What Do Most Enterprises Get Wrong In Their Cloud Adoption Journey?
Every cloud transformation journey has its challenges and, more often than not, these stem from a mismatch between the culture and drive of the business and its IT department. In this post, Christian Nilsson considers different models that could help an enterprise identify where its problems lie and shift its cloud adoption journey back on track.
Over the years Cloudreach has helped enterprises in almost all industries overcome hurdles in their cloud transformation journey. There are a number of different reasons why companies reach out to us for assistance. Often it is because their cloud adoption initiative has stalled, problems with internal politics or the cost of cloud adoption has spiraled out of control. Other times it is because a company is struggling with the current velocity of its development teams and time to market.
Our approach is to try and understand where each individual enterprise is on its cloud adoption journey and get to grips with the problems (both visible and invisible) that are holding them back. In my experience, this approach relies on two different models which can be used to describe what culture defines the enterprise, how the enterprise operates, and where the friction points are to be found.
The first model - Mode 1/ Mode 2
The first model is Gartner’s description of bimodal IT where:
- "Mode 1" is focused on predictability and reliability. It is highly practical in domains that are well known and it especially favors optimisation. We find that Mode 1-organisations often are defined by ITIL processes, have teams working in silos, and tend to be change-averse, hence the ability to drive optimisation.
- "Mode 2" is focused on experimentation and innovation and well suited for domains that demonstrate a high degree of uncertainty. We find that IT organisations operating using Mode 2 often apply a DevOps-methodology with cross-functional teams that embrace change and are driven to fail fast to reduced time to market while achieving higher customer satisfaction.
It is not unusual to have bimodal IT in an enterprise. Both models can prove valuable as long as one recognises which mode best suits each corresponding domain and what business drivers are informing the goals of the IT department.
By looking at an enterprise’s IT, using this model as a "lens", one can get a solid understanding of what is to be expected from the IT department, where the strengths are and what informs the culture.
The second model - Day 1 / Day 2
The other model we use approaches the enterprise from a business values perspective. It was suggested by Amazon CEO, Jeff Bezos, in a shareholders letter when trying to describe what, according to him, made Amazon different from other companies. He referred to Amazon as a "Day 1" company, in comparison to "Day 2" companies.
- A Day 1 company is driven by high-velocity decision making which leads to a reduced time to market. It is informed by continuous adjustments and has a customer focus which is borderline obsessive. These are values that distinguish a digital-first company.
- A Day 2 company, instead, tends to operate in a predictable way and has a high degree of operational integrity, at the expense of the customer obsession demonstrated by Day 1 companies. This is not saying Day 2 companies don’t care about their customers, they certainly have a customer focus, but not a customer obsession informing each decision. We also find that enterprises with a Day 2 culture often have very mature processes that inform most of, if not all, actions and decisions.
This letter is an intriguing read best summarised with this quote:
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” - Jeff Bezos, SEC EX99.1
It might seem that Day 2 is a less effective way of running a company. This is not the case. Most of the global enterprises that are dominating in their respective industries today are successful, mature, and stable (Day 2) organisations. To reiterate, these models are not here to judge enterprises and point out what they are, and are not, doing well. Instead, they help us understand what is informing them, driving them, and what culture they nurture.
A map for change
We now have one lens through which we can understand what is driving the business and one lens to understand the IT organisation supporting this business. By plotting the characteristics of each of these two lenses in a table it is possible to see how points of friction can appear when one IT model is trying to support a business which is incompatible.
By mapping the values in Day 1 and Day 2 to Mode 1 and Mode 2, it becomes clear that there is a harmony between Mode 1 IT operations supporting a Day 2 company because their values are aligned. There is synergy in their values and how they operate and this is reflected in how they are structured.
A Mode 1 IT operation supporting a Day 1 company, however, will cause problems as a change-averse IT department will have problems supporting business demands that request continuous adjustments and reduced time to market. Likewise, a Day 2 enterprise, running with high operational integrity and mature processes, will struggle when supported by Mode 2 IT operations, whose fail fast and fail often approach is best suited to a landscape of many unknowns.
More importantly, these lenses make it possible to understand the source of friction, allowing the enterprise to remove obstructions and bring momentum back into its digital transformation.
Many problems encountered in digital transformation journeys stem from perception and operational disconnects like those suggested above. For a company that is going through digital transformation by cloud adoption, this disconnect will prevent success and must be resolved not only using technology, but by aligning their culture, processes, and overall identity.
When supported by an IT department that operates with similar, compatible values, a business can transform itself and increase its velocity in the process.
Cloudreach specialises in helping enterprises identify where they are on their cloud journey and equipping them with the methodology and tools to ensure they can successfully navigate from bottom-left to top-right.