With Google making their cloud computing pitch to 400 CIOs today, how many of them are thinking about the effect on their business when taking many traditional IT roles offsite to cloud providers? I'm not talking about something as (comparatively) simple as outsourcing tech support, but rather asking the question of what happens to IT skills and knowledge when the people who have key skills are no longer employed in-house.
Senior IT personnel are expensive for a reason; ideally, you are paying them for their ability to apply their skills and experience to solve your business problems and to allow you to gain a competitive business advantage by utilizing the technology where there expertise resides to your best advantage.
But when you no longer need these skills to be there for day to day operations you'll need to find a new justification to keep these people (and skill sets) available, and it's going to be a lot harder to justify the bottom line expense of full time employees when your line-of-business IT needs are being delivered externally.
There are, and will continue to be, a wealth of corporate computing consultancies who will be happy to take your money and deliver consultants to solve your business problems. But the traditional consulting gig is on a project basis, even if it's a long-term one. So while you will be able to define the business needs of the project, managing the technical expectations will become more difficult. Internal IT specialists not only have the skill-set to find the best way to utilize IT, they are motivated to find the best way to utilize their technological expertise to drive the business process. What will it cost to get consultants up to speed with your entire business model and motivate them to focus on your business needs beyond the scope of individual projects?
I talk to project managers all of the time who are responsible for monitoring projects that are completely outsourced and rarely do I hear stories of happy customers and first pass success. These mid-level managers are critical in getting the projects completed and they are often the ones who ride herd on the outsourced technical staffs, even though the consulting contracts are very specific in terms of performance and deliverables.
To a large extent, these middle managers mask the potential problems with the outsourced contractors, because they hide both actual and potential problems from more senior management; not because they want to hide something, but because they are compelled to get the jobs done and senior IT sees only the successful project completion and not the arduous path that the project took. And no, I'm not saying that every outsourced contract is a source of problems, just that it is a common enough issue that IT middle management I deal with on a regular basis comments on it. And as more services move to the cloud, there will be little motivation for any but large enterprise IT to keep any significant middle management presence.
As you move more line-of-business services to the cloud, your internal day-to-day IT technical needs will continue to decline, but at what overall cost? When you and all of your competitors are using the same technical resources and getting your corporate IT services from cloud providers, how will you be able to leverage IT for any sort of competitive advantage for your business? Where will the technical knowledge necessary to get the most from IT reside, and how will you access it?