We will be starting a series of guest posts by other CTO’s and CIO’s, this one from a friend of mine, Manak Ahluwalia from Boston. He is a director at a technology services firm in Boston. You can view his LinkedIn profile at http://www.linkedin.com/pub/manak-ahluwalia/1/91/243.
2012 is appearing to be a transition point for organizations sitting on the sidelines of cloud computing. Executives and directors are carefully reviewing their service catalogs, budgets, and commitments to the business and are carefully eyeing the cloud as a potential option for their organizations. Whether your company adheres strictly to frameworks like ITIL or has a more loosely defined service delivery methodology you should be able to categorize the services you provide to your business in a few broad categories:
- Category A: This service supports the operation of the business
- Category B: This service directly enables the business to generate revenue
- Category C: This service provides a competitive differentiator to the business
With limited resources, business dependence on IT, and a precarious macroeconomic situation many of the IT executives I speak with are reviewing how they align their key resources (budget and people) to delivering across these 3 broad categories. As “cloudy” thoughts emerge across these categories typical decision criteria of adoption based on the categorization of the service is very different:
- Category A decision criteria: Do I provide a better SLA to my business then I can get external? How comparable is what I have to what I can get? How do I define my cap-ex and op-ex for financial justification in my decision process? How do I ensure that the decision to move this function to the cloud doesn’t impact my ability to maintain my staff?
- Category B decision criteria:Can I provide better service, empower my organization, drive top line growth, and minimize risk to the business? What is the risk to this revenue stream if there is a problem with the technology deployment or adoption? Am I agile enough for the business as our strategies or the economic climate change?
- Category C decision criteria: Is it really a competitive differentiator if I can acquire it in the cloud? To make it differentiate will there be a significant cost in customization? Can I afford to take the risk on something so core to how we are branded, demand margins, and continuously enhanced to keep us one step in front of our competition?
Generally my advice to most executives I work with is not to rush to the cloud. The cloud is a different model of consumption all together and it’s important for a business to understand the nuances, changes in service delivery model, and the most appropriate way for them to provide ongoing management for their public cloud. When choosing what to take to the cloud my recommendation is to look at services that fall under category A and look for services that can clearly be provided via the cloud more optimal and cost effective than your current state. Some of the low hanging fruit that is picking up in adoption is communication and collaboration platforms, security related technologies, and development/UAT environments. This doesn’t mean that you eliminate your requirement to maintain the staff for these platforms but rather align your people to focus more on how the business can be better served through the use of the technology as opposed to being focused on the management of the uptime, administration, upgrades, maintenance, etc.
For solutions that fall under Category B, I would leverage the initial experiences with cloud computing under Category A and work with business thought leaders on areas in which you can drive improvements. During this assessment you will be able to determine the incremental costs to provide these capabilities to your business, as well as, understand options available to you in the cloud which could potentially give you the business agility, capabilities, cost control, and advanced features your business units want. This is one of the main reasons CRM has been such a natural fit for organizations to move to a cloud model. As your workforce becomes more mobile, analytics need to be derived, social software needs to be included, functionality and agility become imperative, and costs need to be managed,a cloud offering becomes a much more attractive proposition for your business.
Finally for solutions that fall under Category C,I would tread with caution. It will be highly unlikely you’ll be able to find a competitive differentiator as a canned cloud offering. You may however find that outsourcing the underlying infrastructure or aligning to a platform in the cloud may improve your availability and reliability SLA to your business as well as provide a path for faster service improvement. Before you jump into a Category C I would make sure you have developed appropriate methodologies and procedures after some deployments of Category A and B services.
Next week we’ll review recommendations on how best to consume some of these services when you decide what to take there.
Photo source: http://www.sxc.hu/photo/1369224.