Opinions
The Cloud: CIOs as service brokers
Rens Troost – CTO and Partner
OVERVIEW: The cloud is changing the way CIOs manage the IT function. Increasingly, the cloud will change software development, the desktop, and the role of IT – leading to a dramatic shift in the way the CIO envisages his or her role.
The cloud is changing the traditional model that most CIOs use to manage the IT function. Right now, most CIOs run the IT departments as an aggregator of demand. In essence, the CIO canvases a company, attempts to determine the demand for various services and applications, and then designs, builds, and improves an infrastructure intended to serve the aggregated demand. Figure 1 shows a simplified view of this paradigm.
In the traditional paradigm for IT, the CIO aggregates demand from many different sources.
- Most provisioning is on-premise
- The primary focus is on cost
- The IT department is an intermediary in control of the technology
- Communication across organizational boundaries slows the pace of change
The cloud will challenge and change this paradigm, improving the service that IT offers the rest of the company, transforming the way that software development is performed, reshaping the desktop, and turning the CIO and the IT department from an aggregator to a services broker. Let’s look at the forces that are driving this transformation; I’ll also propose a roadmap for navigating the transition.
Technology focus: the fundamental cloud mistake
When Virtual Clarity becomes engaged in a project that is focused on virtualization or expanding the use of cloud resources, the first challenge we face is to take the focus off of the technology. Virtualization and cloud computing are the equivalent of shiny new toys that are powerful distractions from the most important issue: changing the operating model for IT and eventually for the businesses they serve.
The right way to think about these issues is to ask yourself: What can we now do differently because of the technology? How will relationships change? What new skills will be required? How will those skills be acquired?
A convenient way to organize analysis is to apply a balanced scorecard approach, not the typical enterprise IT version but the one recommended for service providers (For service providers like governments, healthcare organizations, or IT departments, the balanced scorecard puts the customer perspective first. In the typical application of the balanced scorecard, the financial perspective is first, followed by the customer, process, and skills perspectives). This method for organizing strategy starts by examining the customer perspective and sets forth what will be changed from their point of view to improve service. Then the processes that support those changes are described, then the skills that are needed to support those processes, and finally the money needed to support the transformation.
Let’s apply this thinking to the most common ways that virtualization and the cloud will be applied in the enterprise
How the cloud changes software development
In most large organizations, the software development function is embedded in the line-of-business units in order to make sure that development is closely aligned with business needs. The IT department supports the software development unit by providing servers and tools and eventually accepting the applications developed back into the operational environment.
The trouble with this form of organization is the mismatch with the planning windows for the software development group and the ability of IT to react. Here’s a common scenario: As part of the budgeting cycle for the year, each software development group does its best to plan out its needs for the year and present them to IT, which then creates a plan for meeting those needs.
Then early in the year, the business identifies an unplanned need for an application. The software development group comes to IT and asks for a full suite of servers for development, testing, staging, and production. IT responds that they can have everything ready in 12 weeks. The line of business is frustrated at the delay and the business suffers. This story is told in many different ways at organizations all over the world.
The technology-focused way to look at this focuses on the 12-week delay. The application of the cloud is limited to speeding up provisioning of servers. While this would be a great help in most organizations, it does nothing to address the planning issues or to change the processes through which IT is managed.
A better way to approach this problem is to look at the perspective of the software development group, who is the direct customer for IT. How could virtualization and the cloud be used to change the operating model to everyone’s benefit? While the answer will be different at every company, at Virtual Clarity, we have found that the following paradigm provides a good starting point.
This new paradigm, shown in Figure 2, works as follows. The planning cycle occurs as best it can, but the focus is not for the IT department to provide specific servers but capacity to deliver standard services, which we call standard SKUs. The IT department does not provide the SKUs directly, but supplies the computing capacity based on the estimated need. The application development department can choose what to provision as much as possible on a self-service basis using some sort of service catalog. If the needs for a new application cannot be met by standard SKUs, then some sort of remedy is found, ideally using virtualized provisioning of nonstandard assets. When the applications are completed, they are then accepted by IT into a separate operational environment.
In the services broker paradigm, IT provides resources to its clients.
- Provisioning is virtual, taking place from the cloud as well as on-premise
- The primary focus is providing capacity to customers of IT
- The IT department ensures that any services or capacity is reliable and secure
- The IT department assists its customers in managing computing capacity and resources assigned to them
- The IT department is an intermediary in control of the technology
- The IT department provides standard services such as federated data and identity management
- Communication across organizational boundaries is reduced. Direct control of resources speeds the pace of change
This operating model solves a variety of problems, but also creates new challenges. The advantages of the model are profound:
- Application development teams can move much faster. The delays for provisioning servers disappear
- The self-service nature of the relationship causes other delays from communication across silos to disappear. When a new version of a standard SKU arrives, such as a database server with a new security patch, the IT department provides it and the application department
decides when adoption should take place - Because cloning an environment is so much simpler, testing can take place with complete sets of production data in an environment that is identical to production
- The standard SKUs can be provisioned on-premise or via the public cloud if needed
But new skills and processes are required. Application departments and IT must be able to operate differently in the following ways:
- Greater emphasis on planning means there must be greater focus on ‘plan interlock’, a realistic assessment of the capacity throughout the value chain from business to IT producer. This means stronger IT partnership with the sponsors of business change, so they get the end to end
understanding they need to sponsor success. - Building software out of standard SKUs is not the way software is constructed now. Software is more like a custom-built car than one created on assembly lines from standard components
- Application development departments would have to take on more of the management of their self-service virtual environments. A new kind of system administration and supporting tools would be required
- The flexibility of the virtual world challenges compliance with policies and regulations. The ability to clone an environment could present a security risk with respect to sensitive data
- IT departments must provide federated services for access to master data and identity management for applications
While this analysis skims the surface of what is possible, it does show the difference between thinking of virtualization and the cloud in terms of an operating model and moving from the customer perspective to new processes and skills needed in both the application development and IT departments. A clear view of such a future should not be confused with a short distance. Only through the methodical preparation of a roadmap and the disciplined implementation of a series of incremental stages can such a vision be achieved.
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