Leveraging the Cloud to Accelerate IT Renewal – Part 3

This is the third and final part in a three-part post on how Cloud Computing can provide a fast path to “IT Renewal.”

What is IT Renewal?

In the first post in this series, I discussed how information and technology are becoming ever more central to what an organization does and how it does it and how consumer technology is beginning to have a dramatic impact on enterprise IT. I referred to the actions an IT organization takes in response to these changes as “IT Renewal.”

In Part 2, I described three major opportunities for Cloud Computing to accelerate IT renewal:

  1. Finding and validating new business opportunities.
  2. Improving existing business capabilities.
  3. Transforming how IT capabilities are managed and deployed.

I wrapped up the second post focusing on opportunity #3 from the list, arguing that IT Management is becoming a distributed activity that exhibits many of the characteristics of complex systems, where:

  • Organization is a natural, spontaneous act;
  • Emergent structure trumps imposed hierarchy and control;
  • Creativity arises from variety and randomness;
  • Relationships, porous boundaries, free flows of information and self-reference are essential to survival and growth.

These complex system characteristics lend themselves to the use of collaborative approaches to managing IT work – what I referred to as the “Five C’s” of Information Management.

The “Five C’s” of Information Management

As the management of information and technology becomes increasingly distributed and complex, five types of management activity emerge as important to the way work is done:

  1. Collaborating
  2. Coordinating
  3. Connecting
  4. Co-creating
  5. Coalescing

Enabling the “Five C’s” in the Cloud

Because each of these activities is increasingly being conducted across time and space and across organizational boundaries, enabling them through flexible, scalable cloud solutions becomes an attractive proposition.

As an example, I’m currently working with a client who is refining their IT Operating Model so as to enable a new, growth-oriented business-IT strategy. They had determined that they wanted to support their IT work and forge stronger business relationships using Microsoft SharePoint. However, they are currently on SharePoint 2007 and recognized that they needed to move to SharePoint 2010 as their preferred collaboration and knowledge management platform. However, the upgrades to servers, licenses and related IT infrastructure was going to take 3-4 months, and a significant capital outlay. But, they did not want to lose the momentum they had already established in developing the new business-IT strategy.

As an alternative, we were able to set them up with a cloud-hosted SharePoint 2010 instance over one weekend, with zero capital outlay, and a very modest monthly cost that scales with the number of users, and therefore with the value delivered. Now, they are creating new levels of organizational clarity, establishing a continuously improving IT Operating Model, and experiencing new ways of working – collaborating, coordinating, connecting, co-creating and coalescing, against a set of Cloud-based software services.

Let’s take each of these in turn and see how they can help you “manage IT in the cloud.”

Collaborating on IT Work

Much IT work is performed through teams – increasingly distributed across geographies, organizations and time zones. This change forces a shift in work management from a document-centric (write-attach-email-review-attach-email, repeat ad infinitum) to a more collaborative Wiki-based approach, which has significant advantages:

  • Wiki’s are inherently non-linear and encourage a ‘constructive informality’ that improves quality over time, drives organizational clarity and reduces or eliminates redundancy and contradictions. Wiki’s (well-managed!) let you stop wondering, “Is this the latest version? What was changed since the last version?”
  • Wiki’s encourage multi-author collaboration. Whereas the typical document-centric approach has one or two main authors with everyone else in a review role, Wiki’s encourage a more collaborative approach to authoring – with higher engagement and understanding in the content.
  • A Wiki approach dramatically simplifies search and discovery. The ability to hyperlink, tag, and use a well-factored semantic Wiki leads to content that is far more accessible, intelligible and searchable for all stakeholders.
  • There are many good Wiki products available as SaaS, including SharePoint, Confluence, and MediaWiki.

Coordinating Activities in Time and Space

As IT work becomes more distributed, the need to coordinate activities in time and space becomes both increasingly important and challenging. And again, SaaS offerings are ideally suited to helping distributed teams coordinate their activities, including:

  • Real-time communication and collaboration – e.g., IM, Google Wave
  • Collaborative Project Management – e.g., Bamboo, BaseCamp
  • Desktop videoconferencing – e.g., Go To Meeting, WebEx

Connecting People and Ideas

The need to identify and connect people and ideas is important to innovation and learning. As IT work becomes more distributed, cloud-based SaaS solutions become effective ways of connecting people and ideas, through tools such as:

  • Social Networking – e.g., FaceBook, LinkedIn, Plaxo
  • Mind Mapping – e.g., MindMeister, WebBrain, Bubbl.us
  • Virtual Electronic Whiteboards – e.g., FlockDraw, Colabopad
  • Social Network Analysis – e.g., Netminer, InFlow
  • Innovation James – roll your own using a combination of cloud-based services

Co-Creating Experiences

As business and IT converge, opportunities emerge to co-create experiences with customers, consumers, suppliers, business partners, etc. New types of SaaS solutions for co-creation include:

  • Modeling and Simulation – e.g., Creately, FlexSim, Second Life
  • Prototyping – e.g., iRise, Dreamweaver
  • Virtual Worlds – e.g., Second Life, There.com (currently closed)

Coalescing Around Ideas and Reaching Consensus on Decisions

With the increasing distribution of IT work comes the need to poll stakeholders, tap into sentiment, coalesce around ideas and reach consensus around decisions. And new approaches and supporting tools emerging into this space, including:

  • Polling – e.g., Survey Monkey, Kluster, IdeaScale
  • Group Decision Making – e.g., Resolve
  • Prediction Markets – e.g., NewsFutures


One the one hand, the increasing complexity of the world of IT management, and the convergence between the work of professional IT organizations and their customers and consumers can seem like a daunting challenge for IT leaders – a threat to the order, security and stability they have worked so hard to achieve over the last 50 years of enterprise computing. On the other hand, the shift to the “information prosumer” and the distribution of IT work is forcing a new way of managing IT activities – across organizational boundaries, across geographies and across cultures.

Just as these shifts are taking place, the Internet as a computing platform and the rise of Web 2.0 and 3.0 capabilities promise a new set of rapidly evolving tools – available as Web services – accessible from mobile devices – and affordable by even the smallest business or even the individual consumer.

I believe these Cloud-based IT management capabilities offer a way for IT leaders to step ahead – to take the lead in learning how to deploy and take advantage of these services – and help to drive business-IT convergence for their organizations.

Illustration courtesy of Suzanne Lebeda at Adirondack Artists’ Guild

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From Business-IT Alignment to Business-IT Convergence

I’ve posted before on the emergent confluence between business and IT.  I’ve also discussed the shift from Business-IT Alignment to Business-IT Convergence as an aspect of increasing business and IT maturity.  I’ve noted (Goodbye, Shadow IT – Hello, Shadow IT) that ‘Shadow IT’, often viewed as a problem to be solved might be more appropriately recognized as embodying the clues to the new reality of business-IT convergence.

The always-impressive Dion Hinchcliffe sums it all up perfectly in his post, “CoIT: How an accidental future is becoming reality“.  Hinchcliffe repurposes Computerworld’s Scott Finnie’s use of ‘CoIT’ as referring to the ‘consumerization of IT’ to a new term, ‘Cooperative IT.”  I’d like to humbly suggest yet another interpretation of CoIT as a shorthand for “Converged IT” – referring to a world where much of the work of the IT organization has converged with the business as a deeply embedded capability.

A Vision for CoIT

Hinchcliffe suggests some aspects for the vision of CoIT as embodying:

  • Decentralized (or at least distributed) governance
  • IT support that scales up to the new app/device proliferation
  • Business led IT solutions with an enabling infrastructure

I think these are appropriate, though many details and realities to be yet worked through.  And, I believe, while the IT leaders who are most proactive in leading this shift will make some mistakes, they will also be the first to figure out the new realities and will ultimately make less mistakes and learn more quickly than their ‘ostrich’ counterparts who either believe this will all blow over, or that they can figure it out down the road.

What do you think?  Do you agree with Hinchcliffe’s vision?  What are you doing to exploit the emerging ‘converged’ reality of CoIT?

Digital Art: ‘Convergance’ by Wilby  courtesy of Iasos.

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The Dangers of Cloudy Thinking!

clouds-getting-laseredI’m fascinated and bemused by this Cloud Computing phenomenon.  Never before have I had such a strong feeling that something really, really important is happening – a fundamental discontinuity, if you will, in the way we leverage IT – and yet most of my clients and those I am interacting with in a couple of multi-company research projects are essentially standing on the sidelines.

I’m reminded of the earliest days of the personal computer, when IT executives I was working with at the time scoffed at the notion of PC’s (or microcomputers as we called them back then) as anything more than home entertainment, while a little ways down the corridor from their office, business executives were “Visicalcing” away at their Apple II’s and TRS80’s!

I’m not claiming that Cloud Computing is fully ready for prime time, and that any CIO who is not leading a wholesale transformation of his computing approach is irresponsible.  But  I am seeing way more denial than is healthy or appropriate, and the level of understanding and pace of experimentation is, I fear, going to put many CIO’s further behind the 8-ball that they should be.

Why Cloud Computing Denial?

I think there’s a couple of things going on here.

  1. The vendor market, once again, by jumping on the marketing buzzword of the month, is causing confusion and leading to skepticism.  There was a great story this week about the highly respected Jim Goodnight, CEO of SAS, thinking he was having a joke at the expense of the world’s tech media when his company announced a $70 million cloud computing initiative.  It turns out SAS was really announcing a new server farm, but Goognight thought it would sound more appealing if the press release used the term “cloud computing”.
  2. People inevitably try to understand new technologies based on what they already know, so Cloud Computing is seen as “warmed over1960’s time sharing.”   Actually, what mystifies me here is, what was so wrong with or bad about 1960’s time sharing?  It opened the door to end user computing, fourth generation languages and report writers and business analytics.  It made computing accessible and affordable to many who could not otherwise have experienced and benefited from computing.
  3. There’s the control issue.  This gets disguised as the need to protect information and ensure availability, but I believe has more to do with an innate need to own and manage large, hairy data centers and server farms as a badge of courage.

So, What Really Is Cloud Computing?

One of the more helpful descriptions comes from CEO of OpSource, Treb Ryan’s presentation at this year’s SaaS Summit.  Treb argues that the three defining characteristics of Cloud Computing are:

  • Complete flexibility.  Not just pay-as-you-go but automated sign-up, rapid provisioning and no commitments – it’s as easy to turn off as it is to turn on.
  • Web programmability.  The ability to access and manage functionality through Web APIs are a crucial element of a true cloud platform.
  • Community resources.  Successful clouds encourage communities that share ideas, best practices and add-ons to enhance their use of the platform.

These characteristics may be a little self-serving for OpSource, but do get to the essence of Cloud Computing and help differentiate it from earlier, more limited ways of sharing compute capacity.

Time to Denigrate or Time to Experiment?

I do believe that there are untapped “edge” opportunities that yield significant business value, and can be deployed rapidly and easily, especially important under these uncertain economic conditions and constrained IT budgets.  These edge  opportunities typically lend themselves to Cloud Computing as a basis for computing and storage capacity, and to Software as a Service as a basis for solutions provisioning.

CIO’s that see these new computing approaches simply as warmed-over history, may be doomed to repeat it!  CIO’s that see through the marketing hype, and have the vision to appreciate the fundamental changes that are upon us, have a unique opportunity to steal an early march, and while their competitors are hunkering down, help their companies steal market share and innovate.

(Image courtesy of Dvice.)

Clouds, SaaS and the Wal-Martification of Health Care IT

philips_tabletOver the years, a lot of my consulting work has been in pharmaceutical and medical devices industries.  That experience has been augmented over the last few months through my work with a major integrated health care, biomedical research, and medical education institution.  Through these experiences I have become fascinated with the potential for IT to help revolutionize health care in the US.

As a result, I have been closely monitoring this space, and was intrigued by Wal-Mart’s announcement of its plans to market a digital health records system.  For  the uninitiated, companies such as Microsoft and Google, plus a host of other players have offerings (or intentions) in this space, and President Obama’s stimulus package offers $17 billion for incentive payments over five years for doctors and hospitals to adopt EHRs.

Medical Records in the Cloud

As my readers will already know, I’m a proponent of contemporary Web 2.0 means of delivering IT capability – at least for certain situations, and it’s interesting to note that Wal-Mart’s plans are based on both Software-as-a-Service (SaaS) and Cloud Computing underpinnings.

With my interest in IT enablement of health care, among the blogs I track is one penned by John D. Halamka, MD, MS.  John’s many roles include CIO of CareGroup Health System and Harvard Medical School, as well as being a practicing Emergency Physician.  He has just posted on the Wal-Mart entry into this market, with some interesting commentary on the cost structure and Wal-Mart’s qualifications for this business.  His net take is generally a “thumbs up.”

I’m not sufficiently expert to try to predict how all this will work out, and there’s been ongoing heated debate about the cost and value of Electronic Medical Records.  However, I’ve seen enough of the health care industry, both as a consultant, and as a consumer, to know without a shadow of doubt that it has hitherto been woefully under-served by IT.  I strongly believe that while there will be twists and turns and glitches along the way, IT has the potential to take out significant costs, and improve the quality and outcomes of healthcare.   With healthcare taking such a huge bite out of ever decreasing retirement savings, it’s hard to think of many things with higher priority.

(Image is a Phillips Wireless Medical Tablet PC)

SaaS – A Missing Link?

missing-linkI had dinner the other night with a friend who is a very successful software company CEO.  When I say successful, I mean both as in growing a traditional software company from next to nothing to a very successful IPO some years back, repeating the exercise in a very different market segment, and now successfully growing an innovative SaaS start up.  He made a really interesting point at our dinner:

Most companies in the SaaS space, and virtually all those on the sidelines with their cries of, “You can’t make money in SaaS” are missing a key point – they are trying to build a 2.0 business using 1.0 sales and marketing strategies!

His point is that rather than follow 2.0 approaches to sales and marketing, many companies are relying on traditional lead generation mechanisms and ‘feet on the street’ sales forces.  This is not only anachronistic, it is doomed to failure for most of them – the economics of this distribution method will just not hold up for most of them.  The SaaS naysayers, with their claims that SaaS does not present a sustainable business model, may well be proven correct – at least if they follow a 1.0 sales and marketing approach to a 2.0 solution!  Why not leverage all the power of 2.0 to market and sell 2.0 solutions?  Why not use multi-media presentations – short and punchy, delivered over the web, with a layered, interactive approach instead of sales forces?  Why not use demand pull, which better fits today’s hectic executive calendars and short attention spans, rather than supply push approaches, with salespeople playing their games with executive assistants to get their feet in the door?

There’s a corollary to this 1.0 marketing mix approach to 2.0 solutions – that is the 1.0 delivery approach to 2.0 solutions.  Take social networking as an example – perhaps a quintessential 2.0 application.   Facebook, Linked-in and their rapidly proliferating and verticalized alternatives have been largely effective for at least a couple of reasons:

  1. They satisfy a social networking need.
  2. They have an incredibly low barrier to entry due to their SaaS delivery.

Ironically, as companies start to bring 2.0-type social networking capabilities (collaboration, tagging, communities of practice, communities of interest, threaded conversations, wikis, et al) into their corporate environments, many are doing so with 1.0 delivery mechanisms – they are installing large, complex technology inside their firewalls.  The classic example of this is Microsoft’s Sharepoint.  From what I am seeing so far, while Sharepoint can add important and valuable capabilities to an organization that was previously using email and shared folders for collaboration, it typically fails to really satisfy the broader social networking needs and opportunities that exist in the corporate environment.   If technology-enabled social networking is inherently a 2.0 capability, why should we expect an inherently 1.0 delivery mechanism to be effective?  Again, that is both anachronistic and similarly doomed to failure.

My conclusion to this, although I may be over generalizing, is:

Don’t try to use 1.0 sales and marketing methods on 2.0 delivery channels, and don’t try to use 1.0 delivery channels for 2.0 solutions.

Recession and Business-IT Maturity

Just as a lot of CIO’s were gearing up for a year or two of growth and innovation, many are now being told to “hunker down” for a period of austerity.  The usual first victims – cut travel, cut training, cut anything that smells like overhead!  That Enterprise Architecture initiative that was starting to pay off?  Cut it back!  The SOA pilots?  Put them on a back burner.  The Relationship Management training program? Put it on hold.  That IT Strategy Refresh retreat?  Let’s still do it, but cut it from 3 days to 6 hours, and do it in-house instead of at that resort hotel we were going to use.

Yes – the CIO has to be a good corporate citizen, but I find a pattern common among some of my CIO clients. Historically, when cost savings were needed, IT was the first to step up to the plate.  In fact, smart CIO’s used the pressure of cost cutting to rationalize, standardize and simplify their IT environments.  There were plenty of cost savings to be delivered, and deliver they did!  And, they got themselves a leaner, meaner and more agile IT infrastructure along the way.  Problem is, that a few years later when cost savings were needed again, the CEO first turned to his trusty CIO.  “Mary, you remember how successful you were turning in that $70 million savings back in 2002?  And the other $60 million you found in 2006?  Well, I need another $50 million for 2008.  OK?”  What’s a CIO to do without limiting her career options?

I’ve been told by a few CIO’s what they’d like to say, “Last couple of cost take-out rounds, it seems that I was the only member of the management team that played!  In fact, several of the divisions got even fatter while I was wringing blood out of silicon stones!  It seems that the thanks I get is to take some more out!” And, of course, the CIO well knows that previous cuts came out of aggressive rationalization and consolidation of systems and infrastructure.  Those plays have been played, and can’t be played again in any significant way. The outsourcing plays that could safely be taken, have been.  If we go further into outsourcing, it’s not clear that we will get real savings, and it is possible that we will lose some core capability that we will later regret.

So, what’s a poor beleaguered CIO to do?  The first part of my answer depends upon where your organization is on its Business-IT Maturity journey.  If you are somewhere in the Level 1 Supply space, you almost certainly have lots of opportunities in rationalizing, consolidating and standardizing IT infrastructure and common applications.  If you’ve not already done this, recessionary times provide wonderful air cover to take the draconian measures you’ve always wanted to take.  If you are in the Level 2 Supply space, the options are somewhat less.  This is typically a great time really turn up the heat on demand management.  Shift the cost savings burden from the IT budget back to the business budgets where it belongs.  But help your business partners strengthen their ability to build realistic business cases – ones that have teeth in terms of ongoing results tracking and accountability for results.  It’s also a great time to turn up the heat on Enterprise-wide IT improvement activities such as Enterprise IT Portfolio Management and Enterprise Architecture.  These activities will increase transparency into the work of the IT organization, and can help surface new opportunities for cross-enterprise leverage and consolidation.  On top of that, look for opportunities to leverage Software as a Service (SaaS) and Cloud Computing plays.  These are becoming more feasible by the day, and already have a meaningful and growing community of very satisfied customers, including some of the largest global companies.

It you are in the lofty Level 3 Business-IT Maturity space, I suspect the topic is moot – as a CIO, you probably aren’t being asked to give up your first born.  You are just being asked to continue being a careful steward of the firms resources, and to perhaps watch travel spending and things that might have unintended and questionable “optics”.   As with the Level 2 folk, take a good look at SaaS and Cloud Computing – it is likely that there are places to take out some costs, or at least to continue to innovate and create value without large capital outlays.  Other than that, because of all the things you did to move through Level 2, most of the belt-tightening now is business belt-tightening, and, of course, you will do you bit for that.

It’s easy to sit on the sidelines and through a blog advise CIO’s on what and what not to do.  I know the realities are much tougher.  But I’ve also worked closely enough with some great CIO’s over the years to know that knee jerk responses to IT cost cutting requests don’t always turn out as well as was intended, and may just take you down a spiral of reduced IT services, leading to even more questions about the cost and value of IT, leading to a demand for further reductions, and so on.  “Tears before bedtime” as my very British wife is fond of saying about such situations.  Having said that, let me give some free advice on what not  to do. 

  • Don’t relax your drive to increase Business-IT Maturity.  Don’t back off on the changes you are making to leverage the convergence of business and IT, and to increase the value realized from IT investments and assets.
  • Don’t back off on looking for opportunities to innovate and create new streams of business value – look hard at the Web 2.0 and SOA spaces to identify potential experiments that can be conducted quickly and cheaply, and might pan out in a big way.  If you think the odds of finding a big winner are 1 in 10, then you need at least 10 experiments going on.  Maybe you’ll strike it lucky and find 2 big winners!
  • Don’t see a recession as a time to cut back IT activity and shift into cruise control.  Assume that’s what your competitors might do, and take advantage of the climate (and the hungry vendors out there) to drive to higher value.
  • Don’t let the business-IT dialog get bogged down on “costs” as the focus.  It’s about business value.


SaaS and the IT Organization Circa 2017

I’ve speculated before in this blog that Software as a Service was a significant force of change on IT organizations.  A colleague just turned me on to a (new to me) blog called Think IT Services, and its latest post Why IT Now Sees SaaS As A Savior.  In his post Jeff Kaplan cites several indications that SaaS is gaining acceptance by IT organizations.

I think that it’s difficult at this time to predict exactly how and how quickly the SaaS movement will spread, but it clearly is already a sourcing strategy worthy of considering.  And I have no doubt that by 2017 (the time-frame this humble blog tries to consider) it will be a dominant form of sourcing.

I’d also urge that IT leaders formulate their SaaS strategies in conjunction with their SOA strategies.  I’ve recently posted on the business implications of SOA (see Part 1, Part 2 and Part 3) that came out of the recent BSG Alliance multi-company research project on SOA Business Implications.   I believe that SaaS, viewed in the context of SOA, is one of many new sourcing strategies, and that much of the future software and its sub-components that run our companies and agencies will be “pulled from the ether”.  We will care far more about business functionality and results, and less about who write it and where it runs.

I acknowledge that there are still many issues to be worked out, and all sorts of questions about security, privacy, and vendor business models, but I believe these will be worked out satisfactorily in fairly short order (i.e., over the next 3 years).  It could also be, as Mr. Kaplan hints, that the economic climate into which we seem to have slipped, will provide additional incentives for CIO’s to be more open to SaaS possibilities.