Recently, the Financial Times published an article contributed by Jacob Lamm of CA Technologies titled, “Does the cloud mean the CIO is toast?” (registration required).
While the title was provocative and I agree with Jacob that the answer to the question is no, my perspective on this issue is a bit different.
The appropriate question to ask is, “is your CIO strategic?” A strategic CIO is one whose organization delivers technology as an enabler of a company’s business goals. What cloud computing does is allow him or her to focus key staff on doing just that – providing business value and supporting goals directly – rather than maintaining and managing the infrastructure.
A strategic CIO delivers enormous value to an organization. The appropriate reference is, without the CIO or a strategic change management team, that company is toast. If the CIO is one who cares about rack space, the raised floor, and writing custom in-house code, it’s hard for him or her to move the company along with technology as an enabler to growth.
Harnessing Technology to Support Business Growth
The best, most strategic CIOs seek technology as an enabler to improve company initiatives, whether it is to effectively launch products, improve manufacturing capabilities, enter new markets or improve forecast accuracy. GE is a great example. Former CIO Gary Reiner didn’t view his role as anything having to do with computers and servers, but rather it was how he and his team could add value by providing agility to GE’s business units through the use of technology.
With regard to cloud computing, a measure of a CIO’s progressiveness should be about how much he or she thinks about the capability of cloud providers versus capacity. In other words, how well cloud providers offer business capability, agility, and measurable results.
For example, if a company has a need to improve its forecast accuracy, a cloud-based solution may fit the bill from a technical standpoint. The visionary CIO will understand the importance of capacity – the ability to quickly deploy and scale the solution. But they will go further to understand how the solution itself – independent of the cloud – will drive value. After all, without a solution to deliver results, what’s the point of the cloud?
Another important factor for the progressive CIO to consider is the people factor. Does the organization actually possess the right people and the skill sets to deliver continuous value with the solution to prevent stagnation and loss of value. This part of the equation can be costly because you are now talking about lost opportunities. If the solution is not being maintained and utilized effectively, the company will not realize the true potential savings or returns promised during solution deployment. As a result, the CIO will want to understand the cloud solution provider’s capabilities around the long-term sustainability of that value. In other words, if the solution is supposed to be doing X when the company bought it, it should be doing “X plus” five years from now.
Typical software implementations provide high value and return during the first 18 or so months when everything is fresh and utilization is high. Over time ‒ say in 36 months ‒ value begins to decline. A lot of that has to do with people and the loss of expertise and influx of new, less experienced resources assigned to run the solution over time. With less technical expertise due to slashed CIO budgets, this problem is only exacerbated.
How to Seize the Opportunity
From my experience, the best CIOs seize the opportunity of the cloud by taking control of it. This starts with a shift in the CIO’s role from gatekeeper to strategic business advisor where the CIO understands and is able to explain how and when the cloud ‒ versus on-premise software deployment ‒ is the right strategy for their organization. With a cloud strategy developed and visible to the organization, the CIO can more effectively manage the temptation of “one-off” cloud adoption that may only benefit a few users or business units, rather than furthering the company’s strategic goals.
Finally, CIOs should have the professional cloud and services procurement people reporting to them so they can manage the process for the organization. They should be responsible for cloud vendor management – and be held accountable for the value derived from cloud solution providers.
I don’t believe in the notion that IT and the CIO as we know it are “toast”. As we have seen with the adoption of other disruptive technologies over the years, those who are educated in what the technology can do – in the context of their own business environment – will benefit by making appropriate use of it. This is no different when applied to cloud.
Yes, the cloud is delivering great things with much more to come. The CIO will do well by utilizing cloud as a strategic tool to enable business agility and drive results.
How do you view it?