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In my previous blog entry, I discussed the need to make time for creating an IT strategy. I have also discussed the need for balance between free, unstructured thinking, and structured analysis. Brainstorming all the possible approaches is a great start, but how should you structure these thoughts into a workable plan with measurable results?
Clearly, in a short blog post it is impossible to set out all the detailed methods that can be used to drive a strategy but I hope this is a useful overview for non-practitioners and a useful reminder to the strategists amongst readers.
One of the most compelling arguments for a transition to the cloud is transparency of pricing. The move from complicated internal charges for costs ranging from hardware depreciation to software license shares to the time of system admins all makes the simplicity of buying compute time direct off the network very compelling to a business consumer. The definition of a true cloud service being pay-as-you-go (PAYG in mobile phone industry jargon), buy what you need when you need it, gives the consumer scalability and choice at the best price…..at least in theory.
All the technical cloud evangelists are going to hate me for dwelling on the practical financial matters of establishing a cloud project but I am afraid these issues cannot be ignored. If organisations cannot break the deadlock on the problem of first man in or last man out with an sensible approach to managing allocation of costs, then the organisation will be in danger of missing out this critical technology revolution.
In case you have not read my earlier posts, or in case it was not clear, then let us take a real worked example of the challenges faced by a typical organisation in transition to the cloud. Smaller, more nimble organisations may not face this issue so starkly, but certainly the medium to larger ones will.
In my last post I hinted at the dilemma of who covers the costs for a cloud project. There would appear to be few issues and some major advantages to scaling out to the Public Cloud, as you can pay as you go or pay for what you use. But is this really the case? The problem with transitions to any shared platform is that nasty subject of who pays. Typically organisations will allocate shared service costs with an allocation key for the costs to various groups using the shared service. This allocation key will determine how much each person pays. It is obvious that as the shared service grows the unit price will trend downwards and will eventually level to a free market unit price but the first or last user may for an interim period pay much higher prices. This “first man in” or “last man out” problem causes all sorts of grief for projects in the real world, not only for cloud but for many wider IT projects.
Those of you who have watched the firm evolve may have noticed that we have adopted a three-word slogan – Assess, Advance, Assure. Put another way – set your strategy, deliver your projects, then make sure the deliveries continue to add value once operational. We forget the last part at our peril.
Last year, I was actively working on the Assess part, setting the strategy for a large department in one of the major banks. Just recently, they have called me back in to deliver on the proposed strategy. My colleagues at the bank seem to find it amusing that, so often, consultants set the strategy then walk away.