CIO of the Cloud (or not)

Chief Information Officer is an interesting title; what is the CIO accountable for?   Here’s a definition from Gartner:

CIO (Chief Information Officer)

The person responsible for planning, choosing, buying and installing a company’s computer and information-processing operation. Originally called data-processing managers, then management information system (MIS) directors, CIOs develop the information technology (IT) vision for the company. They oversee the development of corporate standards, technology architecture, technology evaluation and transfer; sponsor the business technology planning process; manage client relations; align IT with the business; and develop IT financial management systems. They also oversee plans to reinvest in the IT infrastructure, as well as in business and technology professionals. They are responsible for leading the development of an IT governance framework that will define the working relationships and sharing of IT components among various IT groups within the corporation.

That’s pretty encompassing and I think accurately describes what I call “Enterprise IT”, or what it takes to help your business run efficiently and effectively from an internal perspective.  But what happens when your business is the business of technology?  What if your revenues are based on a cloud offering?  It’s one thing if internal operations are compromised, but it’s a whole different level if your livelihood is on the line.  This situation can still be considered your company’s computer and information-processing operations and the domain of the CIO.  However, product development and perhaps the CTO have some pretty big influence on the technology architecture; in fact they probably own those standards and decisions.  So what’s a CIO to do?   

That’s where “Cloud IT” and being CIO of the Cloud comes into play.  While the CIO may have little to say about what’s running, they may have a lot to say about how it runs.  There is still no one better equipped to understand the operational and support aspects of running IT.  And the truth of the matter is; the product people aren’t so interested in running the cloud as they are in creating the cloud.  By the way, the Gartner definition sort of neglects the operational and support aspects of the CIO role since they stopped at install.  Here is where the CIO must align IT not with “the business” as in the Gartner definition, but with the “business of the business”.  They know the IT professionals and processes it takes to run technology, the CIO should be the partner entrusted with running revenue operations. 

Are the Cloud CIO and the Enterprise CIO the same person?  I remember one time when the company I was working for was acquired, the network was being run by the product development organization.  You never knew what was going to happen when you plugged into the wall (this was a while ago obviously), would there be connectivity or not?  There is definitely segregation required between Cloud and Enterprise IT, security and access are very different between the two not to mention the application set.  There are also common skills required in both aspects of the CIO role and within the organization, the focus and priorities are very different though.  Of course, not every organization is faced with this dilemma but it is becoming more prevalent as the cloud continues to evolve and grow.

What kind of CIO are you?  What kind of IT organization are you a part of?  Which one keeps you up at night?

© Ellen Terwilliger 2012

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How cloudy is your IT career?

I have heard a lot of conversations about the impact of the cloud on Information Technology (IT) careers. People are worried that the positions they hold in IT will be eliminated because “it’s in the cloud”. Even the role of the Chief Information Officer (CIO) is being questioned. Like the REM song, some IT workers are seeing the end of the world as they know it. Not all of them feel fine, but I am not so sure it’s the end of the world; I think maybe the world has just rotated a bit, so I feel fine.

Let’s start with a definition of Information Technology. Based on Merriam Webster, information technology is the technology involving the development, maintenance, and use of computer systems, software, and networks for the processing and distribution of data, where technology is defined as the practical application of knowledge especially in a particular area. Also consider the definition of engineering or the design and manufacture of complex products.

When I think of IT careers, I think of the Corporate IT department focused internally on the practical application of technology knowledge to run the applications and infrastructure that are used for the business operations of an enterprise from marketing through support. Engineering, on the other hand, is externally focused on creation of revenue generating (preferably) products offered to a targeted customer base often based on the use of computer systems, software and networks (IT). In some organizations the IT department supports engineering and sometimes it doesn’t, that is always an interesting conversation; is support of the infrastructure for Engineering an IT or an Engineering career, the activities are often quite similar and Engineering platforms are often good cloud candidates. So are IT or Engineering careers more affected by the cloud? I am not sure either, but let’s keep going.

Beyond IT support of engineering platforms as a career, there is career rotation going on from IT into Engineering. Take networking for example; it is a core competency for ensuring that clouds continue to float.

Capabilities are moving around, some things that used to be delivered in hardware are delivered in firmware and firmware in software (that’s why the word “mostly” is in the picture). But more important from an IT career perspective is the move of tasks that were done manually into software. Now instead of having an IT career in a company implementing and supporting their network you might rotate into a company developing a product that does what you used to do manually (isn’t that what technology is all about) and have an Engineering career, still technology focused just a little rotation. You can take this rotation to other information technology disciplines as well. Look at the whole concept of virtualization and the Engineering careers created from IT needs being looked at in different ways and solved through technology.

The use of the term information technology continues to become broader since computer systems, software and networks have become ubiquitous. You can be talking about the CIO and the Corporate IT department running your business (IT careers) or any aspect of technology used to run anything, anywhere, which for my purposes I am going to call Service Provider IT (SPIT). OK, maybe not the best acronym, how about IT Operations as a Service (ITOaaS).

Anyway, the cloud still runs on physical machinery; maybe fewer and larger but boxes are not going away any time soon. I think that is one of the biggest hypes about cloud, at the end of the day it’s still computer systems, software and networks, information technology. There will always be a requirement for installing new hardware and someone still has to use the wonderful products created by those IT to Engineering career rotations. The question is who’s going to be operating and supporting those boxes. If you are using public XaaS, then ITOaaS is included in your XaaS. The IT career doesn’t go away; it just rotates to your XaaS provider. Perhaps you are a company that provides an XaaS platform, then you will still require those IT operations skills within your organization, the only question is this an Corporate IT or an ITOaaS career. The needs still exist, it’s just a question of rotation of the world, or not.

One thing that you can be sure of, everything does not work perfectly all the time (remember Murphy’s Law). The cloud is founded on the concept of fault tolerance and high availability but I have experienced the finger pointing that occurs when an application is not working as expected. Every supplier claimed 100% uptime, but that was not my user’s experience. Who do you think those users are going to call? I suppose it depends on who has what contract with what provider. Your XaaS providers will be looking individually at their components, but you are the one with the vested interest in getting things running again. You need someone to drive the incident response. Take a look at the ITIL processes; I think many of them will still be performed within your company by IT professionals.

No matter if it’s public, private or hybrid; single or multi-tenant, the cloud runs on computer systems, software and networks (information technology) which are still designed, developed, delivered and supported by people. There are still plenty of career choices in the broad field of IT. It’s the end of the world as we know it and I feel fine.

© Ellen Terwilliger 2012

Get to the cloud (and save money)!

How many C-level executives have heard or uttered this phrase in the last week; for that matter in the last 24 hours? And how many of them really know what they are asking for?

The National Institute of Standards and Technology gives a good high level definition of the cloud. Is cloud computing really that new? As with most things, life is circular (what goes around comes around), so maybe the technology specifics are new but not the concept. Anyway, the definition states that the cloud will save money (hence the utterings in the c-suite). Cloud vendors (and what hardware or software supplier isn’t a cloud provider today?) continually ensure that the cloud will save you money; so it must be true, right? But will it really? Like all things, the answer is – it depends (don’t you hate that!).

There are great reasons for using Infrastructure as a Service (IaaS) or Platform as a Service (PaaS). I think particularly in R&D situations where you have varying compute needs versus having dedicated hardware to meet your highest capacity compute requirements. Crunching big data is probably another area where the cloud could save money. In both scenarios I believe you need data retention policies that are enforced (probably true in or out of the cloud) to ensure your variable storage requirements and associated costs don’t just escalate. You have cost in set up and ensuring you continue to get what you pay for over time but you are relived of the day-to-day operational costs and pay for the benefits. I am sure you have other scenarios where you can save money using compute services in the cloud.

As indicated in an earlier blog, I love applications; I appreciate infrastructure (IaaS and PaaS) but it’s really just a vehicle to run applications (I am not biased or anything)! So I have a business operations application centric view when looking at the cloud. Software as a Service (SaaS) is the predominant cloud choice (or whatever aaS you want to call the on-demand flavor) for running your business. I am not convinced that the cloud is always a money saver in this situation.

The Upper Edge LLC blog has an interesting series about SaaS and On Demand contracts and whether there is really a lot of difference in your cost commitments, SaaS Matters: When “On Demand” Really Isn’t.  For you finance people in the crowd (or is that cloud) how do you feel about capital expense (CapEx) versus operational expense (OpEx)? I am such a conservative that predictable CapEx depreciation makes me feel good. Although from the Upper Edge point of view, maybe you get predictable OpEx using cloud SaaS options. Variable expense is something you should consider as you think about getting to the cloud and saving money.

Another cloud cost consideration from a business operations perspective is integration. Certainly in the early stages of your company, getting your business up and running is a great economical use of SaaS. And fit for function SaaS offerings which are best of breed in doing one thing really well are great choices too. But get too many independent SaaS offerings that need to work together and your cost savings may begin to erode or even disappear. There is not only the cost of integrating the applications but productivity must be considered also. If a single user has to go to multiple applications to complete their work and the configurations and integrations do not provide the necessary consistency, productivity could very well take a dive. The cost of supporting your business users in your unique cloud environment will also be affected by the consistency of integrations.

The cloud and saving money may often but not always be synonymous; it depends. So be cautious if cost savings are your only reason to “Get to the Cloud!”

© Ellen Terwilliger 2012

Why. Now What?

According to Steven Covey’s 7 Habits of Highly Effective People habit #2, you should start with the end in mind. While he’s talking about individuals, I think this is applies equally well to transformation programs. (Maybe all seven habits are applicable; I’ll have to check that out.) Anyway as they say in the army, you can’t hit a target you can’t see.

In an earlier blog Why Transform , we used an example to show that a picture is worth a thousand words to manifest your vision and allow people to internalize why to transform.

 

This is a great start, people can see what success looks like, staring with the end in mind like Steven Covey suggests. But this alone is not always enough to completely inform and empower people to do the right things and make the right decisions during your journey of change. I believe that the next step is to describe solutions that show what is required to get to your desired outcomes.

In the example, there are spaces that need to be filled in to allow us to get to that happy productive salesrep. Take a look at the four solution spaces described below and we’ll talk about each of them:

To realize the vision of One Cloud One Me, first you need to know “Who I am”. A lot of companies do a pretty good job of this; often there is a unique identifier and strong password that is proliferated around the many application systems allowing a single sign on (or in some cases sign on and on and on as my former colleague Leslie Thiel has been heard to say). So you might not need to do a lot of work on this space.

“What I do” can be a little trickier. Since you’re a very successful startup, it’s likely that these SaaS applications were purchased and implemented at different times as the need arose. It may also be the case that some applications were implemented by business groups and some by IT (Does that sound familiar to you IT people in the crowd?), heck maybe IT didn’t even exist at the company when some of these went live. In any case, what I do or my role may not be consistent between the applications. This is pretty straight forward to figure out in order to ensure that your various types of sales people (salesreps, territory managers, etc.) have the appropriate capabilities to do their job.

Now comes some more interesting stuff (remember interesting is the word that is used to mean that complexity and cost are staring to go up). “What I see” may be very different between the various clouds. For example, sales team may play a huge role in the opportunities I see in my sales force automation system (SFA: Salesforce.com in the example) but sales team doesn’t exist in my enterprise resource planning system (ERP: NetSuite in the example), so unless I am the actual salesrep assigned to the deal, I may not be able to see when an order gets booked for the deal I sweated over. And therefore I’m worried I’m not going to get compensated properly by the incentive compensation or commissions system (IC: Callidus in the example) since that’s in some other cloud formation in my mind. Now salesrep productivity begins to erode because time is being spent “checking things out” instead of selling. This is the real opportunity to be addressed.

So what do we do about it? Here’s where the last piece of describing the solution comes in; critical data leverage. By describing what data objects will be used to connect the spaces across all the clouds that are relevant to me, I don’t have to worry about consistency anymore. Everyone can see what will be used to guarantee that every application I use to do my job has the right stuff. People will be able to do the right things and make the right decisions to ensure the desired outcome: one me. The values of the data objects may change over time as territories are divided up differently or salesreps move around the world, but the data object will stay the same and be consistent (until the next transformation anyway).

In the example, let’s say territory, sales team, customer classification and product family are used to determine what I can see and how I am compensated. So we add those data objects to the solution spaces to complete the picture.

The last solution space “How I know”, just became a bit easier to handle. By describing the solution spaces and critical data to be leveraged, everyone has a clear picture of what will be used to connect the clouds consistently and provide the ability to validate or reconcile One Cloud One Me.

Starting with the end in mind and describing the solution creates the guardrails for your transformation program. Do you think people will be able to accurately create the processes and designs that will enable your desired outcomes? Will decision making be easier and more rapid? Will your transformation program be set up for success?

© Ellen Terwilliger 2012

Why Transform: A picture is worth a thousand words

Here’s an example.

What does this represent to you?

• Why transform?

• Who will benefit?

For me this is an example of a manifest vision. The goal is to create a picture in your mind of why to transform and what success looks like. What do you see? For more on why you might want to have a manifest vision see the following: https://blog.manifestvisionsolutions.com/2012/03/07/the-value-of-vision-and-solution-description/

In the example you are part of a very successful startup company. To get going you made extensive use of cloud computing or Software as a Service (SaaS) solutions. It was great! But over time, your salesreps started to complain (salesreps never do that, do they?); they had to go too many places with different logins to get what they needed to know. It was taking way too long. And it didn’t seem consistent to them; what they had quoted didn’t match the win probability values on the opportunity, they could match their configurations and quotes but couldn’t find quotes they thought they had submitted as orders. And you noticed that your salesreps were spending way more time making sure their commissions were accurate instead of being out there selling. Does any of that seem familiar to you?

For this example, I might respond to the questions above like this:

Why transform?  To increase salesrep productivity and increase revenue; get the reps to spend more time selling!

Who will benefit?  Salesreps, sales operations, sales management, order management, shareholders

Success looks like a happy productive salesrep.

Obviously there’s more to it. People will have many perspectives, so depending on who you’re talking to you might get slightly different answers to the questions. But that’s OK; you want people to see what’s in it for them at the vision level.

Lots of people have commented on the importance of having a vision. Here are some observations I found interesting: 5 Reasons Why Vision Is Important http://www.youtube.com/watch?v=St4yaNJkdDQ

Vision has lots of applications; it isn’t limited just to the overall company reason for being. It is an effective tool in any cross functional transformation program where many people need to internalize a common purpose for change.

What do you think of the example? Will people will be able to see why to transform? Will they know what success looks like? I’ve seen a vision like the one in this example used on a program. It was understood by everyone; people were empowered and inherently knew what to do and why. No one was talking about how we couldn’t do something but about how we could and would get things done. It was a productive environment with rapid decision making done at the right level. And the results were spectacular, a global change on time and on budget which was rapidly adopted. Not bad for a little upfront investment!

Do you have a transformation program that could use a picture that is worth a thousand words, a manifest vision?

BTW: I do not endorse or oppose any of the companies whose logos do or do not appear in the example.  They are just the ones I thought of today.

 © Ellen Terwilliger 2012

Software: Limited only by Imagination

I have been challenged with a lot of different and complex puzzles over the course of my career. But I must say that I have often found software to be the most challenging of them all. This is because with software there is nothing physical to tie you down (yes, it has to run on something but these days that’s not too restrictive). Your only limitations are the imaginations of product development and sales people. In my experience that is no limit at all!

Just look at cloud computing. There’s lots of hardware sitting out there waiting to be called upon at a moments notice. But it’s the software that enables you to add capacity on demand. It’s the software that makes you able to share a platform development environment. And of course “software” as a service started the whole cloud computing revolution.

And just look at the number of applications available today. It boggles my mind when I go to the app store and browse. There are lots of very creative people out there building software to do things I would never have dreamed possible.

From a business perspective, what makes software so challenging? If the software is put out in cyberspace for free and it’s “buyer beware” so you don’t provide any support, then software is pretty simple. But the minute you decide you’d like to make some money off this good stuff you’ve developed, that’s when the complexity begins.

There are lots of things to think about once you decide to sell your software (the reality in the quote above). Beginning with deciding what feature sets you are going to offer, through figuring out your pricing and licensing models (more on this in future blogs), to considering your fulfillment methods while protecting your intellectual property and ultimately setting up technical support and renewal methods (after all you want to keep that revenue coming in, right?) there are a large number of operational business processes involved in keeping it all running. For the finance people in the crowd, there is revenue recognition and tax to worry about too. In addition, if you’re offering your software as a service, then there’s the whole platform and 24X7 global operating considerations that can have a significant impact on your brand if not done right.  Here’s another perspective on the difficulty of the XaaS business, Even the Tech-Savviest Struggle with Cloud Based Business Models.

Remember those development and sales people? While you’re thinking about all the stuff in the last paragraph, they are busy changing the license models and coming up with new ways that they could bundle things together to make it easier to buy. And the list goes on. I am so impressed by the people who create at such a rapid pace. Imagination is an awesome thing!

For those of us who are trying to keep an operational model functioning at the speed of software innovation, it makes for a pretty complex and ever changing jigsaw puzzle. It is never boring and that’s what I like most about it!

Do these sound familiar to you? What other challenges have you faced in running a software business?

Graphic credit: The world of imagination is boundless (via Behance)

© Ellen Terwilliger 2012

Cloud Computing – The New Timesharing?

I was having lunch with a colleague the other day and our conversation turned to cloud computing.  He had recently made a presentation to some CIOs and put forth the thought that cloud computing was the new version of the old timesharing concept.  An interesting idea; maybe things haven’t changed so much.

Let’s look at a couple of extracts regarding the history of computers and see if there is a resemblance to cloud computing today.

In the 1970’s, you dealt with what today are called mainframe computers.  There were 2 ways to interact with a mainframe. The first was called time sharing because the computer gave each user a tiny sliver of time in a round-robin fashion. Perhaps 100 users would be simultaneously logged on; each typing on a teletype machine.1 Virtual machines today could be considered the tiny slivers of time back in the 1970s.  Providing additional capacity to the 100 companies using the Infrastructure as a Service (IAAS) capability on demand from their “teletype” is sharing compute power, maybe not in round robin fashion, since things have speeded up considerably since then, but still time sharing of resources.

A timesharing computer was “one organized so that it could be used simultaneously by many users, each person having the illusion of being the sole user of the system – which, in effect, became his or her personal machine.”2 This is interesting since anyone using applications not resident on their personal device qualify here, in the cloud or not.

It was also more efficient, many thought in the late 1960s, for a company (the timesharing utility) to own the mainframe and rent computing power than for each business to own an independent computer.3 Add a few services on top and it seems to me you have Platform as a Service (PaaS).

The types of resources that can be shared have grown and the metrics for charging may have changed, but the fundamental concepts seem pretty similar to me.

Like centralized and decentralized, what goes around comes around.

Here’s another perspective: Cloud Computing: A new name for an old method

© Ellen Terwilliger 2012

1 http://www.computersciencelab.com/ComputerHistory/HistoryPt4.htm

2 Campbell-Kelly and Aspray, Computer, p. 186.

3 Campbell-Kelly, Martin and Garcia-Swartz, Daniel D., Economic Perspectives on the History of the Computer Timesharing Industry, January 20, 2006, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=880740