Flying to the US a couple weeks ago, I had taken with me “Management Strategies for the Cloud Revolution”, Charles Babcock’s latest book. It turned out it was a perfect read for a long flight around the volcano ash cloud. It gives a great overview of the whole Cloud phenomenon and what companies can expect moving forward. It’s well written and reads easily. So, when I was given the opportunity to interview Charles I did not want to miss it and send him a series of questions. Let me share with you his responses as they give a good view of where cloud is going. Don’t worry, I will continue the development of the innovation subject once this interview is posted.
Christian: Cloud often has an unpleasant connotation in traditional manufacturing cycles, as it seems completely overhyped. However, as you point out, we will all be touched by it. So, what would be your advice to manufacturing CEO’s? What should they do to help their organizations adopt the concept and take advantage of the cloud in the future?
Charles: The use of the term "cloud computing" is too loosely defined and too frequently used to avoid leading to much confusion. The charge that "cloud" is overhyped is true, but only in a limited sense that some people misuse the term, and some people focus on that misuse because the tenets of cloud computing unsettle and disturb them. They don't want to do the work to understand. It's easy to resist or dismiss.
The manufacturing CIO needs to realize that the cloud will provide new mechanisms for capturing customer feedback. With generally accessible computer power and collaborative systems, some companies will form communities of interest around their product sets and make the capture of customer feedback a routine, ongoing process. That feedback will guide product planning and design, as it always has, but a wider assortment of customers will be able to participate in the process.
The cloud will give companies a means by which its core competency can be displayed to potential customers. It will allow some basic service from the company to be extended to customers. This could o integrate his own systems in order to sample what the company was all about. These connections, if they take place in an external, public cloud, could be accomplished around the set of Web conventions and connections that make Amazon EC2 and other forms of cloud computing possible. In the future, if the company can't engage customers before, during and after the sale, it will be hard to retain customers. They'll be able to shop the world's suppliers on the Internet and the sample service offered by the next manufacturer may wow your customers into considering a switch. Think in terms of forming an interactive community around your company and keeping it engaged. It won't be easy, but soon there'll be specialists who understand the nature of the challenge and how to meet it.
Those who the challenges coming are overhyped don't understand cloud computing.
Christian: You point out, quite rightly so, that with many public clouds, you pay by credit card. This has the potential to make the public cloud the ultimate “shadow IT”, IT outside the control of the IT department. This may potentially make audit and compliance difficult. What would be your advice to CIO’s to keep things under control?
Charles: Yes, potential use by employees without knowledge of IT. Salesforce.com boasts that it typically sells its software as a service to a sales manager, not an IT manager. Then the sales manager tells IT, after a certain period of use, to support it. IT has little choice, if it's proven useful to the business user. More and more of this selling direct to the business user will be attempted and will be hard to control.
Tools are coming out to detect unmonitored use of cloud services. But usage is hard to control if it's done from home or somewhere outside IT's watchdog perimeter.
The CEO must be enlisted to back up the CIO that unauthorized use of company data in any form, including freelance cloud computing, leads to unacceptable regulatory and compliance risks and will not be tolerated. That won't stop departments from creating their own data with a SaaS service, which the above warning does not cover. There should be a requirement that IT be informed of the use of any outside service, but under severe business pressure, departments will resort to whatever means helps them get their job done, and that sometimes will mean a SaaS or other form of cloud service. I don't think IT can literally control everything that's going to happen on that front. The business user has taken a step closer to getting into the driver's seat. In that
Christian: I believe we all agree that GEN-Y is always connected. They are currently entering the workforce. Would you agree that the combination of Cloud and GEN-Y will completely change the way we work, and if so, could you envisage what the future will bring?
Charles: Yes, it does. I know a Calif. state agency manager who bans smart phones at her meetings because too many of the young staffers want to text under the table. Someday, there'll even be a word for it, communicating your personal thoughts as the boss drones on. Certainly banning devices isn't going to get companies -- or state agencies -- successfully into the future. The younger workforce is going to be accustomed to a lot of transparency from the boss, a lot of access to data that drives the company, a lot of consultation with people who are above their station in the company. Heirarchies will fall, organizations will flatten, middle managers, if there are any of them left, will disappear. What takes their place? I try to say in Management Strategies For The Cloud Revolution that social networking inside the company is going to serve as a substitute for middle managers, collaboration, recruiting and organizing teams. I suggest that the people with the best ideas for dealing with a competitive situation will rise to the top of the social network, and hopefully, some of them will prove capable of taking responsibility for what the company does next. It won't work out every time, but neither did the old hierarchical ways. Part of my thesis is that those who venture the most, in the face of doubt and uncertainty, on the network are those who are best equipped to take responsibility for the next phase of the company. This is an unproven thesis. Academic studies will one day show that, while not completely reliable, the most outspoken, in the face of criticism, on the social network prove something like seven times out of ten to be the next leadership of the company. It's impossible to prove such a thing today but I bet it will evident some day.
The book Social Media at Work by Aurthor Jue, Jackie Marr and Mary Ellen Kassotakis make the best case that I have seen that this will be the case for Generation y. Also see, Paul Gillin's, The New Influencers, for the impact and workings of social networks.
Next entry will contain the second part of this interview, where Charles Babcock speaks about cloud and manufacturing, and much more, so stay tuned.
