Why cloud is crucial for a sustainable business, and how to choose the best option.
The Covid-19 outbreak has reinforced two lessons for businesses – the importance of cloud-based services and the need to ensure their model is sustainable. Cloud platforms have really come into their own, providing accessibility for remote workers and customers, while providing the ultimate scalability for businesses facing an uncertain future. But in a world where both the economy and environment are facing unprecedented challenges, it is more vital than ever for business owners and CFOs to make informed business decisions.
Choosing the right cloud option can be daunting, and a truly
sustainable business needs a clear understanding of the financial and business
case drivers to help make the right decisions.
Review the business model
Changes are happening at a rapid pace in today’s business
environment, with many companies looking at downsizing and improving their
remote working capabilities. Even beyond the extremes of a pandemic, acquisitions, new ventures, upturns
and downturns all provide daily challenges for senior managers.
Over the last few years, the focus of major decision-makers has moved away from in-house tech infrastructure and experts and towards more flexible and agile cloud models and platforms like Microsoft Azure that best fit their way of working. Before making any investment in IT infrastructure or platforms, ask whether they can adapt if your business needs change in the future.
Nothing illustrates how quickly the business environment can change as the infographic below.
The infographic shows the vast drop in consumption of electricity since Covid-19 hit New Zealand. Many businesses were unable to operate from their normal offices and stores. While most have adapted to working from home, the shutdown had a huge impact on commercial electricity consumption.
While major industry consumes a third of all our energy, the wider
commercial sectors consume a further quarter of New Zealand’s electricity
demand. It is this quarter that we can reasonably assume to have almost
completely evaporated when the lights went off.
Although the future is opening up and consumption is
starting to rebound, businesses are now
focused on new ways of consuming energy or delivering services.
Many CFOs and CIOs are trying to figure out this new way of
working and how it affects their own businesses. The days of the road warrior
salesperson may be coming to an end. How we engage with, incentivise and add
value to our clients will look very different, as some may prefer a call from
the office or a virtual meeting to a corporate lunch. Customers too will be
feeling the impact, with online engagement becoming the predominant form of
communication, and Microsoft Teams, Zoom, and Hangouts becoming an integrated
part of working culture.
In addition, Covid-19 has caused a large shift in the global
economy and supply chain. Secure production and supply are increasingly of
greater importance than the cheapest or most efficient options, which has led
to a greater focus on in-house production, multiple suppliers or regional stockpiling.
The result of all this is we can no longer trust the
stability of the surrounding environment. While we may see some return to the
old ways of working, some business processes will never be the same again.
Business managers therefore need to be prepared to constantly review business
models and consider whether their technology needs are still being met by their
current system. This will help ensure their business remains sustainable in a
world that can change drastically in what seems like a second.
Plan for the rebound
Businesses are now furiously planning ahead for the future. Many
will need to start scaling up or down to stay on track with fluctuating demand.
Working through the challenges including staffing, supply chain logistics,
stock management and managing demand will impact most businesses, not to
mention the increasing expectation they will reduce their environmental
footprint.
Kiwifruit producer Zespri is a classic example of how to approach this kind of situation. In 2010, it was dealing with the PSA Virus, which caused entire crops of kiwifruit to fail. The popular gold kiwifruit was the most affected variety, spurring Zespri scientists to research a resistant strain.
They knew the situation could have gone either way – with the
opportunity to double production if the new strain was successful or ultimately
halve if the research failed. Zespri was concerned about having enough
computing power to cover existing demand while preparing for both the best- and
worst-case scenarios.
With support from Total Utilities to assess its existing IT costs and consumption, Zespri was given a list of options that projected the business outcomes and costs for each. It could either continue managing and maintaining its own data centre, outsource its data to another local vendor, or switch to the public cloud so it could replicate the same platforms around the world. Zespri chose the latter, moving its infrastructure and associated platforms onto the Microsoft Azure Cloud.
This decision helped Zespri cover a multitude of potential
problems by removing the financial risk of investing in its own tech
infrastructure, allowing rapid expansion of a global supply chain and delivering
detailed cost control mechanisms. Providing Zespri with financial operations toolsets allowed it to
efficiently manage costs and consumption, which was repaid as Zespri’s research
gamble paid off and the business grew in scale. Measures such as “cost per tray
of kiwifruit shipped” have become an important way of tracking success. Zespri
has used subscription cloud services as an effective way to manage, analyse and
contain its costs ever since.
Not only
does that mean Zespri is able to adapt its model to any scenario, not having a
data centre on site reduces both energy consumption and space. The business is
therefore more sustainable in every sense of the word – something consumers
around the world increasingly expect. Microsoft itself has committed to
removing all carbon it has ever emitted directly or by energy consumption from
the environment by 2050, reinforced by its pledge to support New Zealand’s
sustainability goals through its new datacentre investment. As every
organisation on the planet is challenged to review its impact on the
environment, choosing greener IT options is a great way to minimise your
footprint.
As the adage goes, the only certainty in life is change. While an upfront investment during downturns can be daunting, the best way for any business to safeguard its sustainability long-term is to invest in an IT system that doesn’t become obsolete, that meets modern expectations around environmental impacts and which allows workers the greatest accessibility in an era when many of us are now working remotely. And that means embracing the cloud.
Ensure resilience
A resilient network and good technical support are essential to every modern business. There is an expectation for email, purchasing or sales automation to be working around the clock. Software updates, testing or hardware failures are no longer an excuse for disrupted services, which can instantly see customers go elsewhere.
Just five
years ago, businesses were put off moving their platforms and operations to the
cloud because they weren’t sure about achieving the level of compliance and
technical competence they needed to operate the systems. Every business we
consulted felt the skills to manage cloud migration were a barrier to
digitising their operations, and that only in-house experts could provide the
support needed. That figure is now just 40 per cent. Trust in the cloud and
cloud providers to manage their businesses and tailor their services to their
needs has skyrocketed.
Likewise, secure and reliable connections are more available
than ever. While some thought the demand put on the internet during this period
of working from home wouldn’t hold up, the Covid-19 lockdown has proven how resilient
the internet can be. It is a
credit to our network providers, whether fibre, copper or mobile data-based,
that these services have remained largely in place as millions of people have
suddenly put tremendous demand on capacity.
This shows that network availability is no longer a
constraint holding back businesses from placing their operations and services
in the cloud. Those organisations using public cloud services are also better
placed to combat the predatory
players who sought to take advantage of the situation via scams and cyber-attacks,
with regular security upgrades not available to those using an outdated server
in the back office.
No longer
can you place your trust in simply ‘doing it yourself’. Instead, managed cloud-based
services can prove more secure and reliable. Security and connectivity is
complex to establish and even more challenging to maintain, especially when
scarce, skilled resources are in high demand.
Establish good financial governance
Whichever cloud service you use, make sure to choose a
partner or platform that can provide real-time analysis and reporting so you
can see exactly how it’s working for your business and change your plan if you
need to.
Governance, cost control and resource efficiency have always been top priorities for businesses. Now more than ever, businesses are focused on getting the best value for money from their technological solutions while growing a sustainable business. One thing cloud-based platforms do very well, thanks to their sheer accessibility and ease of use, is enable workers to use a huge range of resources and implement their own changes and updates. However, if unconstrained, this can result in wastage and bill-shock.
While governance
and budget setting have provided the framework for cost control and planning
for decades, moving to the cloud requires a new level of collaboration between
Finance and IT. Ensuring these two teams remain communicative through the cloud
integration process is vital to ensuring it runs smoothly and efficiently, that
the right functionality is baked in from the beginning and there are no budget
surprises.
As well as close co-operation, the key to ensuring total visibility and that cloud services are providing the best value, is using a monitoring service to provide real-time data on how cloud is being consumed across the business. The best services can illustrate exactly how resources are being used – either energy or data – and enable CFOs and other decision-makers to rapidly change to new plans that are better for the environment and the bottom line. Clear and regular reporting is essential and takes a great deal of time and effort out of maintaining good governance.
Cloud is the future of many businesses and in a time of so
much change and uncertainty, it is important to know your business has a model
it can rely on to save costs and make governance far less onerous. To know that
your business is making most of out your cloud service, make sure you have
reporting in place so you can accurately reflect usage in real time, limit your
expenses and energy consumption and create a business model that’s truly
sustainable for many years to come.