Cloud Opens Up Innovation for IT

Apr 14, 2011

Pam Baker

The cloud has changed the role of IT, of that there is no doubt. But fears that the CIO will become extinct because of it are overblown. Instead, the role will likely be redefined.

“The traditional CIO must shift his or her focus from cost efficient delivery of infrastructure to strategic utilization of infrastructure,” explained Chris Drumgoole, SVP of Client Services at Terremark.

A recent study conducted by IDG Research Services and sponsored by CA Technologies, polled 200 IT managers in the U.S. and Europe and found that more than half acknowledge the current value of IT is largely defined by its role as owner and operator of IT infrastructure. However, respondents believe that within two years, the primary value of IT will come from managing the IT supply chain. One out of two surveyed said an increase in cloud-based services, particularly those that were formerly managed in-house, will contribute to this evolution.

That shift of focus is often somewhat vaguely referred to as an “alignment with business” (as though IT was formerly detached from the work of the business). In some cases, of course, that is certainly true. It was preferable in years past for the tech-minded to keep their propeller heads down and the workflow flowing than it was to hob-knob with business heads and wade through the minutiae of other departments.

But that has mostly changed in recent years as technology melded with the business to the point that one was almost indistinguishable from the other. CIOs readily and willingly, for the most part, took a seat at the executive table and began to focus on delivering precisely what the business needed.

The results so far are mixed.

“For many companies, CIOs are unfortunately not strategically relevant to the business strategy and to the CEO -- and it’s not for a lack of trying,” said Nick Mehta, CEO of LiveOffice. “CIOs have worked hard over the past decade to ‘align with business partners,’ setting up governance processes, project portfolio reviews, service bureaus and producing thousands of Power Point slides.”

Despite these highly focused efforts to convey the value of IT to business, some CEO perceptions remain stubbornly unchanged, said Mehta:

  • "They spend tons of money, and I can't figure out where it goes."
  • "Everything seems to be behind schedule and over budget."
  • "They're always solving last year's problem."
  • "Why is the technology my kid uses on his Mac more modern than our stuff?"
  • Most importantly, "Any time we have a creative idea, they seem to find a way to say why it can't be done."

“In short, IT is not seen as a business ‘enabler’ today -- it’s a strategic disabler,” he said.

IT can only be truly perceived as a business enabler if it becomes fast and agile, fails faster, changes quicker, and above all innovates.

“The cloud makes IT more strategically relevant, because it lets CIOs say ‘yes,’” said Mehta. “Yes, we can try this experiment with this strategy or product. Yes, we can put more of our money into innovation versus operations. Yes, we can move faster.”

However, saying yes may not be enough. Not by a long shot.

“Pity the CIO who relies on the cloud to elevate his strategic stature,” warns Joe Graves, CIO at Stratus Technologies. He argues that business strategy makes the cloud more strategically important to the CIO and not the other way around. The potential of cloud centers on how it can serve the business by improving agility, resource utilization, staff productivity, and speed to market.

“If a CIO is not already vested in defining and achieving these goals, pushing work to the cloud should be the least of his concerns,” he said.

Leaders of the mind

It’s a bit disconcerting to find that the CIO’s job has changed from running things smoothly to leading the company with ideas. Not everyone is cut out for that role, frankly. It requires a creative and strategic thinker more so than a nuts and bolts technologist. But make no mistake, a lack of technology understanding will prove deadly to your career.

“In some cases, yes, cloud is becoming integral part of business and hence IT takes a central role,” said Venkat KD, SVP of Enterprise Business Solutions (EBS) at Mahindra Satyam. “For instance, entering a new geography and using cloud for such a geographic expansion involves IT taking a central role in various aspects like P&L impact, break-even and IRR [internal rate of return] calculations, impact of business scalability and potential business exit plans and so on.”

Obviously, these skills are not generally part of the skill sets of the traditional CIO. But just having these new skills are not good enough. One must display them early and frequently for business to consider IT a vital strategic partner.

“Sometimes there is the danger that IT may be bypassed by business in adopting cloud especially for software as a service (SaaS),” he warns.

The cloud, then, is part of the picture whether or not the CIO initiates its use. Given the cloud, just like commercialized devices before it, is -- or will be -- such an integral part of the business, how can the CIO best leverage it to innovate?

“Innovation in IT often comes from trial and error,” said Lancope's CTO Adam Powers. “The cloud gives the CIO an opportunity to try things out without the risk and cost typically associated with IT R&D efforts. The cloud lowers the risk associated with launching new projects which leads to more experimentation and ultimately faster improvements to the way IT aids the business.”

Innovation begins with a good idea and ends with execution. The CIO that can think clearly and strategically, plan thoroughly and use all of IT's tools, whether in the cloud or not, with skillful mastery, will win the day.

A prolific and versatile writer, Pam Baker's published credits include numerous articles in leading publications including, but not limited to: Institutional Investor magazine,, NetworkWorld, ComputerWorld, IT World, Linux World, Internet News, E-Commerce Times, LinuxInsider, CIO Today Magazine, NPTech News (nonprofits), MedTech Journal, I Six Sigma magazine, Computer Sweden, NY Times, and Knight-Ridder/McClatchy newspapers. She has also authored several analytical studies on technology and eight books. Baker also wrote and produced an award-winning documentary on paper-making. She is a member of the National Press Club (NPC), Society of Professional Journalists (SPJ), and the Internet Press Guild (IPG).

Tags: Cloud, CIO success, CIO credibility, IT innovation, CIO Leadership,

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