Leveraging cloud computing to create business value

Tua Huomo, Action Line Leader for Future Cloud, EIT ICT Labs

In today’s highly competitive market, savings cuts is a high priority for many companies but creating value for customers is just as important. Dr Tua Huomo, FUTURE CLOUD action line leader at EIT ICT labs, explains why cloud will force the IT industry to focus on customer value.

Dr Tua Huomo on the importance of leveraging cloud computing to create business value

Many companies have already spent a lot of time and money thinking about how they need to structure their organisations, the types of new competences they need, and the different business models they need to capture the opportunities presented by the cloud. In short, it comes down to being more agile. When companies start providing services in the cloud, they also need to change their processes to be far more agile as real-time value delivery becomes increasingly important.

This is especially true in the consumer market: if you don’t provide something new, something exciting, on a regular basis, you’ll probably be left just looking on as your customers switch to a competitor who does. This is already interwoven into the DNA of gaming companies, for example, but not into that of more traditional ICT service businesses. Yet the pressure to produce new features and new product capabilities faster than ever to keep up with the cloud now applies to business-to-business providers as well, and brings with it an acceleration of the pace of business.

But while many acknowledge how the cloud both demands and enables greater agility, not all of them understand that it requires new tools and methods and a new understanding of how to create and deliver value to customers. So, having established the need to improve the underlying framework of a company in order for it to succeed in the cloud, how can it actually be achieved?

Before joining EIT ICT Labs, I worked on an industry-driven collaborative research and development (R&D) programme called Cloud Software Finland. With a budget of €62m (US$86m) from the Finnish government and more than 30 organisations involved, it ran from 2010 to 2013. The project used applied research methods to develop lean and agile techniques and tools to support cloud businesses. The methods we applied, such as Kanban and “value stream mapping”, remove needless intermediate phases and bottlenecks and help businesses to create and implement systematic change that makes their businesses leaner. We learnt that many people think that being lean only means efficiency – that to be lean you need to cut costs. This is important, but lean is also about focusing on creating new value.

For example, companies need to provide new features as quickly and efficiently as possible, but you also need to be valuable to your customers. In order to keep your customers happy, you need to concentrate on the areas or segments that really bring value not only to your company, but to your customers as well. This needs to be done in a very systematic and comprehensive way. That equates to a strategy change for many companies.
Source: The Impact of Cloud Computing, The Economist, June 2014

CloudWATCH and the Finnish software programme shared the outcomes of the projects, highlighting the benefits of cloud for businesses of all sizes, at our ICT2013 Networking Session, Boosting EU Competitiveness with Cloud Computing - small & large businesses perspectives, November 2013.