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What is the Role of Professional Service in the Cloud’s Digital Transformation?

Enormous expectations have arisen with the spread of cloud computing.  Software as a service (SaaS – a service accessible and usable on the web) packs a punch from the get-go with great user experience, fast time to value and short innovation cycles.

Its pay-per-use model simplifies everything.  However, SaaS solutions do have one caveat: enterprises using SaaS take on a greater degree of
standardized processes. Updates to SaaS solutions aren’t individualized, as many customer tenants share the same, upgradeable core solution.  Only standardized and centrally-managed upgrades can be processed under the responsibility of the solution provider.

This standardized process appears to limit SaaS’s adaptability to specific needs, meaning that professional services seem to be stuck between a rock and a hard place.

But does the cloud really make professional services and intact ecosystems obsolete?


The simplification paradigm

First and foremost, the cloud is about simplification. What is simplified, however, is consumption, not processes. This is particularly true for complex processes. In essence, the cloud is about two things:

1) Centering on the customer’s perspective to deepen engagement

Stepping into the customer’s shoes and focusing on his or her end-to-end experience is essential for simplification in the cloud.  Free up any
obstacles between the customer’s first touch point with your company (digestible messaging, focus, trials, etc.) and his or her experience with the
service (onboarding, upgrades, support, etc.). If you’re able to simplify the end2end experience, you’re a cloud company.

2)  Be agile to react quickly to market changes


We are living in times of unprecedented change. Smart, innovative companies are leapfrogging industry borders to sell additional products and
services in existing markets, leaving behind a trail of perplexed established market leaders. With the rise of every new megatrend, enterprises must adapt to stay in business and ahead of the crowd. This reality is no joke – over 50% of the Fortune 500 companies from 2000 no longer make the list, having succumbed to the pressures of fast change. They have simply been out-innovated by peers and new challengers.

Cloud does not equal cloud

Best practice processes

Companies don’t set themselves apart from their peers with their best practice processes. But once the technology hits, no company wants to be left behind not leveraging the latest innovation.

Companies are keen to move to best practices in the following areas:

  • Customer relationship management, particularly the lead to opportunity process.  The opportunity to cash process is still highly variable, complex and company-specific.
  • Supplier relationship management
  • Human capital management
  • Financials – this is a tricky one, since best practices are highly valued but most companies have privacy concerns here
  • Generic corporate processes like travel and expense management.  I personally don’t know of a single company that differentiates itself from its competitors based on its business traveler processes. This is a great example of a pure best practice area.

These functions are all moving toward public cloud models.  To drive innovation and business agility combined with maximum cost-efficiency, companies using the public cloud model share a maximum of resources.  The cloud service provider owns and operates the solutions and infrastructure, offering access to these resources through the web.

The public cloud is delivered securely and with the highest standards. Frequent updates from service providers ensure access to the latest innovation at any time.

Company-specific and core industry processes

Of course, there are other aspects that are very much company-specific. Core functionality is specific and tailored to companies’ individual needs.  This typically encompasses logistics or IP (intellectual property) and even related functions like R&D. These functions are neither expected nor wanted to be fully standardized. Instead, they are highly differentiated between businesses. But simplified consumption is highly appreciated.

These functions are typically run in a managed cloud environment in which the cloud infrastructure can operate solely for a single organization.  This holds
true regardless of whether it is managed internally or by a third party, hosted internally or externally.

The role of professional services

Software as a service is built on best practices and is highly standardized. This doesn’t mean that, by definition, companies automatically employ SaaS, ready to run their processes in the best way possible.

It may work well for small companies to align all their processes with best practice patterns, but this does not necessarily hold true for large enterprises.
Each industry and individual customer adopts SaaS according to their own business priorities and at their own pace.

The cloud is a transformational deployment option. Simply copying the analog world by digitizing it is not sufficient. The cloud enables companies to rethink their processes and take on new challenges.  We’re talking here about Digital Transformation (see also @SDENECKEN on ZDNET Digital Transformation, Part 1: Rapid State of Change | ZDNet ).

Professional services are also undergoing a similar transformational journey as the entire industry. The cloud will reduce commoditized tasks (because they will be consumed more standardized over the web) and free up resources to focus on value-adding activities.  This provides a tremendous opportunity for
professional services to transform (skills and organizations).  But professional services must first leave their existing niche and handle the likely change of job profiles resulting from the transformation.

In essence, commodity-oriented roles will no longer be as relevant as they were in the past. By contrast, new roles are needed to deliver added value. Well-trained business specialists with strong expertise will be indispensable in helping companies achieve and run best practices.

Such business specialists and tasks will include:

  • End2end Process designers
  • Data migration tasks
  • Data and process integration tasks; Consultants knowledgeable about the integration layer
  • Build cloud extensions (One Offs and Scalable solutions) on PaaS (Platform as a Service)
  • Comprehensive high class project management
  • More data security and privacy experts
  • Data artists to manage the vast amounts of information and help customers interpret signals

Looking at companies with an industry expertise is a huge asset as you find many similarities between industry peers. Help companies achieve Best Practices is the most valuable contribution from Professional Service organizations. It has been the role in the past and will be going forward. Companies desire to get into the Digital Transformation which is built on new technologies like cloud. It is about to significantly change consumption models and deeply affects companies’ cultures and business processes.

A great opportunity for Professional Services to lead the Change. They shouldn’t be anxious about this change – they should be prepared for it.

Looking forward to your thoughts , follow me at @BeSchulze

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