Marketers have spent so long hyping the cloud that the subtle benefits of going on-demand that it sound like an effortless answer to every tech headache a CIO has to deal with
And sure, the potential gains are such that researcher Forrester says use of the cloud will shift into the next gear through 2016, as CxOs decide to push a range of business processes on-demand. But that doesn't mean there aren't issues that CIOs need to take into account when considering a move to the cloud.
1. Recognise how a rise in flexibility can create new concerns and costs
Unlike long-term sourcing deals, the cloud is often portrayed as providing increased financial flexibility. While outsourcing involves lengthy contracts, going on-demand is seen as a way to scale IT resources up or down in relation to changing demands.
Such flexibility is undoubtedly a boon to the business, but this agility must be viewed in context. Going on-demand still involves a procurement decision and a contract. While it is easier to turn the cloud on or off than in traditional outsourcing arrangements, any business looking to leave an on-demand relationship will still encounter a number of challenges.
Remember that new behaviours can quickly become set in stone. Some CIOs suggest end users become trigger-happy when they are given access to the cloud. The ability to buy technology on-demand means employees purchase more resources than they would under the control of a traditional IT department.
Also remember that any potential withdrawal from a cloud arrangement is more complex than simply flipping a switch. CIOs are rightfully fearful of how their data will be removed from an external provider's systems in the event of a contract termination.
For some CIOs, the fear of having to leave the cloud one day is so great that the organisation never moves beyond the initial scoping stage. "It's important to recognise that some elements of IT will simply not move to the cloud," says Geert Ensing, IT leadership researcher and former CIO at ABN Amro.
2. Make sure you consider your entire ecosystem of data and processes
BT Business CIO Colin Lees says decisions about which systems should move to the cloud will be closely related to the sector of operation. BT, for example, is responsible for a large amount of the nation's critical infrastructure. The firm uses its own internal cloud and also works closely with providers to use secure IT systems and services on-demand.
"There's very few instances where we would feel safe enough to host data in another provider's cloud environments," says Lees. "CIOs must make conscious decisions about whether the business needs to own the asset, whether they need a private element of an external provider's resources, or whether the organisation is prepared to go into the public cloud."
When it comes to that decision-making process, most indicators suggest the move on-demand is picking up pace and will continue to quicken. Spending on the cloud is growing by as much as 28 per cent a year, according to Synergy Research. Growth is taking place at all levels, including for public platform and infrastructure services.
Such analysis tallies with Forrester's belief that the cloud will branch into new areas of provision through 2016. Rather than just picking elements of enterprise IT to run on-demand, Forrester says we are entering a new stage of the cloud, where executives will be able to run entire business ecosystems in the cloud.
CIOs can now find an on-demand answer to almost every business process, from invoicing to resource management. Some leading edge IT leaders are already at that stage. Take Chris Hewertson, CTO at hotel group glh, who has pushed a cloud-led business transformation in his organisation. The firm does not run any in-house servers and 95 per cent of IT services are delivered through the cloud.
"We've delivered a phenomenal rate of change during the past few years," says Hewertson, who says on-demand IT provides a platform for digital transformation.
3. The impact of moving to the cloud mean on the role of the CIO
This desire for openness can seem at odds with the vested interests of vendors. CIOs are often worried about the lack of standards between cloud players, yet the good news is that many on-demand services are now built 'ready to talk'. Any cloud service you use through 2016 must come equipped with plug-ins that allow the application to integrate with other tools and platforms.
As new services are created and added, you will need the plug-ins to integrate applications and you will also need to manage developments in a secure manner.
A recent survey by the Cloud Security Alliance suggests a lack of skilled security professionals is the top barrier to stopping data loss when businesses move on-demand. Yet the research also suggests confidence in the cloud is rising. As many as 64.9 per cent of IT leaders think the cloud is as secure or more secure than traditional on-premise software.
The argument is the big providers, like Google and Amazon, are able to allocate far more resources to information security than an individual IT manager.
Andrew Marks, former CIO and now the UK and Ireland managing director for energy in Accenture Technology Strategy, says senior executives must now acknowledge that running technology is a relatively small part of the modern IT leader's role. Many key areas -- such as mobility, big data, and cloud -- can be contracted out, with performance measured by business outcomes.
"The traditional IT director still has a role in terms of running these projects and looking after internal infrastructure where it is retained," he says. "But the truly engaged CIO will focus the vast majority of his or her energy on how transformative IT can be used to create a business advantage and how this can be achieved in a commercially astute way."
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