Cloud computing has been revolutionizing businesses on the journey to digital transformation for over a decade. Future-ready organizations are embracing the advantages of industry clouds to get speed to value faster while enhancing flexibility, efficiency, resilience, business value and competitiveness.
The concept of industry clouds stems from a simple reality: business processes, information models and underlying technology infrastructure needs are industry specific. Industry clouds can help to deliver business outcomes faster by bringing together a set of pre-tailored sector-specific capabilities, products, tools and data modernized natively for cloud platforms and delivered at scale.
Technologies that a healthcare provider needs to manage patient records and other processes are fundamentally different, for example, from what a bank requires to handle financial transactions, customer services and business operations. In healthcare, HIPAA / PHI compliance is indispensable, while in financial services, it’s FINRA Rule 4511,NIST 800.53, Australian Prudential Regulatory Authority (APRA), ISO 20022 etc. The list goes on.
KPMG professionals regularly see clients that are building bespoke solutions for each of these examples listed above, rather than leveraging pre-tailored optimized industry-specific components and services. Industry clouds help seize this opportunity in a secure fashion while providing adherence to relevant industry standards and processes.
What makes up an industry cloud?
Industry clouds are a specialized and optimized set of cloud services (PaaS), applications (SaaS), and other related cloud tools and resources that are designed to meet the specific needs of a particular industry or function. They can bring multiple aspects of technology and operating models together, offering an approach that’s designed to move the entire business forward. Industry cloud platforms turn a cloud platform into a powerful business platform, enabling technology-innovation tools to also serve as powerful business-innovation tools.
An array of cloud services – including business processes, information models, metrics, data & analytical models, APIs, infrastructure, security and more – are target built for the industry and delivered at scale. Moving to an industry cloud offers a breakthrough opportunity to drive business advantage by capturing the best of two worlds: exploiting economies of scale via outsourced commodity functionality, while preserving the system, services and processes that make your business unique and achieve measurable outcomes.
Calibrating just how much vertical expertise is enough is a critical challenge for industry clouds. The key is finding the ‘sweet spot’ between exploiting the advantages of ‘lifting and shifting’ your technical infrastructure to the cloud while accommodating your organization’s unique and proprietary needs. Below is a representation of what makes an industry cloud:
Build and scale your business using industry cloud
Getting a vertical cloud implementation right and deploying it efficiently and cost-effectively requires more than business acumen and sector-specific savviness. Beyond technology and even tailored vertical industry solutions, there are regulatory considerations, strategy considerations, processes, and data models unique to your business that must be incorporated to make an industry cloud solution work as designed. Even a leading industry cloud platform, you will likely require some bespoke components, optimization and next-gen integrations that are specific to your organization.
Key considerations for a successful industry cloud journey:
- Strategic industry cloud implementation should ideally position you to evolve and innovate critical capabilities, optimizing and scaling technology and the business operating model on a continuous basis. This includes integration of various applications, APIs, payment systems, operations and trading partners for internal and external use. For example in the banking sector, this represents a modern ‘open banking’ framework. A set of accelerators that help setup, integrate and comply with PSD2/PSD3 (a.k.a Open Banking in Europe) regulations will help achieve banks this regulatory milestone much faster vs. building it bespoke for each bank.
- Implementing competitive new products and services is pivotal to business growth today and industry clouds pave the way, enabling organizations to accelerate speed to market with new products and services that enhance the customer experience. Companies in many cases are moving to these products on Saas or PaaS platforms adopting pre-built cloud native solutions while relying less on legacy applications running on IaaS or containers.
- IT modernization and optimization via industry cloud promises: better monitoring and management of risk and regulatory pressures; hardened infrastructure; improved resilience; increased availability of operational data; application portfolio modernization; and enhanced business value.
- A modern technology stack and capabilities via IaaS, PaaS and other game-changing services can take efficiency, security and value to a new level while simplifying IT management and enabling automation.
In conclusion, the potential benefits and competitive advantage businesses can gain from industry clouds are clear. But it’s important to note that there is no need to make a wholesale jump into vertical clouds. KPMG professionals are helping many enterprises build a realistic and achievable roadmap to this journey.
Along the way, some legacy systems and applications may best meet your unique business needs compared to anything you can acquire from vertical cloud solution vendors. Conversely, it can make sense to off-load or replace functionality that are constraining resources while offering you no competitive edge.
But make no mistake – in today’s complex environment, the transition to industry clouds is complicated. And KPMG member firms are providing critical support to clients as they move to embrace their remarkable advantages.
KPMG’s Connected Enterprise approach provides a framework to support the journey to becoming an insights-driven, customer-centric digital business. This strategic framework is underpinned by our KPMG Powered Enterprise solution, that includes more than 240 pre-built cloud integrations and accelerators, more than 40 prebuilt legacy-to-cloud, data-conversion scripts, over 80 prebuilt dashboards, and more than 250 prebuilt reports — all optimized for your industry, based on KPMG firms extensive experience of numerous transformations and cloud technologies.
KPMG professionals can help you create a modern strategy that considers the trade-offs and helps get you outcomes that are right for your business. And in today’s hypercompetitive global environment, where the pace of change continues to accelerate, we believe there’s no time to lose.