Are you using you IT strategy to set your user behaviour? Or are they setting yours?
Following on from my last post about getting funding for your strategy, I am going to explore one of the big barriers to approval that you can face.
Strategy plans will often involve some kind of consolidation process; whether it be centralising a common service, or realigning architecture processes. This can often run into what I call the allocation conundrum. Typically, different areas in a business, whether departments or locations, will receive a cost allocation for the IT services they consume. In terms of technologies and their champions, winners and losers will emerge from every consolidation programme; there will always be risk-takers and risk-adverse parties in any organisation. Where the challenge comes, is in handling the costs. The last remaining customer cannot be expected to carry the cost allocation of the whole service.
For those of you who have the same, rather bad, taste in music as me you might remember the Supertramp album from the 1970s with this title, referring to a man staying cool in a crisis.
Perhaps this is a mad idea, but I see the decision on cloud like the decision on buying a coffee machine for the office. It is a basic management decision, pros versus cons, investment versus benefit, running cost versus opportunity. Lets use this as a simple example to see how cloud compares to coffee as a service (CaaS if you will).
The other week I was considering if we should get a machine for the office. Lets face it, with the sophistication of the machines available, you can easily invest a four figure sum in a great coffee maker to match the quality of the coffee from one of the big chains. Now add supplies for a year for the whole team. This includes not just the cost of great coffee, milk etc., but all those hidden extras like cups, filters; not forgetting extra work for the cleaner or one of the staff to clean it all; then potential service costs and spares…
It was interesting to see the announcement that BBVA are moving their mail and office services to the cloud. I have been debating with a number of colleagues from the banking industry the future of the cloud in banking.
In the wider services and financial services world, that is less tightly regulated than the big banks, it is clear that they are already making the journey to cloud based computing. Whether they have made the move to cloud based PaaS services such as Salesforce for CRM, or on Google or similar for document sharing and mail, or on an IaaS service for comprehensive corporate computing.
There is a lot of discussion in the big companies out there of the benefits of creating their own private clouds using their own server farms; whether it is worthwhile versus the full move to use external shared Public Cloud environments. Of course, SMEs don’t have this dilemma: they do not own as much hardware, generally do not have the internal expertise to even consider a private version, and so just use externally available services with no other option. Cheaper, more scalable, more efficient – let us watch some of the leading medium-sized firms leverage the technology to jump ahead of their bigger, less nimble peers.
Over recent years we have seen a number of trends among large corporations trying to get clarity on their real IT costs and squeeze efficiency from their resources. It is interesting to compare some of the approaches, and how they restrict the value that can be gained.
Some companies tried to ring-fence their IT by creating a management services company, forcing financial rigour on the supply of services. Great idea… or was it? Clearly there were some benefits from the transparency on what was being purchased (at least in theory), but there were also management overheads and investments needed to gain this rigour; it is unclear whether or not these were ever compensated for in efficient savings.
Those that know me well would be surprised to find me preaching about the cloud. However, I am not an evangelist. For me, it is clear that the cloud is not just a trend, but a fundamental shift in the way IT is provided that no business can ignore. So I genuinely believe that every business (however large or small) should be facing up to the challenges it brings.
To do this they should be making carefully considered judgements and rational decisions on what to do and when to do it: setting their strategy and planning for adoption.
In previous posts we were looking at inertia in larger organisations and how to achieve your IT objectives. Transitioning to the cloud, despite the benefits, is a daunting concept which must be passed through several stages of approval. We have discussed factors including: the big players’ belief that they have already reached economies of scale, their entrenched IT teams obfuscating the business benefits with technology speak and their fear of losing control of service levels – all as contributing to cloud inertia. What about small and medium-sized businesses? Surely they cannot argue the same?
Clearly, most SMEs cannot afford their own data centres; they don’t have thousands of servers nor big IT support teams. So, one would imagine that the resistance from entrenched internal views and job protection or because of substantial prior investment, would not occur.
Watching the outsourcing decision of some organisations, I sometimes wonder if they really understand what really adds value to their business. Stepping back and looking at them from the outside, I doubt they can genuinely justify their choices for the target of their cost saving exercises.
Which one of these adds more value to the business: a major development project to implement a CRM system to generate more revenue, or keeping the day-to-day running of the racks of servers in the machine room? Time and again I watch, as the supposedly easy and risk free outsourcing targets are chosen, especially the value-adding development projects, whereas the question of real “day to day” IT is avoided because it is seen as too risky or too difficult to change. Ask yourself, is this really the case?