In my last blog post, I talked about shifting from infrastructure to innovation. Innovation has always been a key goal of IT, but the pathway to achieving it has never been easy. The cloud has made it easier, but you need a solid foundation on which to build innovation.
Here are five key steps toward building that pathway, best handled in sequence.
Focus on What’s Important. This goes back to the age-old idea of alignment; that is, how can IT best serve the business? Let’s assume you and your business colleagues have worked out the portfolio of services you need to deliver to help the business meet its objectives (of course, that’s a whole separate discussion in itself). The next question is, how should you deliver them? Is it with internal resources or through a third-party service provider? Most CIOs believe that their IT department can handle anything the business can throw at them. But even if it can, should it? Leave ego out of the equation. You should reserve the skills of your IT team for the most mission-critical needs, and outsource or co-source what’s less important.
Rely on Standardization. Standardization is king. Flexibility and choice are nice, but following the 80/20 rule will reduce costs while still delivering sufficient capability for the needs of the great majority of your business partners. Standardize and enable self-service for 80% of the common requests/requirements. Outsource them to the cloud if it makes sense (and not just financially – compliance and security are vital as well). Then leverage your team resources in shared services or infrastructure teams to do the heavy automation and lifting for the custom 20% of projects.
Calculate Your Baseline. To make informed sourcing decisions you have to develop a sound formula for calculating your service costs. Educated guesses and gut feel no longer cut it. You can achieve this through IT financial management tools that automate the capture of your costs (no more spreadsheets!) and allocate them to specific services. Next, compare your baseline to the competition – benchmarking shows how you stack up against your peers and cloud service providers (and how you’re improving over time). These capabilities are all about confidently making the right sourcing and investment decisions for IT and the business.
It’s All About the Data. No matter where your information lives – on-premise or in the cloud – there’s got to be an easy way to send it back and forth. If you don’t make it easy, you’ll be creating your own bottlenecks. And make sure you develop a cast-iron governance strategy. Just because you don’t control the data in-house doesn’t mean you’re not responsible for it. The flexibility of the cloud bestows great power, and with great power comes great responsibility.
Strive for Visibility and Transparency. I talk to many CIOs who have a definitive mandate: reduce your budget either by real dollars or percentage costs. To do this you need transparency. Think about how you can create a “bill of IT” that clearly states not just what your services cost but who is consuming them. Leverage metering and reporting capabilities to empower a fact-based discussion with your business stakeholders, with showback or even chargeback. This will help you and your business counterparts make better decisions and drive down costs. Use transparency to prove your efficiency – remember, you must be able to show the payoff.
Here’s my recommendation: establish a small, greenfield private cloud deployment for a key line of business and expand from there. Track everything, from costs to ultimate benefits. Show how your investment paid off – that is, how your foundation for innovation enables you to invest limited funds wisely and generate the projected payoff.
Demonstrate that you’ve mastered your costs, targeted business problems, and delivered business value. You’ll have not only created the pathway to innovation, but ratcheted up your reputation within the company.