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July 22, 2012

Cloud: If you can’t beat it…

A CIO recently told me that one of his business units was threatening to move all of its servers to Amazon Web Services. This bears out a statistic I read not long ago claiming that over half of the virtual machines on AWS are now purchased directly by business units via credit card. IT, though, remains responsible for the performance integrity and regulatory compliance of all of the organization’s servers, wherever they reside.

Striving to control all technology adoption ensures that the organization bypasses IT as it seeks new revenues and efficiencies. Rather than compete against the cloud, successful CIOs will leverage its unparalleled opportunities for increased productivity and efficiency – while still ensuring adherence to enterprise standards. This requires a Teutonic shift in the manner with which IT works with the business – evolving from a position of technology controller to one of partnership.

IT-as-a-Bottleneck

IT generally has not had a reputation for stellar customer responsiveness; it is often referred to as the “department of no”. But to be fair, IT has had to contend with data centers that evolved from years of purchasing decisions driven and funded by individual departmental projects. The resulting mishmashes of equipment, tools and processes require 70% of the typical IT budget just to keep the lights on. Not much remains for innovative customer care.

Virtualization would seem to be the resolution, but rather than satiating the business needs, access to faster and less expensive computing generates still more demand. This phenomenon, known as Jevons paradox, makes it still more difficult for IT to keep up.

Jevons paradox is exacerbated by the “Consumerization of IT”. Employees, used to accessing cloud-based applications via their personal devices, expect the same type of instant gratification and flexibility from corporate IT. But CIOs must be able to guarantee enterprise security, privacy and compliance. The result is an increased perception of IT-as-a-Bottleneck (ITaaB).

 

Cloud-If-you-cant-beat-it

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Corporate IT cannot realistically scale to meet escalating computing demand. CIOs must instead leverage the public cloud and other external resources. In this manner, they can both fulfill business requirements while also enabling scarce internal IT resources to be judiciously applied to the core organizational mission and services.

The Changing Role of the CIO

Simply managing and delivering technology has become the ante up. CIOs now must focus on data whether in-house, outsourced or delivered via public cloud. They must secure the enterprise and mitigate data and privacy breaches without requiring all technology to run through IT.

This is not to say that control, compliance, and security are passé; the CIO will continue to be the focal point for these activities. It is just the method that changes. In order to avoid IT-as-a-Bottleneck, CIOs must strive to position IT as an enabler. Then the business will come to IT.

Enabling the business means becoming a partner with it. The CIO, by gaining a deep understanding of its core objectives, can work together with the business to find solutions. They can then evaluate the best way to implement those solutions – whether internally or externally.

CIOs need to be able to influence and affect change that is outside of their direct control. The soft skills of influence and relationships are much more important to success than being the best at delivering technology solutions.

The CIO will evolve from the controller of technology into the broker of information, the enabler of innovation, and ultimately the trusted advisor to the business. The future CIO must be tuned into the wants and needs of the customers, both internal and external, and focused on rapid delivery on those wants and needs.

CIOs will seek to deploy new technologies in ways that enhance business processes, agility, and value. As the organization increasingly views the CIO as a partner and enabler, the CIO in turn gains visibility into all processes affected by new technology adoption, thereby increasing the likelihood that security, compliance, and performance issues are addressed as part of the adoption process.

Trusted advisor status, the ultimate goal for any CIO, results from standing at the confluence of organization process knowledge, master data management, and vendor relationships. Properly used, this vantage point, really this aggregation of information, uniquely positions the CIO to drive business value.

In order to both avoid ITaaB and to maintain relevance, CIOs must evolve from heading the department of “no” to leading the department of “know”.

Vijay George, CIO for the Texas Comptroller’s Office, and Philip Parker, Consulting Healthcare CIO, were both major contributors to this article.

See Also:

Compiling CIO Insights From IBM’s CEO Study 2012. 07/19/2012. Alexander Peters. Forrester.com.

Why CMOs and CIOs Need a Shared Agenda. 07/11/2012. John Kennedy. IDG Connect.

Evolution of “Hybrid Cloud”. 07/02/2012. Brian Gracely (@ bgracely).  Clouds of Change.

Jevons Paradox. Wikipedia. Thanks to Ian Massingham (@IanMmmm).

 

 

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2 Responses to Cloud: If you can’t beat it…

  1. Steve,
    Good article. I like how you start with the premise of, “what if IT says ‘yes’, then figures out the structure to accomplish this”.
    This is a scenario I wrote about last fall, “”The Cloud Concierge” – The New CIO – Creating IT as a Platform” – (http://www.cloudsofchange.com/2011/07/cloud-concierge-new-cio-creating-it-as.html), and I think it’s the next step in building a “Hybrid Cloud” (http://www.cloudsofchange.com/2012/07/evolution-of-hybrid-cloud.html). While it’s possible to envision a scenario where IT can be dynamic and agile with an internal environment, the reality of this is extremely difficult when they are spending 80% of their time and resources with operations. Acknowledging that there are aspects of the business that need to move quickly, or have dynamic requirements, it’s important for them to make the adjustments needed to be involved in a successful dual-purpose IT structure. This is where platforms like enStratus can be a very powerful building block, giving IT visibility into external Cloud resources, but also giving BUs the speed they require for new activities. [NOTE: Other cloud management options exist as well, such as Cisco CIAC, VMware's DynamicOps, etc.]

  2. Thanks for the comment Brian – and I agree. While I didn’t write about it in this article, there is a great opportunity for solutions integrators to evolve into “cloud integrators” to help organizations sort through the myriad options.

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