Cloud transformation: Opportunities, risks and strategies

4 min read
Header_blogpost_Cloud transformation_Opportunities, risks and strategies
4 min read

The pace of innovation in technology has been steady for a few years, showing no signs of slowing down anytime soon. With innovation in cloud technology, businesses worldwide have had to adapt to meet the demands of today’s digital economy.

Last week, I had the opportunity to participate in an intriguing panel discussion at the Handelsblatt Summit Future IT 2024 in Munich. It was an incredible opportunity to exchange ideas with IT leaders from some of Germany's largest corporations such as the CIOs of Siemens, BMW, Volkswagen, Lufthansa, Beiersdorf, Linde, DB Cargo and more.


The 3-day conference was a brilliant occasion to discuss and share perspectives on the future of IT with experts from various industries, who are in the forefront of technology and innovation in Europe. True to this year’s theme of ‘Transforming IT in the Age of AI,’ the various sessions covered everything from digital transformation to AI, its capabilities, ROI, risks, implications for the economy and the future of AI. 
The discussion on ‘Cloud transformation: Opportunities, risks and strategies,’ was moderated by Prof. Dr. Walter Brenner, where I shared the stage with fellow panelists Martin Thormählen - CTO Business Technology at Munich Re, and Sebastian Weber - CIO at E.ON SE.  


In this blog post, I would like to share some key statements and takeaways from the panel discussion I was part of and the insights I gained from the event.

The power of cloud transformation 

Cloud transformation is more than just a technological shift; it’s a fundamental change in how businesses operate. During the panel discussion, I emphasized the profound opportunities that cloud technology presents including driving innovation and enhancing operational efficiency, among others.  
Companies can become not only more efficient but also more agile through the adoption of cloud technologies and AI. The discussion highlighted both the enormous opportunities that the cloud offers for business models and processes, as well as the challenges and risks that come with implementing and scaling cloud services. 
Before talking more about digital transformation and its capabilities, I want to invite your attention to a statement Dr. Annett Hamann - CIO of Beiersdorf - made during her panel discussion. The term 'digital transformation’, she said, implies that there is an end to it. Digital evolution is a more accurate term, she said, since the cloud will constantly evolve and keep changing, compelling organizations to continuously adapt accordingly. 
Perhaps looking from this perspective, it is easier to perceive that migrating to and collaborating in the cloud is not a process that comes to an end at some point, but one that is constantly evolving – both capabilities and challenges included.  
At Rencore, we maintain that the rapid adoption of cloud services by more tech savvy end users requires organizations to implement necessary governance measures. This is so that organizations can steer the end users safely but also that they efficiently use these new capabilities without sacrificing the security posture and adding more risk factors. The constant evolution calls for a robust and well formulated governance framework in place.

Addressing the risks 

While the opportunities are immense, adoption of cloud technologies also brings several risks that need to be managed. Some of the main risks are:  

  • Cloud sprawl 
  • Access & permissions  
  • Security & compliance 
  • Managing costs 

If you’d like to read about the importance of implementing cloud collaboration governance, feel free to read this blog where I explain these risks in more detail. The vulnerabilities associated with improper adoption of AI technologies expose your organization to these risks and more. It also makes the dangers of not having a proper governance framework in place more prominent and possibly at a higher risk scale as well.  

Germany and AI  

The conference brought together experts from various fields including from the public sector. Bavarian State Minister for Digital Affairs Dr. Fabian Mehring has  emphasized the importance of digitizing and has been previously quoted as saying that digitization is a master task of our time. As the second minister in a fairly new ministry, he is at the forefront of leading the way in the topic of digitalization in an attempt to secure the economy in the markets of tomorrow. 

At the conference, Dr. Fabian Mehring passionately emphasized that we need to get away from the constant fear and risk thinking which seems to have taken over in particular in Germany over the last decades. If companies don’t embrace the changes with AI, he cautioned, it will become a competitive disadvantage. Do we agree? Yes and no. Without undermining the arguments of risk assessment and ensuring security while collaborating in the cloud, it needs to be said that locking down possibilities of collaboration is hardly the way to go. Organizations should be empowered to make the most of technological innovations without jeopardizing the security of their company data. 

By implementing an operational governance approach, organizations don’t need to prohibit such innovations (with AI in the current context) or completely lock down their systems for the end-users but rather evolve together while systematically monitoring and managing possible risks. 

What then does the future of AI look like? Dr. Andreas Liebl, Head of AppliedAI called for an accelerated adoption of AI across industries, taking into account the rate at which it is developing. He spoke at length about how Europe can strengthen its position in the world of artificial intelligence and at the same time generate significant added value. He made it clear that Europe's proactive stance in AI policy and promotion is essential to remain competitive on a global level and achieve technological leadership. 

In a LinkedIn post, Christof Kerkmann, Technology correspondent at Handelsblatt sums up key takeaways from another panel discussion he moderated along with Walter Brenner titled ‘Potentials and challenges: How does AI change the role of IT leaders?’ If Germany is to have a chance with artificial intelligence, he writes, companies from all industries must commit.  

AI Governance 

I found this statement about AI governance that MTU's CIO, Lutz Seidenfaden made extremely amusing. Allow me to paraphrase. "AI is the cherry on the cake, but you can't do without a cake base.’’ 

This perfectly describes the ideal approach organizations must follow when it comes to AI adoption and usage. While organizations are eager to leverage the new, shiny cherry on top of their cake, the first question they must ask themselves is whether their cake base is strong enough or not. Data hygiene, permissions and access management and oversharing are very real risks that if left unchecked, can cause more harm than good.  


Participating in the conference was a fantastic opportunity for me to discuss the transformative impact of cloud technology with industry peers. As we move forward, we remain committed to leveraging cloud technology to drive innovation, enhance efficiency, and deliver exceptional value to our customers. If you’re curious about our cloud collaboration governance solution Rencore Governance, feel free to learn more about how we help organizations stay in control of their Microsoft 365 environments.

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