Cloud as an “Innovation Enabler”

Posted on : 30-06-2014 | By : john.vincent | In : Cloud

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It seems that most people we come across in our daily activities now agree that cloud computing is a key disrupter to “traditional” technology service delivery. We no longer start conversations with “let’s define what we mean by cloud computing”, “cloud means different things to different people” or having to ensuring all documents have descriptions of public, private and hybrid cloud as laid out by NIST (the  National Institute of Standards and Technology).

People get cloud now. Of course, there are still naysayers and those that raise the security, compliance or regulatory card, but those voices are now becoming fainter (Indeed, if you look closer you’ll often find that what it actually stems from is a cultural fear, such as loss of control).

If we look at the evolution and adoption of cloud technology, it has predominantly been focused around two business drivers, efficiency and agility. The first of these took some time just from an economic business case perspective. As with most new technologies or ideologies, economies of scale create the tipping point for accelerating adoption but we have now reached the point where the pure cost benefits of on-demand infrastructure are compelling when compared to the internally managed alternative.

The agility angle requires more of a shift in the operating model and mindset for technology organisations. CIOs are generally used to owning and managing infrastructure in “tranches” – deploying additional compute capability for new applications or removing it for consolidation, rationalisation and changes in business strategy.

What cloud technologies provide is the capability for matching demand and supply of compute resource without step changes. To deliver this, however, requires improved forecasting, provisioning and monitoring processes within the technology organisation.

So that’s where most organisations have positioned the cloud. However, what about using cloud to drive business innovation?

A recent McKinsey study on Cloud and Innovation made the following point:

The problem in many cases is that adopting cloud technologies is an IT initiative, which means that cloud solutions are all around improving IT and IT productivity. But that’s not where growth is going to come from. . . Incremental investments in productivity don’t drive growth. . . Investments need to go into innovation and disruptive business models . . . Unless companies are asking themselves how to use the cloud to disrupt their own business models or someone else’s, then adopting the cloud is just another IT project.

This observation encapsulates the current situation well – we often see cloud in the category of “another IT project”. We also saw similar with the whole “Big Data” hype (not that we like that label) in recent years when some IT organisations were building capabilities with products like Hadoop without really knowing what the business objectives or value were. Sound familiar?

Building further on this, we see the problem with driving innovation through cloud based technology as two-fold.

Firstly, many organisations still struggle to foster innovation, whether within the company boundaries or via external ventures and partnerships. We have written about this in previous articles (here as related to innovation in banks). Although things are developing with companies building “Digital Business Units” as a complete separate entity (staffed with both business and IT stakeholders), or sponsoring/funding start-up programmes, it is still too slow. Sadly, innovation is too often just an objective on a performance appraisal which was “achieved” through something fairly uninspiring.

The second point is that relating cloud technology as an enabler to innovation requires a high degree of abstraction between current and future state. It needs people to work together that understand and can shape;

  • The current value of a business and history from a people, process, asset and customer perspective
  • How cloud technology can innovate and underpin new digital channels, such as mobile, social, payments, the internet-of-things and the like
  • How to change the mindset of peer C’level executives to embrace the “art of the possible” – to take decisions that will bring a step change in the companies client services

The challenge facing many organisations is that the shift to innovative cloud based services, which connects clients, services, data and devices on a potentially huge scale, is not supported by traditional technology architectures. It jars with the old, tried and tested way of designing technology infrastructure within a defined boundaries.

However, if organisations do not adapt and innovate then the real threat comes from those companies who know nothing more than “innovating in the cloud”. They started there and use it not only as an efficiency and agility tool but to deliver new and disruptive cloud based business services. To compete, traditional organisations will need to evolve their cloud based innovation.

BROADScale – Cloud Assessment

Posted on : 30-04-2013 | By : jo.rose | In : Cloud

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We are well into a step-change in the way that underlying technology services are delivered.  Cloud Computing in its various guises is gaining industry acceptance.  Terms such as Software as a Service (SaaS), Platform as a Service (PaaS), Private Cloud, Hybrid Cloud, Infrastructure as a Service (IaaS) and so on have made their way into the vocabulary of the CIO organisation.

Cloud Computing isn’t new.  Indeed many organisations have been sourcing applications or infrastructure in a utility model for years, although it is only recently that vendors have rebranded these offerings ( “Cloud Washing” ).

With all the hype it is vital that organisations consider carefully their approach to Cloud as part of their overall business strategy and enterprise architecture.

Most importantly, it is not a technology issue and should be considered first and fore mostly from the standpoint of Business, Applications and Operating Model.

Organisations are facing a number of common challenges:

  • Technology budgets are under increasing pressure, with CIO’s looking to extract more value from existing assets with less resource
  • Data Centre investment continues to grow with IT departments constantly battling the issue of power consumption and physical space constraints
  • Time to market and business innovation sit uncomfortably alongside the speed with which IT departments can transform and refresh technology
  • Increases in service level management standards and customer intimacy continue to be at the forefront

Cloud Computing can assist in addressing some of these issues, but only as part of a well thought out strategy as it also brings with it a number of additional complexities and challenges of its own.

Considering the bigger picture, a “Strategic Cloud Framework”

Before entering into a Cloud deployment, organisations should look at all of the dimensions which drive their technology requirements, not the technology itself.  These will shape the Cloud Framework and include:

  • Governance – business alignment, policies and procedures, approval processes and workflow
  • Organisation – changes to operating models, organisation, interdependencies, end-to-end processes, roles and responsibilities
  • Enterprise Architecture – application profiling to determine which applications are suitable, such as irregular / spiky utilisation, loosely coupled, low latency dependency, commodity, development and test
  • Sourcing – internal versus external, Cloud providers positioning, service management, selection approach and leverage
  • Investment Model – business case, impact to technology refresh cycle, cost allocation, recharge model and finance
  • Data Security – user access, data integrity and availability, identity management, confidentiality, IP, reputational risk, legislature, compliance, storage and retrieval processes

The BROADScale service

At Broadgate Consultants we have developed an approach to address the business aspects of the Cloud strategy.  Our consultants have experience in the underpinning technology but also understand that it is led from the Business domain and can help organisations determine the “best execution venue” for their business applications.

Our recommended initial engagement depends on the size, scale and scope of services in terms of the Cloud assessment.

  1. Initial – High Level analysis of capability, maturity and focus areas
  2. Targeted – Specific review around a business function or platform
  3. Deep – Complete analysis and application profiling

At the end of the assessment period we will provide a report and discuss the findings with you.  It will cover the areas outlined in the “Strategic Cloud Framework” and provide you with a roadmap and plan of approach.

During the engagement, our consultant will organise workshops with key stakeholders and align with the IT Strategy and Architecture.

For more details and to schedule an appointment contact us on 0203 326 8000 or email BROADScale@broadgateconsultants.com

Cloud Service Delivery – Part 3: Organisational Impact

Posted on : 26-01-2012 | By : john.vincent | In : Cloud

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So far we have looked at Hosted ITSM solutions and End-to-End Service Management relating to cloud based deployment. In our final part we look briefly at the organisational aspects.

Pros and cons of cloud aside, what we do see is an increased awareness and acceptance that for most organisations, a journey towards some form of cloud based computing is either underway or imminent. Whilst technology departments wrestle with this in terms of infrastructure, data, security, financials and the like, one aspect that receives less attention is the impact to the traditional IT organisation. Let’s explore some of this.

Business users are demanding more speed and agility for provision of services in an increasingly competitive market place. We still hear anecdotes from both IT and Business along the line of “Getting a test server takes several weeks to provision…”, “Finally got my login ID and laptop after 10 days…” etc. Familiar ? It’s not a criticism, just an observation ( and they’ll be a lot of colleagues claiming “not here sir” ).

At a recent roundtable we heard of the business user who, fed up with waiting, bought some compute power on his credit card and expensed it.

From the organisation aspect this has a real adverse effect. IT departments have been traditionally configured as internal, captive providers, both in terms of people and assets ( granted, sometimes services are outsourced, but again this is driven from an internal perspective point and often lacks business alignment in structure ). It is therefore very difficult for an internal IT provider to reconfigure itself based on;

  • Operating Model: the capability to shift in terms of flexibility of costs in both baseline and discretionary, offering market comparative / benchmarked technology delivery and economies of scale. Internal organisations are also often still domain aligned, so particularly shared infrastructure services prove challenging from a customer relationship perspective. It often requires external change to optimise these factors and drive efficiencies.
  • Motivation and Desire: job security plays a large part of the challenge. Staff join company technology organisations for a number of reasons, from financial through to technical. Creating and engineering solutions is in the DNA of many teams. Indeed, there are many internal technology departments building huge enterprise class private clouds “on behalf of their business”. Really ?
  • Commoditisation of Technology: the evolution of IT products and services is such that there is a much stronger value proposition for “Buy” vs “Build” and a reduction in configuration and customisation. Changing this ethos and reconfiguring the internal organisation takes some time.
  • Commoditisation of Resource: this is a big issue and often the “elephant in the room”. Business technology innovation and enablement is as important as ever, if not more so. However, the “entry level of expertise” at both a technical and business level, particularly lower down the stack, has reduced. This may cause a few discerning cries, but it is a fact. Is a 30%/40% compensation premium for a desktop engineer in capital markets over someone in retail justified now ?

All of these aspects require careful thinking from an organisational change perspective. Much as with outsourcing capability, there is sometimes the view that simply drawing a line between the retained and transitioned resources is sufficient. It isn’t.

To be successful, the end-to-end operating model should be clearly defined and likewise the roles and responsibilities within that. As more cloud services come on stream, Service Management, Domain / Enterprise Architecture and Commercial & Vendor skills, as opposed to technical and operational, will be more key to maintaining the service integrity and delivering business value. Attention to the training, development and realignment of roles should not be underestimated.

So what about the CIO ? Well we wrote before about how the cloud may elevate the role closer to the business. In the meantime, perhaps we will start to see the emergence of the Chief Service Broker ?