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Cloud governance as a driver of business value

Empowering employees to make optimal and creative use of the possibilities offered by data and technology is an increasingly important part of being a competitive and distinctive organization. The role of cloud governance in this is often overlooked, yet it can help ensure the success of your business.
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Azure cloud and governance

When we talk about governance, we are referring to the relationship between policy, frameworks and processes such as support for budget, resources, risk management and progress measurement. Governance of technology, and the Azure cloud in particular, falls into a separate category due to the speed of developments on the platform. Once it has been set up, normal governance often serves its purpose unchanged over a long period, but this is not the case in the cloud.  

‘Digital Darwinism is the phenomenon when technology, customer behavior and society evolve faster than an organization can adapt’ – Brian Solis

The speed at which the Azure cloud is developing and growing richer requires a continuous recalibration of basic principles. The pace at which technology innovates, combined with employees’ adoption capacity and changing market conditions, necessitates a dynamic approach to cloud governance.

Cloud computing strategy 

Governance should focus on the effective implementation of the technological development strategy. Time after time, research has shown that many organizations are lagging behind in adapting their governance to the pace of digitization. The main characteristics of failing governance are:

  • A focus on costs and performance, resulting in the link between business and IT becoming broken. 
  • Excessive preoccupation with long-term effects, causing short-term opportunities to be overlooked.
  • A preference for a waterfall approach or project management, which slows down the organization.
  • Delivery of IT for separate business units, leading to strategic changes being missed.

A modern governance structure based on cloud technology focuses on business value. It is clear from best practices that more and more organizations are focusing their changes on the following aspects:

  • Attention to delivering business value, preferably with a view to mutually reinforcing initiatives within several organizational components at the same time.
  • Adjusting architecture and policy principles so that organizations can respond more quickly to new situations.
  • Risk management – perhaps the most crucial factor. Because the cloud’s cost model makes getting started quicker and easier, the investment risk decreases and the business risk increases – especially around security and protection of business and personal data.
  • Measurement, measurement, measurement. With changing governance, it is crucial to be able to continuously measure the effect of any changes, the most important indicators being business value and risk. This will also reduce the importance of costs in the governance strategy.

Elements of cloud governance

Good cloud governance is the foundation of a technology strategy. A number of elements are important to laying this foundation properly:

  • Budget
  • Policy
  • Risk

The right way to set this up will differ from one organization to another, of course, but we can distinguish a number of basic steps.

Businesses must allocate their budgets mainly on the basis of business impact and contribution to results. The sequence of allocation will primarily be from the outside in; it is mainly the external changes that ensure the organization’s capacity to react with greater speed and agility. Allocation of budgets often slows things down in this context; the benchmark here must be the link with the speed and agility of other organizational components. Making technology budgets really work as an accelerator for your organization also means being able to adjust priorities and initiatives flexibly.

Policy will need to focus on a more flexible architecture and being able to respond to collaboration with external partners. Cohesion between the different individual contexts and a smooth flow of information about different business components thus becomes more important. A modern IT architecture makes this possible, and good governance ensures that ‘citizen developers’ using no-code/low-code platforms are able to respond quickly to business demands.

The ability to create an open culture in which risk can be discussed and quickly recognized means that risk management becomes a healthy part of strategy and business planning. Culture plays an essential role in this, and it is the task of management to create and strengthen this culture. A good benchmark for culture is the way employees behave when the manager leaves the room. The secret ingredient in risk management is automation: the cloud is packed with possibilities for automating processes, which in practice is the best way to mitigate risks. 

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Case

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