Dutch companies have made substantial progress but are still lagging when it comes to using the cloud at the platform level. Join Ragnar van der Valk, cloud & digital partner at PwC, following the EMEA Cloud Business Survey 2023, as he discusses how large companies can keep up with newcomers in cloud adoption…and learn from the East.
Unique value proposition
For Van der Valk, there is a reason why Dutch companies are lagging in cloud adoption at a platform level. ‘First, many organisations still think they are unique in certain areas where they are not or should not be. ‘Processes such as Purchase-to-pay should be consumed out of the (cloud) box’
‘If you differentiate yourself in a particular market segment, all other parts (your non-differentiating capabilities) should be consumed as standard as possible from the cloud SaaS providers. This means you consume the majority of the market standards. What remains, your so-called “differentiating capabilities”, is the unique value proposition that you actually bring to the market and customers.’ That is where the real platform approach kicks in, by building these capabilities onto the (cloud) platform a thereby investing and innovating only there where it makes sense.’
Second, only when you know what makes your value proposition unique you can start putting value into your journey to cloud and cloud does not only become a tech-play. Cloud is the new way for businesses to reinvent themselves, e.g. finding new revenue pockets, finding new ways of working in your go-to-market, new customer segments, or new or adjusted products and services.
When asked how companies should look for their unique value proposition, Van der Valk explains that it requires a profound understanding of the real contribution of your company in their value chain and a true understanding of your customer requirements now and in the future. ‘Some of these capabilities could well not be in the technological solutions, but you should think much more in terms of the branched experience of a company. Of course, with the support of IT or other organisational capabilities.’
Purchasing innovation and linking it to business operations
Van der Valk uses upcoming markets like India and China as examples of how they are implementing the cloud down to the last detail at the platform level. ‘For example, Chinese companies are adapting very quickly to their disloyal customer, by facilitating this group little by little, they are increasingly drawing customers into the platform. This requires partnerships with partners who can deliver the desired innovation. By purchasing that piece of innovation and linking it to their own business operations, Chinese companies are able to increase their service levels and keep their customer engaged.’
In contrast, while European and Dutch markets focus on becoming more agile through gradual digitalisation efforts, China leverages agility as inherent to survival in a fiercely competitive landscape. ‘In Europe and the Netherlands, we are mainly trying to become agile. For example, by working in an agile way to implement digitalisation. In China, it’s all about being agile, it’s in their DNA. They need it or will be left behind by their customers and the competition, a pure Red Ocean situation. It is something we can grow towards, with small steps forward. With the mindset that you can bring a little more innovation into your processes every day.’
Van der Valk is aware that amongst others privacy legislation in Europe can be a limitation to building a more transparent customer relationship. ‘The market is usually faster than any legislation that can be made on it. Companies need to use their moral compass as a starting point and keep each other sharp as they work together. If you push the boundaries but don’t cross them, you can regulate legislation instead of waiting for it.’
Tips for cloud adoption
One of the findings of the EMEA Cloud Business Survey 2023 is that cloud adoption is high among Dutch companies, but only 16% have already adapted their processes accordingly. Van der Valk sees that companies have already taken many steps. ‘But this mainly concerns the use of applications for supporting functions such as HR and in marketing. At the platform level, we can do even more with cloud adoption, such as software development and data engineering for new insights.’
Of course, the newcomers to cloud adoption, the so-called cloud-native players, are by nature much better at reducing complexity. Van der Valk says that ‘cloud natives’ simply ensure that their processes are not as complex as those of more traditional companies and really think about their uniqueness and position in the value chain, but that does not mean that more traditional companies can’t be cloud powered.
What can more traditional companies do in return? Van der Valk provides insight that companies should start seeing cloud as an enabler for business to:
Develop new business models
Start new digital entities
Simplify their businesses and move them to the cloud
‘I always compare it to renovating a house,’ says Van der Valk. If you want state-of-the-art, renovating is sometimes more complicated than starting from scratch, but that doesn’t mean that you only should do new builds. Much is possible with the right focus and driven by the right business outcomes. Cloud is a business play, not a pure tech game’
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