v 

U#lisingtheAdop#onofCloudServicesintheOnlineandDigitalIndustry

WhatarethechallengesandwhatarethebenefitsoncerisksareovercomeinNigeria?

Dis9nguishingCoreITfunc9onsfromNon-CoreITfunc9ons.

‘WaleOyepejuHeadofI.T,Ul4maLimited(Ul4maStudios)

RelevanceofCloudinNigeria

q EndUsers q Na9onalInterests

q  Enterprise

TheNigerianOnlineandDigitalIndustryOverview

Itsapplica9oninenterprisemobilityandcollabora9onislowand

Adhoc

Growingadop9ontrendinaudio-visualStreamingwithTELCOVASleadinginmarket

share

Theuseofcloudforwebhos9ng,socialmedia,bloggingandemailiscommon

Thegrowingtechecosystemleveragecloudforproductdevelopmentand

marke9ng

Liveeventbroadcastisbeingsimplifiedwith

OTTplaNorms

Ø WhatareNigeriansdoingonline?

Ø  Cloudtrendsintheonlineanddigitalindustry

TheBenefitsofCloud

•  ReducedITcomplexi#es:Complexi9esaremostlyreducedfromtheusersideandtransferredtocloudproviderswhencloudinfrastructureorserviceisu9lised.

•  Scalability:Cloudcanofferreal9mescalabilityforonlineanddigitalbusinesses.Cloudresourcestobeu9lised

areflexibletoincreaseincapacityandefficiencywithliTleornodown9me.•  Costagility:ThisisachievedinInfrastructureasaservicewhenthereduc9oninthedemandforservice

translatestoreduc9onincloudrent.Reduc9oninthisOPEXfreeupcashtoinvestinotherkeybusinessini9a9ves.

•  Reduc#oninCAPEXonITinfrastructure:Cloudadop9onwillreducecapitalexpenditurethatshowsupincompanybalancesheet,especiallyatthisfinanciallyconserva9ve9mes.Foranindustrythatisasdynamicasonlineanddigital,ITleaderswilldowelltoshiXfocus,leveragingthecloudindeliveringagileITspending.ITneedstomovefromassetownershipmodeltoAssetopera9onalmodelasfarasITbudge9ngisconcerned.

•  HighPerformanceandAvailability:Thereisahighdegreeofserviceavailabilitywithcloudinfrastructurewhencomparedtoon-premises.Inherentrisksofdown9meduetoenterpriseissuessuchasresourcelimita9onandpoweroutagearereducedwithcloudadop9on.CloudproviderssignSLAsthatguarantee99.9%up9me.Thisispossibleduetotheapplica9onofbestinclassdisasterrecoveryandfailovertac9csthatensurethatyourbusinessdoesnotsufferdown9me.Youalsogetallthepatches,upgrade,backup/recovery,incidentandproblemmanaged.

TheBenefitsofCloud

•  MobilityandCollabora#on:Thenatureofonlineanddigitalindustryallowtheworkforcetobemobileandnotworkon-premise. Thisdeliveredat reasonable costwith cloudadop9on.Newcloudop9ons nowdeliversmorebenefits forBYOD (Bringyourowndevice) implementa9on.Cloud-basedwork flow and file sharing tools encourage employees to domore together andviewtheresultsoftheirteamworkreal9me.

•  Security: Central to con9nual use of the cloud is security. Cloud security offers businesscon9nuitywhendataislostorcompromisedduetolossordamagetoon-premisescomputers.

•  Compe#veness:Cloudsupportfastergo-to-marketforSmallMediumEnterprises.Itallowstheir

ITtobeforwardthinkingwiththeuseofenterprise-classtechnologyinrollingoutproductsandservices.

•  LowEnvironmental Impact:Cloudadop9on reduces carbonemission since youdon’t have to

powertheinfrastructureon-premises.•  BestinClassAnaly#cs:Real9meanaly9csanddashboardswillofferITandFinanceinsightsinto

productperformance,resourceu9liza9on;leadingtosmart,informedandproac9vedecisionsinthisdigitalage.

ChallengesofCloudAdop9on•  Pricing:Pricepointisonemajorfactorthatdeterminescloudadop9oninNigeria.ITneedstojus9fycloudu9lity

costincomparisonwithon-premises(despitethemanybenefits).Anymigra9onplanisdroppedifthepricepointis not beTer than on-premises offering. Transport, monthly/annual recurrent rent, support, and addi9onalcustomisa9oncostsare someof theprice components thatmakeprice-pointapainpointof cloudu9lisa9on.Thereiscurrentlynofavourablepricepointtosupportcloudu9lisa9onforbackupandarchivingservicesintheNigerianbroadcastindustry.Tradi9onalwarehouseiss9llwidelyused.

•  Adop#onReluctance:thisisborneoutofthefollowingfears:

1.Fearofexposingcri9calandsensi9vedatatounauthorisedaccess.Most FinancialIns9tu9onsinNigerias9llhostITserviceson-premises.

2.Fearofjoblossonceinfrastructureismovedtothecloud.Anyideatoadoptcloudisfrustratedduetolackof

understanding of the opportuni9es cloud offers in terms of encouraging IT staff develop new skills and bemorerelevantinthedigitalage.

3.Fearofbeinglocked-inandnotabletomigratedatatoanothercloudproviderorbacktoon-premises.The

unknowncostassociatedwithdatamigra9onalsocontributestothelackoftrustinCloud.4.FearofIncreasedmonthlyrent:Costincreasedconsiderablyascloudusageincreases.Decisionmakersdonot

necessarilywanttoincreaseOPEXandanyunknownpictureofwhatrecurrentcostwilllooklikewillnotmakecloudadop9ontoscalethrough.

ChallengesofCloudAdop9on•  Infrastructure:Keyareasofconcern:

1.Power:PoorelectricitysupplyinNigeriadoesnotfavourcloudconsump9on.Electricityisneededtoruncloudfacili9esincountry.Costofcloudu9lisa9onwillreducewhentherearelocalproviders(spreadacrossgeo-poli9calzones)withaccesstostablepowersupply.

2.FixedBroadbandPenetra9on:Fixedbroadbandpenetra9on inNigeria isat8%andthegovernment

promised in2015 to increase to36%.Wirelessbroadband isexpensive forcloud adop9on for many industry stakeholders. Infrastructures that aresuppor9ngonlineanddigital industryareconcentratedinLagoswithotherstateslackingdirectconnec9ontounder-seainternetnetwork.TheInternethastobefasterandcheaperforcloudtogaingroundinOnlineandDigitalIndustry.

3. Government Policy and Regula9on: Government policies and legal framework to support Cloudinfrastructuredeploymentisweak. ThereisnoknowneffortatdevelopingLegal framework that addresses issues on mul9ple taxa9on, QoS, privacyand right ofway. Establishment of parastatals likeNOTAP (Na9onalOfficefor TechnologyAcquisi9onandPromo9on) is awelcomedevelopmentbutcostofcloudadop9onwillreduce ifthere isanenablingpolicies,structureandincen9vestoproducecloudequipmentinNigeria.

•  AwarenessandCommunica#on:InabilityofITtocommunicatethebenefitsofcloudtoFinanceandBusiness

hasalwaysstalledadop9on.ThereisnosharedunderstandingofthebenefitsofcloudamongIT,FinanceandBusinessLeaders.

AddressingtheChallengesENTERPRISE1.  IT Leadership need to be strategic and forward thinking in this digital age. Cloud technology skill acquisi9on and

con9nuousimprovementshouldbetoppriorityandpartoftheorganisa9onalculture.2.  BusinessLeadersshouldthinkofcloudbenefitsbeyondcost. Theironlineanddigitalbusinesswillscalefasterwhen

cloudisu9lisedintheareasofproductdevelopmentandhos9ng,marke9ng,customerserviceandvaluecrea9on.3.  Internal communica9ons around cloud adop9onmust improve and in the best interest of the company. Adop9on

discussionsmustbehingedonobjec9vity.GOVERNMENT1.Provideenablingenvironmentforstakeholderswithintheonlineanddigital industriesthroughpoliciesandregula9onsthatpromotelocalcontentinvestment.2.Acceleratefixedbroadbandpenetra9onthroughpartnershipsandsmartcityini9a9ves.3.Engagestakeholdersinabidtoaddressindustrychallenges.CLOUDPROVIDERS1.  Cloud product development strategy should be “Outside-in” instead of “Inside-out”. Products should be tailored

towardsindustryneeds.2.  Constantlyengagetheindustrystakeholders,decisionmakersandFinancetopushthecloudagendaforward3.  Engage in value added programs such as cloud knowledge acquisi9on to promote transfer of knowledge and skills

withintheecosystem

AddressingtheRisksandConcerns•  JobCuts: Cloudadop9ondoesnottranslatetojobloss.Cloudadop9onwillmakeITjobsmore

interes9ng,accordingtoPeterGrauer,ChairmanofBloomberg.Computerswilldomorerou9neworkwhilehumanswilldothemoreanaly9calwork.Withcloudadop9onbackedbycloudskillsacquisi9on, a network or server administrator will transform into cloud administrator andnetworkarchitecttocloudarchitect………

•  Data Ownership:Make sure this is addressedwith cloud providers.Who owns the data andwhatcanthecloudprovidersdowithyourdata?

•  Lock-in:Mostcloudprovidershaveprovisiontomoveyourdatafromcloudtoon-premisesoranothercloudproviders.

•  Business Con#nuity: You are beTer of in the cloud than on-premises. Cloud providers are

equippedwithtechnologiesthatensureyourdataarebeTerprotected.Theywillmostcertainlykeepatabonglobalsecuritythreatsthanyou.

•  Cost:Whilecloudcanaidgo-tomarketandenable companytogrowrapidly,someconsumersofcloudhavearguedthatitbecomesexpensiveinthelongrun.MicrosoX,GoogleandAmazonhaveacknowledgedthisconcernandarecusngpricestoensurethatpricingisoneofthemajorbenefitsofcloudu9lisa9on.

FutureofCloudInNigeria

•  VideoStreamingandOnDemand•  Gaming:productdevelopmentand

streaming•  BigDataandBusinessIntelligence•  Globalisa9on•  DisasterrecoveryandBusinessCon9nuity

•  ProjectManagement•  FinancialServicesande-Commerce•  eGovernanceandSmartCity•  DigitalRightManagement•  IoT•  MachineLearning

Increasedcloudu9lisa9oninNigeriawillfosterastrongeronlineanddigitalindustryInthefollowingkeyareas:

Dis9nguishingITFunc9ons

ITLeadership(Management)

ITProjectManagement ITOpera9ons Business

Applica9ons

Applica9onDevelopmentAndIntegra9on

SharedServicesSystemsand

ServiceEngineering

DataCenterOpera9ons

ServerAdministra9on

EnterpriseMobilityandSecurity

Marke9ngandsocial

applica9onsCommunica9ons

ITArchitecture BusinessIntelligence

ValueAddedServices

•  ITismoreexternalcustomerfocusedinthedigitalage,buildingvalueaddedrela9onshipswithclientsandcustomers.

There is surely nothingquite so useless as doingwith great efficiency whatshouldnotbedoneat all.PeterDrucker(1963).

FindingFocus:CoreandNon-CoreITFunc9ons

STRATEGYINCONTEXTWhatistheessenceofStrategyinOnlineandDigitalIndustry?Makewisechoicesastowhattodoandwhatnottodo.Twoonlinecompaniesmaybeplayingthesamesectorbuteachisuniqueinitsmarketfocus.Thedis9nguishingfactorisStrategy.Twomajorareasofinterestsforonlineanddigitalstrategydesignare:1.Whatyoushouldbedoing(yourCOREbusiness)2.Whatyoushouldnotbedoing(nonofyourbusiness)StrategicITfocusonenablingbusiness.ITneedstodevelopfunc9onalstrategythatoutlineswhattodoandwhatnottodoinenablingbusiness.

FindingFocus:CoreandNon-CoreITFunc9ons

CORE NONCOREThey are func9ons necessary to gain strategicadvantage and achieve corporate goal and growthinbothtop-lineandboTom-line.

Noncore ITarealsoenabling technologies thatdonot directly help a company compete (Whelan,1988)

ITstaffhasstrongcapabilityforthem Theyarefunc9onstheITstaffisstrugglingtocomplete

TheyarebeTerkeptinternallyandsome9mesareprotectedbyapplicableintellectualrights

TheyarebeTeroutsourcedtocompanieswhohavethemastheircore.

Theydeliverrewardwhentheyaredonewell. Dothemwell,nooneno9cesbutifyoudon’tdothemwelleverybodyno9ces.

Whytheneedfordis#nc#on?Thedis9nc9onbetweencoreandnon-coreITfunc9onsisbasedontheneedto:

•  EnsureOPEXandCAPEXarefocusedonstrategicITini9a9vesthathelpthecompanygrow•  Ensureefficiencyinthealloca9onandu9lisa9onofITresources•  DeterminewhattokeepinternallyandwhattooutsourceeithertocloudorlocalITservice

providers.

FindingFocus:CoreandNon-CoreITFunc9ons

Dis#nguishingbetweencoreandnoncorefunc#onsdependson;

•  Time:Timeaffectsthecompany’sfocuswithinagivenperiodandchoicesavailableinthemarketplace

•  Corporatestrategy:Themarketandopera9onalfocusofthecompany•  LeadershiporManagement:Makesthefinaldecisionofwhatandwhentooutsource•  InternalCapability:CapacitytoundertakeITfunc9ons

Compe##veAdvantage

Capability Decision

Strong Weak Outsource

Strong Strong Retain

Weak Weak Outsource

Weak Strong Outsource

Ac9onPoints:CoreandNon-CoreITFunc9ons

•  EmbarkonTechnologyporNolioreview.InvolveteammembersasyoureviewthelistofallITfunc9ons.

•  HighlightITfunc9onsthatareessen9altocompanysuccessintheshortandlongterm(CORE)

•  YouwillbeleXwithITfunc9onsthatyoupossessbutarenotuniqueandwillnothelpyoustandoutfromcompe99onevenifyouhavedonethemwellovertheyears.Partoftheselistalsoincludesfunc9onsyoudopossessthattheITstaffisstrugglingatfulfillingandwillnotgivecompe99veadvantage.ThesearenoncoreITFunc9onsthatyouneedtostopdoing

•  MakethedecisiontoeitheroutsourcetocloudprovidersorstopperformingtheNon-corefunc9onsasyouprepareyourbusinesstocompeteglobally

•  MakeitanhabittoreviewyourITfunc9onlistorregisterperiodicallytoiden9fyI.Tfunc9onsyoushouldstopandthecorefunc9onsyoushouldstartasmarketevolvesandthecompanymatures.Youwillneedtoacquirecapacityforthosethatarenotpartofthelistthatyoushouldstartdoing.

•  Ifyoudecidetokeepspecificnon-coreac9vi9es,makeitarulenottoallowthemreceivethesamehuman,9meandmaterialresourcesascoreac9vi9es.

Email:Wale.oyepeju@ul9malimited.com

LinkedIn:waleoyepejuTwiTer:@waleoyepejuInstagram:@DaddyKoye