Myth 4: Moving to the cloud increases architectural complexity
Bain’s survey shows respondents’ on-premises infrastructure will drop 13% over the next three years, but on-premises deployment isn’t going away. Companies will have to deal with hybrid architectures.
Executives are concerned that hybrid solutions will become complicated, which is understandable when it comes to interoperability, for example.
Hybrid multicloud setups can add complexity, but modern cloud management solutions can contain this effectively. Through careful analysis involving IT and operations teams, companies can strike the right balance between portability and ease of implementation.
Myth 5: The cloud is not suitable for the core business
Cloud-based finserv services were previously focused on ancillary services and specific applications such as customer relationship management or software development. Today, cloud-native core banking systems are emerging at major incumbents. For example, JPMorgan Chase announced in 2021 that it would move the retail banking core system to the cloud.
Cloud technology is considered essential for integrated finance, including fast-growing applications such as banking as a service and buy now, pay later (BNPL).
While there are multiple paths to transformation, a shared legacy approach that combines cloud-native digital platforms with a bank’s existing digital capabilities can even help those banks avoid a complete technology reboot.
Myth 6: An agile transformation does not involve a lot of planning
Most finance leaders recognize that cloud transformation is a long journey. They realize that going too fast could disrupt and harm the organization.
Most have found a gradual approach to be the most effective. However, taking a step-by-step approach without clear direction can also be misguided and risky. An agile transformation requires a clear vision of the desired end game, as well as careful preparation and planning.
The Bain survey finds that half of respondents feel unprepared to govern a cloud migration and lack a talent management strategy. To reach the desired cloud-based end state, the organization must learn practical insights and overcome obstacles along the way.
Start the cloud journey with a lift-and-shift migration
A lift-and-shift migration, where a business moves workloads to a new environment with minor changes or no changes, is sometimes considered a sensible approach. In reality, it could lead to problems and provide a fraction of the potential benefits.
Instead, a high-impact evolutionary migration usually involves taking a long-term perspective with thoughtful staging. The first step is to determine the starting point of the business along five dimensions:
- cloud vision and strategy
- transformation and economy plan
- approach to safety, risks and regulations
- cloud-based operating model
- technical strategy and execution
Cloud adoption will not happen overnight. It is a journey with clear milestones, especially taking into account budgets and available resources.
Since the main barriers are largely cultural and organizational, senior management will need a clear strategy to achieve their goals. Those who understand and avoid myths and misconceptions have a better chance of realizing the full potential of the cloud.
READ the full Bain & Company overview.