With Everything as a Service, CIOs need a new recipe for success, says consultant Peter High.
The trend toward Everything as a Service (XaaS) has CIOs scrambling to set the right strategy. To learn more about how CIOs will succeed in a services world, Contributing Editor Tom Farre spoke recently with Peter High, President of CIO advisory firm Metis Strategy and author of World Class IT: Why Businesses Succeed When IT Triumphs (Jossey-Bass, 2009).
In today’s enterprise, how can smart CIOs use XaaS to improve the IT infrastructure?
Traditional on-premises IT infrastructure is typically capital-intensive. The more of it you have to control and manage, the more difficult it is to keep current; and as demand changes, you can’t easily ratchet it up and back. But by leveraging a service-based model, you are better positioned with a variable cost structure. In tough economic times, your costs should more closely reflect the realities of the business environment.
But with IT and business services available directly from the cloud, how can CIOs ensure that business users won’t bypass IT?
When this happens, it’s often a sign that something is lacking. It could mean that IT isn’t delivering fast enough, or that IT is miscomprehending what the business needs.
Instead, the CIO and his or her team need to forge positive relationships with business executives, to bring the needs and concerns of the business into the open. Regardless of whether the IT department develops something or the business engages someone else to do so, it’s IT that will be responsible for maintaining and supporting the service — as well as ensuring that the overall infrastructure remains secure. When these kinds of relationships exist, then the business will be less inclined to work around IT and more inclined to engage IT whenever possible.
How about people? What impact will XaaS have on IT personnel?
One CIO I admire has embraced the service-based model. His insight: When IT managers are called to cut costs, all too often they first move to cut “muscle” — their people. It’s a reflection of on-premises infrastructure costs that are capitalized, amortized and therefore inflexible. By contrast, in the service-based model, utility pricing enables you to retain muscle for as long as possible. People are the foundation.
So in a world-class IT organization, what should this “muscle” be doing?
The whole idea is that you should constantly work to improve the IT department’s performance, delivering more value and always thinking about the future. Your infrastructure today is a collection of past decisions, all the things you’ve invested in. No doubt there are some things that shouldn’t be there.
If you create more of a service model, the collection of past decisions will become smaller, more manageable and more reliable. Your team will be freed to focus more of its attention on the future. You can’t do that if you’re always thinking about the past.
What else should CIOs know about world-class IT?
Project and portfolio management. It’s the engine through which new capabilities can be brought to bear. Only after you have solidified people, the infrastructure and the ability to deliver the right things in the manner in which they have been envisioned, can IT be in a position to partner with the business.
So how important are internal communications?
Success requires that the IT team communicate effectively with the rest of the organization, drawing out business needs and solving them with innovative new solutions.
Also, more of IT’s work is done in collaboration with vendor partners. IT must ensure that vendor partners are engaged appropriately, that the value they are to deliver is agreed upon up front, and that they are motivated to ultimately deliver that value.
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