Insights - How Cloud Services impact IT Executives.

How Cloud Services impact IT Executives.

by Dr. Jeannot Muller on October 14, 2014

There is a lively ongoing discussion about the approach, the timing and speed of introduction of cloud services into the enterprise workflows. When asked by their business stakeholders, you often hear IT executives state that “the cloud is expensive”, “the cloud is insecure”, “the cloud doesn't fit to our business model” ... These statements fail to appreciate a fundamental paradigm shift. The cloud is now! It is not about if you will move to the cloud but when.

MANAGING CHANGE.

If we could look into the heads of the same executives, their thoughts would paint a picture full of challenges:

  1. “After the depreciation of our in-house hardware, we will have to renew everything which will be expensive. As hardware becomes smaller, our data center will by then be too big also”.
  2. “We outsourced a lot in the past, as I can't compete with my teams against the subject matter experts in service companies. As we outsourced telecoms, I can't guarantee that we have full control of security today. There are services for encryption which we could use to protect you, but we have no idea how to do so”.
  3. “The more you are going for external services, the more expensive my team will look like. The more you will like external services, the more you will hate our own implementations, lack of integration into public services and speed of innovation”.
  4. “My team can't compete with the update cycles of specific services, nor can we offer the mobile experience you do like so much at the same cost”.
  5. “Lots of people, including myself, will lose our jobs, as you - the business - will run your services by yourself in the future. Or I will lose my influence, as no one will understand the problems I have to deal with”.

The cloud is redefining the cost base, delivery approach and structure of the IT organization.

MEETING NEW EXPECTATIONS.

IT customers (aka the end-users) are neither interested in these challenges of current IT, nor are they interested in the “cloud” itself. They are solely seeing the “service” and the “ease” of getting these services up and running.

Let's take a smartphone as an example. The first versions required the installation of a piece of software on your desktop or laptop for a simple activation. This implied all kinds of typical IT challenges: perhaps the user had downloaded the wrong version for the specific operating system, or didn't have enough space on the hard drive, or changed USB ports ... With the latest version of smartphones, a simple registration during the installation process with your supplier is sufficient. All done, all up and running in a few minutes, with no or very little need to call for support.

It is exactly this seamless and hassle-free “service experience” which makes a happy customer and disconnects the end-user from his own IT people who do not provide a similar experience.

It is not about the “cloud”, it is all about “services”.

BALANCING CUSTOMIZATION VERSUS STANDARDIZATION

For decades IT departments did a fantastic job in convincing their business about the need of customization. Indeed, there are areas where customization makes sense, either from a competition point of view, or because of the nature of the process. Production is one example. Your machines are probably very specific and consequently they do need specific IT solutions.

However, Finance, HR, Marketing, Communication, Telecoms, Collaboration - you name it - are standardized services which can easily be covered by commodity services delivered in the cloud. Why should an order-to-cash, or a purchase-to-pay process be customized? Each penny invested into customization of such services is a pure loss of cash and does not help in making a company more competitive.

REINVENTING THE ROLE OF IT.

The best place to show the impact of the cloud on IT is most probably the area of license management. For years suppliers and internal IT departments tried to fight this battle from both sides. “How many licenses are used” versus “How many and what type of licenses are really needed”. The cloud re-frames this discussion dramatically, as actual consumption of value-add services is what a business pays for, not licenses. This is a fundamental change to yesterday's way of doing business and redefines the role of IT personnel (the IT license managers in our example).

The impact goes though beyond plain role redefinition. Today the business needs experts to help them chose the right services and to ensure seamless integration and security. The strategic roadmap is driven by the business, not IT. The executives helping the business will be enablers to the business, but the business itself will become the “officer” of “information”.

These support functions will see new jobs like “Chief Service Orchestrator”, “Chief Service Integrator”, “Chief Service Securer” ... but all these jobs will be very different from all the current IT positions and they will need a very small overhead of technical experts.

Intelligent executives are aware of this evolution, they are embracing change and they are helping their business on their path to leave classic IT. It is not about “if” this change will happen, it's about “when” it will happen for your business.

The Author

Dr. Jeannot Muller Dr. Jeannot Muller has over 20 years broad experience in IT. He has worked in different executive management positions with Deutsche Post DHL Global Business Services since 2006 on both sides of Business IT and IT Supply. Prior to his engagement with Deutsche Post DHL Dr. Jeannot Muller was employed by CIBER, where he was part of the management team and responsible for project management in various global IT projects for international customers.

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CREDITS & REFERENCES

Neos Chronos are thankful to the author for accepting our invitation and generously sharing their knowledge and insights. The content of this article is licensed under the Creative Commons Attribution 4.0 International License with permission from the author. You are free to use and adapt this article for your own purposes as long as you visibly acknowledge the author and Neos Chronos as the source in any derivative work. Please also observe the Neos Chronos Terms of Use.

  1. Webopedia: cloud services
  2. Wikipedia: The Cloud, Cloud Computing

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