By John Mooney and Jeanne Ross
Talk of the cloud has stirred up a lot of excitement. A 2011 mandate from the government CIO to move toward a cloud-first strategy has managers hoping that public cloud solutions will provide a quick fix to sticky technology challenges and messy business processes.
To some extent the hype is real. The cloud is transforming how organizations use and manage technology. As cloud adoption becomes more prevalent, government organizations that resist its charms risk missing opportunities to enhance the services they deliver.
So what’s the catch? It’s not an easy transformation. Cloud solutions go in quickly, but they demand enormous organizational changes, and those have to be envisioned, managed and led. In addition, cloud solutions can be risky. It’s not so much about data privacy issues because sophisticated cloud providers address those as well as anyone. Rather, the risk is that you’ll assemble an incoherent mass of solutions that fail to support data sharing and access, which are essential to high quality service levels in the digital economy.
But the cloud’s ability to accelerate technology adoption can lead to big advantages, so it’s well worth it to start the transformation. In a case study of the SEC and a number of for-profit firms, we’ve identified five imperatives for preparing for the cloud.
1. Rethink the value proposition
The first step is to rethink the value proposition of technology in your organization. Since the 1980s, we’ve been focusing on the cost-savings of technology. Many organizations have resisted cloud solutions because they appear more expensive to implement and run than home-grown or purchased package solutions.
IT efficiency still matters, but speed often matters more. Technology doesn’t generate a payback until it’s used. When Tom Bayer took on the role of CIO at the SEC, he found that the underlying infrastructure was so outdated that it could not support organizational process transformations necessary to fulfill the SEC’s mission. Rebuilding the infrastructure required a sales effort within the SEC and with Congress, but Bayer has persuaded management to adopt a “spend to save,” mentality. Investments in new technology are generating big savings in operational costs.
2. Re-architect digitized platforms
It takes more than an attitude adjustment to successfully deploy cloud services. You also need to re-architect your digitized platform. Some organizations are solving immediate application needs with individual cloud services and thinking they can solve the integration issues later. You will regret that kind of thinking. To take advantage of all the innovative services offered by emerging specialist providers, you will need to plan the interfaces among them. So start envisioning not just individual solutions, but also your major platforms and how everything will connect and interface.
The SEC had to reestablish its core technology foundations to stabilize operations. It abandoned homegrown systems and purchased best-of-breed, off-the-shelf solutions like Microsoft Windows and Sharepoint to stabilize operations and improve data collection and routing. Adoption of a single database platform has facilitated development of an enterprise data warehouse that makes data more accessible to both internal and external users.
3. Redesign your IT governance
The cloud environment requires you to make one critical high-level governance decision: Which services will be global and which will be local? In other words, which business processes should be executed in the same manner regardless of location, and which can be customized at the business unit or regional level?
This is a big decision because if the service is deemed global, it requires a single enterprise solution and tight governance to ensure adoption and sue. If local or specialized parts of the organization have unique needs, enterprise solutions may hamper the mission.
4. Redevelop the IT organization
Stop thinking of your IT group as the people who build and run technology. You need them to broker, orchestrate, and exploit a growing set of technology services. This requires new IT unit skills and new roles throughout the business to help your organization make more informed decisions about IT. Government policies can limit opportunities to retool talent. The SEC turned to outsourcing, combining the talents of 180 IT employees with 500 specialized contractors.
5. Reset your clock
The SEC is constantly challenged to stay ahead of the market activities it monitors. Agile development practices coupled with public cloud services are providing the data, applications, and processing power needed to keep pace with dynamic markets.
Recognize that the cloud is making it pointless for you to build, run, and maintain much software internally. You don’t have the time or the managerial focus to manage software that many other organizations also need. Start working on these imperatives now.
John Mooney is a researcher at MIT Sloan School of Management’s Center for Information Systems Research (CISR) and associate professor at Pepperdine University. Jeanne Ross is director and principal research scientist at CISR. They coauthored, “Embrace the Inevitable: Six Imperatives to Prepare Your Organization for Cloud Computing.”