Why manufacturers need to go all in on cloud technology.

Opportunities await manufacturers who migrate to cloud
Opportunities await manufacturers who migrate to cloud.

By Oliver Wright, global lead of Accenture’s Consumer Goods & Services industry group

Today, many manufacturers understand that cloud computing is the future of enterprise technology. But are they using cloud to its full potential? Arguably not.

The truth is, many companies in this industry have got stuck in “phase one” of their cloud journeys. That is, they’ve migrated some of their workloads to cloud infrastructure with a view to driving down the cost of their IT. But for a host of reasons, they now find themselves unwilling or unable to go further.

Cloud can dramatically increase speed, flexibility and scale

Focusing on the cost-effectiveness of a cloud migration is perfectly fine as far as it goes. Cloud does, after all, offer a business the prospect of faster, more scalable, on-demand compute—and anything up to a 40% reduction in infrastructure costs.

But cloud can do so much more. When fully embraced, it’s not just a source of efficient IT, it’s also a way to dramatically increase the speed, flexibility and scale at which the business operates.

Migrating to the cloud to help manage costs is a sensible strategy. Cloud can enable faster, more scalable, on-demand compute—and anything up to a 40% reduction in infrastructure costs. But it can do so much more. When fully embraced, cloud is not just a source of efficient IT, it is also a way to dramatically increase the speed, flexibility and scale at which the business can operate, generating competitive advantage and enabling new business models.

Consider, for example, the way cloud enables a business to integrate huge datasets for increased security, accuracy, and real-time reporting. Or the way it provides access to cutting-edge machine learning capabilities for big data analysis. Cloud is also now a key platform for product and business innovation, enabling rapid testing and scaling of eCommerce for example. It is, furthermore, a core requirement of connecting across the business ecosystem, enabling collaboration and secure information sharing with partners, clients and customers.

Food processing company Del Monte Foods is a good example of a business being transformed by change and cloud initiatives. Del Monte embarked on a cloud migration journey that involved transferring 200 servers and 50 complex workloads in less than four months. This was not just another story of “lift and shift.” Del Monte is seeking value from cloud-enabled use of AI and internet of things technologies to gain much-needed insights for its business.

Getting to the next level

To capture these benefits, manufactures need to commit to both cloud itself, and to the significant human and business changes it entails. That means making bold decisions about how the business will compete in the future.

This “next-level” adoption of cloud is something most companies continue to struggle with and not just in manufacturing.  Accenture’s research suggests that, while a huge majority of executives (84%) recognize the criticality of data, advanced analytics and artificial intelligence to their strategic objectives, almost as many (76%) admit to struggling when it comes to scaling these capabilities across the business.

Making cloud a whole-business priority

To resolve this, companies need to address some of the obstacles preventing them from tapping the full power of cloud. There are three key steps to consider.

The first and perhaps biggest, is a question of mindset. Leaders must look to change the organization’s perception of cloud from one of “cheaper IT” to one of business innovation and reinvention.

That means broadening the cloud conversation to include the whole of the business. Aligning IT and the business around the same vision and objectives provides coherence and clarity in a cloud journey. Creating a single role in the C-suite, such as a chief data officer, to stitch together business and IT interests, can also help ensure the cloud journey is centered on business value.

The second important step is to be clear where your cloud journey is going. What new capabilities are you targeting within the next three years? Which parts of the organization would benefit most from greater speed and flexibility? What business problems are currently holding your company back?

By working back from your desired outcomes, you create a set of guiderails for your whole cloud journey, enabling you to avoid aimless experimentation with new cloud services and prioritize the projects and use cases that actually get you closer to your objectives.

The third step is to commit to going “all in” on cloud. Migrating your workloads to cloud infrastructure is only the start of this. The true value of cloud comes when the business starts to modernize and transform its data, applications, and ways of working within the cloud. The goal is to make your organization “cloud native” and able to use cloud as a platform for business innovation.

Real business value comes from committing to cloud

As the business becomes cloud native, new things become possible. At the end it comes down to a single vital point. The full adoption of cloud is now a business priority, not an IT priority. Manufacturers must see it as a core component of digital transformation—and a non-negotiable source of future competitive advantage.

oliver wright accenture
Oliver Wright

Oliver Wright the global lead for Accenture’s Consumer Goods and Services industry group. Oliver works with the C-suite of leading companies to set strategy and guide growth, developing offerings and thought leadership to help consumer goods clients become more agile and innovative, transform and reshape their businesses for growth.