Tug-of-War? The Cloud as a Powerful Peacemaker between IT and Line-of-Business Leadership
Historically, the IT organization oversees all technology investments and governs the implementation to ensure the company maximizes efficiency while achieving cohesion and compliance. It’s focused on running the company to ensure its “doing things right.”
Yet, LoB leaders … whether the CMO, CFO, CPO … are increasingly being propelled by market forces to innovate the company. They MUST respond to customer and shareholder expectations or face the risk of being usurped by quicker competitors. Results rule. The LoB leaders are driven by effectiveness to ensure they are “doing the right thing” for the business and for customers.
And thanks to speed, agility and innovation enabled by cloud computing, LoB leaders are initiating technology investments to power their business objectives. According to Sven Denecken, SAP VP of Cloud Strategy, budgets for IT organizations have remained flat while technology spend among LoB organizations has continued to rise.
So, is cloud the instigator of this conundrum?
No. Instead, it’s a powerful peacemaker that delivers both the efficiency that IT seeks while enabling the effectiveness for delivering results that drive LoB technology decisions.
I spoke recently with Sven as part of an interview series with SAP and Ariba thought leaders on the business trends influencing organizations’ drive towards greater collaboration. Sven is a leading industry voice for cloud computing and an active blogger at SCN.
Q. How is the cloud influencing the roles and relationships among LoB and IT leaders?
The LoB leaders are focused on outcomes. They don’t care what business model is used –cloud, on-premise or hybrid — they just want to get goals accomplished now. IT leaders want to ensure the LoB organization can accomplish its goals using the right model. One that scales across systems, is secure and ensures cohesion and compliance within the IT infrastructure.
For LoB leaders, the cloud addresses their needs for agility and speed while facilitating the innovation process. They can implement cloud applications within a matter of weeks. With IT, the cloud offers flexibility – there’s no need to “rip and replace” existing systems. With its constant delivery of functional improvements in swift cycles, the cloud eliminates the time and costs associated with upgrades on individual customer systems. The advantages of cloud help IT to evolve its role from being the infrastructure gatekeeper to innovation guru – ensuring LoB teams can take advantage of cloud offerings while making sure systems are optimized and secure. The cloud enables a level of collaboration that supports the business needs of both IT and LoB leaders.
Q. Are you seeing regional differences in the way businesses are approaching the cloud?
In Europe, there is a tendency to focus on how to achieve business outcomes (e.g. the end-to-end solution). Business needs … rather than technology … dominate the thinking, with a need to determine who in the organization is responsible for process and products.
In certain markets within the Asia-Pacific region, businesses are leapfrogging — going to cloud computing rather than modernizing their on-premise solutions. This has been most evident in China and Korea.
Want to learn more? SAP Cloud Solutions will be a featured topic at Ariba LIVE, which takes place March 17 to 19 in Las Vegas and April 8 to 10 in Rome. Follow the #AribaLIVE hashtag to connect with conversations from the event.
For cloud enthusiasts, Sven Denecken is an industry leader to follow on Twitter at @sdenecken. He delivers frequent insights on technology and cloud computing through his blog postings at SAP Business Trends.
Follow Debbie on Twitter at @DebCM.
Photo: © Max Tactic – Fotolia.com
I am a big believer that the Cloud is a great enabler of peace amongst LoB Executives and CIOs, IF (and only IF) they are predisposed to want peace. Many appear not to have gotten to that point yet.
My nerves are still a little raw after having recently been caught in the middle of one of those tugs-of-war that you mention.
We recently spent a couple of weeks working with a LoB Executive to produce a working proof of concept of a cloud based SAP Integrated B2B eCommerce website for his US based organization. Within a couple of days work we were ready to launch a pilot production version for him. Something that he has wanted for years, was days away from becoming a reality for him.
With an actual demonstrable solution in hand, he flew over to his German based HQ to get ceremonial "approval" from his Corporate CIO. Much to his chagrin he was arm-wrestled into a bespoke on-premise solution that one of the CIO's 90+ ABAP developers could "probably" develop in a couple of months time.
We will all now sadly sit on the sideline while HQ struggles to bring a small percentage of the solution to the LoB Executive at greater cost and with no doubt many delays.
I'm afraid that if the success of SAP integrated cloud based solutions is dependent upon the availability of enlightened SAP CIOs, we may have to scale back our growth projections. Don't get me wrong, there are many enlightened CIO's out there and we count ALL of our clients in that cohort. However, when it comes to giving up control in order to facilitate agility, my market research suggests that the enlightened ones appear to be few and far in between.
I hear you. Change needs to be internal and external as well. See interesting post from my colleague on the topic as well here:
A plan isn´t a contract any longer or what are the consequences of IT decisions moving to LOB executives