Cloud Source Blog
In This HP Cloud Source Blog, HP Expert, Christian Verstraete will examine cloud computing challenges, discuss practical approaches to cloud computing and suggest realistic solutions.

The business aspects of cloud: Part 11 – Does the IT department own cloud computing?

A couple weeks ago I met with a customer who challenged me on the idea that the responsibility of cloud is not up to the IT department. They don’t have spikes in the demand for infrastructure and when something new needs to be developed, the implementation by the business of the associated processes typically takes one to two years, so fast provisioning is absolutely not needed. Oh, he told me they are a business-to-business company so they don’t sell to consumers, and as a result never face the volatility consumer-focused businesses have. So, cloud is just hype.

 

I’m sure that this is what he fundamentally believes; but isn’t he missing something? How much is happening without him noticing?

 

Let me go back 15 years or so and shortly describe an analogy. Databases were becoming important and business people were asking for an increased amount of reports slicing and dicing the numbers. But they quickly became frustrated as it took IT 6-12 months to develop their reports. As spreadsheets started to appear, many decided to buy VisiCalc, Lotus 1,2,3 and later Excel, copied the numbers in the spreadsheet and developed their own reports. They stopped asking IT about it and just did it themselves. IT felt they addressed all needs of the business, and company information was left behind in ever increasing numbers on non-secured PC’s putting the company at quite a risk.

 

We’re back at the same point even now. Business people increasingly use external resources to deliver what IT does not provide them. I know the customer I mentioned above has needs to analyze marketing campaigns, to gain better understanding of how their brand is perceived by the market, to model their supply chain with the objective of reducing costs and improving resilience, etc. And they typically cannot wait one or two years for that to be implemented. So?  Well ,they use “shadow-IT.”


Denial mode

A number of IT departments are still in denial mode. In the example I gave above, it’s the infrastructure team that reacts. They are at the end of the line and may not see the demand of the business for more agility and responsiveness. They are also afraid of what will happen to them with cloud. So, in some cases denial is just a way to protect their job. The point is that, when the business will fully understand what they require, the existing IT department may be rocked. So, it may not be such a good idea all together.

 

Nearly one year ago, I met with the CTO of a large European bank and spoke about “shadow IT” and the needs for IT to adapt. He agreed the latter, but told me very seriously they did not have any issues with “shadow IT.” That was not happening at their bank. A couple months later, I received a candid message in which he told me that my point had gotten him thinking. He explained he finally decided to do a little investigation and realized bank employees were using DropBox, Facebook, LinkedIN and a number of other tools to collaborate. That actually brought the point home. Yes they had an issue and needed to address it.

 

I could go on with such examples… I’ve got a whole series. The fundamental question is why such beliefs? I think it’s partly to do with the existing structure of many IT departments, where the focus is on individual technologies, resulting in lack of overview of what is truly happening from a business perspective. Teams are focused on servers, on databases, on storage, etc. Others are operating around a specific application, but there is little understanding of how all the pieces fit together and where the white spaces are. And business users often take advantage of these white spaces.


Changing the organization

To truly take advantage of Cloud, enterprises should change the way their IT department is organized. I suggest building a team with responsibility to build and operate the cloud platform, in other words, the hardware/software environment that manages and delivers the cloud services. Their objective is to ensure 24 by 7 operations, 365 days a year with the highest possible service level. They do not focus on what services are delivered but ensure the environment to deliver them is always available. A second team focuses on the services that need to be delivered, interacting with the business under the responsibility of the service governance team to build or source the services requested by the line of business teams. Their objective is to deliver services while meeting expectations on time.

 

Changing the organization requires three initial steps:

  1. Organizational assessment. What skills do we have in the organization today and how can we map those skills to the future requirements? What training needs are there, who can we “re-skill,” how do we adapt available skills to required ones?
  2. Organizational design & development. We need to define how we put the organization together. A possible approach is the one highlighted by the Boston Consulting Group in an article titled “Between Anarchy and Dictatorship” and successfully implemented at ING. The development part consists in identifying which resource will fill in what role. There are multiple ways of doing that, going from a central team identifying the resources, to an open process where everybody re-applies for a job. Which approach is taken really depends on the organization itself and its culture.
  3. Roles & responsibilities. Clearly define who does what and how the organizational elements are measured. It’s important to define clearly what each individual is supposed to do and how he/she will be measured.

 

Once those steps are performed the new organization can be implemented. The transition period is very often difficult and stressful. To ensure an as-smooth-as-possible transition, we often suggest the establishment of a PMO (project management office) who’s role is to manage the plan and ensure all decisions are taken in due time. The PMO often gets implemented at the start of the initial steps and survives till one or two years after the implementation of the new team to ensure a proper transition.


Conclusion

IT departments should not be transformed in isolation, but in close collaboration with the business. Actually, together with the re-invention of IT, the governance we discussed in part 3 as well as appropriate project and portfolio management should be implemented to ensure success of the migration to cloud. Are you still dubious? Well, you may want to listen to Dana Gardner’s interview of Ian Griffiths, Director of Strategic Partnerships at Nottingham Trent University, and Michael Garrett, Vice President of Professional Services for HP EMEA. They discuss how Nottingham Trent University transformed their IT to improve end-user satisfaction while freeing up I... to pursue additional technology innovation. This is only one of the many places where we have helped customers transform themselves to improve operations and better address the needs of the business.

 

Now, would you like to find out where you stand from an IT organization and cloud perspective? Are you ready for a quick challenge? Why don’t you take following two tests, they’re short and give you a good idea of where you stand compared to your peers.

 

 If you want a more regular update of how your IT department operates, you might be interested with HP’s IT Performance Suite. It helps you following KPI’s and metrics determining if IT is measuring up…

Labels: cloud| Cloud Source
Comments
Lutz Bartsch(anon) | ‎03-19-2012 07:27 AM
Hi Christan, On the spot. Working with Enterprises day in day out on on-boarding tasks for the #BizX SaaS solution the business wants. Some Enterprise IT organizations are well prepared: Security, Data Privacy, Integration, Business Continuity managed by 4 experts and all based on Business Risk analysis - strong audit - straight response; an easy job if your are well prepared as a vendor. But the majority of prospects struggle, miss competencies and focus on the fear of the unknown instead of a fact based analysis - to put the money under the pillow is not necessary the most save place just because you control it yourself. But it is not only IT that need to be ready for Cloud: Workers Council, Enterprise Legal to manage data processing across affiliates, Procurement to understand the impact of a shared platform, Change Management to understand the difference of platform/code changes on a shared platform and the behavior of customer's instance - all this is beyond IT but need to transform and be prepared for a smooth cloud adoption. Lutz Bartsch Chief Technologist EMEA SuccessFactors a SAP company
Lutz Bartsch(anon) | ‎03-19-2012 07:57 AM

On the spot

lbartsch | ‎03-19-2012 08:26 AM

Hi Christian,

 

on the spot. But #Cloud readiness is much more than "just" IT organization.

Working with Enterprises day in day out on the on-baording of #BizX SaaS solution the Business selected to work with I meet IT organizations that are very well prepared: Secutity, Data Privacy, Integration, Business Continuity - 4 experts - strong audit based on Business Risk analysis - easy job if you are perpared well as a vendor.

But the majority of organizations struggle - they focus on the fear of the unknown: but to put the money under the pillow is not neccesarily the best and most save solution just because you control it yourself.

But beside IT organizations all Enterprise need to prepare for #Cloud: Legal to implement Data processing agreements cross affiliate, Workers Council to understand the difference of Cloud, Procurement to accept terms and conditions for shared platforms, Risk analyists to understand and clasify reality of Cloud-style SaaS, Business Change management to acept to not control application code and platform changes but Business process and configuration etc.

 

 

Lutz Bartsch

Chief Technologist EMEA of SuccessFactors - a SAP company

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About the Author
Christian is responsible for building services focused on advising clients in their move to cloud, particularly from a business process and ...
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