How do you meet rapidly evolving and escalating demands and keep up with the rate of change in technology, when your primary IT estate is ageing and you don't have the capital for a large-scale replacement?
This is the challenge faced by a lot of companies that have suffered in the economic downturn since 2008 and have postponed or shelved major IT investments. This has resulted in a large estate of foundation legacy applications, central to the continued and smooth functioning of businesses, but which cannot easily be upgraded and are incompatible with modern methods of access.
In capital-intensive industries, such as steel making, this is especially acute as not only was the downturn severe, but the competition for capital funds is extremely high and always likely to go to major manufacturing projects ahead of IT investments.
The result is a mess of obsolete operating systems, old versions of core software and a patchwork of home-grown spot solutions, coupled with a growing demand from users through their consumer IT experience for “modern looking”, intuitive mobile-accessible applications.
So, how do you tackle the conundrum of needing to do something but not having the money to do it?
Although cloud is no magic wand, it does offer a high degree of flexibility to approach these issues. First, cost - cloud is an efficient way to purchase IT that gets around the capital funding issue.
Read more on legacy IT issues
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Traditionally IT projects have required up-front investment in hardware, licences and implementation costs with the promise of a return on that investment once it was live and fully deployed to hundreds of users. This was often a slow process and usually meant that promised business benefits were not realised until years later, dropped off the radar or were simply not realised at all.
The cloud model changes this completely, enabling piecemeal investment in shared infrastructure which avoids a large outlay and supports more rapid deployment and faster business case realisation. This is because high-value business areas can be targeted for early deployment of solutions, creating a faster return on investment. It also allows quicker validation of the benefits to ensure the expected returns will be met, so a project can be reshaped or even cancelled before it becomes an expensive failure.
Second is the technical mess issue - cloud allows you to mask much of your IT systems complexity from users and customers by putting in smart solutions which are intuitively designed, can be easily accessed by multiple devices and scaled to meet demand.
Using a process orchestration engine you can deploy cloud applications which talk to and pull data from your back-end legacy systems without the user ever having to understand the complexity. A good example of this is an application such as SAP Fiori which “chunks up” your ERP into the bite-size transactions a user needs to complete certain tasks, and can be accessed from multiple devices.
This can eliminate training costs for large parts of the user population, allow you to “tick over” your legacy systems in their existing state - avoiding the need for major spend - and enable you, on the surface at least, to keep up to date with the latest technological developments and therefore meet user and customer demands.
Disadvantages of cloud
What are the downsides to cloud and how far should we go with it?
The cloud model enables piecemeal investment in shared infrastructure which avoids a large outlay and supports more rapid deployment
To answer the second question first, the possibilities really are endless. We may all get precious about data and security – issues that are preventing all services going outside the corporate network at this moment. But we are not far off the point when companies will be 100% cloud-reliant.
The main downside is that cloud goes against most recent IT strategies to consolidate suppliers and solutions and create a clean landscape, because it creates more and more small, spot solutions. If you are an IT architect you are probably tearing your hair out at all these solutions popping up.
But the interoperability of systems these days is far greater than before, so this should be a less scary exercise than most. Many startups become acquired by a major player eventually, so it’s likely that your supplier landscape will remain a fairly consolidated one. Yes, you will have numerous spot solutions for specific business issues, but that isn’t necessarily a negative with cloud.
Low initial investment, speed of deployment and currency with technology will be critical to the success of IT projects and IT departments in the near future. Cloud enables this and every public and private sector organisation needs to embrace it, and embrace it rapidly, even in a traditional industry like steel manufacturing.
Alisdair Walton (pictured) is the solution lead for Tata Steel Group and a member of the Corporate IT Forum. Through its Real IT Awards ‘Best Use of Cloud’ category, The Corporate IT Forum recognises real-word organisations that have successfully taken advantage of this paradigm shift in enterprise computing.
This was first published in June 2014