Conclusion: Cloud Computing and the New Role of the IT manager

Read Part 1 and Part 2 (IaaS) and Part 3 (SaaS) here.

In the previous entries we discussed the possible impact of IaaS (Infrastructure as a Service), SaaS (Software a as a Service) and even briefly PaaS (Platform as a Service) on the role of our Cloud IT Manager separately.

It is, however, important to realize these three models are not happening separately; they are all happening at the same time and as result are influencing each other. As all three models are delivered “as a service”, vendors are preparing themselves to play their role in 1, 2 or even all 3 of these markets. Will our Cloud IT Manager only be a consumer of services provided by these vendors or will he retain other responsibilities as well? Sourcing services will certainly be a core activity, not only for end user services (like CRM) but also for IT services like Infrastructure, security and support as a service.  Before reaching a preliminary conclusion about our IT manager’s future role, one of the questions I’d like to ask is:

Will a Cloud IT Manager be a more Lean IT manager?
Connecting Cloud Computing and Lean IT may at first glance seem farfetched, but both Cloud Computing and Lean IT are leveraging the concept that mass produced is almost always cheaper than custom made. Cloud Computing offers mass produced standardized services to millions of users, and as a result monthly amounts per user can be relatively low. The proverbial Ford Model T was all about using standardization to drive cost down – any color as long as it is black! Toyota perfected Lean manufacturing to be able to offer choice at affordable cost. They did so by using highly standardized components and combining these into unique, desirable automobiles, by using standardized processes in the last phases of their manufacturing process.

More on the relationship between Cost and Cloud at a later date, but at minimum, what our Cloud IT manager can do today is use the Lean IT mantra of Maximizing Value (only do what adds value to the end customer) and Minimizing Waste (eliminating steps that do not add value) to guide his  current decisions on Cloud Computing. Just take any cloud proposal and evaluate it against these two criteria.  More long term I’d like to think that a Lean IT approach will help our Cloud IT Manager to combine standardized low-cost cloud services, into unique desirable and differentiating – customer relevant – services.

This last sentence sounds a bit too much like brochure talk, so let’s explore this a bit further: Imagine a sporting goods manufacturer that traditionally ran a planning application to manage its logistical operations. This manufacturer outsourced most of its manufacturing to third parties. It may however still offer this planning application to help this “Extended Enterprise” go to market more efficiently than its competitors. Or one could think of an electronics manufacturer that differentiates itself with “unmatched customer service”. This manufacturer runs a return-and-repair management system even though 90% of the repairs and returns are handled by third parties.  The traditional idea that internal applications are intended primarily for internal staff is increasingly no longer sustainable. A number of forward thinking companies therefore no longer provide their business applications (exclusively) on their own network. They take their applications and offer these on the Internet as a service. In some sense they have become cloud service providers, like a bank offering home banking or a travel agent offering online booking to its business customers. In some organizations the synergy between the original activities and providing the service makes them more competitive, others may at some point spin off this new activity as a new venture, while for some running the service is all they will be doing (having outsourced manufacturing, logistics, design, etc.). Our Cloud IT Manager is no longer just aligned or even integrated with the business, he is becoming the business.

Reaching conclusions on Cloud Computing is not easy. To some the whole cloud thing may be a bit overwhelming, providing yet more acronyms and complexity; to others it may seem the best idea since sliced bread. IT magazines continue to talk almost exclusively about Cloud Computing, as if there is nothing else left to invest in. For larger organizations Gartner disagrees with that and recently predicted that through 2012, IT will invest more in private than public cloud providers. Last month the US government announced a major many billion dollar large cloud computing initiative, while at the same time in Europe the Dutch Government basically forbids any use of the Cloud by government.

So when and where should your organization start?  Several organizations have started building Private Clouds. Not as a pilot, but as a first real project. Disentangling existing applications is way too expensive and labor intensive to just have a look; you need to build a business case. Others have started with SaaS for some less business critical applications (somehow CRM and sales force automation still seem to classify as such).  If you are serious about engaging with the business I would encourage you to investigate some PaaS platforms (like Force.com) and some technology for connecting Cloud and non Cloud applications (like Dutch based “Cloud Orchestrator” Cordys).

But no matter what you decide to do first; deployment will be more successful if you have a relative high level of maturity in your existing processes. Cloud Computing offers more options, more flexibility, more opportunities for efficiency and automation. But just like in the past: automating chaos will only give you one thing: automated chaos. If this four part blog only gave you one insight, I hope that it is that frameworks like ITIL and COBIT with their best practices for service portfolio management, security and risk management, configuration and asset management. etc.  are crucial to our Cloud IT Manager’s chances of success, now maybe more than ever.

One thought on “Conclusion: Cloud Computing and the New Role of the IT manager

  1. Thanks for the blog which contains such a valuable information's of Cloud Computing. Thanks for sharing it here. By the way have you heard about Cloudslam 2010 conference which is a upcoming event covering latest trends and innovations of Cloud Computing and its technologies. This a good chance to gather more knowledge on Cloud computing from the World's leading experts of Cloud Computing.

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