Thursday, February 1, 2018

The CIO as a Cloud Supply Chain Manager

Transforming IT from engineers and builders... to assemblers and integrators

About 5 years ago, I wrote a GigaOm article, The CIO as the IT Supply Chain Manager. The focus was how cloud services would transform how CIOs shifted from Technology Builders to become Service Assemblers. This concept is now more relevant than ever – with 30+ vendors offering API management products, Integration Platforms as a Service (iPaaS), Serverless functions and containerized microservices.  Let’s look at how technology is helping CIOs in this transition...

Setting the stage
If you’ve been a CIO for more than 10 years, you’ve probably thought of yourself as a builder of technology. You’ve had oversight of app development, built custom databases, managed director and identity systems, and hired scads of coders. 

But the CIO as a software engineer and builder of technology is changing.

Let’s consider enterprise application evolution. Over time, monolithic applications made way to special-purpose apps... which then made way to third-party SaaS apps. This evolution afforded IT with higher-value and better fit-for-purpose infrastructure, while allowing for broader choice to use different app sources and vendors. Indeed, the number of SaaS apps being consumed by enterprises is exploding, with the average midsized company consuming 20+ SaaS apps

However, today we’re now seeing the SaaS apps beginning to yield to component web services, public APIs, and even micro-services.  We’re also seeing companies beginning to front-end their existing services with internally published APIs, so that they can be consumed like external micro-services.

But these changes are challenging IT teams with the need to integrate the cloud services, APIs and workflows, so that the services work seamlessly with the business.

But all of this comes with new challenges that require a new CIO mindset and set of capabilities.

Enter: The Transformational CIO

As Tim Crawford recently pointed out, the job of the CIO is going through a transformation. CIOs are becoming more central to the business, more critical to strategic agility, more essential to competitive advantage. 

To achieve those goals, IT departments are now looking at how they need to use and consume services, whether they’re internal apps, external SaaS providers, data sources, public API-generated microservices, and even IoT-generated event streams. And, more CIOs are taking inventory of their internal apps, disaggregating them, and internally publishing their APIs and event streams so app services can be more readily consumed by other apps.... becoming service creators themselves.

The driving force behind these changes are simple: large, monolithic apps – and even large SaaS app suites – are difficult to modify.  So, when a business need requires a new function, supplier integration, app integration, data source, etc., IT has to be able to respond quickly.

Act II: Integrating the Cloud Supply Chain

The new mindset for IT requires them to think as integrators of resources... whether internal, external (public cloud, SaaS, etc.) and a hybrid of both. This is the “IT Supply Chain”.

If the CIO is successful, the result is a monolithic-app-to-API-and-service-centric transformation that yields a new set of capabilities for IT as well as for the business: 
  • Standardization: Curated and managed APIs make service use (and re-use) simpler. 
  • Technology agility: Assembly, workflow and orchestration of service components helps IT add/adjust its capabilities and portfolio more quickly
  • Business agility: By adjusting technology quickly, IT can enable the business with new revenue-generating, competitive, and strategic services sooner than the competition. 
Take, for example, a marketing-driven company that typically consumes a dozen or more web services for different functions such as demand generation, operations, customer communications, and web development. There are nearly 100 services to choose from and integrate, and few if any the company will want to natively develop. 
Credit: Storm Ventures

However, if the CIO views their role as a supply chain manager of these services, they can provide their company – in short order – with a sophisticated, integrated set of services that are customized to their needs. And agile enough to change should business conditions change too.

The advent of cloud services, public APIs, and integration/programming platforms will transform how CIOs operate. And in turn, these new supply chain-oriented CIOs will drive a new advent of change in their organizations.

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