|Cloud computing can unlock latent value in your key internal capabilities and processes by enabling the extensible enterprise.|
Double-digit unemployment would seem to spell trouble for a payroll services provider, but Automatic Data Processing (ADP) managed through the recession with flat revenues. How did it do that?
Cloud computing was a key factor. Most media coverage—you’ve probably seen some—has focused on how the cloud makes IT less expensive and more agile. ADP has improved the efficiency of its IT organization by using the cloud, but the bigger payoff—and what helped the company avoid declining revenue—has been ADP’s use of the cloud as a strategic new business development and deployment platform.
Case in point: Customers needed tools to manage their talent better in tough times, so ADP filled out its portfolio of payroll and related services by partnering with the provider of a talent management suite. The provider also operates in the cloud, which means the two partners could quickly integrate the business processes of their two platforms and reap new revenue.
By leveraging the deep-integration capability of cloud computing, ADP expanded its business prospects.
Amazon.com also used the cloud to extend its business prospects, but took a different tack.
Amazon modularized certain internal processes, making them more versatile, and exposed them to an ecosystem of partners who created a large number of new uses. This approach unlocked latent value that Amazon had not anticipated. The result: higher traffic to the Amazon site and more revenue created by its ecosystem.
Figure 1: Cloud computing represents a new source of enterprise growth.
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ADP, through deep integration, and Amazon, through versatile processes, exemplify how cloud computing can create strategic advantage and drive revenue growth. They illustrate two key characteristics of what PwC calls the extensible enterprise—a concept that represents a distinctive, new growth strategy. (See Figure 1.) CEOs who think of cloud computing as strictly a better solution to internal IT will miss a potentially huge opportunity.