Passing on the cloud revolution

Peter Rae explores why certain organisations remain wary of the cloud

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Passing on the cloud revolution Peter G Rae, chief digital officer, Platform Four.
By  Peter G Rae Published  October 13, 2016

Mark Hurd in the latest issue of the Oracle publication, Profit, echoed the theme of many tech company leaders when he said: “What makes cloud computing so revolutionary is that it can permeate everything your company does, from back-office processes to how it goes to market.”

Is that a promise or a warning? Does a company want a revolution that permeates everything it does? A revolution means change everywhere — processes, hierarchies, lines of business, job roles.

If the declarations made every year since 2013 are to be believed, cloud as a mainstream technology by now should have moved from the roundtable discussion to the user training manual — from debate to adoption.

Cloud technology is maturing rapidly and its benefits are not an area of dispute any longer. But a search for “cloud renewal managers” delivers a long list of vacancies. Tech companies are investing in numerous staff whose job it is to ensure that customers renew their subscriptions.

Why would that be necessary if the cloud delivered such obvious benefits? Because it’s people that have to adopt cloud to enjoy its benefits. And when people start using the cloud they find that their working habits need to change, and that change is often seen as a threat.

Cloud has been adopted rapidly in those places where it disrupts the organisational status quo the least – HR, e-mail, software development and testing, data and document storage. In these instances, companies could do the same thing, only better. Adoption didn’t result in any dramatic disruption, and the benefits were immediately tangible.

The organisational impact of cloud is more profound in sales, or marketing, or distribution, or customer relationship management, and it is in these areas that disruption takes on an ominous note and the resistance movements begin to form.

Recent empirical research (largely academic) has covered the potential of cloud to disrupt legal and other organisational structures and departments. Research on human behaviour, though, is relevant over generations and can shed some light on the human response to the promise of cloud disruption.

Faced with the cloud revolution, many companies may decide that the potential consequences of not adopting cloud in certain departments are not as alarming as the prospect of sparking an existential crisis in every corner of the organisation.

This action is explained by economic psychologists Kahneman and Tversky, who observed that people feel less regret for the bad consequences of inaction, than for bad consequences arising from new actions (Kahneman & Tversky, 1982).

That decision to ‘do nothing’ in a murky business climate is often accepted with more complacency as companies hunker down and wait for business to improve. It is only a matter of time, though, before the big change will have to happen if they are to compete with upstart start-ups. ‘Opportunity’, ‘transformation’, ‘reinvention’, ‘game changing’: big, scary words describing a cloud that will cover the world, eventually.

Peter G Rae, chief digital officer, Platform Four.

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