health transformation institute (HTI)
research institute & knowledge portal
Joaquim Cardoso MSc*
Founder, Chief Researcher and Editor
November 28, 2022
MSc* from London Business School
MIT Sloan Masters Program
FastCompany
BY GREG LINDSAY FOR FASTCO WORKS
Companies that successfully implemented complex digital systems are now taking stock and figuring out how to optimize their investments.
Here are some of the challenges they face — and how to overcome them.
Digital transformation and the history of IT is an endless cycle of exploration, optimization, and consolidation as companies race to acquire the right balance of talent, skills, and technology to innovate.
Cloud computing is a textbook example, as early expensive private clouds gave way to massively scalable public ones before finally landing on “hybrid clouds” combining the speed and agility of public services with the security of keeping critical systems on premises.
In a one-on-one conversation at the recent Fast Company Innovation Festival titled “Accelerate Digital Business Value in a Hybrid World,” Jason McGee, IBM’s general manager and CTO of Cloud, discussed how companies are using a hybrid approach to accelerate the transformations started during the pandemic.
Here are edited excerpts from the discussion.
Cloud computing is a textbook example, as early expensive private clouds gave way to massively scalable public ones before finally landing on “hybrid clouds” combining the speed and agility of public services with the security of keeping critical systems on premises.
How does “digital transformation” differ from traditional IT, and why are hybrid clouds best suited for it?
Jason McGee:
Cloud services that started as a way to save money and run your IT more efficiently quickly evolved into an innovation platform designed to help you move faster — and that urgency was juiced during the pandemic, when everyone had to figure out how to change their business processes literally overnight.
The world has only gotten more complex since.
Companies have multiple cloud environments from multiple providers, and they also have large on-premises solutions.
Also, their workloads changed as innovation accelerated.
Now the back ends of these systems have to start moving to the cloud, too — and that’s a lot harder.
Cloud services that started as a way to save money and run your IT more efficiently quickly evolved into an innovation platform designed to help you move faster — and that urgency was juiced during the pandemic, when everyone had to figure out how to change their business processes literally overnight. The world has only gotten more complex since.
Now the back ends of these systems have to start moving to the cloud, too — and that’s a lot harder.
How did the pandemic help drive this shift, for both good and bad?
What’s interesting is how we got a lot more tactical in an environment like that — how do I solve this problem right now?
There’s some freedom in that — people worried less about the strategic ramifications 10 years from then.
But now we’re three years out, dealing with all the fallout of the short-term decisions you made, including all your different partners and cloud providers you signed in the heat of it.
The stumbling block now is: How do I get a handle on everything I’ve done and bring some consistency to that environment? Because all of that complexity is bogging me down.
The stumbling block now is: How do I get a handle on everything I’ve done and bring some consistency to that environment? Because all of that complexity is bogging me down.
Right, because you want the flexibility to innovate freely while taking into account legal and regulatory complications. How do you ensure the best of both worlds?
We have a client in Germany, Mainz Hospitals, that’s been able to do this.
During the pandemic, they had to quickly build new applications for vaccine schedules and doctor communication.
They also had stringent privacy rules about where their data can live.
So, they needed to run these systems within the hospital itself, but they also wanted the speed and power of public clouds to help them build and deploy them quickly.
That’s where a hybrid approach helped them achieve both — the data needed to live in a certain jurisdiction, but putting the application in the same place didn’t make sense technically.
It would have been too far away, too slow, and too fragile.
We have a client in Germany, Mainz Hospitals, that’s been able to do this (innovate freely while taking into account legal and regulatory complications)
… they needed to run these systems (vaccine schedules and doctor communication) within the hospital itself, but they also wanted the speed and power of public clouds to help them build and deploy them quickly.
That’s where a hybrid approach helped them achieve both — the data needed to live in a certain jurisdiction, but putting the application in the same place didn’t make sense technically.
What does the rise of hybrid mean for developing in-house skills and talent?
Because on the one hand, public clouds create this deep reservoir of capabilities available as a service, but on the other, organizations still need to differentiate themselves.
The whole as-a-service trend underlying cloud is important, as it lessens the skill base you have to build yourself.
I talk to a lot of organizations trying to build these very high-skilled teams.
That’s hard! It’s hard to find and retain those people, as they’re very expensive.
Public clouds can lessen that burden by centralizing the necessary skills into the service providers underlying these projects.
You can take advantage of innovations like AI and new database systems much more easily than you could have done traditionally.
The whole as-a-service trend underlying cloud is important, as it lessens the skill base you have to build yourself.
Public clouds can lessen that burden by centralizing the necessary skills into the service providers underlying these projects. You can take advantage of innovations like AI and new database systems much more easily than you could have done traditionally
That’s what’s unique about the role clouds are playing in this space: Everyone has access to them.
In the past, a large organization could perhaps take advantage of the latest and greatest things, and smaller organizations would struggle because they didn’t have the resources to build it themselves. But with clouds, everyone can tap in.
In the past, a large organization could perhaps take advantage of the latest and greatest things, and smaller organizations would struggle because they didn’t have the resources to build it themselves. But with clouds, everyone can tap in.
In light of this, how should companies evaluate which capabilities to bring in house, and which to draw upon from the cloud?
You’ve got to ask yourself: What skills are unique to you and your industry versus what you can outsource to your provider of choice, who’s hopefully going to deliver it as a service to you?
For example, American Airlines is a big client of ours, running their mission-critical systems on IBM Cloud, including ticketing — which I have a vested interest in, because it makes the news if you screw up those systems.
But their primary motivation was speed.
Look at what happened during the pandemic — all of a sudden, you needed vaccine certification to board a plane.
Somebody had to implement that in their check-in flow and perform all of the verifications as quickly as possible, because people couldn’t fly without it!
You’ve got to ask yourself: What skills are unique to you and your industry versus what you can outsource to your provider of choice, who’s hopefully going to deliver it as a service to you?
For them, being hybrid meant being able to take advantage of new technologies such as AI, Kubernetes, and containerization, while shrinking the cycle times of new applications from 18 to 20 months down to six to 12 weeks.
For them (American Airlines), being hybrid meant being able to take advantage of new technologies such as AI, Kubernetes, and containerization, while shrinking the cycle times of new applications from 18 to 20 months down to six to 12 weeks.
What comes after the cloud era? What’s next?
There’s a new class of problems emerging.
We’re in this interesting phase with hybrid cloud where we’re tackling more complex systems.
We’ve lifted and shifted the easy stuff and done the front-end, customer-facing things.
We’ve done the greenfield projects, which fit very well with cloud.
But moving my core banking or ticketing systems — or something equally fundamental — is a much harder problem.
We’ve done the greenfield projects, which fit very well with cloud.
But moving my core banking or ticketing systems — or something equally fundamental — is a much harder problem.
What will hold companies back in tackling such problems?
There’s a real lack of skills preventing cloud consumers from really taking advantage of these opportunities.
We have an abundance of new capabilities — developers today have instant access to a catalog of capabilities that didn’t exist 15 years ago — but you need a very diverse, very current set of skills to harness them.
As-a-service and cloud delivery are enabling a larger pool of users from gaining those advantages by reducing the skills needed to get there.
There’s a real lack of skills preventing cloud consumers from really taking advantage of these opportunities.
We have an abundance of new capabilities — developers today have instant access to a catalog of capabilities that didn’t exist 15 years ago — but you need a very diverse, very current set of skills to harness them.
Originally published at https://www.fastcompany.com
Names mentioned
Jason McGee, IBM’s general manager and CTO of Cloud,
