cloud computing - isaca conference 2012

Cloud Computing
ISACA Conference 2012

Mariana Carroll

©2012 Deloitte. All rights reserved

Objectives

• Technology trends of today
• Cloud computing fundamentals
• The stages of the cloud computing journey
• Business and technology impact of cloud computing
• Cloud computing services can create new opportunities for business and IT
• Develop new ways of addressing the challenges and leveraging the
opportunities presented by cloud computing

1 ©2012 Deloitte. All rights reserved

Technology Trends
Elevate IT for digital business

Tech Trends 2012

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For more information please visit:
http://www.deloitte.com/view/en_ZA/za/services/consulting/techno
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Bottom-line

Post-digital
Enterprise

Cloud Computing combined with social computing, mobile technologies,
and data analytics could play a prominent role in deepening customer
relationships, increasing agility to achieve new market growth, and
4 accelerating innovation. ©2012 Deloitte. All rights reserved

Cloud computing overview
Cloud Computing presents a significant shift in the way businesses operate


Cloud computing service sources: A variety of implementation
models

Cloud implementation models
Other groupings of cloud offerings can be made, such as the distinction between public (or vendor),
private, and hybrid clouds.

Public Private Hybrid
Services from vendors Computing architectures Cloud computing
which can be accessed built, managed, and used environment in which an
across the Internet using internally and using a organisation provides and
systems in one or more shared services model with manages some resource
data centers, shared variable usage of a in-house and has others
among multiple customers, common pool of virtualized provided externally
with varying degrees of computing resources
data privacy control


Cloud computing puts daily IT decision making in the hands
of the end users

Dramatic shift away from today’s top-down IT decision making
Trends that point toward the adoption of Cloud Computing
• Commoditisation of purely technology-related work/tasks; buying vs. building
• Deepening relationship between technology and people
• Business innovation is increasingly fueled by technology; faster networks
• Cloud computing gives users on-demand access to large scale, elastic, shared
computing capabilities

Today’s software-heavy IT Tomorrow’s Cloud Company
organisation


But What Exactly is Cloud Computing, and Why is it Different?
Cloud is…
Provides almost immediate access to IT applications and services, platforms, or a
…on-demand
pool of hardware resources that can be allocated and provisioned on-demand

…scalable Provides the ability to dynamically provision and de-provision , and automatically
and elastic scale capacity up or down
Vendor-provided cloud services are not licenses products or purchasable assets.
…pay-as-you-
Services are billed by user, quantity of resources consumed, or similar consumption-
use
based metric.

Cloud is not…
Cloud provides pooling of resources across massive infrastructure. Some services
…simply
advertised as “cloud” are just virtualization designed to support the traditional
virtualization
enterprise IT stack
…just
Service Oriented Architecture (SOA) is a set of design principles; cloud capabilities are
applying SOA
most powerful when their software and services are designed from the beginning using SOA
principles
Unlike traditional hosting cloud services do not dedicate hardware to a single
…traditional
customer; the advantages of agility, scalability, and cost are possible only through
hosting
resource pooling

Cloud computing offers increased agility, faster time to market, lower capital costs, and the
ability to easily scale up / down and reallocate resources


What the journey to cloud computing means …

• A reduction in…
• In-house IT focus on commodity
technologies
• Annual IT spend
• Capex tied up in noncore areas of
the business
• Data centers
• Energy consumption and carbon
footprint
• An increase in…
• Focus on core processes and
technology
Headquarters
• Collaboration between company
and its supply chain Regional office

• Business analytics/product
intelligence
• Scalability and response to growth

Strategic areas in the journey

New approaches for architecture, solution delivery, life cycle
Technology
management, and IT service management

People and Significant cultural change, unique people skills and capabilities
organisation resulting in organisation redesign

Finance, procurement, New spend models, changes to capex / opex, treatment, tax
and legal and legal

Governance and Adherence to internal and external compliance standards and
compliance governance models

Risk, privacy, and
Alignment with enterprise risk and governance strategy
security management


Market perspectives
Now and next

Some stats…

• Global cloud spending is forecast to grow 22% annually to US$241 billion by
2020
• More and more organisations evaluate cloud options first before making any
new IT investments
• Organisations are embracing cloud to reduce the complexity and costs of
traditional IT
• Organisations are not only relying on cloud to enhance internal efficiencies, but
also to target more strategic business capabilities
• Major industries adopting cloud includes communications, education & finance
and IT & Telecom’s

“The full business potential of cloud computing has yet to be realised or even
understood by most enterprise organisations”
Source: IBM Institute for Business Value: The power of cloud – Driving business model innovation


Some stats…


What are other large companies doing at this time?

• Moving development, testing, and integration of major systems to cloud
infrastructure as a service
• For smaller functions and services, deploying cloud systems to replace on-site
major system implementations of older “stand-alone” systems
• “Decoupling” the major systems stacks using a “best-of-breed” approach, taking
into account new software now available on a SaaS subscription delivery model
• Consolidating major application platforms onto single cloud-based
infrastructures, while removing “edge” services to other cloud vendors when
possible
• Understanding their major system roadmaps, working with vendors to influence
the product direction to map to their customer priorities
• Taking a hard look at their end-to-end IT architectures, to determine their
long-range plans for a more fully “cloud-enabled” business architecture and
customer services

Many enterprises with large systems are taking the first steps to make their cloud
plans “actionable,” to position themselves for strategic advantage


How do we expect the cloud market to evolve?
High
IT services will migrate to different cloud
computing models at different times, based on
fit, the maturity of service providers, and
availability of suitable technology
Collaboration
(Sharepoint)
SaaS
Value from migration to cloud

Data Storage Marketing
Mgmt
PaaS
IaaS SaaS

Customer
Service PaaS CRM and SFA HR/Talent
SaaS (GQP, Oracle /Recruitment
Quoting) SaaS
Analytics SaaS
(Hyperion, PaaS
OBIEE, BI) PaaS
SaaS Email and Website &
Communication Content
SaaS Management
PaaS
Desktop /
Custom Applications Productivity Development
(Billing, Suite SaaS and testing
Customer Portals) PaaS
PaaS
IaaS
Finance/ Public
Core ERP Accounting SaaS
(OM, SC) SaaS Private
Business
PaaS Maturity Early Adoption
Transformation Hybrid
Low
Low Ease of migration/ adoption on cloud High

New Opportunities
For Business and IT

Cloud Opportunities

• Promote business value to drive cloud adoption
• How is value created?

• Understand the cloud ecosystem and business models
• How can I leverage cloud to improve business processes, asset and organisational
capabilities?

• Recognise the wide-ranging internal changes required
• Is it possible to change what we currently do?

• Set principles and stay flexible
• What are the key principles to enable growth, enhance operating margin and efficiency
and manage expectations?


Example: Global Large Regional Bank

Challenges • Fragmented sales processes
• Multiple customer data repositories
• Inconsistent goals
• Highly variable customer experiences

Cloud Rather making changes in any one of these areas, the bank turned to a
Solution cloud solution, a multi-release CRM program to +1500 users across the
organisation (retail banking, wealth management, insurance & mortgage)

Summary of Enabled:
Results • accelerated on-demand and data integration (providing integrated
visibility to financial accounts, real-time marketing, adjustment and
scoring
• Increased consistency (data, sales and view of customer)


Promoting business value to drive cloud adoption
Value #1:
Growth and Profitability
• ELEVATED GROWTH
Support and facilitate growth through higher sales traffic, higher unit volumes, increased average order
size, increased purchase frequency, faster adoption rates for new product launches (expansion of
business offerings), market share gains, and new partnerships, markets or segments.

• IMPROVE MARKETABILITY
An improved image / reputation helps to attract and retain customers leading to reduced costs of
acquiring new customers, earning higher ROI, increasing sales through cost effective customer referrals
and recommendations, and even lower price sensitivity to improve profit margins.

Value #2:
Market Share
• EXPANDED MARKET SHARE
Add and support more customers by establishing market leadership with higher brand value and
recognition, converting more customers to brand advocates, resulting in higher net promoter scores,
and a larger share of their wallet earned across multiple sales channels and touch points.


Promoting business value to drive cloud adoption
Value #3:
Productivity and Differentiation
• ENHANCED PRODUCTIVITY
Organisations can better concentrate on core business competencies through greater agility and
standardisation leading to more efficient sales operations, effective processes and enabling technology
that improve sales conversions rates and reduce the level of efforts required on sales prospects and
leads.

• INCREASED DIFFERENTIATION
Cloud computing enables access to the latest technology and industry learning in undifferentiated
areas of the business. Remain competitive advantage and increase differentiation by creating more
lock-in with new customers and building entry barriers for new competitors.

Value #4:
Sustainability
• PROLONGED SUSTAINABILITY
Create a sustainable operating margin and retain and grow customer interaction efficiency leading to
customers who are less likely to leave, stay with the company longer, demonstrate higher loyalty and
satisfaction levels, and are more likely to participate in cross-sell and up-sell opportunities.


Addressing challenges &
leveraging opportunities
What’s next

Key operational and governance issues
Data Controls Who owns the data? How is it be used? Are controls in place?

Security and
How is security achieved? What is the level of privacy protection?
Privacy

Audit and
Are there risk management controls to applications and data?
Assurance

Tax and Legal Can you meet needs for legal compliance and tax issues?

Disaster
Are data backup, retention, and disaster recovery practices sufficient?
Recovery

Vendor
Is the vendor limiting interoperability or access to your data?
“Lock-In”

IT Operations What IT services and applications are best suited for the cloud?

IT Readiness Are internal IT architecture and organisation structures “ready”?

Alignment with Enterprise Risk and Governance strategy will help organisations address the
operational hurdles to cloud adoption

Cloud is here to stay…

Education is key!

It is important to scale up on our knowledge of cloud computing to
leveraging the multitude of opportunities while addressing the
challenges.


Contact information

For additional information, please contact:

Dr. Mariana Carroll
Leader - Cloud Computing Centre of Excellence
Risk Advisory | Deloitte & Touché
Mobile: +27 (0)83 333 5536
mcarroll@deloitte.co.za


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