The CIO's role will shift from an internal IT supplier to a business enabler
The industry buzz around cloud computing has become deafening these days. Just name any information technology (IT) provider and you will find it marketing its cloud computing strategy. The usual data centre virtualisation solutions and infrastructure outsourcing have suddenly become “clouded”. Large providers are holding analyst calls to explain their strategy for cloud computing, while traditional infrastructure outsourcers are investing in data centre virtualization. A leading consulting company is engaged with a large Indian IT provider to chalk out its cloud strategy and then there are numerous start-ups and small IT players offering different services on the cloud.
With all these developments surrounded by a good chunk of hype, the Chief Information Officers (CIO) of major buyer organisations are becoming apprehensive. Not only do they want to learn more about the cloud and its implication on their IT strategy, they also want to cut through the clutter and understand its real value. They have commissioned their best architects to develop a “cloud strategy” without perhaps realising that organisations need IT strategy and not a cloud strategy. The supplier push and the clamour in the industry appear to be winning against a methodical and sound judgment for business case. The CEOs are asking the CIOs about their cloud strategies and the CIOs are responding dutifully.
Many industry observers have commented that CIOs do not need a cloud strategy and that cloud should be a part of their overall IT strategy. CIOs are advised to start educating their other C-level executives about the “creative disruption” and potential benefit of cloud computing, which generally revolves around cost reduction and flexibility. However, there has not been much discussion about the paradigm shift the role of the CIO will undergo when and if cloud computing becomes mainstream.
The misalignment of business and IT is a story for folklores. It has been bemoaned time and again that how businesses find the slow functioning of IT in provisioning the right systems as one of the biggest hurdles in their business growth. IT complains that the businesses come with half-baked requirements, have unrealistic turn-around expectations and IT assets are costly to provision for an untested business.
Cloud computing can impact all the above scenarios by providing flexibility to the CIOs to develop cheaper test systems for the businesses before they can be provisioned for production. Cloud computing allows the CIOs to quickly rent infrastructure, platforms and utilities to develop applications which can then be leveraged to turn around an application in a shorter time. Moreover as the infrastructure becomes available incrementally at a lower overall cost, it can be used to iteratively test the system and hence the impact of the new business can be evaluated with improved certainty.
However cloud computing may end up further dividing the line between businesses and the CIOs if CIOs do not take necessary preemptive actions. In the current setup, businesses are dependant on the IT department to procure the needed systems. Though due to the inherent slow processing in IT, many businesses also buy their own applications, yet by and large the IT department still acts as the central system procurement channel in large organisations. Cloud computing will allow the businesses to rent the infrastructure for developing the needed applications on their own. This may obviate the need to involve the IT department in the procurement process. The businesses can cut through the red tape and bureaucracy and hence can improve their time to market.
CIOs need to prevent these developments where the need for the IT department is reduced. They need to become more proactive in engaging the businesses and understanding their requirements. This will involve educating the businesses about new IT systems they can leverage to improve their business. Moreover CIOs need to educate the businesses that they may buy cloud infrastructure on their own to improve their time to market, though the actual system for production will normally come from the IT department. Hence if the IT department is not involved from the beginning in terms of understanding requirements from the business, it will not be able to produce the production system.
Hence the philosophy of actively engaging the business and knowing its requirements and proactively suggesting systems remains the same. Cloud computing will enable the actual execution of this philosophy. Unlike the earlier days, CIOs can procure cheap infrastructure incrementally in a fairly short time and deploy the test systems quickly to win the confidence of the business. However, for this to happen, the CIO’s role will shift from an internal IT supplier to a business enabler who understands the need of the business and the alignment of IT towards larger strategic goals. This is easier said than done and the traditional CIOs will find this change unnerving. The current profile of the CIO of someone who has tremendous understanding of IT yet may or may not understand the business will change and the CIO will become a business leader who also knows IT.
The usual IT budgeting process starts with the CIOs asking the businesses about their initiatives in a year and accordingly budgeting IT costs linked to a specific business. The budgeting process depends largely on the accurate assessment of new initiatives by the businesses. In cloud scenario, we will see this changing. As various large and small IT providers continue developing solutions in the cloud, the CIOs can actively scan the market and let the business know some innovative solutions which are available on the cloud and which the business can leverage on a “pay per use” model. This will allow the businesses to incrementally deploy application as and when they find traction for their business and avoid the development of that application in-house.
The top management of an organisation also has an important role to play. The performance evaluation of the CIO has largely been on tactical parameters like uptime of the systems, budgeted IT procurement, cost control and operational excellence. However, in the new ecosystem involving cloud computing, the performance evaluation for the CIO should change. A significant part should be the feedback from the businesses in terms of their perception about the value delivered by the CIO team, the turnaround time for business systems and the involvement of the IT department to understand their business requirements.
Therefore CIOs’ role will become more strategic than tactical. The change is not going to be smooth and the traditional silo-based CIO office which is normally divided into a solutions group, support group, procurement/infrastructure group and IT governance may need to be overhauled to get maximum benefit out of the agility provided by cloud computing. The people working in these groups having been brought up with a healthy “IT and control first” genetic will need to relook their strategies as “business and agility first”. Hence, cloud computing despite the clamor, is something which the CIOs should not ignore. CIOs will need clear strategy to evaluate the role cloud computing will play in their current and future set-up. The biggest disruption cloud computing will cause is to make the CIO office a business enabler and contribute towards the business. Whether this disruption is leveraged by the CIOs to become a strategic resource for the organisation, is yet to be seen.
The author is a freelancer and tracks global sourcing, technology and telecom sector. He can be contacted at yugaljoshi@gmail.com
