Rob livingstone CIO Strategy Summit - Park Hyatt Melbourne 17th feb 2012


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Many Cloud computing evangelists believe that the conventional enterprise IT service delivery model is dead and almost buried. The new ‘IT democracy spring’ is being fueled by influences such as the ready access to user friendly public Cloud applications, perceptions of low cost and speed of deployment.
On the other hand, the reality is that the vast majority of well-run enterprise IT departments were never really dictatorships, and were never comfortable being branded as such. Nevertheless many observers feel that enterprise IT is under siege, with the skies slowly filling with ‘as-a-service’ vendors circling high above, ready to make the most of the opportunities.
The reality is that Cloud computing, in all its various forms, is reshaping the way both business and IT thinks about service delivery. For the first time since the advent of the personal computer, business users who consume IT services now have a real choice: If enterprise IT cannot provide them with the services they require in a speedy and cost-effective manner, they'll simply go elsewhere.

This keynote session explored the transformation occurring in and around enterprise IT departments and how organisation, IT department and individuals alike can all benefit from the new way of managing and delivering IT services that modern organisations, want, need and feel they are entitled to.

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Rob livingstone CIO Strategy Summit - Park Hyatt Melbourne 17th feb 2012

  1. 1. © All rights reserved. Rob Livingstone Advisory Pty Ltd. Unauthorized redistribution prohibited without prior approval.„Navigating through the Cloud‟ is a Trademark of Rob Livingstone Advisory Pty Ltd. Cloud: Fueling the crisis of confidence in corporate IT? ROB LIVINGSTONE - PRINCIPAL, Rob Livingstone Advisory Pty Ltd, and - Fellow, University of Technology, Sydney Melbourne, 17th February 2011
  2. 2. What am I going to cover?1. A perspective on Cloud2. Next few years – from hype to hope, we hope!3. Kryptonite and the Cloud4. Democratisation of IT5. The spectre of a Shadow IT Department6. The shift away from the cost centre7. Influences on your career, and those of your team(s)8. The future is now9. Discussions and questions
  3. 3. 1. A Perspective on Cloud Maurits Cornelis Escher (1898-1972) - most famous for his artworks of so- called impossible structures, such as Ascending and Descending, Relativity, his Transformation Prints and more Relativity by M. Escher
  4. 4. 1. A Perspective on Cloud It all depends on your perspective… • No absolutely precise definition, although the NIST definition is a frequently quoted definition • No universally defined and adopted standards • It can mean different things to different people under different circumstances
  5. 5. 1. A Perspective on CloudDefinition:Cloud computing is a model for enabling convenient,on-demand network access to a shared pool ofconfigurable computing resources (e.g. networks,servers, storage, applications, and services) that canbe rapidly provisioned and released with minimalmanagement effort or cloud provider interaction • US National Institute of Standards and Technology‟s (NIST) definition
  6. 6. 1. A Perspective on Cloud Cloud is about getting from one place to a better place, …. however ….The challenge is to know the risks and the endpoint with certainty
  7. 7. 2. Next few years – from hype to hope, we hope!“There are known knowns. These are things we knowthat we know. There are known unknowns. That is tosay, there are things that we know we dont know. Butthere are also unknown unknowns. There are things wedont know we dont know”- Former US Defence secretary Donald Rumsfeld , 2002 Let‟s transform the Cloud journey from unknowns into knowns!
  8. 8. 3. Kryptonite and the CloudIs this what happenswhen public SaaSmeets the true facts?
  9. 9. 3. Kryptonite and the CloudRisks associated with asymmetry of understanding of ‘Cloud’between IT and line-of-business:• While there is largely a solid understanding of what‟s inside the public cloud „black box‟ by CIOs and those within the IT industry, this is often not the case for line-of-business executives and managers.• As long as this asymmetry of understanding exists: 1. Potentially inappropriate decisions regarding enterprise systems may be made by the business on behalf of IT 2. The full relevance and potential of cloud computing may not be fully realised in organisations. 3. The business may not end up performing appropriate due diligence, which may increase risk exposure• Are you ready to manage this if it occurs in your environment?
  10. 10. 4. The ‘Democratisation of IT’Good IT – Bad IT?• Also known as the „Consumerisation of IT‟• DOI essentially allows users in a business to be able to implement their own systems without having to ask enterprise IT.• Business users, for the first time, are able to choose from a variety of IT services without always needing to engage their internal IT departments.• The technologies are mostly simple, easy to use and even fashionable with the rise of the Smart Phone and iPad.• Essentially, if your IT department cannot deliver in a manner that meets the business users‟ expectations in a timely and cost-effective way the business now has plenty of other options.
  11. 11. 4. The ‘Democratisation of IT’Good IT – Bad IT?• The DOI effect provides a number of elements that, when combined, create the perfect storm. – Individuals have direct access to enterprise systems and applications – Risk of a viral cloud• The challenge for enterprise IT comes in the form of how to meet these new demands; – how to handle new investment dollars, security concerns, new vendors in the market and new skill sets within the IT organisation in what really is a wave of innovation and a wave of business requests
  12. 12. 4. The ‘Democratisation of IT’The DOI Effect and the CIO• CIO Accountabilities (it‟s in their contracts and job specs!) include • governance, • effective process design, management and control • risk and governance• CIOs and CFOs have a common accountability of risk, governance, etc, but from differing perspectives• However, CIOs are now expected to be able to a support and manage a more chaotic and higher risk environment.• What are some mitigating strategies?
  13. 13. 4. The ‘Democratisation of IT’ Getting the balance rightAlso, always keep in the mind the paradox of the DOI.• DOI can foster local innovation, which can benefit the whole organisation• DOI can transfer ownership of non-core technologies, systems etc to business owners.• The key is to balance the good governance, protection and maximisation of the investment in the core technology and systems, yet allow the voice of the users to be heard in the overall process.But …..• Expecting your CIO to dilute good governance over core systems and technologies, irrespective of whether they be Cloud or otherwise, is analogous to asking your CFO to provide rough estimates of the P&L. Everyone always has a preference on how they should treat their revenue and expenses!
  14. 14. 4. The ‘Democratisation of IT’Proactive management of the DOISome considerations…….1. The secret is in effective communication, alignment and operational engagement between IT and the business = a shared vision for the organisation by IT and for IT by the organisation.2. Will clarify and assign the accountabilities for all aspects of enterprise3. Put in place effective policy frameworks that allows the non-core applications to „democratise‟, subject to a deliberate management decision, with a defined and effective perimeter4. BYO End user device policy? – A diversion from the main game?5. Manage expectation management. Today there‟s a certain set of devices that everyone wants supported. Tomorrow it‟s going to be different with a new set of devices on the market.6. Work out how to deploy and embrace new technologies without breaking the IT budget – Continually review the enterprise IT Roadmap
  15. 15. 4. The ‘Democratisation of IT’Implications for the business as a wholeShifting from a centralised to a federated IT model (or even deliberatelyfragmented IT function) presents a number of challenges for the enterprise:• A local solution that is not scalable• Facilitates Vendor predation• Higher overall total cost of IT to the business as a whole• Inability of integrate disparate technologies• No single point of ownership = lack of cohesive business strategy for technology• Increased Information security vulnerability (increased threat surface)• Driving a wedge between Enterprise IT and line of business• Inconsistency of system use across the enterprise, leading to higher training and support costs, not to mention brand consistency if exposed to the end users / customers / outside world
  16. 16. 5. The spectre of a Shadow IT Department• If IT cannot deliver in a manner that meets the business users‟ expectations in a timely and cost-effective way, the business now has plenty of other options.• Can lead to Shadow IT.• Shadow IT will flourish in organisations where: • The prevailing organisational culture is somewhat relaxed about good governance and/or • Where there are poor business-IT engagement and alignments, and/or • IT is just not meeting the real needs of the business
  17. 17. 6. The shift away from the cost centre• CIOs have often had to battle the perception that IT is slow and merely a cost centre.• The perceived speed and simplicity of cloud is shaping the conversations across the business on the role of IT.• As such, IT is now increasingly being expected to deliver more utility-like services to the business – if not, the Shadow IT department will!• It is therefore important for IT Departments to fully understand the cost drivers in a utility costing model, rather than the traditional fixed „cost centre‟ approach.• Those without a solid appreciation of cost accounting, and the cost drivers within IT will be poorly equipped to provide meaningful comparative cost analysis for the IT services „as-a-service‟ to the business. • ie: Is $50/month really cheaper than the $3Million capital investment?
  18. 18. 7. Influences on your / your staff’s careerHere are few thought starters on how to mitigate against anyunplanned career changes that can arise from the „democratisation‟ ofIT*:• Read widely and be well informed about influences that are or could impact you, your department, business unit, company / organisation and industry.• Start developing trusted professional networks outside of your employer, and outside the IT community• Broaden your skills base – especially if you are trading salary for niche expertise• Develop your own personal „business plan‟* ….or anything else, for that matter!
  19. 19. 8. Cloud – The future is now1. Cloud technology, as with any other innovation, has the potential to do things cheaper, faster and better.2. Cloud has the potential to be a real game changer for the astute3. It also has hidden pitfalls for the ill-informed4. Understand the influences it will have on your IT career, and those of your staff5. To achieve the real benefits of Cloud technologies, organisations as a whole need to understand: • the true cost • the value • the risk • when to buy • what to buy, and • when to exit the technology and/or switch horses.
  20. 20. 9. Discussions and questionsRob Livingstone Advisory Pty Ltd ABN 41 146 643 165W1: www.rob-livingstone.comW2: www.navigatingthroughthecloud.comE: rob@rob-livingstone.comP: +61 2 8005 1972P: +1 609 843 0349M: +61 419 632 673F: +61 2 9879 5004 rladvisory© All rights reserved. Unauthorised redistribution not without prior approval