How do you make sure cloud computing is the right strategic fit and makes your IT organization more service-oriented towards the business?

Jim Love CEO, Chelsea Group/Performance Advantage

Jim Love CEO, Chelsea Group/Performance Advantage

One piece of guidance comes not from any technology guru, but from the playwright Oscar Wilde who said, “a fool is someone who knows the price of everything and the value of nothing.”  Wise advice in both technology and strategy.

Those who go into the cloud with blinders on, looking only for cost savings are often disappointed at the strategic level.  In the cloud, as in life, nothing comes free.  I would recommend that companies take a wider view.   Let me give you an example of a company that we worked with recently, which highlights what we think will become a best practice in developing and implementing cloud strategy.

We look at moving to the cloud not as an end in and of itself, but as a way to achieve strategic objectives.  For this client, like many businesses, reducing overall costs was one objective, certainly.   But equally, other objectives were important.  The need to be more agile and maintain technology leadership in a few core areas were also critical to strategic success.

We agreed and focused on some strategic principles about how we’d get there.   We did that before we started talking about cloud or any other technology choices.

The principles?

First, simplify core technology.  The aim is to have “fewer moving parts,” which means fewer things that can go wrong.  This leads to increased reliability, which in turn means lower cost.  Cost is a component, but only one.  Reliability also translates into a better user experience and greater productivity for the business, which can actually be more important than the savings on the direct IT spend.

Second, focus on areas where technology is core to strategic success. Just because our client’s business is in the technology area doesn’t mean that they must excel at maintaining all technologies.  Sometimes the real advantage comes from using less technology more effectively.  And you don’t have to do everything yourself. If someone else does it better, faster, cheaper; if they are investing in continual advancement; and if it is their core business — why not use their solution?

Using this principle, we migrated this client to a public cloud SaaS solution for email messaging and collaboration.  We asked ourselves: Why should IT be managing a commodity like email?  What was the competitive advantage? The answer: None.

If we had looked at this cloud migration purely from a cost-savings perspective, I’m not sure it would have been at the top of the priority list.  Plus – who wants to move email?  No matter what you do, it’s an effort, a big change and it’s risky.  I call email the “third rail” of IT management.  Plus, was the old system such a big cost?  Not if you looked at it simply.  On the surface, the IT component appeared to be one server and some regular upgrades.  As a tactical cost-saving move, it didn’t seem like “low hanging fruit.”

But as a strategic move, it made sense.  It wasn’t just direct cost; it was a chance to simplify – to have fewer “moving parts.”  It would allow the client to eliminate not just server management, but also a host of related issues that you might not think of at first — mobile integration, spam management and a big part of malware and anti-virus efforts to name a few.  Archiving and backup of what was becoming a significant amount of critical data storage would also no longer be an issue.

There was some initial reluctance.  Someone raised a concern about putting email totally in the cloud – but since email travels through the cloud, was this really an issue?  The Google “brand” did provide some degree of assurance.  Everyone was familiar with Gmail.  Plus, since practically everyone had a Gmail account of his or her own, the transition seemed relatively easy.

If you looked only at the direct costs, the cloud migration was a good idea, but one with relatively minor savings when compared to other potential projects.  When you looked at it through the lens of our strategy – it was a great strategic choice.

It doesn’t stop there.   Building on the success of this client’s email migration, we are expanding to other projects in the true public cloud.  For example, we are looking to use public cloud for our “overflow” capability — where we need rapid expansion or temporary increases in processing cycles. Again, this may not be a huge cost savings, but it’s a valuable learning step. We know that the cloud is the future, but we don’t have to be on the bleeding edge. We’ll learn and adapt. We’ll move strategically.

CIO Canada Snapshot

Question 1:

What do you need to know before moving to Infrastructure as a service (IaaS)?

Read the answer from Doug Hodgson, Chief Information and Technology Officer City of Calgary

The CIO Canada Snapshot is an ongoing dialogue on IT management issues that matter with senior technology professionals at public and private sector organizations. To join our panel of experts, e-mail us at [email protected].