Whether to transition an organisation to cloud based SaaS platforms and if so which provider/s to chose is a question on the mind of many CIO’s. Operationally there should be a checklist of common cloud transition issues that is addressed first.
However in the bigger picture how many of these CIO’s are thinking beyond the obvious short term benefits like shifting spending from capex to opex, to the longer term organisational implications of what is gained and lost by choosing cloud services?
For example changes in patterns of expenditure is one area that is sometimes forgotten when considering cloud based solutions. Inhouse spending on IT infrastructure and staff is an area CIO’s and CFO’s are used to keeping track of.
However usage of cloud services is more abstract, extra costs will be borne by the organisation during any transitional period and service/subscription based charges based on the level of usage can result in unexpected issues eg: running out of monthly API calls during peak periods when many staff are generating reports from the CRM.
Even providers of cloud services are reconsidering what they offer, with AWS recently moving up the value chain by launching a marketplace of applications including offerings from CeBIT exhibitors CA Technologies and IBM.
We have had the pleasure of chatting with all 3 of these speakers about their thoughts regarding the cloud. Some of their advice and thoughts from the resulting interview articles is excerpted below, click on the speaker’s name to read the full article.
Andi Mann is a renowned international commentator on cloud issues and we’re delighted that he accepted our invitation to travel from the USA to speak at CeBIT Australia’s Cloud conference.
One of Andi’s current issues of interest is that some organizations are now wondering whether they even need a CIO, when users can just login to or download a solution, and leave the IT driving to their cloud service providers.
His thoughts on the matter are that:
“Indeed, you could say it’s another nail in the CIO’s coffin every time a department chooses SaaS, every time people bring devices to work, every time teams go mobile courtesy of a smartphone store, or every time people hack the corporate network with help from an app vendor.”
“You could say that. But you would be wrong. Certainly there’s a movement afoot in many organizations to bypass IT. And certainly the CIO’s role is changing. It has to. But that doesn’t mean the office is going away-at least, not universally. What is true is that those CIOs who are not adding value to their organizations are definitely at risk, because companies today are quick to eliminate positions that don’t add value. And that goes double for people leading IT organizations today.”
“Traditional IT has to refocus, and make the refocusing visible throughout the organization. The idea that information systems are important to the business, when the rest of the business increasingly sees IT as a commodity to be bought and served from the cloud, is the catalyst that’s costing CIOs their budget and eroding their influence. It’s a vicious circle. And as they lose budget, they get excluded from more conversations, which loses more budget, and so on.”
“Here’s the pivot CIOs need to make: Instead of defining and controlling IT, the CIO needs to become a trusted advisor to the business. Netflix, for example, has done away with the CIO, and instead, has a CTO. This person is looking at the technology future, and advising the business on how it can drive business opportunity with technology. There you have a strategic role that’s important and visible to the business. And it can’t be bought from the cloud with a Visa card.”
Bill McMurray, Managing Director at CA Technologies Australia & New Zealand added his thoughts on the matter:
“There’s no doubt that cloud computing is revolutionising business particularly in these strained economic times. But it’s also breeding a new type of technology leader – one who understands that by using the cloud to innovate, increase speed to market and reduce costs in providing strategic business services, he or she will be in a position to make a significant impact on the business and potentially be positioned to lead it”.
Alan Perkins, Specialist IT Consultant at Altium Limited, is a Cloud Computing pioneer who has won awards for Altium’s Cloud Computing initiatives as CIO and was a finalist for IDC’s Asia Pacific CIO of the Year.
Alan told us that he:
“Believes that cloud is a concept more far reaching than any specific implementation and businesses cannot really transition to the cloud until they fully understand the shift in thinking required to leverage it successfully.”
Duing his interview he compared the reaction of many CIO’s to cloud as being similar to:
“19th century industrialists who were offered utility power for the first time. What did they think it could be used for? Their vision was very limited – and so is ours today. I hope to open people’s vision to wider possibilities beyond just thinking of infrastructure provisioning.”
“In fact there is a real danger of being left to the annals of history if one only thinks of cloud as a cheaper or more efficient means of provisioning infrastructure.”
During our discussion with Chris we discovered that Xero is much more than a cloud accounting Software as a Service transactions platform, it’s a social enterprise platform.
Chris told us that Xero openly shares what they learn with their accountant and ecosystem addon partners. He has the view that helping partner organisations grow, helps Xero, a case of “a rising tide lifts all boats”.
Some accountants are capitalising on the extra time they have due to workflow efficiencies from using Xero to take advantage of advising their clients as a system integrator. This elevates Accountants to the role of true advisor, offering maximum value rather than just doing tax returns on historical data.
Ultimately implementing cloud solutions like Xero is not about technology but accelerating and lubricating business workflow processes and making insights about business transactions available much faster.
Xero is a case study of where the technology market is going, the accounting channel is the next technology channel for small business. It’s not just cloud that is disrupting, it’s the notion of an accountant as trusted advisor for more than just compliance with tax office regulations.