Thursday, October 20, 2011

IT Leadership: Two Days with Leading CIOs

I'm writing this at Logan airport as I fly home after two full days in Boston, attending EMC’s IT Leadership Council. At it, senior EMC staff were able to spend nearly two full days with a room full of IT leaders from some of the world’s largest and most respected companies.

What made the time unique was the quality of interactions as well as heady topics. EMC’s own leaders and practitioners interacted with our leading customers about  IT Transformation, IT as a Service, managing IT change, and cloud computing futures.  But the conversations were rarely about technology, and did not touch on product at all. Rather, they focused on challenges facing IT today and on IT’s renewed role to support the business.

This was the first time EMC has attempted something so ambitious with such a senior audience. And the results were fantastic -
  • For our customers: EMC was able to share our experience in transforming our own IT, helping to validate many of their approaches. Our customers got to interact directly with our internal consultants and practitioners, and exchange views on best practices, pitfalls and works-in-progress.  And I believe we also transformed our customer’s view of EMC's knowledge and capabilities as an enterprise vendor/partner.
  • For EMC: We had a unique chance to get out of the “weeds” of technical details, and to focus on the high-level business drivers that are really facing (and affecting) our customers. This was a chance to hear the unfiltered voices of the customers first-hand, for two days. Our thanks to them cannot be overstated.
It’s hard to summarize all of the themes from all of the sessions – including dozens of breakouts on various topics – but follows are my personal takeaways and “high points” from many individual and group conversations:

IT transformation isn’t about technology: Almost everyone was in agreement on this. The technology problems can be solved for. But the real barriers to IT reinventing itself lie in the area of new operational and organizational models, evolving roles and skills, and new financial models. Often-heard was “My technology is ready. My people are not”.

IT leader’s focus: To support business agility:
Yes, IT agility and infrastructure agility were still points of conversation. But more important was providing business agility – the ability to help lines-of-business be more productive, more profitable and more competitive. Linking the business case between cloud, IT investment and LoB top-line is becoming an increasingly important strategic conversation for the enterprise.

IT will compete for business: This theme was becoming more prevalent. Users are turning to external service and cloud providers because of pricing and/or convenience. Sometimes termed “shadow IT”, internal IT now has to think of itself as having to “win the business” from lines-of-business. It has to reinvent itself as a competitive internal Service Provider (and/or service broker) to the business. IT is now rarely the only game in town.

Public Cloud isn’t (always) the panacea: There were more than a few customers – mainly banks, government contractors and the like – for whom the public cloud is simply a non-starter, usually due to regulations and compliance needs. But private cloud remained appealing. They were eager to learn more about private clouds and the IT transformation needed to make them productive.

IT must move away from a “hero” culture: IT heroes used to embody all of the organization’s tribal knowledge, and could parachute into a problem and solve it at any time of the day or night. But this SWAT culture has to make way for the “new guard”, consisting of IT staffs trained as generalists, who can work with increasing levels standardization, automation and shared infrastructure. Many practitioners agreed that entirely new staff rewards systems needed to replace those that awarded those with superhero powers.

Marketing? In IT? As IT shifts to becoming an internal service provider that competes for business, it’s also faced with acting like a business unit – replete with marketing functions. And these are skills that are somewhat alien to the organization. They include outbound marketing: publicizing and actively marketing their services to business units to drive demand, and inbound marketing: working alongside customers to identify needs and requirements for future product/service development.

Financial transparency more important than ever: To compete, to forecast, and to model, IT has to know its per-unit costs, whether or not chargeback/showback is implemented.  Knowing capital, operational and incremental costs helps the organization make better buy-versus-build decisions, and allows the rest of the enterprise to make similar decisions about how/where to apply infrastructure. And most important, if/when IT chooses to price services, they do so with detailed information. 

Overall, IT is having “new and unfamiliar” conversations: IT is talking with lines-of business regarding business agility. They are learning about inbound and outbound marketing skills. They are discussing competing against consumer service - and/or brokering them. They are being asked to support any and all employee-provided devices. They’re entertaining buy vs. build for application services.  They are being asked to meet or exceed demand for services… rather than to limit them. And they’re shifting from structured data and heavyweight GUIs to unstructured data using throw-away apps.

Much debate was had over whether IT is going through a Transformation or an Evolution. My answer? Evolution takes an awfully long time.

Event Agenda

Tuesday, October 18, 2011

Practitioner’s View: IT Transformation and GreenPages’ Solutions Architect

Last week I had the chance to speak with EMC Velocity Partner GreenPages – specifically with Trevor Williamson, their director of Solutions Architecture. Trevor regularly speaks with CIO’s from Enterprises and SMBs about cloud computing and IT transformation. He has a refreshingly balanced perspective on technology… and on its impact on business. Follows are some paraphrases from our conversation late last week.

Lots of Talk About Cloud But…

Not surprisingly, Trevor noted that 80% of his customers are talking about cloud computing (who isn’t?) but only really 20% are doing something about it. 

Why: He’s noticed lots of reasons – having to do with resistance to change, the demographics of IT leadership, and more.  Trevor’s analogy was to that of an automobile:  Traditional IT looks like a basic car with a basic engine and basic drive train. Yeah, it basically keeps running for ever. But if you wanted to change something, good luck.  There wasn’t much room for upgrading without changing the whole thing.   Next, enter virtualization… akin to a car with Fuel Injection. It’s an upgrade – and the engine will run more efficiently. But in the very grand scheme of things, it’s still a point-solution (although quite valuable). Now finally, enter the concepts of automation and Cloud Computing: where the car’s components become completely different and independent – no piston engine, an electric drive train, etc.  So it’s much easier to upgrade components without needing to alter others.  Simply increasing the battery gives better range. Changing the electric motors gives better performance. Changing the engine might speed battery recharge.  But components now operate more distinctly and can be optimized independently.

On IT Finance, and Why It Might Be the Key to Change

Trevor also had a terribly pragmatic perspective on a simple but ingrained factor holding-back IT’s efficiency.   In the traditional (read: old) IT financial model, the IT Project Number was the key to all implementations.  Any change to a specific system got charged to that number. And the dollar size of that number got watched under a microscope.  However, bounding the infrastructure’s financial model with a single project number reinforced the technological stove-pipe-ness of the assets themselves. The financial model did not allow for any sharing of assets between systems – because each new asset of course had to be assigned to a single project number. So, one result was the wasteful sizing of each silo - and resulting horrific utilization of each silo.  Ergo, Capital inefficiency became a necessary result of a limited financial model.

Enter: Shared infrastructure that can meter incremental IT usage, and cost-accounting that can keep track of (and assign) incremental costs.  With these two tools, IT could now implement a shared (and, needless to say, virtualized) infrastructure. The improvement in utilization, and resulting improvement in capital efficiency, was and is a boon to IT.

So, Who Calls the Play?

When an IT department decides to go down the path of a private cloud, who makes the call?

Well, there are usually two models Trevor and GreenPages frequently see – either top-down (by decree), or organic (bottoms-up). More often-than-not, Trevor believes most initial deployments are bottoms-up. The typically the initial application is internal to IT, such as QA/Dev/Test – also because these use case customer needs are very dynamic and fast-moving.  Giving the engineers a self-service portal and ability to spin-up tons of cookie-cutter environments is a great fit and a great win.  And doing so internal to IT (in contrast to line-of-business apps) minimizes the number of approvers… also speeding along the project.

Most initial bottoms-up automation and cloud initiatives are relatively new implementations, *not* system refreshes – which surprised me. But for good reason: Refreshes usually involve a cross-application and cross-domain initiative. Which means more approvers and multiple teams.

Now, there are times of course when IT leadership “decrees” building a private cloud – and mostly the impetus is either to reduce costs, or to cater to the LoBs who are looking for agility that will result in making more money.  But when these initiatives are by leadership decree, they’re usually bigger (and slower) than their internal organic cousins.  In fact, the top-down initiatives are usually corporate-scale, even to the point where they’re ‘branded’ and ‘marketed’ cross-org.  But reading between the lines, all of the hoopla doesn’t make the top-down initiatives any faster than the internal approach.

Is building an Internal Cloud Bad (for IT Jobs)?

Trevor gets this question a lot. He’s not yet seen an instance where virtualizing and automating infrastructure has meant a reduction in jobs. Instead, he’s found more the case that it’s good for the *existing* jobs.  Building a private cloud helps IT personnel climb out of day-to-day fray, and frees-up their time for more interesting, higher-value work for the company.   We both noted that IT should be focused on extracting value from company data and partnering with the lines-of-business…. Rather than “keeping the lights on” laboring as a monotonous workhorse.

And Finally…. On Keeping IT Competitive

“Why does business go around IT?” I asked. Trevor was pretty firm on this one: Only when IT can get out of its own way and move at “market speed” will internal customers will choose them. He sees lots of use of external services by lines-of-business, and lots of IT organizations racing to keep up with them.

How to achieve market speed? Part of the answer is re-engineering IT as an internal service provider / service broker. IT must think of itself as a service bureau, right down to marketing its services to users in the enterprise. From an infrastructure perspective, IT also has to become more agile. It has to “stop plugging holes with humans” and start by leveraging automation as part of its DNA. Lots of point systems can be automated, e.g. provisioning OS, virtualization platforms, I/O, networking. And only then can Orchestration be layered across those automated systems to attain the speed and agility needed. Take it a step at a time, with the goal being competitive and customer-focused.

Monday, October 10, 2011

A Leading Indicator of "Consumerized IT"?

Let me start with a game: Try to guess the type of customer I met with last week...
  • Roughly 5,000 users with ~ 25% annual turnover
  • Pressured to support multiple user-provided devices (Smart phones, iPads, etc.)
  • Significant "Shadow IT" (e.g. users turning to external web services w/out IT's knowledge)
  • Inquiring into a VDI environment to increase manageability, reduce costs
  • Increasingly huge storage needs, esp. for video (on-demand media, surveillance, etc.) 
Give up?  Well, this customer was a High School district, with thousands of students and hundreds of faculty. And they shocked me with their challenges, ones which I assumed only large enterprises had.  I have to admit I was pretty surprised at their level of sophistication - and their vision.

And then it dawned on me: These guys actually more of a "leading indicator" than most their commercial enterprise cousins.  Their internal customers are nearly all Millennials, arguably leading users of consumer technology, and sometimes the most demanding. The student base requires support for "any device, any time", and doesn't hesitate to use external commercial services rather than IT (think: kids using DropBox, Evernote, Mobile Me, etc.). Also, users (students) without their own personal "smart" devices will typically log into multiple alternative devices a number of times each day, requiring virtual display and authentication technologies.

So, think about it: These students - and their appetite for "consumerized" technologies, will be your workforce of tomorrow.

What that high school IT department is facing is what most IT will be facing during the next few years. So consider carefully who (and what) you'll need to support in the coming years. And consider the organizational, technological, and governance transitions you'll need to implement as well.

In a recent Forrester Research report, "Shifting from Rules to Guardrails" there are some good observations of how IT (and the CIO) have to transform from being technologists to becoming brokers, vendor managers, and providers of technology governance:
"We see a blurring boundary between business and IT. The rise of self-service technologies, driven by empowered employees, provides new opportunities for IT to improve business responsiveness by enabling greater autonomy... To do this successfully, IT must evolve new governance approaches that empower the business with guardrails and education, reserving strict technology control for only the most critical technology assets. For many, this will be a radical change.
So, my lesson was that the places to look for Leading Indicators of IT transformation aren't necessarily the analysts and brainiac IT leaders... Instead, perhaps I should focus more on the needs of the 9th grade entering class.

I hope to stay in touch with the IT staff at the school district, and see what priorities (and solutions) they see emerging in the coming months.  As I exited the meeting, one of the IT leaders took me aside and also mentioned that IT has also experienced - not surprisingly - hacker break-ins as well.  As I said, perhaps the youngsters are where to look...

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