Back in 2016, global research firm Gartner made the bold statement that by 2020, “a corporate ‘no-cloud’ policy will be as rare as a ‘no-internet’ policy is today.” Well, whilst 2020 wasn’t the year that anyone expected, it is the year that accelerated digitalisation, and helped push more and more companies, including players in the financial industry, to strongly consider moving to the cloud.
Why the Cloud
The cloud has changed how we both work and live. First emerging as a data access and storage solution, cloud benefits are numerous.
Ranging from scalability on demand, ‘pay as you use’ tariffication, centralisation, better access for a distributed workforce and improved disaster recovery. Not just an IT gizmo, the cloud leads to key business factors such as faster time to market, greater flexibility, improved quality and it easily supports meeting compliance and sustainability targets.
There is little argument against the cloud, but with great opportunity always come great challenges. These can be painlessly dealt with if they are recognised, and potential risks and obstacles are planned and evaluated.
Setting out on a cloud journey
- Choose your Cloud
The first milestone is to decide which cloud is fit for your purpose. Factors such as security, data protection, downtime expertise and risk of vendor lock-in must be weighed up carefully.
Whilst Amazon’s AWS still holds over 30% total market share and might be the ‘go-to’ cloud, Azure is quickly emerging as a hybrid solution thanks to Microsoft’s firm foundations in SaaS.
Security is a fundamental consideration. Insurance and Claims data is highly sensitive and certain data protection laws have to be intensely respected, and many insurers will be left uneasy at the thought of data being moved to countries where the same laws do not apply. However, most clouds which do move data, will allow for regional configuration also allowing an insurer to quickly apply group policies.
Current security guidelines often don’t offer much information on how to manage cloud infrastructure. This can lead to ad hoc security configuration, isolated projects with limited shared standards and shared resources and learnings. However, when transformation is managed correctly, 94% of businesses, claim they see improvements in securities when shifting to the cloud.
- Define your strategy
Once a solution is selected, the insurer faces challenges on how to integrate the cloud on the legacy landscape. An important question is raised: is the strategy Cloud only, or should two worlds exist in parallel?
Whether hybrid or all-in, if not well executed, this can eradicate all efficiency advantages as operational teams struggle to maintain several incompatible systems.
One key benefit offered by many clouds is that onsite servers can still be integrated into the Cloud, allowing numerous possibilities.
And what for downtime
The cloud often gets negative press about outages. The Coronavirus surge in cloud migrations has been the greatest stress test. But most outages are caused by regular technical incidents and not related to usage. Nonetheless, open-source monitoring systems can quickly be implemented on the cloud instance, providing an insurer to react ahead of time, eventually becoming proactive and prediction to keep the organisation running smoothly.
Alongside a cloud strategy, the insurer will also need to adopt a continuous learning culture in line with DevOps ways of working. Investing in skilled resources who can support the transformation, particularly when moving to a run state is thus necessary.
Without enough expertise, the central Cloud Data teams may operate more like a service desk, executing mundane tasks for the rest of the workforce rather than working on new developments and service improvements. This can lead to a lot of frustration from technical resources who came on board with promises of innovation.
Here, it’s important to discuss that change is all too often met with an element of human resistance. At one insurer, we noted that much of the resistance came from the Management Team itself, who struggled to view the long-term benefits to the business of a large-scale IT implementation. This needs to be carefully managed to keep motivation and enthusiasm levels high towards the Cloud.
How to overcome Cloud adoption challenges
The only way to overcome these important challenges is with a solid change management plan. The first step is to have a firm understanding of the current IT landscape and integration patterns. This will help identify potential issues, opportunities and needs.
A move to the Cloud may seem costly. An insurer must budget for bandwidth, migration, adoption, training, rewriting application architecture to name just a few items. But in the future, investments are easily returned as IT overhead, inoperability costs reduction, and efficiency improvements.
With a focus on planning, an insurer can then migrate to the cloud in more manageable pieces over time, whether product by product or in a partial move – hybrid cloud options should not be overlooked. To allow scalability and elasticity, start with an easy application, dip toes, test the water and build up.
From the beginning, a good integration with business and leadership buy-in can accelerate and enhance a move to the cloud. When choosing your cloud solution, prioritise usability and integration. You need to integrate it with existing tools for a smoother workflow and better efficiency. Investing in onboarding and training ultimately will improve your Cloud integration.
If you’d like to talk more on this subject, share ideas or discover how we’ve managed successful Cloud migration journeys reach out. We’re always up for a good (virtual) chat!