Hybrid cloud combines the best of two approaches in the race to add value

September 27, 2023

Today’s IT leaders are faced with an interesting conundrum - the need to be careful with the desire to be quick. The tortoise might win the race but that doesn’t mean the hare’s approach is without merit. Which is why adopting a hybrid cloud approach - operating in both an on-premises and cloud environment - can make a lot of sense. Especially when managing risk and regulatory constraints is as important as keeping up with the speed of change.

In CCL’s State of New Zealand Cloud Transformation 2023 report, based on research with 476 IT decision makers, 22% of respondents had adopted hybrid cloud and 37% consider it the most preferred future model. While the top benefit (38%) is the increase in flexibility and scalability, perhaps most telling is the breadth of benefits cited – from customer experience and innovation through to regulatory compliance.

An example of where hybrid cloud is useful is the highly regulated banking sector. While some core systems and processes may be hard to change because they contain highly sensitive data and regulations require they remain within the banks physical control, other non-sensitive workloads like customer-facing applications chatbots and data analytics can benefit from the public cloud platforms that enable rapid development and deployment of innovative customer applications and services.  

Hybrid cloud also allows organisations in every sector to enter a transitional state of moving legacy systems – many of which can take multiple years and budget cycles to change – to cloud platforms. In other words, keeping certain core platforms or workloads in situ while migrating to cloud enables businesses to maintain consistency over the long periods it might take to work through challenges such as regulatory and budgetary restraints.

Data management and hybrid cloud

One area that is particularly suited to hybrid cloud is data management, as it allows organisations to locate data in different environments and thereby address data sovereignty, security, accessibility and performance and cost requirements. In the CCL report, the ‘mix of on-premises and in cloud’ was the most popular category for managing every kind of data – from financial and IoT, through to consumer and sales.  

Data management is evolving alongside the development of cloud computing. Around 30 years ago applications managed their own data, with a database located inside an application server. Now data analytics relies on data lakes and data warehouses so that data is aggregated and managed centrally and then applications have access to the data as required.

Hybrid cloud means organisations get the best of both worlds, by keeping sensitive data in legacy applications where it remains siloed, but with a data integration layer for analytics and other uses.

Change in processes and behaviours

Hybrid cloud is, however, only as effective as the people and processes it enables. Organisations often fall into the trap of maintaining the same systems after adopting a hybrid cloud approach, and so fail to get the best return on their investment.

For example, if you digitise a process that used to be paper based then you need to maximise the value it unlocks. If the current process involves someone printing off a memo and walking it down the hall to place on a stack of paper on someone’s desk, and when email is introduced, they simply send it to that person’s inbox, there isn’t a huge amount of productivity gained. However, if you create a system that generates requests, prioritises messages and sends them to a group of people to action in order of most important, you’ve improved the decision-making process.

It’s important to adopt a holistic view of infrastructure, so that teams are constantly talking to each other and advising each other what their capabilities are, and what their successes are, regardless of what side of the IT divide - on premises or cloud - they are on. Being deliberate in putting communication at the forefront will avoid siloes from developing.

- Daniel Parsons, Leaven Head of Digital Transformation

In addition, organisational structures that emphasize a product management approach and enable more agile behaviours, can help bring decision making closer to the day-to-day craft of maintaining infrastructure and innovating with new products.

It's natural for some members of the IT team to be resistant to change, especially if they have invested in training and certifications which are no longer current.  The reality is that the capabilities of the team are just as important as the capabilities provided by the technology. Hybrid cloud facilitates a transitional state, not just for the transformation to new digital tools but, equally, for people to learn new ways of delivering IT services.

Managing technical debt, enabling innovation

Institutional knowledge is highly valued when managing technical debt, an issue faced by many organisations. This is when large investments were made on technology that at the time was cutting edge, but which is now becoming unsupported.  

Hybrid cloud enables IT leaders to ring fence technical debt and manage it over an extended period of time, and not allow it to hold their teams back from developing new products and services in a really dynamic way. In the CCL report, 49% of respondents are looking to replace existing applications with cloud-based solutions.

As with all technology, organisations need to be clear about what can be handled in terms of change and what’s realistic to achieve in a calendar year or financial quarter. The ‘build and they will come’ approach can end up with a lot of wasted investment, so it pays to be deliberate and considered. At the same time IT teams need to be bold and enable new products when they are needed by the business.  

In the end, whether the tortoise or the hare wins is immaterial if everyone loses sight of the point of the race - which is to be constantly adding value to the organisation.

The full State of New Zealand Cloud Transformation 2023 report can be found here.

Daniel Parsons
Daniel Parsons
Leaven Head of Digital Transformation
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Daniel Parsons leads Leaven’s consulting team and champions the transformative power of technology. Leveraging his 25 years of information technology experience, Daniel collaborates closely with c-suite stakeholders to understand organisational needs and create impactful change.

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