The Four Stages of Cloud Business Transformation

By Amar Hanspal, senior vice president, Products at Autodesk

I used to wonder what it would have been like to be standing on the shoulders of Galileo as he gazed through his telescope for the first time or to be sitting in Thomas Edison’s lab when his first successful lightbulb started to glow.

I have come to appreciate another revolution is happening right now, one that is changing business massively. It’s an industrial revolution following the pattern first laid out by the steam engine and electricity. Today, the revolution is information, or knowledge, and the ability to share and exchange that knowledge far and wide through the cloud. That broad connectivity and fertilization is also accompanied by an increase in raw computing power and accompanying reduction in computing costs. To put it simply: The cloud changes everything.

It’s certainly changing and reshaping the entire business landscape. Industries as diverse as retail, hospitality and transportation are being redefined by the cloud. The world of construction and manufacturing is going to be no different.

But the question is: How do businesses respond to a historical shift like this? When confronted with such change, it’s inevitable that human emotions will try to cope by minimizing or compartmentalizing the change. To me — distinguished armchair psychologist that I am — those coping mechanisms are akin to four of the stages of grief: denial, anger, bargaining and acceptance. In a business-transformation context, though, the stages are a bit different.

The first stage is dismissiveness. I have heard manufacturers and construction companies argue that the engineering will never take place in the cloud for a whole host of reasons: There’s not enough bandwidth; the IP (intellectual property) is insecure; and it will never be powerful enough, secure enough or capable enough for the company to use it.

But once that manufacturer or construction company watches a competitor make a successful move to the cloud, the second phase kicks in: defensiveness. Now, the company in question has to explain why it wasn’t the first to embrace new technology. And that defense is always, “We have traditions; we have legal obligations; we have [insert objection here].” Whatever the explanation, the core is, “We’re different. We’re special. The cloud doesn’t apply to us.”

At a certain point, though, as competitors increasingly move to the cloud, those objections begin to ring hollow. When the pressure mounts to do something, the business moves into the third stage: incremental steps. Those steps generally take the form of special projects. For example, an automotive manufacturer might say, “We’ll do all of the non-core components — visualization, simulation and supply chain collaboration —online.”

And guess what happens after that business finds success with those cloud-based pilot projects? Acceptance. The business sees the light, so to speak. At this point, the technology is proven; the company gets past it; and the newest hires are already well-versed in cloud workflows, further convincing the decision makers that the old way just doesn’t work anymore.

As any good armchair psychologist knows, those phases of growth and change have to be completed to come out the other side successfully. Manufacturers, builders, media companies and more are experiencing a Darwinian moment in the evolution of business — the cloud is changing everything — and they will either change with it or die.

Amar Hanspal is senior vice president for Products at Autodesk. Send email about this commentary to [email protected].