IT-as-a-Service: IT Competing for Business vs. “Shadow IT”

As I begin to sink my teeth into the realities of IT Transformation and the operational change to IT-as-a-Service (ITaaS), it’s becoming shockingly clear that adoption challenges aren't technology issues.

Although debate continues over what cloud computing means, clarity is beginning to take shape as public/commodity cloud, private cloud, and hybrid cloud models evolve.

So if we now know how to build clouds, where does that leave our IT operations? What of our IT organization, skill-sets and CIO’s? How does the technology map to enable lines of business? How will infrastructure change the game for the enterprise?

IMHO, these are the questions we still must answer in order for “cloud” to be the next successful model for IT.

Enter IT-as-a-Service

Much the way that the internal combustion engine was the technology transformation catalyst for new forms of transportation and resulting commerce, cloud technology is transforming how information infrastructure impacts organizations and business models.  The Technology is the enabler of The Services.   But the automobile alone didn’t alter the landscape. It needed infrastructure, customization, and even rules for safe operation. Same goes for IT technology.

EMC’s own IT department, led significantly by Jon Peirce, VP of EMC’s IT and Private Cloud Infrastructure & Services, thinks of the infrastructure relationship this way:

IT as a Service is a delivery model leverages cloud infrastructure to enable business users to be more agile through readily-consumable IT services that have transparent prices and service levels.  While it is built on technology, ITaaS isn’t a technology.  It is an operational model that transforms our traditional approach to IT into a services-based world.

Good timing.  Because there is another trend afoot:  The emerging external set of services – from public cloud service providers – to attempt to compete for the same attention. And dollars.

Competing with “Shadow IT”

John observes that IT’s days as a “monopoly” on technology are gone because

• Users are global, mobile and social, with impatience for having information at their fingertips.  They’ll instantly use any alternative if it’s accessible. IT needs to plan for this – or have a competitive alternative
• Access:  iPads and other edge devices are pervasive. The days of “IT-approved” access devices (the corporate-issued laptop) are numbered. Users will demand their own type/style of devices.
• Public clouds are clamoring for developer’s attention and $.  Essentially developer with a credit card has the potential to release corporate IP to the outside.  IT needs a model to deal with this… and an attractive alternative.
• SaaS alternatives are courting business managers.   And worse, IT isn’t necessarily informed when business managers use these services. Governance and access models need to be created, since there will always be external SaaS options.

So, as users and LoB’s turn outside the company, this “Shadow IT” phenomenon arises : the use of external IT resources.  Appealing because of their on-demand nature, yet dangerous because of their security porosity, lack of usage governance, and lack of financial transparency/control.

So IT finds itself in a competitive position vs. Shadow IT. 

John then asks a question this way: If our internal line-of-business customers had a choice, would they use us (Enterprise IT)?  When IT was the only game in town, it didn’t matter what they charged or how good the service was because LoB’s had no choice.  But now there is. So we have an unavoidable imperative to be more competitive.

Unavoidable Implications for the New IT

As I think about IT Transformation to IT-as-a-Service-for-the-business, there are two implications that are inevitable and unavoidable.

• IT cannot resist this transformation.  It will be forced upon them because of the use of, and competition from, Shadow IT - as well as from the increased demands from LoB.  So IT needs to be better-acquainted with the competition, their services, their SLA’s, their pricing.  Like any competitive situation, IT needs to do *external* benchmarking in all of these areas.   Because if they don’t their CFO will do it for them.
  
• IT needs to think competitively.  IT orgs need to think in terms of winning the internal business by actively selling and creating demand for products (services). This is opposite from how they’ve been conditioned to behave – so IT has to develop basic business skills and even organizations to operate in a competitive business environment. These include product marketing, product management, financial management, and even competitive analysis and sales skills.

This is an exciting time for IT. And while most are focusing on the technology, I urge you to look at the business and operational aspects of this change.  While any change can be scary at first, it also can provide a brand new set of competitive opportunities for the business.



For more info:

• Is Shadow IT or Rogue IT Fueling the Cloud? (Richard Ingram)
• Cloud DevOps and Shadow IT (James Urquhart)
• Cloud: The Ultimate Shadow IT (HP Grounded in the Cloud) 
• Organizing from Silos to Services (Chuck Hollis)
• The Cloud Concierge:  The new CIO - Creating IT as a Platform (Brian Gracely)

A Morning With State Government... Talking IT Transformation

Think your enterprise is challenged as it struggles to move toward IT-as-a-Service and a shared IT services model?   It seems that state and local governments are also trailblazing as well.

Earlier this week I had the honor of spending a morning in EMC's Executive Briefing Center with various members of a state legislature - and members of their IT staff - looking to learn more about their investment in a Vblock, and how it could enable a shared services infrastructure that could save them $ millions while upping services to citizenry.

This was not a technical crowd in the least. These were state representatives with constituencies who cared about things like better services and lower-cost government. But they wanted to know that they'd chosen the right horse, the right technology.

But what was fascinating was nobody wanted to drill into the technology... or even really get educated about it.  Rather, they were simply acutely aware of the opportunity to save money while upping service.  They knew that government agency data centers were siloed. They realized how long it took to deliver new IT services.  They acknowledged how un-integrated inter-departmental state data was. But they all wanted to be part of the solution, to get the rest of the legislature to a point of appreciating the opportunity before them.

The notes I took might sound familiar:

• Where do we start?  VDI sounds like a shoe-in. But after that, which departments, offices and data centers should become part of the shared-services model? [What workload migration and ROI model should they adopt?]
• If we do end up saving money, there's the risk that the savings will be taken away from us - how do we ensure it's plowed-back into innovating and creating higher-level services? [How to meter IT costs? What higher-level services could be proposed to the lines-of-business? How to facilitate IT educating departmental management in what new opportunities are available?]
• Every office and department feels like they have a "special IT need" that only their own data center can provide. Is that really true? [How to illustrate the versatility of a cloud environment? How to guarantee differentiated SLA's?]
• With a shared infrastructure, how do we ensure that sensitive information (e.g. the Highway Patrol department) is kept secure from prying eyes of other parts of IT... and indeed, other parts of the state government? [How to illustrate multi-tenancy? security? auditability?]
• How can we ultimately simplify the government experience for citizens? e.g. Reduce paperwork for driver's licensing? Work permitting? Unemployment applications?  [How to go about merging and analyzing structured and semi-structured data from diverse sources?]

While this was not the forum to solve the problems, by the end of the morning we were all happy to have the issues laid-out on the table for discussion.  And to have educated the policy-makers and users that they can in fact operate their state government IT as a 21st century infrastructure.

The other good news is that this state is not the first to make this transition. A very good initial resource, for example, is from the Center for Digital Government - their paper on IT-as-a-Service for State and Local Government which gives a number of very good examples of state governments taking the right steps for the right rationales.   There is also an excellent paper published by the US Department of the Interior and their IT Transformation plan.

Stay tuned on more of what IT Transformation makes possible, and how to migrate to a service-based IT organization.... ITaaS.