utilising the adoption of cloud services in the online and digital industry
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U#lisingtheAdop#onofCloudServicesintheOnlineandDigitalIndustry
WhatarethechallengesandwhatarethebenefitsoncerisksareovercomeinNigeria?
Dis9nguishingCoreITfunc9onsfromNon-CoreITfunc9ons.
‘WaleOyepejuHeadofI.T,Ul4maLimited(Ul4maStudios)
RelevanceofCloudinNigeria
q EndUsers q Na9onalInterests
q Enterprise
TheNigerianOnlineandDigitalIndustryOverview
Itsapplica9oninenterprisemobilityandcollabora9onislowand
Adhoc
Growingadop9ontrendinaudio-visualStreamingwithTELCOVASleadinginmarket
share
Theuseofcloudforwebhos9ng,socialmedia,bloggingandemailiscommon
Thegrowingtechecosystemleveragecloudforproductdevelopmentand
marke9ng
Liveeventbroadcastisbeingsimplifiedwith
OTTplaNorms
Ø WhatareNigeriansdoingonline?
Ø Cloudtrendsintheonlineanddigitalindustry
TheBenefitsofCloud
• ReducedITcomplexi#es:Complexi9esaremostlyreducedfromtheusersideandtransferredtocloudproviderswhencloudinfrastructureorserviceisu9lised.
• Scalability:Cloudcanofferreal9mescalabilityforonlineanddigitalbusinesses.Cloudresourcestobeu9lised
areflexibletoincreaseincapacityandefficiencywithliTleornodown9me.• Costagility:ThisisachievedinInfrastructureasaservicewhenthereduc9oninthedemandforservice
translatestoreduc9onincloudrent.Reduc9oninthisOPEXfreeupcashtoinvestinotherkeybusinessini9a9ves.
• Reduc#oninCAPEXonITinfrastructure:Cloudadop9onwillreducecapitalexpenditurethatshowsupincompanybalancesheet,especiallyatthisfinanciallyconserva9ve9mes.Foranindustrythatisasdynamicasonlineanddigital,ITleaderswilldowelltoshiXfocus,leveragingthecloudindeliveringagileITspending.ITneedstomovefromassetownershipmodeltoAssetopera9onalmodelasfarasITbudge9ngisconcerned.
• HighPerformanceandAvailability:Thereisahighdegreeofserviceavailabilitywithcloudinfrastructurewhencomparedtoon-premises.Inherentrisksofdown9meduetoenterpriseissuessuchasresourcelimita9onandpoweroutagearereducedwithcloudadop9on.CloudproviderssignSLAsthatguarantee99.9%up9me.Thisispossibleduetotheapplica9onofbestinclassdisasterrecoveryandfailovertac9csthatensurethatyourbusinessdoesnotsufferdown9me.Youalsogetallthepatches,upgrade,backup/recovery,incidentandproblemmanaged.
TheBenefitsofCloud
• MobilityandCollabora#on:Thenatureofonlineanddigitalindustryallowtheworkforcetobemobileandnotworkon-premise. Thisdeliveredat reasonable costwith cloudadop9on.Newcloudop9ons nowdeliversmorebenefits forBYOD (Bringyourowndevice) implementa9on.Cloud-basedwork flow and file sharing tools encourage employees to domore together andviewtheresultsoftheirteamworkreal9me.
• Security: Central to con9nual use of the cloud is security. Cloud security offers businesscon9nuitywhendataislostorcompromisedduetolossordamagetoon-premisescomputers.
• Compe#veness:Cloudsupportfastergo-to-marketforSmallMediumEnterprises.Itallowstheir
ITtobeforwardthinkingwiththeuseofenterprise-classtechnologyinrollingoutproductsandservices.
• LowEnvironmental Impact:Cloudadop9on reduces carbonemission since youdon’t have to
powertheinfrastructureon-premises.• BestinClassAnaly#cs:Real9meanaly9csanddashboardswillofferITandFinanceinsightsinto
productperformance,resourceu9liza9on;leadingtosmart,informedandproac9vedecisionsinthisdigitalage.
ChallengesofCloudAdop9on• Pricing:Pricepointisonemajorfactorthatdeterminescloudadop9oninNigeria.ITneedstojus9fycloudu9lity
costincomparisonwithon-premises(despitethemanybenefits).Anymigra9onplanisdroppedifthepricepointis not beTer than on-premises offering. Transport, monthly/annual recurrent rent, support, and addi9onalcustomisa9oncostsare someof theprice components thatmakeprice-pointapainpointof cloudu9lisa9on.Thereiscurrentlynofavourablepricepointtosupportcloudu9lisa9onforbackupandarchivingservicesintheNigerianbroadcastindustry.Tradi9onalwarehouseiss9llwidelyused.
• Adop#onReluctance:thisisborneoutofthefollowingfears:
1.Fearofexposingcri9calandsensi9vedatatounauthorisedaccess.Most FinancialIns9tu9onsinNigerias9llhostITserviceson-premises.
2.Fearofjoblossonceinfrastructureismovedtothecloud.Anyideatoadoptcloudisfrustratedduetolackof
understanding of the opportuni9es cloud offers in terms of encouraging IT staff develop new skills and bemorerelevantinthedigitalage.
3.Fearofbeinglocked-inandnotabletomigratedatatoanothercloudproviderorbacktoon-premises.The
unknowncostassociatedwithdatamigra9onalsocontributestothelackoftrustinCloud.4.FearofIncreasedmonthlyrent:Costincreasedconsiderablyascloudusageincreases.Decisionmakersdonot
necessarilywanttoincreaseOPEXandanyunknownpictureofwhatrecurrentcostwilllooklikewillnotmakecloudadop9ontoscalethrough.
ChallengesofCloudAdop9on• Infrastructure:Keyareasofconcern:
1.Power:PoorelectricitysupplyinNigeriadoesnotfavourcloudconsump9on.Electricityisneededtoruncloudfacili9esincountry.Costofcloudu9lisa9onwillreducewhentherearelocalproviders(spreadacrossgeo-poli9calzones)withaccesstostablepowersupply.
2.FixedBroadbandPenetra9on:Fixedbroadbandpenetra9on inNigeria isat8%andthegovernment
promised in2015 to increase to36%.Wirelessbroadband isexpensive forcloud adop9on for many industry stakeholders. Infrastructures that aresuppor9ngonlineanddigital industryareconcentratedinLagoswithotherstateslackingdirectconnec9ontounder-seainternetnetwork.TheInternethastobefasterandcheaperforcloudtogaingroundinOnlineandDigitalIndustry.
3. Government Policy and Regula9on: Government policies and legal framework to support Cloudinfrastructuredeploymentisweak. ThereisnoknowneffortatdevelopingLegal framework that addresses issues on mul9ple taxa9on, QoS, privacyand right ofway. Establishment of parastatals likeNOTAP (Na9onalOfficefor TechnologyAcquisi9onandPromo9on) is awelcomedevelopmentbutcostofcloudadop9onwillreduce ifthere isanenablingpolicies,structureandincen9vestoproducecloudequipmentinNigeria.
• AwarenessandCommunica#on:InabilityofITtocommunicatethebenefitsofcloudtoFinanceandBusiness
hasalwaysstalledadop9on.ThereisnosharedunderstandingofthebenefitsofcloudamongIT,FinanceandBusinessLeaders.
AddressingtheChallengesENTERPRISE1. IT Leadership need to be strategic and forward thinking in this digital age. Cloud technology skill acquisi9on and
con9nuousimprovementshouldbetoppriorityandpartoftheorganisa9onalculture.2. BusinessLeadersshouldthinkofcloudbenefitsbeyondcost. Theironlineanddigitalbusinesswillscalefasterwhen
cloudisu9lisedintheareasofproductdevelopmentandhos9ng,marke9ng,customerserviceandvaluecrea9on.3. Internal communica9ons around cloud adop9onmust improve and in the best interest of the company. Adop9on
discussionsmustbehingedonobjec9vity.GOVERNMENT1.Provideenablingenvironmentforstakeholderswithintheonlineanddigital industriesthroughpoliciesandregula9onsthatpromotelocalcontentinvestment.2.Acceleratefixedbroadbandpenetra9onthroughpartnershipsandsmartcityini9a9ves.3.Engagestakeholdersinabidtoaddressindustrychallenges.CLOUDPROVIDERS1. Cloud product development strategy should be “Outside-in” instead of “Inside-out”. Products should be tailored
towardsindustryneeds.2. Constantlyengagetheindustrystakeholders,decisionmakersandFinancetopushthecloudagendaforward3. Engage in value added programs such as cloud knowledge acquisi9on to promote transfer of knowledge and skills
withintheecosystem
AddressingtheRisksandConcerns• JobCuts: Cloudadop9ondoesnottranslatetojobloss.Cloudadop9onwillmakeITjobsmore
interes9ng,accordingtoPeterGrauer,ChairmanofBloomberg.Computerswilldomorerou9neworkwhilehumanswilldothemoreanaly9calwork.Withcloudadop9onbackedbycloudskillsacquisi9on, a network or server administrator will transform into cloud administrator andnetworkarchitecttocloudarchitect………
• Data Ownership:Make sure this is addressedwith cloud providers.Who owns the data andwhatcanthecloudprovidersdowithyourdata?
• Lock-in:Mostcloudprovidershaveprovisiontomoveyourdatafromcloudtoon-premisesoranothercloudproviders.
• Business Con#nuity: You are beTer of in the cloud than on-premises. Cloud providers are
equippedwithtechnologiesthatensureyourdataarebeTerprotected.Theywillmostcertainlykeepatabonglobalsecuritythreatsthanyou.
• Cost:Whilecloudcanaidgo-tomarketandenable companytogrowrapidly,someconsumersofcloudhavearguedthatitbecomesexpensiveinthelongrun.MicrosoX,GoogleandAmazonhaveacknowledgedthisconcernandarecusngpricestoensurethatpricingisoneofthemajorbenefitsofcloudu9lisa9on.
FutureofCloudInNigeria
• VideoStreamingandOnDemand• Gaming:productdevelopmentand
streaming• BigDataandBusinessIntelligence• Globalisa9on• DisasterrecoveryandBusinessCon9nuity
• ProjectManagement• FinancialServicesande-Commerce• eGovernanceandSmartCity• DigitalRightManagement• IoT• MachineLearning
Increasedcloudu9lisa9oninNigeriawillfosterastrongeronlineanddigitalindustryInthefollowingkeyareas:
Dis9nguishingITFunc9ons
ITLeadership(Management)
ITProjectManagement ITOpera9ons Business
Applica9ons
Applica9onDevelopmentAndIntegra9on
SharedServicesSystemsand
ServiceEngineering
DataCenterOpera9ons
ServerAdministra9on
EnterpriseMobilityandSecurity
Marke9ngandsocial
applica9onsCommunica9ons
ITArchitecture BusinessIntelligence
ValueAddedServices
• ITismoreexternalcustomerfocusedinthedigitalage,buildingvalueaddedrela9onshipswithclientsandcustomers.
There is surely nothingquite so useless as doingwith great efficiency whatshouldnotbedoneat all.PeterDrucker(1963).
FindingFocus:CoreandNon-CoreITFunc9ons
STRATEGYINCONTEXTWhatistheessenceofStrategyinOnlineandDigitalIndustry?Makewisechoicesastowhattodoandwhatnottodo.Twoonlinecompaniesmaybeplayingthesamesectorbuteachisuniqueinitsmarketfocus.Thedis9nguishingfactorisStrategy.Twomajorareasofinterestsforonlineanddigitalstrategydesignare:1.Whatyoushouldbedoing(yourCOREbusiness)2.Whatyoushouldnotbedoing(nonofyourbusiness)StrategicITfocusonenablingbusiness.ITneedstodevelopfunc9onalstrategythatoutlineswhattodoandwhatnottodoinenablingbusiness.
FindingFocus:CoreandNon-CoreITFunc9ons
CORE NONCOREThey are func9ons necessary to gain strategicadvantage and achieve corporate goal and growthinbothtop-lineandboTom-line.
Noncore ITarealsoenabling technologies thatdonot directly help a company compete (Whelan,1988)
ITstaffhasstrongcapabilityforthem Theyarefunc9onstheITstaffisstrugglingtocomplete
TheyarebeTerkeptinternallyandsome9mesareprotectedbyapplicableintellectualrights
TheyarebeTeroutsourcedtocompanieswhohavethemastheircore.
Theydeliverrewardwhentheyaredonewell. Dothemwell,nooneno9cesbutifyoudon’tdothemwelleverybodyno9ces.
Whytheneedfordis#nc#on?Thedis9nc9onbetweencoreandnon-coreITfunc9onsisbasedontheneedto:
• EnsureOPEXandCAPEXarefocusedonstrategicITini9a9vesthathelpthecompanygrow• Ensureefficiencyinthealloca9onandu9lisa9onofITresources• DeterminewhattokeepinternallyandwhattooutsourceeithertocloudorlocalITservice
providers.
FindingFocus:CoreandNon-CoreITFunc9ons
Dis#nguishingbetweencoreandnoncorefunc#onsdependson;
• Time:Timeaffectsthecompany’sfocuswithinagivenperiodandchoicesavailableinthemarketplace
• Corporatestrategy:Themarketandopera9onalfocusofthecompany• LeadershiporManagement:Makesthefinaldecisionofwhatandwhentooutsource• InternalCapability:CapacitytoundertakeITfunc9ons
Compe##veAdvantage
Capability Decision
Strong Weak Outsource
Strong Strong Retain
Weak Weak Outsource
Weak Strong Outsource
Ac9onPoints:CoreandNon-CoreITFunc9ons
• EmbarkonTechnologyporNolioreview.InvolveteammembersasyoureviewthelistofallITfunc9ons.
• HighlightITfunc9onsthatareessen9altocompanysuccessintheshortandlongterm(CORE)
• YouwillbeleXwithITfunc9onsthatyoupossessbutarenotuniqueandwillnothelpyoustandoutfromcompe99onevenifyouhavedonethemwellovertheyears.Partoftheselistalsoincludesfunc9onsyoudopossessthattheITstaffisstrugglingatfulfillingandwillnotgivecompe99veadvantage.ThesearenoncoreITFunc9onsthatyouneedtostopdoing
• MakethedecisiontoeitheroutsourcetocloudprovidersorstopperformingtheNon-corefunc9onsasyouprepareyourbusinesstocompeteglobally
• MakeitanhabittoreviewyourITfunc9onlistorregisterperiodicallytoiden9fyI.Tfunc9onsyoushouldstopandthecorefunc9onsyoushouldstartasmarketevolvesandthecompanymatures.Youwillneedtoacquirecapacityforthosethatarenotpartofthelistthatyoushouldstartdoing.
• Ifyoudecidetokeepspecificnon-coreac9vi9es,makeitarulenottoallowthemreceivethesamehuman,9meandmaterialresourcesascoreac9vi9es.
Email:[email protected]
LinkedIn:waleoyepejuTwiTer:@waleoyepejuInstagram:@DaddyKoye