Cloud360 is delighted to share its latest newsletter, featuring Gartner research, Stop Shadow IT with On-demand Business Transformation. This newsletter provides you deep insights into how enterprises can adopt a hyperplatform, a single cloud-based infrastructure and management layer, for better control, smoother governance and agility of business. • On-demand self-service IT (users get what they want when they want it) • End-to-end process automation (avoid piecemeal manual IT) • Accountability and chargeback (pay-as-you-use pricing) • Universal governance (consistent global policy monitoring and control)

1. 1
Featuring research from
Enabled by a hyperplatform for better control, smoother governance and agility of business
Stop Shadow IT with On-Demand Business Transformation
From the Gartner Files: Accelerate IT Transformation With Cloud
Computing Best Practices
About Cognizant
Issue 2
2
9
14
Stop Shadow IT
with On-Demand
Business Transformation

2. 2
Stop Shadow IT with On-Demand
Business Transformation
With a hyperplatform that allows for better control,
smoother governance, and agility of business.
Cloud service providers show why it’s good
for any business to operate at a high level of
infrastructure and operations (I&O) maturity. These
are the providers that business users will turn
to when internal IT doesn’t align with business
requirements. The practice is called “shadow IT”
and it causes a significant amount of spending on
cloud computing services – mostly software as a
service (SaaS) and Infrastructure as a Service (IaaS)
– without internal IT oversight. But shadow IT
wouldn’t happen if internal IT adopted a cloud pro-
vider’s business model. In other words, if internal IT
adopted the same cloud computing best practices
(and the same business alignment) there would
be no incentive to go outside. So, how do you
run your infrastructure as if it were a single cloud
platform even though it’s really not? You adopt a
hyperplatform – a single cloud-based infrastructure
and management layer that encompasses what
most real-world IT operations actually consist of
– a diverse set of cloud platforms and legacy IT
assets.
Hyperplatform makes this possible by providing
following features to businesses:
· On-demand self-service IT (users get what
they want when they want)
· End-to-end process automation (avoid
piecemeal manual IT)
· Accountability and chargeback (pay-as-you-
use pricing)
· Universal governance (consistent global
policy monitoring and control)
A Sign of Deeper Troubles – Shadow IT
Shadow IT is actually more a symptom than
a cause. It happens because business leaders
can’t get the level of responsiveness they
need out of their IT organizations. To spin up
a new application environment (including the
application, middleware, database, storage, etc.)
most users today might wait days or even weeks.
And after IT does fulfill the request, chances are
good that the user would not be charged for the
provisioning work or even for using the newly
available resources once they come online. Lack
of chargeback further frustrates business leaders.
Not knowing the service costs, they are not in
a position to make rational decisions regarding
resource allocation. As a result, resources are not
aligned to the business needs that increases the
service gap and response time.
Poor IT scalability is another reason business
leaders might rather avoid using internal IT. They
need to realize that the technical playing field isn’t
level – that a cloud services provider operates in a
very homogeneous environment (the one they’ve
built) while internal IT must operate in silos
(some of which they have inherited) full of legacy
systems plus diverse cloud platforms. It’s hard
to scale resources that don’t naturally play well
together or where performance limitations exist,
either physically (in the case of legacy assets) or by
contract (such as with a cloud services provider).
Cloud Computing Alone Is No Solution
Yes, cloud service providers generally operate
at a higher level of I&O maturity than most
other organizations do. But if you think just
adding another cloud platform to your IT mix
solve the issues that lead to shadow IT, you
may need to rethink. Organizations across
industries need to reconsider their approach to
cloud computing if they are:
• Seeing a higher complexity of IT
management after cloud adoption
• Concerned about lack of control and
governance of multi-tenant services
• Facing IT resource crunch even though
capacity is under-utilized
• Still running IT as a cost center instead of as
a business enabler

3. 3
That’s why some IT organizations over-provision –
so they’ll always satisfy performance needs during
periods of peak demand – even if that means most
of the time they are paying for resources they are
not currently using.
Even if services can be brought online quickly
and scaled up or down to meet demand, it’s not
good enough. Users also sidestep internal IT
because they can’t control what IT gives them.
Compliance and Governance management in
response to ongoing business changes is still a
major challenge. Services need to meet certain
rules governing compliance, performance (SLAs),
and security – rules that may change depending
on mandates from a variety of sources: legal
authorities, external customers, internal customers,
the organization’s financial controllers and so forth.
Ideally, what users want is the assurance that
when new services are provisioned, that the correct
rules are applied automatically and consistently
and that it’s easy to customize policies
dynamically, granularly and globally.
The Solution - On-Demand Business
Transformation
The problem of shadow IT can be framed in terms
of I&O maturity. Cloud operators are able to win
IT users away from internal IT because cloud
operators run IT like it’s a business (because it is
their business). In other words, they have achieved
business-IT alignment. The ultimate step is where
IT contributes to business innovation. As the
business needs to transform itself to meet ongoing
opportunities and challenges, IT enables dynamic
business change. That is IT-enabled business
transformation.
Source: Cognizant
FIGURE 1 Organizations with a high level of I&O maturity reap benefits
Source: Cognizant

4. 4
On-demand business transformation benefits the
organization in three ways (Figure 1):
Empowering people for greater efficiencies:
This happens by giving users the ability to do
things themselves (i.e., self-service IT) while
automatically meeting the organization’s policies
for governance, security and compliance. At the
same time it also enables users within the IT
organization itself to easily customize polices
dynamically, granularly and globally across
boundaries that previously separated the various
disparate systems and platforms.
Rapid response to changing businesses: IT can
respond to users faster because of standardization
and process automation. Services don’t have to
be reinvented from scratch to meet every request
– they can be assembled from “prefabricated
parts.” And they can be assembled and deployed
automatically, avoiding piecemeal people-based
approaches that lead to process failures and many
IT service outages.
Variable economics for variable business
models: Services and infrastructure scale fluidly
to meet higher or lower demand while chargeback
tells users how much of which services they’ve
used. They can therefore allocate resources
rationally and pay only for what they actually use
regardless of how needs fluctuate.
Enable On-Demand Transformation using a
Hyperplatform
What is a hyperplatform? Let’s start with what it
is not. A hyperplatform is different from a pure
cloud management platform. It doesn’t just
“manage.” It’s not just technology. And its scope
is not limited to the cloud. As depicted in Figure
2, a hyperplatform is a single service management
layer between applications and infrastructure
that integrates a business’s entire IT environment
(both cloud and non-cloud). It creates a unified IT
service accessible on demand, encompassing any
combination of disparate IT assets across silos. The
hyperplatform enables policy-based orchestration
of applications management combined with
Source: Cognizant
FIGURE 2 A Hyperplatform is a manager of cloud services that enables on-demand business transformation
Source: Cognizant

5. 5
automated on-demand application deployment.
And it does all this while providing SLA- and
metrics-driven management of all IT assets.
A hyperplatform enables internal IT to achieve
Level 5 status. And it can do so in a matter of days
instead of months or years. Furthermore, once
that level is achieved, the hyperplatform enables
realignment of IT in weeks. This qualifies as
virtually on-demand business transformation. Real-
world implementations of the hyperplatform have
consistently shown 20X improvements in agility
and cost reductions of 35%.
This higher level of maturity is possible because of
the following features of the hyperplatform:
• On-demand self-service IT (“users get what
they want when they want it”)
• End-to-end process automation (“avoid
piecemeal manual IT”)
• Accountability and chargeback (“pay-as-you-
use pricing”)
• Universal governance (“consistent global
policy monitoring and control”)
The hyperplatform counters shadow IT by leveling
the competitive playing field between internal
IT and external providers while at the same
time strengthening IT’s hand in dealing with the
insurgency. Giving internal users what they want
starts with:
On-demand Self-service IT
Like any business, the IT organization is only as
viable as its ability to deliver a great customer
experience. Under pressure to accommodate
rapidly changing business needs, one capability
users will want is the ability to deploy application
environments as fast as possible. That’s one-click
deployment where the environment is provisioned
within minutes and the needed resources scale
fluidly to meet demand. And although they may
not request a managed services organization to
monitor the runtime environment, they will expect
benefits such an organization exists to provide –
high availability based on business metrics and
baseline SLAs.
By combining on-demand self-service, automated
policy enforcement, and managed services the
hyperplatform creates a virtuous cycle of IT and
(by extension) business empowerment. The more
IT users get what they want when they want it, the
more they will use IT, and the less shadow IT will
take place – giving IT more control (and hopefully
more dollars) while at the same time extending the
reach of IT best practices throughout the business.
That, in turn, will lead to even more satisfied users.
A key enabler to ongoing dynamic change is
standardization throughout IT operations and
infrastructure. Standardization sets IT free to
offer what most users want most, and want most
of the time – on-demand solutions tailored to
their particular needs, which don’t change very
much very often for most users. This means IT
no longer has to get involved in fulfilling every
day-to-day request – end-users are doing that for
themselves from a standardized service catalog of
application and instance profiles that ensure that
application environments align with published
policies. Furthermore the profiles themselves
must be aligned with the policies which profiles
are published for use by business users who are
authorized to access the profiles according to
RBAC (role based access control) rules.
Standards let everyone (users, IT, business
leaders) know what to expect. But by definition,
standards are only standards if they can apply and
be enforced consistently – hence, the need for a
hyperplatform that extends across and abstracts
conventional domain-centric platforms. By letting
everyone know what to expect everywhere, a
hyperplatform lets IT run like a business within
the business. IT can now compete with the cloud
service providers’ standardized offerings. It has
a standard set of building blocks, which both
lowers operating costs and enables the business to
respond to dynamic change more quickly. And it
can price and therefore monetize services just like
a cloud services provider would.
End-to-End Process Automation
People-based piecemeal infrastructure
management incurs high costs and slows the
response to user requests. It also leads to people
and process errors and failures that cause 40% of
all mission critical IT service outages.

6. 6
In providing end-to-end automation a
hyperplatform provides end-to-end policy
definition and enforcement governing so that
everything happens automatically – from how
environments are provisioned to how they are
monitored and managed once deployed. And it
brings in standardization (to be discussed next)
of process and workflow – further reducing
costs versus the manual piecemeal approach.
It also enables auto-remediation of application
environments across the infrastructure, regardless
of where impacted components reside – so those
people and process errors are avoided.
Here are some good examples of end-to-end
automation at work:
• Administrators defining quotas based on
restrictions at various levels in an organization
– such as quota for a deployment or quota for
the entire enterprise
• Integration with approval management
systems so that requests that require approval
are automatically forwarded to the approval
systems before they are granted
• Configurable intelligent placement policies
that can be created to provision instances and
store and backup data in the best possible
geographical locations – a level of automation
that facilitates proper disaster recovery with
little loss of productivity
Accountability and Chargeback
It is hard to price something if you don’t know
what it costs to provide. That’s why a hyperplatform
enables per-use consumption of cloud services
and analytics on resource usage and activity.
Visibility into the cost of providing services must
be available at a highly granular (i.e., per user per
resource) level if it is to be meaningful – even if
the components involved in providing that service
exist in disparate technical environments, such as in
different cloud platforms or distributed across cloud
platforms and legacy systems.
Ideally such visibility is not only granular but also
comprehensive. Business decision makers are more
concerned about consumption levels and costs
than they are about which parts of the technical
environment a service happens to reside on. To
enable informed business decisions, all consumption
meters for all infrastructure services and users would
therefore appear on a single dashboard.
Governance, Security and Compliance
True “hyperplatform style” governance is based on:
• Flexible and configurable policy
frameworks that allow IT to set cost and
resource consumption limits for application
deployments, locations, users groups, or
departments
• Policy management automation with
comprehensive audit trails that enhance
IT governance and security through enforced
compliance with regulations, detection of
unauthorized access, and extensive reporting of
user activity
• Automated compliance where users can
configure compliance policies to track any
deviation and also take corrective actions
automatically
• Analytics and reporting to view the utilization
trend of resources such as memory, CPU,
storage, and network – and also control their
consumption across various environments
accordingly
• Application awareness for holistic
management of environments where the
business needs drive application sizing on the
fly
Cloud360 – the first Hyperplatform
Cloud360 is the first hyperplatform – fulfilling the
key criteria of a hyperplatform and accelerating an
organization’s progress toward high I&O maturity.
Dozens of organizations across virtually every
industry have implemented Cloud360, including
healthcare, financial services, manufacturing,
software development, higher education,
pharmaceuticals and transportation. These
organizations report cutting IT costs by about 35%
and achieving a 15-20% gain in operational agility.
Cloud360 encompasses the entire IT environment
with a complete integration layer for unified
command and control, aggregating multiple
platforms and services in a consolidated view. It
enables policy-based orchestration of applications
management combined with automated on-
demand application deployment for true SLA- and
metric-driven performance.

7. 7
Cloud360 comes with integrated consulting
and IT services from Cognizant, one of
the world’s largest and most experienced
IT services providers, to assess, evaluate,
implement and manage the newly enhanced
ecosystem. Cognizant can deploy Cloud360
in even the most complex of environments,
almost regardless of which operating
systems, hypervisors, cloud platforms or
other IT components the organization has
chosen, or which IT services they might wish
to offer.
Cognizant is specifically positioned to help
organizations transform their IT and, with IT,
their business. Our approach is application-
centric, integrating IT management and
operations from an end-to-end perspective
that encompasses both on-premises IT with
cloud-enabled services. It’s good to know
FIGURE 3 Cognizant is specifically positioned to deliver Cloud360’s transformative benefits.
Source: Cognizant
that we are a premium partner to the industry’s
best cloud providers – and that we are also a
premium partner to you – staying with you every
step throughout the Cloud360 implementation and
afterwards.
With Cloud360, organizations don’t have to be
a cloud service provider to enjoy the benefits of
operating at a high I&O maturity level. Nor do they
have to abandon their existing IT investments to
do so.
Cloud360 Value-Added Services
Cloud360 implements a hyperplatform that lets
enterprises quickly and cost-effectively deploy,
manage and operate modern, dynamic and
scalable architectures within a seamless holistic
environment marrying industry-leading cloud
platforms with an organization’s other, sometimes
disparate, IT infrastructures.

8. 8
The resulting strategic, business and operational
advantages do not occur randomly, however. They
happen because Cloud360 comes with world-class
services that guide each implementation according
to an organization’s specific requirements.
That starts with the initial service definition,
creation of catalogs and application profiles,
and extends through deployment to ongoing
infrastructure management – with dashboards
on metered resource consumption, cloud sizing,
policy-driven provisioning, and business rules-
based management
ITIL-based Management
Both in each of its features and through
integration of leading service management tools
a hyperplatform enables IT management based on
Information Technology Infrastructure Library (ITIL)
guidelines.
Wikipedia defines the ITIL as a set of “processes,
procedures, tasks and checklists that are not
organization-specific, used by an organization for
establishing integration with the organization’s
strategy, delivering value and maintaining a
minimum level of competency.”
Because IT operations are standardized and
governed holistically, they can now also be
managed correctly, in that ITIL based management
is both simpler and easier. In a hyperplatform
roles and permissions are audited, complexity is
reduced, non-conforming operations stand out as
the exception, policies are enforced globally, out-
of-bounds conditions are remediated automatically
and one dashboard presents a complete view of IT
– all of which supports best practices as outlined
in the ITIL framework.
Customization Services
As stated earlier, a hyperplatform is not just
technology. If it is to serve the specific needs
of the organization – it must provide access to
services that users want and need in line with IT
policies and best practices. That customization
involves:
• The application environments to be provided
• The size of application environment to be
provided
• Rules around levels of resiliency, service and
support
• The degree to which users can self-orchestrate
and administer applications
• Standards and policies with respect to all of the
above
This work acknowledges the fact that different
organizations have different needs, which is
why you can’t just buy a hyperplatform off
the shelf. It also has to include consulting,
implementation and managed services. These
services include application migration and
deployment, which by extension include analysis
of the “as-is” environment (e.g., application
base-lining modeling) and modeling of the “to
be” environment (e.g., analysis of various cloud
alternatives and their associated TCO/ROI).
Once the new environment has been architected,
implementation involves setting up the on-
demand provisioning, application right-sizing, help
with service standardization, and integration of
the unified management portal with the various
cloud platforms and legacy systems. This work also
includes creating the extensions, connectors and
bridges that tie these systems together as a unified
whole.
After it’s been implemented the new environment
has to be managed. That involves both operating
it, and optimizing it. On the operations side, that
includes day-to-day management, including
dashboards on meter resource consumption, cloud
sizing, policy-driven provisioning and business
rules-based management. On the optimization
side, it includes leveraging operations data to
resize and fine-tune the various application and
infrastructure components on an almost real-time
basis.
The central premise of a hyperplatform is
dynamic business change enablement. The role
of customization services is to ensure that IT
not only enables dynamic business change (or
transformation) but that the change is in the
direction the organization’s leaders want it to go.
Source: Cognizant

9. 9
Accelerate IT Transformation With Cloud Computing
Best Practices
Are your customers circumventing IT to buy
external cloud services? If “yes,” use this research
to learn from public cloud providers and transform
IT into a more-agile, customer-centric service
provider.
Overview
Most IT organizations can learn from public cloud
providers how to transform IT by implementing
facets of their business model. Adopting these
best practices will help you justify, simplify and
accelerate IT transformation initiatives.
Key Findings
• The vast majority of IT organizations operate
at Level 2 (committed) on the Gartner ITScore
for I&O maturity model versus Level 4 (service
aligned) for many cloud service providers. This
gap makes the cloud provider attractive to
business customers.
• IT organizations can learn significant lessons
and best practices from cloud service providers,
especially by mimicking their business models
and practices.
• ITIL initiatives often fail when technology
building blocks are nonstandard, unstructured
and poorly architected.
• Effective IT transformations are often the result
of new leadership that affects the culture, and
develops and executes the vision.
Recommendations
• Accelerate your IT transformation to service
alignment by developing a cloud business
model and implementing external service
provider (ESP) practices.
• Use the Gartner ITScore for I&O maturity model
to determine your current state, and chart a
path to the future state.
• Invest in product/service development,
architecture and standards, cost accounting,
marketing, sales and customer relationships.
• Move toward higher-level optimized processes
that will improve service delivery at faster
speeds and significantly lower costs.
Analysis
Many IT organizations, in conjunction with their
finance organizations, are auditing IT spending
by business units and are finding a significant
amount of IT spending on cloud computing
services — mostly software as a service (SaaS) and
infrastructure as a service (IaaS) — without any
oversight on behalf of the IT organization. Business
users should not buy public cloud services before
notifying the IT organization, particularly if the
services are mission-critical or have the potential
to become mission-critical. Lack of oversight and
considerations of IT operational requirements could
pose unacceptable risks and costs to the business.
The IT organization should also be aware of the
business use of cloud computing services, even
for noncritical services. This will ensure that the IT
organization is meeting its customer requirements
and not missing business requirements that result in
a higher amount of shadow IT and increased overall
business cost and risks. Some governance factors to
consider are the questions listed in Note 1.
IT is seeing competition from more-nimble external
cloud providers. As a result, many IT organizations
are reassessing what they should do differently to
meet business requirements and to get ahead of
the business demands for cloud computing.
First, the Bad News
Analyzing 239 self-assessments taken with
Gartner’s ITScore for I&O maturity model, we
conclude that most organizations are at Level 2
(see Figure 1).
From the Gartner Files:

10. 10
Level 2 is not desirable, because costs are too high
and quality is too low. Therefore, we recommend
that organizations take immediate action to justify
investments in people, process, technology and
business management to move to Level 3, the
minimum recommended level. Level 3 increases
IT service quality, while controlling costs and
enabling IT to provide more-scalable IT services
so that, as business growth occurs, IT services’
per-unit costs can decline. Level 3 also emphasizes
standardization and the associated benefit of
agility or speed of service delivery.
The primary value of moving from Level 3 to Level
4 is in business alignment and decision making.
Level 4 enables businesses to make value-
based consumption decisions, and processes are
integrated across I&O, application development
and the business, thus driving efficiency and
speed. Most IT organizations understand the
interrelationships between business processes and
IT processes, as well as the underlying applications
and infrastructure that deliver those business
processes. Moving to Level 5 enables IT to
contribute more effectively to business innovation.
Many external cloud providers, by definition,
are at Level 4 — service aligned, or focused on
getting there. While it’s safe to say that there is a
spectrum of maturity levels among providers, they
are heavily motivated to reach Level 4, because
their business depends on it. IT organizations lag
behind ESPs in this regard, and it is now time for IT
to act to change this dynamic.
There are many advantages to improving I&O
maturity (see Figure 2). The benefits listed under
“increasing customer confidence” are associated
with things that contribute to the business’s
confidence in IT, and strategic alignments
and partnerships. Among the greatest values
of improving I&O maturity are enhancing the
business and IT decision making. The higher in
maturity, the more business- and optimization-
oriented is the analysis. This is due to having
close alignment and integration between IT and
the business, as well as more-detailed processes
and cost data regarding the delivery of business-
IT services. The five bullets on the right of the
figure are traditionally tried and true measurable
outcomes used for developing the business case
for IT transformation and process improvement, not
just for I&O, but for end-to-end processes across
the service life cycle.
Next, the Good News
The good news is that IT organizations can learn
many things from cloud providers, which will help
accelerate their IT transformation and achieve the
benefits shown in Figure 2. They can get the most
benefit by looking at the public cloud business
model and how they monetize their investments
FIGURE 1 Distribution of Self-Assessments for Gartner ITScore for I&O
Source: Gartner (December 2011)

11. 11
(their business is IT). Few IT organizations think
about their business model — i.e., about the
business plan, funding, services, product/service
development and management, marketing and
sales. With cloud computing, IT organizations
must think in business terms to become service
providers to their customers (achieving ITScore for
I&O Level 4) and business innovators (achieving
ITScore for I&O Level 5), as well.
Following are the top practices that IT
organizations can learn from cloud providers.
Put the Right Team in Place
Hire visionary leaders with expertise in service
management. People are the backbone of success.
The right team can drive the right kind of culture
for success. People drive business partnerships,
innovation, vision, strategy, leadership and
execution. Culturally, it is critical for the IT
organization to think like a service organization.
Moreover, sometimes it takes a change in
leadership to affect the culture. Putting the right
team in place starts with executive leadership
and sponsorship. If that is lacking, then it will be
difficult, if not impossible, to improve I&O maturity.
Change the IT Business Model From Cost to
Profit Center
Invest profits in service delivery and return to
the business. This is a difficult undertaking for
the IT organization. Most IT organizations are
fixed-budget cost centers, and their services are
not priced or charged for (even at cost). Rather,
they consume IT services as though they are
“free,” while complaining about the total IT
cost. This drives a high level of custom requests.
The consequence is a nonstandard, fragile and
inefficient infrastructure that is slow to change.
As a result, capital and operating expenditures
are high, while reliability and asset utilization
are low. Moreover, because there is no price or
charge associated with service delivery, IT has to
ration limited resources, rather than enabling the
business to ration service based on value. Because
your business is not getting anything for free from
cloud providers, why should they get anything free
from you? For IT organizations unable to move to
a profit center or do usage-based billing, giving
customers a better understanding of the cost of
services through showback is a great way to start,
and also enables a cost-to-value discussion, which
could result in application rationalization.
Invest in Packaging, Pricing, Marketing and
Sales
For organizations able to charge back to customers,
we recommend offering pricing incentives to
customers to put their new applications onto the
shared environment. That implies that you have
predetermined a pricing mechanism based on a
business or IT metric of usage. The price will have
to be significantly lower in the shared model for
customers to see the benefit. However, customized
services still should be offered as an alternative,
with higher pricing to justify the increased
dedicated capital and labor that are necessary to
operate effectively. Most cloud providers bypass
FIGURE 2 Benefits of Maturing I&O
Source: Gartner (December 2011)

12. 12
the challenge of legacy completely. Internal
providers do not have that luxury. For areas that
cannot be standardized and automated because
of cost or other constraints, internal IT should
“containerize” these nonstandard areas and
attribute costs with them as an isolated group of
premium offerings. This will increase awareness,
and likely funding, to resolve more legacy
challenges toward new standardized offerings.
Invest in Standards and Architecture
ITIL is the means for professionalizing and
standardizing operations. Even professional
operations will fail to meet your improvement
objectives if the technology building blocks are
nonstandard, unstructured and poorly architected.
Enterprises that standardize on their hardware and
software components (which can be assembled into
services) find ITIL easier and faster to implement,
compared with a nonstandard environment, because
they reduce the complexity of the infrastructure
they support, reduce the skill set to support it,
and make it faster to deploy and maintain the
infrastructure. Standardization is the heart of agility.
That does not mean that IT cannot support a custom
request from its business. However, it should be a
funded exception, not the rule. The end result is
that IT can be thought of as a “factory” that uses
standardized (and just-in-time) raw materials and
processes, resulting in more-competitive pricing for
IT services.
Offer Services Your Customers Want and Need
Cloud providers employ service development
techniques, such as engaging with customers
and investing in primary research, to help them
design, refine and develop needed services. Your
cloud should not be based on “build it and they
will come.” Rather, act as the service provider does
and invest in service design and development.
Moreover, rather than assuming one size fits all,
and that size is mission-critical, offer options for
levels of resiliency and levels of service and support
(including delegated to the customer) and guidance
on selection.
Offer Standardized Services That Are Customer-
Orderable, and Delivered in an Automated Way
The cloud service provider does not offer “all IT
services.” The providers are motivated to develop
standard services that are made up of standard
components, so they can repeatedly leverage their
product investments (in components, automation
and management), as well as increase their margins.
Using a manufacturing analogy, you can think of
their models as dynamic build-to-order models
(with prefabricated components), as opposed to
made-to-order, which customizes the order and
takes much longer to manufacture. To preserve
the integrity of the standards, IT should consider
sourcing nonstandard configurations on behalf of
the business. In addition, cloud providers design
their services holistically across stakeholders,
such as service management, I&O and application
development; the operational management is not
done “after the fact.”
Invest in New Roles
Many new roles are required to turn IT into running
as a service provider, including for strategic
planning, relationship management, financial
management, product/service development and
management, and automation management.
Roles should be full-time, rather than part-
time, as much as possible, to show a degree of
commitment, as well as continuous optimization.
There also needs to be role clarity, proper training,
revised job descriptions, performance measures
and compensation plans. Note that smaller
organizations will, by necessity, combine roles.
Infuse Business Skills in the IT Organization
In many organizations, there is a language divide
between business and IT. Unless this divide can
be closed, including through translation of IT
terminology to business value, the divide will persist,
making it difficult, if not impossible, for IT to gain
trust and credibility, and align with the business
strategy. The business does not care about the
technology, but it cares about the value it brings in
solving a business problem or creating innovation
to spur growth and transformation. As a result,
when it comes to service management, the IT
organization needs to translate the value of service
management into business benefit. CIOs need to
communicate first, foremost and always in terms of
business outcomes and business performance. The
question they need to answer is not “what does the
technology do,” but “can we achieve the outcome we
want?”
In this era of cloud, now is the time to shore up
business management skills to make specific
decisions around competitiveness and attractiveness
of internal versus external services, and to effectively
compete for customer business. This means
investing in IT business strategy, product/service
development and management, marketing, sales
and cost accounting. You may find that stale rules
on allocation and chargeback hamper your ability to

13. 13
compete with ESPs. These must be corrected so that
your business can make decisions comparing “apples
to apples.” There may be preferences or rules that
make customers want to buy internally or externally,
but these should be explicit policies, not hunches.
Move From a Functional Orientation to Straight-
Through Processing
Most IT organizations that have implemented
virtualization have already started their move from
a purely functional organization toward an end-to-
end process orientation. When they do so, however,
functional processes change because policies
are established across the new process. Thus, IT
organizations can begin to think about automating
the entire process — i.e., straight-through processing
without human intervention. This was the same
evolution that manufacturing organizations
took 30-plus years ago when they implemented
ERP systems. They found that, to get significant
value, they needed to do things differently, not
just automate what they had been doing in the
functional groups (see Figure 3).
Bottom Line
Learn from the cloud providers to help you accelerate
IT transformation to service alignment and business
partnerships. This includes implementing the top
recommendations presented in this research. In
addition, use the Gartner ITScore for I&O maturity
model to assess your current standing, and chart a
path to improve IT maturity, resulting in improved
decision making, and increased agility and customer
trust, while reducing cost and risk.
Note 1
IT Governance Considerations With Respect to
Cloud Computing
• Are buyers authorized to establish a legal
relationship on behalf of your company?
• What are the contractual terms, such as service
termination, service levels, penalties, software
license rights and intellectual property (IP)
protection?
• What are the liabilities for damages?
• Does the contract meet your requirements for
data location and privacy?
• Does the provider meet requirements to conform
to service changes in time for you to move off the
platform, if necessary?
• Does the contract support backward compatibility
in APIs for a time period acceptable to your
business?
• Will the provider notify you of changes, incidents,
communications and escalations in a time frame
acceptable to your business?
• Does the contract allow for full application and
data integration?
Source: Gartner Research, G00223845, D. Scott, 11 December 2011
FIGURE 3 Moving From a Functional Orientation to Straight-Through Processing
Source: Gartner (December 2011)

14. 14
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of
information technology, consulting, and business
process outsourcing services, dedicated to helping
the world’s leading companies build stronger
businesses. Headquartered in Teaneck, New Jersey
(U.S.), Cognizant combines a passion for client satisfaction,
technology innovation, deep industry and business process
expertise, and a global, collaborative workforce that
embodies the future of work. With over 50 delivery centers
worldwide and approximately 164,300 employees as of
June 30, 2013, Cognizant is a member of the NASDAQ-100,
the S&P 500, the Forbes Global 2000, and the Fortune
500 and is ranked among the top performing and fastest
growing companies in the world. Visit us online at www.
cognizant.com or follow us on Twitter: Cognizant.
Stop Shadow IT with On-Demand Business Transformation is published by Cognizant. Editorial content supplied by Cognizant is independent of Gartner analysis. All Gartner
research is used with Gartner’s permission, and was originally published as part of Gartner’s syndicated research service available to all entitled Gartner clients. © 2013 Gartner,
Inc. and/or its affiliates. All rights reserved. The use of Gartner research in this publication does not indicate Gartner’s endorsement of Client Name’s products and/or strategies.
Reproduction or distribution of this publication in any form without Gartner’s prior written permission is forbidden. The information contained herein has been obtained from
sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. The opinions expressed herein are subject to
change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not
be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research.
Gartner’s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or
influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see “Guiding Principles on Independence and
Objectivity” on its website, http://www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.