Too Many Clouds on the Horizon?

IMG_0221Cloud is great.  I like cloud.  It’s a way to jettison some aspects of IT that allow for some very tedious things to be taken care of in a way that is simple.  What’s not great is chaos, chaos is no fun, and cloud chaos is even worse because it is so easy to get there.

Adopting a banking cloud solution requires a clear understanding of what is where and which components are strategic and which are commodity.  These days I don’t think there are any “hard and fast rules” about what should be in the cloud and what should be on premise.  At one point people viewed it like this and created some simple guidelines for what they would keep where.  Currently I see these guidelines pushed aside as the technology becomes more secure and more consumable.

The greatest challenge that I see is that many firms are adopting cloud solutions without a cohesive strategy or approach and while each decision in itself may be justified and make sense the direction as a whole is incoherent.  A bit of cloud here for this and some other cloud for that is fine for the short-term, but the real challenges emerge when you want to integrate the process or the data from each of these clouds.

Cloud solutions don’t mix well, and don’t always play nicely with others..

The cloud approach itself is very powerful, but without a strategy and approach it can be dangerous.  It is important to define which topics are strategically important to hold and which can be externalized.  Here are some ideas and examples of what I mean:

  1. Much of financial services is about trust.  Cloud solutions can be incredibly secure and well designed for privacy and transaction integrity – but be aware of the trust relationships involved.  I have seen cloud solutions where the bank is front and Centre on managing the trust relationships because this topic is too important to leave to any third-party, what I like about this is that the decision was taken consciously and with a clear perspective of the underlying principles involved.  Be aware of where trust exists in the solution and consider that this is a fundamental part of the customer/financial services relationship.
  2. Create some boundaries and order around cloud solutions.  If you have a cloud strategy around your supply chain avoid having three platforms performing the same function – this will drive future complexity and create integration nightmares that will impede future flexibility.
  3. Keep the cloud simple and under control by defining a strategy and clear guidelines and patterns for usage.  Expect to see more cloud solutions in the coming months and years, having a cloud strategy ensures that the decisions going forward are aligned to a specific direction.  This means that your organization is going somewhere with cloud which beats the alternative.

Overall I believe that hosted solutions are the future for many things, and that this will give some firms a major advantage.  Having a foundation of strategy and structure and adding the cloud to this will result in great progress and flexibility.  Without order there will just be too many clouds and a new class of legacy.

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