Video Quick Take: Accenture’s Karthik Narain on the Cloud Continuum
Julie Devoll, HBR
Welcome to the HBR Video Quick Take. I’m Julie Devoll, Editor of Special Projects and Webinars at HBR. I want to thank everybody for joining us today. In today’s Quick Take, we’re joined by Karthik Narain, Lead Accenture Cloud First, to discuss some of the themes that came out of Accenture’s recent research about unleashing competitiveness in the Cloud Continuum. Karthik, thank you so much for joining us today.
Karthik Narain, Accenture
Thank you so much, Julie, for having me here.
Julie Devoll, HBR
So let’s start with the research. The report discusses a Cloud Continuum. How is this defined?
Karthik Narain, Accenture
Julie, the Cloud Continuum is a dynamic array of capabilities, the organizations can leverage from the public cloud to the edge to everything in-between, all seamlessly connected through cloud first networks like software-defined networks or 5G.
And Cloud Continuum is going to enable organizations operate more intelligently by leveraging the power of cloud across this Continuum, so that they could deliver the business outcomes and deliver to their customers, partners, and their ecosystems in the closest and the most intimate way possible.
And there are certain organizations that are doing this extremely well. And we are calling these organizations as the Continuum Competitors. And these organizations are leveraging this power of cloud across the Continuum to deliver to better operations’ financial outcomes.
They are able to drive better experience to their stakeholders. And they are able to seamlessly engage their employees and get the power of innovation within their organization, so that they could create a competitive differentiation not just within their competitive set but across their entire industry that they are operating in.
Julie Devoll, HBR
So how is the research conducted?
Karthik Narain, Accenture
So we conducted this research with a broad set of participants. And we did this from late 2020 to early 2021. And we had about 4,000 C-suite executives participating, both IT executives and business executives across 25 different industries and across 16 different countries.
And this was conducted in the form of interviews, some case study research, and also economic modeling. And we asked them about how cloud is being used by their organization. What is the financial advantage or impact that they are getting?
Julie Devoll, HBR
So let’s talk about the Continuum Competitors. How have they been able to advance to past their peers? And was there one approach that stood out as the most important?
Karthik Narain, Accenture
Yeah, first of all, migrating their existing business and their IT landscape to cloud is a primary first step. And everybody is doing that. And everybody should do that. But the difference in the approach that the Continuum Competitors took was, they just used the migration as their first step in a longer journey that they planned well in advance.
And the purpose of that was that they understood the power of cloud to be a lot more than just a cost-saving lever, even though cost savings is a primary advantage of cloud. But they looked at it from broader objectives. And then they started mapping the latest capabilities across the Continuum to deliver to those strategic objectives.
Julie Devoll, HBR
For organizations that have adopted cloud, but aren’t seeing the return as of yet, what does the research suggest that they do?
Karthik Narain, Accenture
First of all, it’s extremely important that cloud is going to be available across this continuum. And organizations should think about cloud as the operating model for the future enterprise. But when organizations take that kind of approach, there are four things that these Continuum Competitors are doing that appeared as a common pattern across that entire set.
The first thing is that they have a clear understanding of where they want the Continuum to take them, which means that they develop a strategy and vision of where their organization needs to go over the long-term. And they map that strategy and vision with the various capabilities available across the Continuum to take them there. So it’s a holistic objective.
The second thing is the established Continuum practices to support and augment all of the technology capability that is available in the Continuum. What do I mean by that? They need to reimagine how they operate in the cloud. Because cloud is a capability that is available on-demand. And it’s available at every destination or location possible, which means the fundamental premise on which the organization needs to spin is agility.
So organizations need to always create this experimentation mindset so that they are able to constantly assemble and consume. And if something does not work, they should be able to pull back and experiment the next idea that they have. They also set continuous goals so that these goals are not static.
And the third thing that we found common was all the Continuum Competitors focused on one thing over everything else and that is delivering exceptional experience. It’s all about experience. And cloud now enables you to provide the right experience to your right stakeholders at the right place and time.
And the last common factor was this, secure continuous senior leadership commitment. Cloud transformation is not just a technology transformation. It is indeed a big technology transformation. But it’s a technology transformation enabling a holistic business transformation.
So the CEO and the C-suite needs to be engaged. And they need to be supporting this transformation journey because it’s multi-year, multifaceted. It is interdepartmental. So these are the four best practices that we see.
Julie Devoll, HBR
How do you introduce the Cloud Continuum concept to a client that is just starting on their journey?
Karthik Narain, Accenture
We would talk to them that, first of all, we hope that they are thinking about migrating their existing landscape, existing IT systems to cloud to bring operational flexibility, elasticity, and a bit of agility in their business. That’s the first step.
Once they start doing that, we would talk to them about the benefits, both from a bottom line savings such as cost, and cost reduction, and increased speed to market that they can get. But we also want to talk to them about the top-line growth in sales through cross-sell, upsell, better customer insights, more intuitive products that they can get. So that’s the second step.
And the third step that we would talk to them about is driving business goals and business outcomes through the power of cloud. So constantly creating strategies and vision, and mapping them with the power of cloud so that they could use the right capabilities to drive right outcomes. But look at every area of your business and see where you want to transform. And look at all the capabilities that the Cloud Continuum provides to augment and transform. That, eventually, would be something that we would do.
Julie Devoll, HBR
How does data play into the Continuum concept?
Karthik Narain, Accenture
I think data economy is blossoming in cloud. And it’s going to enhance further in the Cloud Continuum. Organizations are learning that there’s so much data that could be collected. And there is so much that they could do in their business using that data. Namely, they could derive better customer insights, and increase customer engagement and satisfaction.
Number two, they can optimize various business processes and the various steps in those business processes by simplifying them and reducing the cost of operations as well as the business complexity. Or they could use data to build more intelligent and intuitive products, so that the users get hooked to their products and the customer loyalty increases from these products.
But to create these things, you need a strong foundational data backbone. And that data backbone cannot be anywhere other than the cloud and in the Continuum. And why do I say in the Continuum is because of another important trend that we are seeing. And that is, over the next five years, 75% of the data is going to be generated in the edge. And it’s also going to be processed in the edge.
If you look at some industries like health care, the whole health transformation is going to happen through sharing of data across the entire industry, from pure science that is happening in research institutions and universities, to in drug discovery that happens to clinical trial process, to FDA approvals, to manufacturing supply chain, and the rules feedback loop on how that drug is actually working in the field.
And sharing this data, but sharing this data in a very secure way, in a controlled manner, is going to improve the overall health care and make all of our lives much, much better. And for that, the Cloud Continuum is going to enable the seamless management and governance, and the sharing of this data across the industries.
Julie Devoll, HBR
What findings in the research surprised you the most?
Karthik Narain, Accenture
One of the interesting aspects that we found from the research, Julie, was even though the Continuum Competitors were not primarily driven by cost savings, they ended up actually achieving greater cost savings, cost reductions than the ones that were focused on cost savings.
Public cloud allows the innovation of people outside of the four walls of your enterprise to innovate on your behalf. And when organizations leverage that power, they’re able to achieve certain business goals quicker, and also they’re able to achieve certain projects at a lower cost, at a faster time to market. So that was one interesting achievement.
But it was also an interesting revelation, was you don’t need to be a cloud native, digitally-born organization to take advantage of the power of cloud. A lot of the winners or the Continuum Competitors that we saw in this top 13% were traditional organizations, but were smartly using the power of the Continuum across everything that they do in their enterprise. So those were two interesting findings.
Julie Devoll, HBR
Is Accenture a Continuum competitor? And where is it on the Continuum?
Karthik Narain, Accenture
We are well down the digital transformation path. And we’ve been doing it, Julie, for the last five years. And we’ve made big strides and big bets on cloud and intelligent automation, where a lot of our capabilities have been augmented to analytics and AI. So our employees perform more knowledge functions rather than route tasks.
We also changed our ways of working with the newer culture so that we are able to move up and think about doing value added tasks, and not do the routine, mundane tasks that we used to do in the past. And last but not the least is we’ve invested heavily in talent and skill development across the organization. We are in the business of skills and talent. But we are seeing the S-curves of technology and skills are happening a lot faster.
So we’ve spent a lot of energy and heart in enabling that as well. So at scale, we are now able to operate faster and a lot more effective. And we are able to manage our risks and able to scale with the same amount of infrastructure. We are able to do a lot more than what we used to do in the past.
Just to double click on cloud, Accenture’s IT infrastructure is over 95% in the public cloud. There is very few functions that happens in– on-prem for us. And it is costing about 1/2 of what it used to cost us five years ago. But in these last five years, as an organization, we have nearly doubled in our size, scale, headcount, and all aspects.
Julie Devoll, HBR
Well, Karthik, this has been a great discussion. I want to thank you so much for joining us today.
Karthik Narain, Accenture
Thank you so much for having me.
Julie Devoll, HBR
Karthik, this has been a great discussion. I want to thank you so much for joining us today.
Karthik Narain, Accenture
Thank you so much, Julie. I enjoyed the conversation as well.
To learn more about the research, go to accenture.com/cloudcontinuum.