1
Featuring research from
Enabled by a hyperplatform for better control, smoother governance and agility of business
Stop ...
2
Stop Shadow IT with On-Demand
Business Transformation
With a hyperplatform that allows for better control,
smoother gove...
3
That’s why some IT organizations over-provision –
so they’ll always satisfy performance needs during
periods of peak dem...
4
On-demand business transformation benefits the
organization in three ways (Figure 1):
Empowering people for greater effi...
5
automated on-demand application deployment.
And it does all this while providing SLA- and
metrics-driven management of a...
6
In providing end-to-end automation a
hyperplatform provides end-to-end policy
definition and enforcement governing so th...
7
Cloud360 comes with integrated consulting
and IT services from Cognizant, one of
the world’s largest and most experience...
8
The resulting strategic, business and operational
advantages do not occur randomly, however. They
happen because Cloud36...
9
Accelerate IT Transformation With Cloud Computing
Best Practices
Are your customers circumventing IT to buy
external clo...
10
Level 2 is not desirable, because costs are too high
and quality is too low. Therefore, we recommend
that organizations...
11
(their business is IT). Few IT organizations think
about their business model — i.e., about the
business plan, funding,...
12
the challenge of legacy completely. Internal
providers do not have that luxury. For areas that
cannot be standardized a...
13
compete with ESPs. These must be corrected so that
your business can make decisions comparing “apples
to apples.” There...
14
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of
information technology, consulting, and business
proc...
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Stop Shadow IT with On-Demand Business Transformation

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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)

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Stop Shadow IT with On-Demand Business Transformation

  1. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

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