The market downturn gave impetus to cloud computing by forcing organizations to find new ways to press forward with IT innovation despite their constrained resources—so they could continue to improve their competitive position, boost productivity and gain actionable market insight.
In other words, after years of talk about aligning IT and business, alignment has quickly become life and death. If IT can’t reduce costs while keeping a step ahead of an increasingly dynamic business climate, everyone loses.
This alignment was not possible with traditional IT—which only gives companies a fairly binary choice to either in-source or outsource entire IT functions and/or projects, based on factors such as economics and quality.
Cloud computing, on the other hand, gives companies unprecedented flexibility to tap into whatever application and infrastructure services they need, when they need them, from any one of several competing vendors. In fact, it’s so easy to engage cloud vendors that business decision-makers can do so without IT’s involvement at all.
If a department manager wants to implement a cloud-based email marketing tool or a CRM system, they simply order it and activate it. They don’t need to add machines or install any software. They just solve their business problem with a rapidly and easily-deployable technology solution.
So, with the advent of the cloud, businesses have a broad set of high-value choices that fundamentally disrupt traditional IT.
Avoiding cloud chaos
While the cloud model offers a rapid time-to-value and a highly adaptable cost structure, it also has a downside: a potentially fragmented enterprise computing environment, where nobody knows what anyone else is doing. This can result in inefficient and/or poorly informed purchasing. The cloud also raises serious questions about who is ultimately responsible for traditional IT functions such as service level management, IT security and compliance with information governance policies.
In fact, a recent CA Technologies/ Ponemon Institute survey found that IT is often unaware of cloud services being used in their enterprise— and that less than half of cloud services are appropriately vetted by IT for possible security issues.
IT therefore faces a rather stark choice – if it does not learn how to add value to the use of cloud services by the business, it will quickly become less relevant—and the business will become exposed to a new set of IT-related risks.
IT’s new role as a manager of a cloud-based “supply chain” boils down to several relevant questions, including:
• How can IT best help the business understand, choose and exploit available cloud resources?
• How can IT help the business optimize its mix of internal and cloud resources?
• How can IT re-deploy existing workloads to run in the cloud?
• How can IT manage its constantly changing mix of internal and cloud resources?
• How can IT ensure that cloud vendors deliver required service levels?
As with manufacturing supply chains, businesses can actually derive competitive advantage by continuously optimizing their IT supply chains in terms of quality, agility, risk, capability and cost (QARCC). Rather than allowing the enterprise computing environment to become an inefficient patchwork of cloud applications, cloud infrastructure and cloud platforms, IT can apply cloud management best practices to bring coherence and optimized resource-efficiency to the new enterprise IT supply chain.
Best practices for the new IT supply chain
Five best practices are especially important when it comes to optimizing IT supply chains:
1. Cloud metrics
IT needs a standard way to discover and describe cloud resources using business-based metrics that enable clear, accurate comparisons between available alternatives.
2. Cloud insight
IT needs access to vendor performance ratings, customer feedback, expert advice and other information necessary to make informed IT supply chain decisions—and execute them with excellence.
3. Cloud enablement
IT must be able to adaptively move workloads to and from cloud resources based on QARCC consideration. This requires IT to abstract workloads from whatever physical dependencies they may have at any given time
4. Cloud governance
IT needs to implement a disciplined, ongoing process for supply chain improvement that vigilantly monitors both the availability of new options and changes in business need.
5. Cloud management
IT needs tools and skills to track, troubleshoot, secure and tune all active cloud resources at least as effectively as it does its conventional resources.
Of course, IT organizations will not be able to gain these best practices capabilities overnight. And IT professionals are likely to learn many new lessons about cloud governance as more and more companies embrace the cloud and pursue its promised benefits.
But this is no reason to delay the development of essential supply chain optimization capabilities now. Companies that get ahead of the curve when it comes to IT supply chain management will gain a distinctive competitive advantage over those that don’t. And that advantage will be critical in a global marketplace where business success is increasingly contingent upon IT excellence.
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