Gartner predicts that worldwide spending on public cloud services will grow 20.7% to reach $591.8-billion in 2023, outpacing the 18.8% growth forecast for 2022.

However, says Cameron Beveridge, Regional Director for Southern Africa at SAP, moving to cloud environments requires effective change management to ensure digital transformation initiatives reach their objectives. “There is palpable excitement around cloud services in African markets, but there are still questions around how to effectively migrate and how to orchestrate multiple cloud solutions once the migration is complete. And while it’s true that one of the main benefits of cloud services is the ability to fail quickly without incurring huge cost or time overruns, you really don’t want your cloud initiative to fail due to poor change management.”

Studies have highlighted the importance of effective change management to the success of digital transformation initiatives. McKinsey data indicates that less than a third of digital transformation initiatives succeed worldwide. This is partly due to poor change management, of which barely a third (34%) are clear successes.

Methodology, Partners reduce perils of Cloud Migrations

Brent Flint, Head of Enterprise Applications at Dimension Data, believes part of the answer to effective change management during cloud transformation projects rests on an effective methodology. “Migrating core business processes from on-premise environments to the cloud requires a proven methodology to accelerate the transition and reduce associated risks. A repeatable methodology that incorporates automation to ensure aspects such as data integrity, for example, can ease data migration and speed up the time-to-value.”

SAP introduced RISE with SAP in 2021 to help companies get started with SAP cloud solutions, accelerate cloud adoption, and simplify the process of shifting core business processes to cloud environments. “Companies undertaking digital transformation initiatives that could benefit from RISE need to ensure their implementation partners are accredited and have the skills capacity to support the project throughout,” explains Flint.

Beveridge adds that companies that successfully leverage the insight, skills and experience of partner organisations can reduce risk and enhance the impact and business outcomes of their transformation efforts. “Companies are realising that cloud adoption is not a once-off event: it requires near-continuous refinement and evolution to deliver business value. This makes the role of expert partners, who have developed experience with specific use cases of cloud technologies and can guide organisations in their adoption of cloud solutions, critical to their success.”

Keys to cloud success

Understanding how and where the journey to the cloud should start remains among the biggest obstacles to the digital transformation efforts of African organisations.

Lauren Wortmann, Vice President: Applications at Dimension Data, says there’s still some resistance to the cloud among organisations limiting the success of cloud transformation projects. “Cloud adoption is a business-critical activity, but the optimal starting point is not always clear. Many organisations and their IT teams also acknowledge that the shift to cloud is coming, but there’s internal resistance due to fear about how it will affect the business and existing IT skills.”

Arguably the most important factor when developing a cloud strategy is defining a clear business case for cloud adoption. “Cloud is not just about cost efficiency,” says Wortmann. “It’s about modernising the business and its core processes, unlocking new opportunities, enhancing capabilities and achieving broader digital transformation. For this to be successful, there needs to be massive buy-in from the business at every layer, from the boardroom to the IT department and every end-user.”

The era of large on-premise deployments was typified by big winners and big losers, but the new era of cloud has changed the dynamic entirely. Flint explains: “In the old days, if you defined the scope of the project correctly upfront and quoted accurately, you could deliver a successful implementation that delivered new capabilities and was profitable to the technology provider and their implementation partner. The era of cloud requires a change of mindset. Today, tech vendors and partner organisations need to strive for near-continuous innovation, with KPIs around unlocking additional business value from existing technologies built into managed services contracts. It puts the onus on partners to unlock features and benefits from software, with the goal of ongoing value generation.”

Wortmann adds that companies should be smart when choosing how they start their cloud journey. “Aspects such as Human Capital Management are perfect starting points for cloud adoption, with solutions like SAP SuccessFactors offering a high-value, low-risk way to test how cloud migration plays out in the organisation. Larger, more critical business processes such as core finance, sales and logistics carry high degrees of risk due to fears of disruption and business continuity in the event of downtime.”

Flint believes one of the keys to successful cloud adoption is simplification. “Organisations should work with their partners to understand their application landscape and identify opportunities for simplification. Reducing customisation can also keep things simple while driving costs down. Partners need to avoid customisation to limit technical debt and achieve quicker time to value. Adopting best-practice standards for core business processes opens the door to incremental innovation which can suit cloud-first companies better.”

Beveridge says this requires a change in mindset to how digital transformation initiatives are approached, both by customers and partners. “The most successful tech partners will be the ones that develop strong commercial models that meet customers’ expectations of what value digital transformation projects should deliver. However, there’s no blueprint for how this should work. Organisations should work closely with tech providers and implementation partners to develop strong business use cases and change management programmes to ensure each initiative delivers business value and unlocks new capabilities, efficiencies and opportunities for growth.”

Cameron Beveridge, Regional Director for Southern Africa at SAP, believes corporate leaders are having to balance traditional business objectives such as revenue and profit with the demands of the modern economy that include building a healthy company culture, playing a positive role in society and being a good corporate citizen.

“The lines are being redrawn around what employees, customers and broader society expect of a modern business, especially as it relates to a company’s role in building a more equitable and sustainable world. Present trends indicate that we are moving toward a situation where environmental sustainability, fair employment practices and societal value trump pure profitability.”

Businesses have traditionally focused on creating maximum value for shareholders, and short-term financial profitability continues to be vital to a company’s growth and success. 

However, as the mounting costs and headline-grabbing impact of climate change starts affecting more people in developed and emerging economies, consumers are increasingly demanding that companies also make positive contributions to the environment and vulnerable communities. 

Looking beyond quarterly results

Studies have found that 84% of global consumers try to shop from companies that support causes they care about, while another study revealed that two-thirds of consumers and 73% of Millennials globally are willing to pay more for a sustainable brand. 

“There is growing recognition that companies need to shift their focus from purely delivering quarterly results that drive the share price, to ensuring they minimise their impact on the environment and prioritise creating healthy company cultures, ensuring adequate worker pay, and act as exemplars or enablers of more sustainable business practices,” explains Beveridge. “If your positive quarterly financial results were achieved on the back of environmental devastation, for example, consumers today are more likely than ever to abandon you for a more equitable-minded competitor.”

There are solid economic reasons for building sustainability into a company’s business model. One study found that companies with positive Environmental, Societal and Governance records produced higher returns, had a greater likelihood of becoming high-quality stocks, and were less likely to go bankrupt than their less ESG-focused peers.

“Business leaders still need to produce solid bottom-line results and ensure the financial sustainability of the business,” says Beveridge. “This is forcing them into a delicate balancing act where the correct course of action is not always clear, adding pressure to decision-makers already besieged by the disruptive impact of the pandemic, a constrained global supply chain, and growing economic pressures. Even the World Economic Forum, highlighting the importance for the private sector to look beyond the bottom line, put the onus squarely on business leaders to figure out the correct balance between short- and long-term priorities.”

The new talent battlefield

One of the most obvious examples of the new business balancing act is in workplace culture and employee engagement. During the early stages of the pandemic, businesses around the world shifted to remote models that saw millions of workers performing their day-to-day tasks away from the confines of corporate offices.

“The past two years have marked a greater shift in how we work than the two decades preceding it,” says Beveridge. “In the services industry, workers who previously completed their tasks within an office space under the watchful gaze of managers and HR specialists were suddenly asked to maintain high levels of productivity from home. Now that offices are reopening, many of these formerly office-bound employees now prefer to work remotely at least some of the time, creating new challenges in attracting, motivating and retaining top talent.”

The shift in how people view work came under the spotlight when millions of US workers shifted to more fulfilling or more accommodating jobs in a process dubbed the Great Resignation. “This shift in expectations of what people want from their jobs is forcing companies to rethink their company cultures, their salary packages, and the types of support they need to provide to employees to ensure high levels of productivity and retention.”

Research indicates that real wages in the US have been stagnant for decades, while UN data points to growing inequality for more than 70% of the world’s population.

Work-related stress is also growing and is now the most common form of stress in the UK, with only 1% of workers saying they’ve never experienced it.

“Business leaders are confronted with the task of balancing their teams’ productivity against the physical and mental wellbeing of each employee,” explains Beveridge. 

“As a company providing technology tools and expertise that help companies run better and become more successful, we are in the enviable position to act as both an exemplar of sustainable business practices and an enabler of more sustainable business models,” says Beveridge. “The shift to remote work created a situation where many employees work longer hours than ever before, raising the chances of burnout and forcing companies to implement additional measures to support employees that are working under immense pressure.”

Beveridge advises that business leaders deploy technology tools to dispel uncertainty in their business models and their human capital management strategies. “Companies have an opportunity to be both an exemplar of more sustainable business and employment practices – for example by reimagining their business models to focus more on longer-term sustainability and value creation – as well as enablers, by providing tools that assist other companies in their sustainability efforts. As we enter an era of great uncertainty and ongoing volatility, business leaders will need to leverage the latest technologies to ensure they can manage this new balancing act.”