Other parts of this series:
In an environment where digital disruption creates new services and entirely new markets overnight, today’s competitive battle cry is “Differentiate or die.” Yet for large incumbent companies, differentiating is getting more difficult by the day.
Because many companies are stuck in traditional operating modes; inextricably tied to their matrices, organized for the sake of the old rules and processes rather than leading with the changing needs of customers and innovating outside in. It’s no wonder start-ups drive disproportionate amounts of market disruption. It may be less about their innovation capability and more about their simpler structures, transparency and, hence, agility.
With customers demanding new experiences, Financial Services Institutions need to be able to move faster and do things differently through new service acceleration and deployments, or they may risk losing market share. Yet, buying more servers to increase capacity means long-tail depreciation and being stuck with the technology for years. Given how quickly technology changes these days, five years might as well be 50.
As I said in my previous post, we at Accenture foresee cloud changing the financial services industry within the next few years. Cloud technology will be required to compete in the new economy—it’s no longer a question of “if,” but “when.”
According to Morgan Stanley’s 2016 CIO Survey1:
- By 2018, 30 percent of all applications will be migrated to the cloud.
- By 2019, 91 percent of companies will be using public cloud.
Cloud underpins all of the digital changes firms need to make to meet their future customer needs and business objectives, and provides companies with the opportunity to drive the growth agenda. With cloud, the capacity is there when you need it. And when you don’t need it, you don’t have to pay for it.
The difference between owning technology and using cloud services is comparable to owning an aging car versus using a car-sharing service—you don’t need to take care of the car when you don’t need it, and when you do, you’ll always be riding in an updated car.
Cloud technologies could allow companies to become experience-centric versus product-centric and enhance their business functions for everything from advanced data analytics to compliance activities and human resources (HR). With all the building blocks in place, cloud technologies can be used to:
- Manage data more effectively
- Reduce cost
- Scale up
- Innovate and re-architect to serve clients better
- Improve speed to market
- Balance agility and need to manage cost agenda
- Strengthen and improve infrastructure
- Help validate market opportunities
- Reduce legacy issues and dependencies
- Improve competitive position
- Expedite transformation into a digital business
- Tackle security compliance
- Handle mergers and acquisitions (M&As)
- Let users develop an ecosystem of business alliances and relationships to move beyond their traditional barriers
All these factors serve one common purpose: they help companies differentiate themselves in the industry. Cloud technology could take away the barriers to the experience model, and lets you get going right away.
Without cloud’s capacity and firepower, digital simply will not happen.
1Source: Morgan Stanley 2016 CIO Survey.