupting established business—and it is—many business leaders are uncertain about how to take advantage of cloud computing’s benefits.
My analysis of more than 100 cloud projects of varying sizes over the last six years shows that successful projects use one or more of the following five actions:
- Offer your services as an application program interface (API)
The first and easiest way cloud can help you innovate is to use cloud as a route to market. APIs are the digital services you provide. Partners and customers can pay for these services as they use the APIs. PayPal is an ideal example, as a wide range of mobile apps and web-based businesses use its API.
The minimum viable product for a born-in-the-cloud company is a set of APIs. Established businesses should consider what partner and client interactions could be offered as an API to improve process efficiency, increase speed, and amplify value.
- Capture new data
The cloud allows you to capture data easily that would be otherwise hidden or ignored. The Internet of things and pervasive connectivity let an organization reach beyond its walls to see how the product or service is used and provide additional services at the right moment to the customer.
We can learn from many inspiring examples. Creative cloud use and social media allowed ASB Bank to create the “Like a Loan” campaign. Customers were offered zero cost loans for the “best liked” story regarding a loan. These stories provided a rich set of insights on customer needs, which the bank then used to tune its product offerings.
- Sell your data
Every large enterprise builds vast lakes of data to support their business and allow its leaders to make smart decisions. However, not all of this data is confidential to the business and could be valuable to others. In many cases, organizations would be willing to pay for certain data. Cloud allows you to provide data as a service in a manageable way, which helps organizations capture value. There are risks to consider when sharing data, foremost, privacy and ethical use.
Born-in-the-cloud organizations start by considering the value of data and then develop a strategy to capture it. Established businesses start by uncovering novel use. Hackathons offer a fresh approach to finding new value in data and open up innovation. Essentially, leaders should bring together a broad team with diverse experience to envision how your enterprise’s data could be valuable to others.
- Combine information sources
Cloud also allows organizations to integrate data from multiple sources. Social media is often used as an example, but more interesting opportunities are in optimizing interactions that span multiple organizations. The IBM Intelligent Operations Centre in Rio de Janeiro combines data from weather providers, city administrations, traffic management, and emergency services to more efficiently respond to emergency situations.
Starting by understanding your value chain interactions will uncover optimization opportunities and help identify how data can be combined in the cloud to capture the new value.
- Go digital
Digital representation creates new opportunities to create and capture value. Digital books, music and videos eliminate the distribution logistics associated with paper books, CDs or DVDs.
How does cloud help here? It provides the means to store, access or distribute these digital assets. With the advent of 3D printing, a new class of cloud-based services is emerging. For example, blueprints can be personalized to instantly print unique toys. Cloud also enables virtual learning environments, where colleagues from around the world can learn together without being in the same room. Leaders need to consider how cloud-based digital representations can enable innovation and allow new value to be captured.
Non-traditional competitors are exploring ways these five strategies can disrupt established businesses. In established enterprises, constant experimentation using combinations of these five actions allows leaders to innovate, motivate employees and wow customers. Source: Rashik Parmar