Governance in the Cloud and the role of IT

The debate of the role of IT in the Cloud landscape has been ongoing for some time. My view is that IT has a role to play, but it is not the same role that it plays today. IT is required to manage the vendor relationship, negotiate contracts, support and administer the system, design and deliver integration, migrate and protect data, ensure compliance, and provide governance. It is the protector of the system, the business adviser, and the procurement expert.

Governance is not just about rules, regulations, and order; it is about ensuring that the system is used correctly, responsibly, and with a technical understanding for each business decision or action. This point refers to enabling business users to understand the impact of their actions. IT has to ensure that the business does not have a siloed view when making design decisions. For example, introducing something “simple” like a new object or field may seem trivial because of the ease in which it can be done, but this still requires a technical impact study – even if only small – to understand how this modification will impact the wider system and also other systems that are inter-dependent.

Even something as minor as the password policy should require input from IT. This is not an option – IT sets the overall standards and is a valuable adviser to aligning practices across the organization. Activities like leveraging Single Sign-On (SSO) and integration are not standalone activities and will absolutely necessitate the involvement of IT. Administration may become partly centralized functions in instances where a system provides business users with administration activities.

This is even more critical when the organization has a global landscape. Any organization that is mitigating against risk needs to ensure that it effectively manages all aspects of its practices. Having a global reach into almost every aspect of the organization gives IT valuable insight and perspective when designing globalized systems with localized characteristics. This is especially significant when replacing an existing system that was designed with the input of IT.

Although this is not entirely new, it is something that may have been lacking when a legacy system was implemented but is rendered significant when implementing a Cloud system. In addition to revisiting your business processes, this is another opportunity to enhance the way that things are done while also protecting against problems down the line. The expertise of IT can prevent activities from having unwelcome repercussions in the future. How many times has a problem been caused as a result of bad practice in the past? Often it occurs because of a siloed view – someone doing something without understanding of or thinking about the bigger picture – and as mentioned earlier IT can provide that overarching perspective and provide sound assessment.

In the past IT has often had a role in system selection and this can often be to the detriment of what the business wants. This is something that will change – and must change – in the Cloud era. Businesses must not make the same mistake of letting IT choose a business system. With many of the complexities of managing and operating a system gone, it doesn’t make sense for IT to call the shots any longer.

Cloud systems are often business systems. IT is there to hold the hand of the business when they need to do something. IT is there to ensure that the system remains operationally optimized and users understand what impact their actions can and will have. In traditional projects IT was an influencer in terms of budget, technology selection, and architecture – but in the Cloud they need to add value through their support of business initiatives and activities, rather than just systems. Managing expectations is of great value – IT folks will know the technical limitations of SaaS software versus the almost limitless scope of on-premise systems. However, protectionist views might also be enough to scare off HR from using a Cloud system if they feel it is very limited in its extensibility. If IT wants a role in the Cloud landscape it needs to understand the true possibilities of Cloud.

Summary

IT is by no means excluded from the table. On the contrary, they are needed to play a pivotal role in ensuring that Cloud technology is integrated, managed, and governed within the business to meet the required outcomes. Just because there is no on-site hardware administration does not mean the end of IT. The bottom line is that IT still has a role to play, but the boundaries are changing. IT needs to work hard to stay relevant and become a true business partner. They can force positive change in the business, but must adjust to the demands of Cloud and how they can deliver value.

The biggest risk for the exclusion of IT comes from IT itself. Protectionist agendas and scaremongering against the views of the rest of the business will only alienate them – which is dangerous for both parties. Proactive engagement and supporting the business will add value to both sides. Anything else leaves daunting consequences when entering the new era of the Cloud.

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The Consulting-as-a-Service model (CONaaS)

In a comment to my recent blog post Belgium: An example of Cloud changing the SAP HCM consulting market, Steve Hunt, Senior Director, Customer Value Research at SuccessFactors mentioned Consulting-as-a-Service as a consulting delivery model. Of course, consulting is all about delivering services, but as technology and the related consulting market transitions to the Cloud, the way in which services are delivered and consumed will also change.

Steve’s description of Consulting-as-a-Service – which I will abbreviate to CONaaS from hereon – was simply of consultancies delivering small chunks of services over a prolonged period of time, rather than high-volume services into large projects and then ending the engagement once Go Live is reached (with exception of standardized enterprise support contracts). I don’t believe that we will see the end of this type of consulting as it is a necessity for getting new technology and practices implemented into organizations, but we may see services consumed by customers in a different way than we do today. There are some consultancies that deliver regular services and some that already deliver services on a CONaaS basis, so this is not something new. However, we may see this become more of the norm as customers get more used to the on-demand delivery model for technology and require partners that can offer them consulting services on a similar basis.

Ultimately as technology delivery and markets change, and as businesses adapt, so too will the suppliers of these companies. Invariably those that can and are willing to adapt will no doubt survive the transition, and it might mean adopting a business model and strategy that seems much less lucrative. Synonymous with the transition to the Cloud, it will be those companies that are adaptable and willing to take risks that will be the survivors. Trying to hold onto the consulting gravy train will ensure short-term survival, but in the long-term this will only serve to mask the necessity to transform into an organization that has to survive with lower revenue.

Another interesting facet of a CONaaS model is billability/chargeability, either as a subscription or in the form of units. Currently consulting is billed by the hour or day and even fixed-price proposals are based on a number of days. In a CONaaS model it would be more likely that a fixed subscription gives x number of hours to the customer – a sort of retainer, as you like. This would provide value when it comes to working with customers on explaining new features and benefits of a quarterly SaaS release. Another option is that units are based on a business outcome or specific delivery and that will have a fixed cost associated to it. The revenue would most likely vary from unit to unit and would be based on the exact deliverable and/or perceived value of the outcome of the deliverable. Customers want business outcomes and the CONaaS model allows them either to have work on demand or to buy specific outcomes when they want it.

It is worth noting that some consultancies and vendors have tried this in the past… and failed. That may be because of the infancy of Cloud in some areas or just the fact that these organizations have struggled to win enough business in their respective market to prove the business model. It certainly does not constitute a failure with the model itself. In addition, there are also issues with the middle men – or layers – within consulting that cannot proposer with this type of model. In his blog Full time culture and the non-value-adding middle man, Sven Ringling makes some excellent points about this and also about the full-time culture that has developed in consulting. It is definitely worth a read.

As Cloud becomes more prevalent and the consulting markets being to change it is inevitable that new models will arrive. Of course, the usual disclaimers about quality versus price apply and vigilance by customers should not change. A bit of research and reference-checking goes a long way to achieving those business outcomes, albeit indirectly. Whatever happens in the market, there will almost certainly be changes to how consulting services are delivered and it might be the most innovative methods that drive success.