We have entered a very interesting stage in cloud computing, a second generation, if you like. The cloud business model pioneered in the late 1990s quickly became the de facto standard for how fast-growth businesses are run. In fact, we’re rapidly approaching a time when every single company is a cloud company.
Companies adopt cloud as their technology backbone to support the ability to innovate, deploy new business models and continue to grow at a time of unprecedented levels of rapid market change and constant business disruption. Companies also need to become increasingly proactive in anticipating change and disruption, ensuring that they are the instigators of innovation rather than ending up being overwhelmed by their more agile competitors.
Debunking some old myths about cloud and customization
Given the benefits so many companies already realize by running their business in the cloud, no one questions whether cloud computing is a passing fad or a viable business. The cloud is the present and the future.
But some old myths still persist. For example, some suggest that cloud applications are somehow less customizable than their antiquated on-premises antecedents or that it’s harder for customizations to persist between automatic updates in the cloud versus on-premises. Let’s put these rumors to rest. The cloud is a welcome place for customizations and, in fact, is preferable as customizations can be seamlessly upgraded again and again.
In the cloud, “customization” is not a dirty word, as it often was in the on-premises world. Many companies still bear the business scars incurred during lengthy, highly painful and costly customizations of their inflexible on-premises business management systems. The goal was to make these rigid solutions a better fit for the changing needs of the organization. Not only did these efforts often fail, but a good deal of the time the company ended up with “version lock” since there was no easy or cost-effective way to upgrade the customized on-premises implementation to more recent versions of its business management software.
Cloud customization is a very different proposition where – given the right cloud platform – there’s no version lock. With the right cloud platform, customization is a way to ensure an optimal fit of the software to the business with all customizations automatically migrating to the latest version of the underlying cloud system.
Four key reasons to use cloud software customization to improve your business
Every company’s approach to customization is different, but even the organization that plans to only use out-of-the-box functionality will likely tailor its business processes at some point. Some of the changes can be done easily in-house by non-IT staff, while other more significant customizations may be carried out by internal or external professional services experts or may involve the addition of a complementary application created by a third-party developer on the cloud platform.
I identify four key reasons organizations engage in customization of their cloud software: better serving their customers, their target industry or region, their own organization and employees, as well as responding to disruptive change. Let’s look at these four reasons in a little more detail.
1. Disrupt an industry. As brand-new companies disrupt more and more industries with new ways of doing business, organizations need to be able to move fast and add to or change their core focus. Being able to rapidly morph a product-focused business into a services-focused one or enable a manufacturer to quickly establish a direct-to-consumer ecommerce operation is possible through customization of a highly flexible cloud-based business management solution.
2. Exceed customer expectations. We live in a customer-centric world where the bar has been set very high in terms of what customers expect in their interactions with vendors and their partners. Being able to customize all aspects of the customer experience is an important way for an organization to meet and exceed those very high customer expectations and to differentiate itself from its competitors.
3. Comply with industry-specific or local regulations. For many global organizations, customization comes into play to ensure that the company maintains compliance with changing rules regarding the industries it serves or the countries or regions in which it does business. So, customization may be applied more at the local level rather than on a global basis.
4. Improve the organization internally. Companies always look to streamline business processes and make them more efficient, and this work often involves customization of individual end-to-end processes. Businesses aren’t static entities, and organizations should expect to continually fine-tune processes via customization and encourage employees to take ownership of those processes.
Cloud customization improves chances of business survival
We live in a very tough business environment. Just look at what has been happening to Fortune 500 companies. Since 2000, Ray Wang, principal analyst at Constellation Research estimates 52 percent of the Fortune 500 have either gone bankrupt, ceased to exist or fallen out of the Fortune 500. And, the business environment is just going to get tougher still. Cloud software customization can help your business thrive in the midst of disruptive change by enabling the ongoing tailoring of your business software to benefit your customers and your own organization.
Guido Haarmans is SVP Business Development – Technology Partners at NetSuite and leads its SuiteCloud Developer Network and all business development initiatives with technology partners. Mr. Haarmans has nearly 20 years’ experience with technology partnering programs. At Autodesk he grew its developer network to more than 3,500 members. At Driva Solutions he consulted with companies such as TiVo and Microsoft on improving their customer and partner satisfaction. At CollabNet he built a developer community of over 70,000 members.