Driving Innovation

Cloud-based services create new opportunities for CIOs. But to benefit, IT leaders will need to play new roles in their organizations.

For CIOs, the availability of just about everything in IT as a service is a great opportunity. By leveraging shared, specialized and commodity services, CIOs can reduce costs and make IT more effective at its everyday tasks. Perhaps more important, the cloud-based service model enables CIOs to become more influential in driving business innovation. That’s due to the speed and efficiency with which the new services can be modeled, assembled, automated, assured and secured.

Everything as a Service is no panacea, however. We expect the typical enterprise to adopt a hybrid model for the next five years, where services will be delivered through a mix of on-premises IT and the cloud. But when the business requires a new application or capability, forward-thinking CIOs will increasingly favor the “as a service” model.

To succeed with cloud-based services, CIOs must become business managers, brokers of a supply chain of business-supporting services. While many IT departments aspire to this new role, few have reached it. Managing business services as a supply chain requires CIOs to pragmatically match service investments to business demand. The key is understanding how complementary subservices work in the aggregate, so they can be quickly and cost-effectively combined in a supply chain to solve business problems. Enterprises that consistently innovate through the application of IT are also good at the IT supply-chain work of evaluating, assembling, integrating and virtualizing cloud-based services within a secure, managed framework.

For example, consider the task of meeting a business need for a new e-commerce service. Rather than build a commerce system in-house, a CIO could link to an existing service and a payment system, and perhaps orchestrate between the two.

Also, as developers work to test the IT infrastructure and continually improve the e-commerce service, they may not always want to test using the live subservices. So CIOs will increasingly look to simulate parts of the service through virtualization in a cloud-based test environment prior to moving improvements to the production service.

Keep It Safe

Security also takes on new dimensions in such systems. In the past, CIOs emphasized securing the perimeter. While that is still important for both the enterprise and cloud providers, security of cloud-based services focuses more on data location and identity management. That is, you need to know where your data is, and how to control who can — and can’t — access it. Then, you need to enable authorized users to seamlessly traverse multiple services. Just because services reside outside the enterprise, users should not have to log on repeatedly.

The same logic applies to Service Level Management. The CIO is accountable for the performance and service-level characteristics of any service provided to the business. That’s true whether the service is delivered on-premises, from the cloud, or in some combination of the two. To hold cloud providers accountable for agreed-upon service and performance levels, management solutions are fundamental. Typically, such solutions start with the user. Namely, how does the user experience the service, which might be an aggregate of services contracted across the supply chain? From there, the CIO needs visibility down through the application, server and infrastructure to understand the factors that affect the user experience.

CIOs who adapt quickly to such changes, and who plan for and drive a cloud-based service model, will enjoy a competitive advantage. These CIOs will need to gain competencies in service sourcing, assembly, integration, virtualization, security, and vendor and Service Level Management. All these disciplines are essential to managing services as a supply chain and, ultimately, driving business innovation.

Peter Griffiths is EVP and Group Executive at CA Technologies.