Going (Cloud) Native

One of the most enjoyable Business Agility conversations I’ve ever had was with UTS academic and Enterprise Agility expert, Asif Gill.  His comment was simple, but to me, quite profound: 

“A truly agile organisation doesn’t exist until the customer needs it”

I want you to think about that for a minute.  There are no assets and no people, just an empty shell.  Then all of a sudden, like a dance in a musical ballet, some event springs everyone into life.  A whole web of outsourced functions and services are built up and torn down solely for the purpose of completing that transaction.

While it’s not really a new concept, businesses today are being born with this level of agility baked in.  They are the Cloud Natives for whom cloud and agility isn’t a strategy, it’s just the way you do business.  Beyond this organic adoption though, if we have any hope of reproducing this ideal then we’re going to need a little structure.

Orchestrating your Value Ecosystem

Have a think about the current supply chain within your business.  I bet it follows a fairly standard process:  We collate assets together to build services.  We combine services to produce products.  And finally, those products a presented out for distribution and consumption.  With any luck, there be gold at the end of that little rainbow.

It’s a pretty simple, well-trodden process that works across multiple dimensions, and indeed, at each step of the supply journey.  Here in lies where it becomes complicated.  For the most part we don’t have one dimensional value or supply chains, but multi-dimensional value ecosystems. 

Most businesses sit in the middle of this web of supply and demand.  Their role, and indeed value, lies in their ability to align internal and external elements towards a common good.  Wrapped around the supply process is all the things businesses do to make it happen.

Generally, you can break those activities into two categories:  Those that we rely on day to day to generate value (the Execution of the business), and those we look to, to add new value (the Evolution of the business).  Simple enough right?  So lets break those functions apart a little…

On the Execution side, you are typically looking at two functions:

  • Orchestration: The activities you need to bring capability and functions into your business.  These include any processes need to use those functions such as HR, procurement, project delivery, go to market and others.
  • Operation: Quite simply, the day to day processes and activities needed to keep those functions running.  

The Evolution side of the coin follows a similar Current & New aspect to it. The difference is their function is to provide answers to these questions:

  • Performance: With respect to our overall business objectives, how are each of our business functions performing?
  • Planning:  What changes should we make to create new value and how will those changes impact the rest of the business?

How did you book your last holiday?  Let’s use the travel industry as an example.

You want to book a 5 day holiday in Tasmania say, so you head to an online travel site.  You enter in some preferences, things you want to do, places you want to see, level of luxury, and budget. 

The travel website has none of these things.  Instead it reaches across its ecosystem of partners.  Via those partners, the platform orchestrates for you a combination of assets and services; The hire of a minivan, a tour guide, flights, accommodation, restaurants, venue tickets, and even catered lunches. 

The platform assesses the performance of those partners using customer satisfaction ratings and resale margin.   A planning function makes decisions about each choice based on availability, performance, and budget.

Assets are combined into services to form a product.  A Tasmanian holiday product presented to the customer via website that grows and shrinks in capacity according to demand.  All in all, a product that didn’t exist until the customer needed it and a company whose only purpose was as an integrator to make it all happen. 

Business as a Platform (BaaP)

Combining these concepts together we form a mesh of business functions.  Each square in that mesh is a distinct capability needed by the business to drive value.

Breaking the business apart like this gives us two things. 

  1. We can start to describe in detail what each of those functional squares do. 
  2. We can start to map how those squares integrate and connect with each other in order to function.  Their interfaces if you will

It is here that magic starts to happen.

Once we’ve defined our mesh of functions, each of those little squares can be decoupled from the business.  Internal, external, does it matter how that function is provided? Probably not, so long as we can manage and control the performance of those functions as necessary.

What’s left is all that space in the middle.  The integration fabric that holds all those functions together.  Like the travel website, a business that exists only as a platform, ready for that trigger to wake everyone up and fulfil its customers needs.

A business built as a platform (BaaP) does not exist as a single entity.  In fact, it barely exists at all.  Instead, the business relies almost completely on the capability of the ecosystem around them.  Harnessing the agility and speed of that ecosystem to drive new value to the consumer.

The Future of Cloud?

Once the domain of technologists, Cloud platforms are going mainstream.  Nearly any business with a web presence can provide capability either transactionally or as a service. 

As a result, more and more businesses are expecting transactions to happen in near real time purely because they can.  With shorter lead times, business loyalties are going out the window.  Services are essentially being bought and sold to the fastest providers with the best price.  

We’ve seen this story before.  The rise of algorithmic traders on the financial markets has seen an arms race develop: Who can make the best market decisions, in the shortest possible time, for the least transactional cost.

Is this the future of cloud?  Services traded algorithmically by businesses on the open market.  Choices based on the specific needs of the consumer at the point of purchase.

Whatever the case, transactional barriers for services are falling.  The business models and practices of those that consume them are changing.  For most of us, the hurdle is one of mindset as we grapple with the illusion of control.  It’s for this reason the cloud natives born into this paradigm likely have the upper hand.

In short: Accelerating time to Value

Why is this all even important?  Why should you care? As abstract as it all may seem, for each industry there is likely to be common solutions for each function in that mesh.  If not, breaking that function apart as we have described could certainly help you build one.

Buzz words aside, the goals of business ecosystems and digital transformation are invariably to help you accelerate your time to value.  Being able to rapidly build and integrate common industry solutions into your business will certainly help you do that. 

Understanding how it all should fit together is the map that makes that happen. And that is where this framework kicks in.

Ultimately, cloud service ecosystems are now everywhere and in virtually every industry.  Native or not, applying Business as a Platform principles to your business may just be necessary for you to survive.

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