With all the buzz surrounding cloud computing, I’m surprised nobody has come out with a more comprehensive philosophy for IT in the cloud-computing era with regard to end to end business processes in companies. A lot of focus is on how to take existing systems and move them to private or public clouds to transform them into private Software as a Service (SaaS) implementations. This is no small technical feat.
The early SaaS market was as much about proving this new business model for software companies as it was figuring out technical delivery. Thanks to pioneer Salesforce.com, this business model is proven, and since then a large number of SaaS offerings are now on the market trying to grab market share.
Part of the pioneering that Salesforce.com did with this business model was marginalizing IT in the sales process and instead selling direct to sales management and sales users. I’m not blaming the Benioff crew, they simply seized an opportunity that IT as a craft handed to them. Truth is, IT has remained too focused on wrangling technology, and not on delivering value to their customers: business managers and end users. Recall the endless discussions about the “gap” between business and IT.
So here’s the rub: you have an IT department focused on trying to contain costs with existing on premise systems by moving them to the cloud. And you have other business units in the company doing point innovation by subscribing to SaaS solutions in disconneted clouds. Some bloggers such as Phil Wainewright are even questioning whether IT even matters anymore.
With the situation above, however, you are losing some key benefits of a coordinated strategy that centralized IT used to provide, and are leaving your company faced with:
- Inconsistent security and spotty compliance
- Your people lacking cohesion
- Your business processes siloed and opaque
- Your information scattered, redundant, and of poor quality
- Innovation in your company that is adhoc and hard to acculturate
While business services in the cloud have meant a path around IT for impatient line of business managers, I believe it also provides an opportunity for the transformation of IT as a craft. IT vendors are now expected to engineer their systems for rapid startup and low operating costs – SaaS being the ultimate example of this. This means IT departments have less to worry about in terms of specialized skills in specific technologies, and can focus on bridging and architecting business services on the cloud to meet requirements from the business.
Over the last few weeks, I’ve been working with Sina Moatamed to explain this point of view in a paper he’s writing. As I’ve gotten to know about his experiences with SAP Business ByDesign, he and I realized that we were thinking much the same thing with regard to a “cloud-centered” approach for IT. What is lacking was a good articulation of an approach that looks something like: Suite standardization + SaaS w/ a sprinkling of Focus on Business Value is What Sets BPM Apart = business services. Correspondingly, the traditional side of the house is working towards turning their on premise systems into private cloud-based services.
As a result of this collaboration with Sina, I sketched up a few drawings and posted them on Facebook and Linked in to try and elicit feedback from a couple of cloud-interested communities. We got some great comments from some smart people. I’d like to share them with you, and am definitely interested in your own thoughts about these concepts.
Cloud-centered IT vs. Cloud-Attached IT
“Cloud-centered IT” is an IT approach designed with the principle of “cloud first” for architecting business services to support a company’s business processes. Leverage Software as a Service wherever possible; construct new services using Platform as a Service when necessary. Only when the above does not make sense do you resort to hosted services or on premise systems – such as when available cloud services lack industry specific features. A cloud-centered IT strategy has holistic planning along the dimensions of:
- Security & compliance
The culmination of a “cloud-centric IT” practice would be self service enablement of business units for new functionality, similar to what I describe in my recent blog ““Appification” of Enterprise Architecture.”
Cloud-attached IT starts with traditional IT operations that evolve towards the cloud. Here, IT is concerned with taking advantage of cloud-based automation to reduce labor and hardware costs. IT (or an outsourced provider) remains responsible for wrangling technology to provide IT services. Cloud-attached IT may include Software as a Service, acquired and integrated on an adhoc basis. Stability and cost containment are the most important things here.
(Comments on the above from the Facebook page for SAP BusinssByDesign)
Chris Horak I like cloud-centric vs cloud attached. A lot of existing IT shops will run a cloud-attached strategy for a long time (hybrid) .. but new enterprises will think twice about getting into the cost for an IT lab (Halon and all ..) .. cloud centric would be the natural choice there
Greg Chase Chris Horak->resulting from these sketches I got a great email from @sina moatamed. Cloud-centered IT is a practice that can be run even in the hybrid case – side by side with traditional, and probobly with a much better long results than cloud-attached.
Chris Horak Makes sense. I guess the key point is that in a cloud-centric approach, the IT chiefs can really become business architects as opposed to hardware jockeys .. a goal of many years.
(Comments on the above from the Linked in Page for SAP Business ByDesign)
Cindy Jutras • Greg – I’m not sure exactly what you are concluding here. It almost seems like you are saying a cloud-centered strategy is best? But in fact most current environments are not, unless you made an early decision to go with a SaaS based ERP, because let’s face it ERP is really the core from which you support your business. And if today that core is on-premise, then you eaither need to approach the cloud from an evolutionary or revolutionary direction. Right?
Without ERP being in the cloud, (and most aren’t today) the cloud deployments surround or extend ERP. My recent ERP survey asked how important interoperability was – SaaS ERP with other applications. My top performers (World Class ERP implementations) were most likely to say it was important now (41%) or would be required in the future (41%), compared to All Others (16% and 23% respectively). But another interesting perspective comes from looking at responses from Plex customers, who all have SaaS ERP, whether they started out with a SaaS strategy or not (many, particularly early on selected Plex Online for its functionality, in spite of, not because it was SaaS). Only 25% said interoperability was required now, 7% said it would be required in the future and 32% said it was not required but would be considered. Why? Of course I am speculating, but I think it is because they are expecting more and more from their ERP solution.
How do your scenarios fit into this?
Judson Wickham • Democratization of IT…great for small groups within, horrible for a company’s system landscape. (Though this seems to be growing less true due to ‘interoperability’, and makes the job more about reactionist integration instead of a proactive strategy)
Shrihari Prabhakar • Greg as you point out rightly its very important to adopt strategic approach as IT will be a disaster if implemented in Silos. But as Cindy mentions out, I think that cloud is more of still a Buzz for majority of the firms. Its just the social media and some enterprises trying to push it to the next level. However I feel any person who has long been in this industry will look at short term strategies when it comes to IT.
I clearly see no reason to plan your IT infrastructure for long term, because IT landscape changes rapidly.
If I am developing a solution then I know my target market and what they are running on. I make sure I make my solution can be deployed seamlessly, so a CIO or anybody in that position should not bother long term to make current IT decisions.
The companies will always seek answer to ease of deployment and companies such as SAP or Salesforce etc know this and they make sure that the solutions they build cater to most of the IT architectures out there.
Hence, what I feel is IT decisions should be strategic in the sense all the departments should be involved but they have to look for solutions that meet the immediate requirements of current IT architecture and be scalable.
I would love to hear all feedback.
Hybrid Cloud-centered IT vs Cloud-attached IT
With the move towards “hybrid” cloud-on premise architectures, cloud-centered vs. cloud-attached IT approaches are still valid. With holistic planning, dependencies between a SaaS – PaaS based-universe and traditional enterprise architecture are well understood. On premise or hosted software is kept up to date as possible so as to not be a limiting factor to a cloud-centric IT practice.
A cloud-attached approach treats each new cloud service as a one-off project. Integration, if present at all, is slow coming and substandard. Governance is nonexistant. People and processes are siloed by each seperate cloud.
Sina Moatamed (via email) – So you realize you just opened up a whole new can with the Hybrid cartoon. The Cloud centered-IT model makes sense. However moving on in your illustrations, what makes one persons line of business SaaS adoption strategic versus another just being opportunistic? I get it, but the devil is in the details on this one.
The article I am writingreally speaks to the Cloud centered-IT model. You and I understand it, and the article will lay it out. But the part that gets even more interesting is how to engage the enterprise who has already invested heavily in traditional IT and are successful for the most part. The requirement for businesses evolving into the cloud is to make sure the suite concept of centralized data and analytics do not get disrupted. The first move these customers make is going to break the things that they have worked so hard through waterfall and heavy governance to achieve. So what does that roadmap look like. I can honestly say that no one has even come close to articulate this one. Mostly because they don’t understand the problem. I think SAP will be uniquely qualified to lay out this roadmap, but right now it is a very unformed articulation.
It cannot be a case where SAP just says ByD is for enterprises who need a new system or the ones who can’t grow further with their current traditional ERP. What is going to be the message to the established successfully operating traditional IT shop, who through great expense and time can operate. Why and how should they get to the agile cloud centered-IT model. What will their strategic path look like, without losing the value they have constructed?
Honestly, I have not thought all the way through this myself. If I could pick my next business life experience, it would be to work in an established traditional environment and develop a meaningful “hybrid cloud centered-IT model”. Maybe eventually to become a complete cloud centered-IT migration model strategy. But it does beg the question of how do you know you are being strategic vs opportunistic and what does that actually look like.
No Strategy Cloud
If you approach the cloud in a totally adhoc basis, without centralized IT planning, then your company’s silos each live in their own cloud. You can face significant security & compliance risks. Your people, processes, and information are disconnected. Business innovation, while possible in the department level, is accidental at best.
I haven’t recieved any comments on this diagram yet. Do you agree or disagree with this view?