by Derek Lacks
In a meeting with a Fortune 100 CIO last week, the well-known line from the baseball classic Field of Dreams came to mind: “If you build it, he will come.” In the movie, the main character was compelled to plow under highly lucrative cornfields to build a baseball diamond in the middle of nowhere. The only thing that kept him going was the voice in his head that reinforced the promise that lie ahead.
So, why was I reminded of the classic movie line? The CIO had just told me that his organization had recently stood up its tenth private cloud in the past 24 months. The problem was, there were no users. I know what you’re thinking—why 10 clouds? That’s a story for another day. I want to focus on the same blind faith that led this organization to commit the time and resources to build its collection of clouds.
The CIO was not looking for my validation that what he built was right, he was sharing his unfortunate realization that his organization didn’t have the necessary skills to make his cloud initiatives successful. The core competencies that had contributed to his past success were no longer enough, and to evolve his organization to the strategic service broker required to meet the needs of his end users, he required core IT competencies from his team that previously were non-existent. These included individuals focused on managing the lifecycle of the service catalog; to the internal IT sales teams who were going to effectively position the value and drive user adoption; to finance teams focused on ensuring that services were achieving their pre-defined financial goals around cost and impact (see Figure 1).
Figure 1: Business of the Cloud – Shifting IT Competencies
Why the sudden shift? With the advent of competition for internal stakeholders, IT shops no longer have a monopolistic hold on their internal customers. Public cloud services such as EC2 and Rackspace have infiltrated the safe haven of core IT and are providing disenfranchised IT users something that they have never had since the inception of the IT department— an alternative. All they need is an Internet browser and valid credit card.
As a result, IT organizations, understanding that they have to up their game and become more responsive to internal customers, have turned to cloud-enabled services, such as infrastructure as a service (IaaS) and platform as a service (PaaS ) to slow down the exodus. This was recently the case with another client of mine who wanted to build out PaaS in direct response to a sizeable percentage of his company’s development teams going directly to an external provider for their infrastructure requirements.
Which leads me back to my “if you build it, he will come” analogy—the CIO now realizes that building and standing up the technology was just the ante. To be successful and drive adoption, he has to approach the services that he extends as would a product company. His team’s traditional IT functions need to parallel the engineering teams within a product company that are manically focused on building a product that meets specific customer requirements. And the job doesn’t end once that product is built. The CIO needs to continue deliver the IT services demanded as the new teams engage—product managers, sales, marketing and finance —to take that product and exploit its commercial goodness going forward.
To do this, IT must transform from being a cost center to a service broker—a “business within the business.” The mission of the CIO needs to shift from being a supplier of technology to a strategic service provider that anticipates the needs of the business. An organization once charged with keeping the lights on is now expected to drive competitive advantage by providing business users with the optimal mix of services at the most competitive price points.
Based on these requirements, a new business management toolset needs to be leveraged to provide the requisite level of visibility, transparency and clarity into the business. In addition to traditional measures—such as system availability, application performance and utilization levels—IT executives will also need access to business-oriented metrics such as compliance to service-level agreements (SLAs), forecasted demand, profitability and customer satisfaction. CIOs will require insights into their business in order to execute with a service broker mentality, such as:
• What are the services that I provide and how do they compare to available alternatives?
• What are the costs of those services so I have the ability to make strategic decisions in terms of whether I will source that service internally or explore a better external option to leverage?
• Are my pricing strategies that I have deployed driving versus stunting adoption?
• Who are my power users, and am I meeting their specific requirements?
• Can I provide a value add to externally sourced IT suppliers that results in greater stakeholder satisfaction?
IT business management solutions, which up to this point have been a “nice to haves” driven by IT finance, are now a prerequisite for IT executives looking to execute on the service broker opportunity. The ability to articulate cost structures, track business unit consumption and adoption, and monitor the quality of services delivered will provide the basis for validating success or failure to your business stakeholders.
The VMware IT Business Management (ITBM) suite provides transparency and control over IT costs, services and quality. By automating previously manual process and providing a business context to what IT does, IT moves from a technology orientation to a service broker orientation with an IT portfolio of services managed to align with business needs. With benchmarks providing objective evidence of where IT is today, where IT could be and illuminating the path to where IT wants to be—ITBM provides the fact-based approach needed to minimize the cost of IT while maximizing competitive advantage so CIOs and IT executives can run IT like a business.
Derek Lacks is a business strategist for VMware Accelerate Advisory Services.
VMware Accelerate Advisory Services provide high-value enterprise IT strategy consulting to help CIOs and their key stakeholders to accelerate IT and business transformation, and can help your organization maximize and even accelerate its evolution into this new role as service broker. Visit our Web site to learn more about our offerings, or reach out to us today at: firstname.lastname@example.org for more information.
Would you like to continue this conversation with your C-level executive peers? Join our exclusive CxO Corner Facebook page for access to hundreds of verified CxOs sharing ideas around IT Transformation right now by going to CxO Corner and clicking “ask to join group.”