Thriving in Today’s Disruptive Financial Services Environment Enterprise Cloud Migration for the Financial Services Industry
Thriving in Today’s Disruptive Financial Services Environment
Enterprise Cloud Migration for the Financial Services Industry
Organizations are adopting cloud architectures to decrease the time to market for new applications and perform upgrades and systems integrations, which in turn can drive down costs and rapidly improve product releases and quality.
Digital native disruptors are having a significant impact on every type of business today, and
financial services is no exception. Services such as the Apple Credit Card¹ and Square payment
processing² are changing the way financial services are consumed. What does this mean for
traditional financial services firms? You must be able to standardize, integrate, and innovate just
to survive – and that means you need to be in the cloud. No other approach even comes close
to giving you the agility, scalability, speed, access to innovation, and value that you’ll need to
thrive in today’s environment.
But this is not news. Businesses everywhere have been moving to
the cloud in increasing numbers. According to a 2019 IDC report,³
worldwide spending on public cloud services and infrastructure will
surpass $210 billion in 2019, an increase of 23.8% over 2018. Many
companies around the world are already reaping the benefits of
software-as-a-service (SaaS) solutions and cloud-first strategies for
their new systems.
Despite this overall increase in cloud investment, enterprise cloud
adoption has been maturing slowly. Migrating to the cloud is no
small task, and many businesses have approached it piecemeal.
Unfortunately, if you take a piecemeal approach, not only will you be
unable to realize the full value of the cloud, you’ll find that maintaining
your traditional data center environments in conjunction with cloud
migrations is neither easy nor affordable.
Take a close look at your challengesTraditional financial services institutions face some major challenges
when they’re considering a move to the cloud. A few common
challenges include the following:
• Existing business applications will need to be updated or replaced,
because they were created using the traditional IT architectures,
often with fixed capacity and in a few data centers. The cloud will
not miraculously enable organizations to leverage cloud-native
add-on features. Cloud transformation requires a new skill set for
product development toward cloud-native applications.
• Retraining staff and retaining the technical skills required to support
the cloud ecosystem is complex and costly.
• The lack of strategy around data operations, data life-cycle
management, governance and security results in siloed solutions
and inefficient systems.
The adoption of cloud
computing has been
increasing rapidly. While
large global organizations
have successfully
implemented specific
software-as-a-service (SaaS)
solutions or adopted a
cloud-first strategy for new
systems, many are struggling
to get the full value of
moving their enterprise
systems to the cloud.
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Whether you’re on an organic or acquisition-led growth journey, you’ll
need to think about how these technologies are changing the industry and
what being digital will mean for your organization. Then you can develop
your digital strategy, identifying your goals and target outcomes. Next,
you’ll develop a plan to get there, including how to measure outcomes at
each stage of your plan implementation.
Transforming your enterprise systems and architectures into
cloud environments
Working in an agile operating model
Standardizing and integrating your IT environment through
open APIs
Implementing new capabilities to drive innovative business value
Establishing a modern, compliant security framework
In addition, each of these challenges can be linked to the difficulty of
accurately measuring the return on investment (ROI) of an enterprise cloud
migration. For example, taking legacy enterprise applications and moving
them to cloud infrastructure – the “lift-and-shift” approach – might not
automatically deliver the benefits that cloud infrastructure can provide. In
fact, in some cases, that approach can result in more complex, more costly
IT systems architectures.
The best way to gain value from your cloud initiative may be to migrate
your entire ecosystem to the cloud, and to do so with a well-thought-out
strategy and planned financial investment. You can better achieve your ROI
by adopting a cohesive approach that delivers continuous, incremental
value rather than creating short-term technical debt. We’ve seen a definite
shift in the financial services industry toward this approach in recent
months.
Future-proof with a comprehensive, holistic strategy
To realize the full value of your cloud migration, consider pursuing your
digital transformation as a broader strategy rather than as a number of
siloed IT projects. A comprehensive, holistic strategy encompasses several
key tasks, including:
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Acknowledge that your organization will go
through a major cultural transformation that will
present some internal challenges. You’ll need to
be sure that your stakeholders understand what’s
involved, buy in, and are committed to your
transformation if it is to be successful. Help them
to understand that this transformation will also
present great opportunities for the organization,
its employees and its customers. Consider the
new business models you will be able to develop
and how access to advanced analytics will
transform your business – and maybe even help
you reinvent your business from the core.
Think about what you’ll need to become
“digital.” What does the concept mean
specifically to your organization? When
your digital vision is well-defined and well-
understood across your organization, you
can set up a plan to measure your outcomes
at every stage. A good digital strategy allows
you to understand how technology is going
to change your business, prepare for potential
disruptions, envision new businesses you
might build, and consider how technology
or analytics will transform your business or
reinvent your core.
What Does Digital Mean to You?Evaluate your cloud
options
Adopting a cloud approach can decrease your
time to market for new applications, increase
your business agility, reduce your maintenance
and upgrade costs, support standards-based
systems integrations, and deliver an enhanced
experience for your customers. Ultimately, your
cloud architecture should give you a robust
platform to support future business growth.
The benefits from cloud services can lead to
much lower IT costs, faster time to market and
better service quality compared with traditional
on-premises IT offerings. Public cloud offerings
such as Amazon Web Services (AWS), Microsoft®
Azure, SAP®, Oracle® Cloud and Google Cloud
PlatformTM (GCP) appeal to many organizations
because of their inherently flexible features:
consumption-based pricing, scalability, dynamic
elasticity, low latency, high resiliency, self-
service and more.
Part of your cloud strategy will be deciding
which cloud provider – or providers – are
right for you. Will you need a private cloud, a
public cloud, or a hybrid system? Will you use
a single cloud provider or launch a multi-cloud
environment? How do you know what’s right for
your enterprise?
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Develop your cloud migration strategy
When you’re ready to devise your enterprise cloud migration strategy, it’s
important to start with the right professional services provider – one who
can help guide you on this journey successfully. Look for a provider that
uses a customer-centric approach that combines global, industry-specific
experience in financial services with proven cloud methodology and
delivery capabilities.
The ideal provider will work closely with you to develop a consultative
cloud migration solution that helps you align your cloud migration
strategy to your business strategy. Your strategy should lead to a
migration that substantially contributes to your business success without
creating short-term technical debt.
Before you commit to a provider, make sure the provider is right for your
specific needs. Can the provider assess your applications’ landscape
across technologies – that is, is the provider technology agnostic? Will
you receive recommendations for the best approach across functions,
geographies and business units? Carefully examine the proposed delivery
execution model. If it is a traditional onsite/offshore model focusing only
on lower cost, it may prove even more costly in the long run. Such an
approach is likely to miss out on the industry-specific experience and
broad innovative vision that the right professional services provider can
provide.
Key questions your provider can help you address for your enterprise
cloud journey include the following:
How will you include long-term financial backing in the project plan?
How will you document the status of your current architecture and
data processes to decide whether to replace or modernize?
How do you plan to address data security and data governance across
multiple business units, jurisdictions and regulatory rules?
How will you leverage the right experience, technologies and
methodologies to plan, execute and quantify your ROI?
What type of cloud environment do you prefer (single
provider, multicloud, or hybrid)?
What’s the best way to drive cultural change and generate
innovative use cases to achieve growth?
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One of the world’s largest asset management firms chose Hitachi Consulting
to help it develop and execute its enterprise transformation. By leveraging
Oracle and Microsoft services hosted in the public cloud, the firm expects to
dramatically reduce the annual cost base of its finance systems associated
with operational maintenance and recurring software upgrades. The
transformation will also create a digital finance platform to support the
company’s wealth management activity, increase agility and flexibility to
support its internal business demand for quality insights, deliver transparency
on cost-base limits, and improve efficiency on cost management and cost
economies of scale.
Hitachi Consulting helped the firm initiate a complete cultural change,
moving from a legacy on-premises Oracle solution to cloud migration and
integration. The project added Microsoft development and business analytics
capability to support master data management, data warehousing, and
reporting to drive the entire digital transformation. The result is a business
transformation that reconciles IT, operations and business functions to
create “IT as a service.”
A cloud migration success story
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Hitachi Consulting has experience working with financial institutions and
corporations as an advisor and a technology, change management and
digital accelerator. We collaborate with our customers to address market
disruption and create new innovative value that delivers proven results. We
accomplish this through the combination of our cloud technology and
financial services experience.
For example, one of the few industry enablers in this process is Hitachi’s
REAN Cloud Accelerators platform, which enables companies to automate
all stages of cloud adoption – from pre-migration assessment, migration,
and testing to compliance documentation and operations – and to gain
repeatable and consistent results. They can fast-track their cloud migration
and effectively respond to business demands while getting the most from
their cloud investment.
The financial services industry is rapidly becoming a digital industry.
With the right cloud strategy and the right professional services provider,
traditional financial services companies can accelerate their cloud
migration for competitive advantage, setting the stage for new business
innovation and long-term success.
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1 https://hackernoon.com/the-disruptor-of-credit-cards-apple-credit-card-5451f539ecca2 https://www.forbes.com/sites/andyswan/2018/08/31/square-growth/#7f5202ff291d 3 https://www.idc.com/getdoc.jsp?containerId=prUS44891519
Hitachi Consulting is the digital solutions and professional services organization within Hitachi Ltd., a global technology and social innovation leader. Hitachi Consulting is a catalyst for positive business change, propelling organizations to drive disruptive innovation and to accelerate digital transformation. We help organizations leverage data as a strategic asset to innovate faster, develop new revenue streams, and respond to global dynamics with insight and agility. We collaborate with clients to create solutions that help maximize operational efficiency and deliver measurable, sustainable business results.
About Hitachi Consulting
Authors
Contact
Sara de la TorreDirector of Financial Services
Hitachi Consulting, U.K. and Europe
Sara de la Torre is a subject matter expert in banking and financial services with domain
expertise in data management, risk and regulatory compliance. As part of her role, she
works alongside financial institutions to achieve data monetization in the digital age.
Richard HercusRegional Sales Director
Hitachi Consulting, U.S.
Richard Hercus is a subject matter expert in cloud enablement and strategy with
certifications from IBM and Oracle, coupled with more than 20 years of diverse
experience in disruptive technologies and enterprise applications and platforms.
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