Cloud computing is a disruptive innovation for business and IT, changing how technology services are provided for both consumers and service providers.
In practice, cloud computing promises to deliver various IT and compute services quicker, faster and cheaper - without the need for ownership of the whole IT infrastructure. Even typical IT service providers may no longer own certain parts of their IT infrastructure. They may choose to outsource that to a cloud provider in order to capitalize on the economies of scale and lower costs.
But what are the competencies needed to manage this shift in the IT landscape?
Organizations are slowly becoming aware of the need to upskill both their technical and business knowledge in order to 1) understand the shift cloud computing introduces 2) understand how to capitalize on the benefits that cloud adoption brings and 3) understand how to manage procure, integrate and manage cloud computing and cloud based services.
Even if the organization outsources various elements of its IT to a cloud provider it is true to say that, in this hybrid IT cloud model, training and education will be needed for practitioners to understand, work with and benefit from cloud computing. Staff within technology and outsourced IT providers will absolutely need to be upskilled and certified to handle the requirements of designing, transitioning and managing cloud computing and cloud based services in hybrid IT environments.
Note: the world is moving to a hybrid IT model whereby IT can consist of legacy infrastructure, client-service infrastructure and cloud computing and cloud based services.
Therefore organizations need to avoid problems associated with integrating and managing a combination of legacy mainframes, a traditional IT client server model and now cloud services. The question is how to integrate these different IT capabilities to achieve the full benefits available. This involves IT professionals architecting and managing new cloud environments to work in tandem with existing IT infrastructure.
Understanding this new world is not merely focused on the technology. It is also about recognizing the new level of training and education required to handle other elements of managing cloud services. For example, does the IT department have the skills to negotiate a deal or contract with a cloud computing provider? Do they understand what may be required to extract the company from a cloud service arrangement?
IT roles are changing to include responsibilities such as dealing with cloud computing and IT service providers on a commercial level, which requires management, negotiation and business skills. With the advent of cloud brokering, do organizations know how to successfully capitalise on using a cloud broker or even understand their offerings?
Then come the legal issues such as data protection and security, i.e., where is the organization’s data held? How safe is it? What regulations are governing the organization’s data? What is the implication in storing an organization’s data in a different location or country?
A company-wide cloud policy
Organizations need to have a clearly defined policy on cloud computing and how they plan to use cloud based services.
Defining a cloud based policy involves training technologists and management in understanding cloud computing and cloud based services, their benefits and concerns. This is required in order to provide a level of knowledge to various parts of the organization such as the board of management, procurement, legal, supplier management and around the rest of the business.
For procurement, various pricing models used for cloud services can appear to provide unpredictable pricing structures. This is borne from the utility models used in cloud computing. The utility models are synonymous with a pay-per-use model of utility organizations i.e., you pay for the amount of the service consumed. Therefore procurement may be uneasy about procuring IT services on such a model, unless the benefits are clearly and easily explained to them. Procurement teams need educating about how the cloud environment, and spend on cloud based services, can be controlled without them becoming a barrier to the benefits of cloud computing.
Cloud, the business and the price tag
IT departments need to respond to their customers and end-users in a timeliness that the business requires. Cloud computing provides the benefits of scalability: if you want more storage or processing and compute power you can obtain it more quickly today than from traditionally buying IT hardware and infrastructure. If you need another terabyte of storage, under a cloud model that should be available instantaneously. But beware: when you switch on cloud based services, the meter starts running!
The utility, pay-per-use model of cloud requires a change in controlling IT budgets. The established approach of “budgets agreed last year for next year” is no longer flexible enough to enable funding for necessary projects or infrastructure. The pay-per-use model should yield savings from the capital expenditure budgets and are likely to increase operational expenditure. Who understands the impact to the operational budget is a key question. However, overall there should be a cost saving from a total cost of ownership (TCO) and value of investment (VOI) point of view when analyzed.
Because of the increase in operational expenditure, the IT budget holder may actually seek to charge departments for their use of cloud based services, basically asking the business to pay for its use of IT based on the utility model. The premise of a service catalogue provides a good foundation to charge for these IT services. In other words, identifying the services, breaking down the costs and applying a charge back to the business. Many organizations are still in the early stages of readiness for this approach, some are more mature.
Traditional IT/ITSM approaches and the cloud environment?
In adopting cloud computing and cloud based services organizations still require strong and mature service management and governance structures to deliver what customers want and to react to business needs.
If an organization’s IT is based on frameworks such as ITIL® best practice, that is still the right foundation to use in the management of cloud computing. Don’t throw out your current processes and structures but adapt them to get the benefits of scalability and cost savings from cloud computing. From a security perspective organizations need to clearly understand how adopting cloud based services changes their current approach to security and data protection, for example where is the cloud infrastructure located and where is the data replicated.
There is still a vital role for the service desk to play in a hybrid scenario. While it may not provide the final resolution to a problem it still owns the end-to-end management of incidents and requests in a hybrid environment. For instance, the service desk may need to work with a cloud provider to resolve an infrastructure problem generating email incidents. This is not different from today’s service desk model whereby they manage issue escalated to third parties.
Supplier management will need to improve and interact closely with service level management as companies are now dealing with multiple cloud providers, potentially all providing different service levels and agreements.
Service disintermediation is on the increase and must be watched and carefully managed. A typical example of service disintermediation occurs when the sales department by-passes the IT department and obtains a CRM system directly from a SaaS provider leading to a fragmented service The cloud service is not supported by the IT department and may prove difficult to manage if something goes wrong as the service desk will not be able to help. Eliminating service disintermediation requires strong internal management to ensure cloud based services are procured and supported properly and in accordance with company policy.
ITIL and the cloud
The fundamentals of ITIL best-practice provide a solid foundation for organizations adopting cloud computing and cloud based services.
IT service providers, outsourcing organizations, cloud computing service providers and internal IT departments all should update their ITIL best-practices and processes to cater for the flexibility and scalability of cloud computing. They must consider the management and control of data, security, the cloud environment, budget and services to the business. Essentially, cloud is another form of delivering IT, so a lot of the fundamentals of ITIL and IT service management don’t radically change.
In fact, the cloud of today came from yesteryear’s mainframe environment. The difference, today, is the internet which provides a platform to deliver pay-per-use utility based computing services globally from cloud service providers’ data centres.
Competence in a fast-changing world
The world of cloud is changing rapidly and it needs more, not less, technical competence. Technology practitioners need to learn about cloud computing and how to work with this alongside traditional and legacy IT infrastructure.
Lower level technical roles may go to cloud providers while in-house IT professionals will be elevated to a more business-oriented role supported by a layer of technicians to handle the legacy and traditional client-server IT. Ultimately, their role and responsibility will be to understand what the business wants from technology and to know how best to deliver it via the cloud.
For further insight into cloud and ITSM, download the free white paper, IT service management and cloud computing.
Mark O’Loughlin - managing director and principal consultant, Red Circle Strategies
As originally seen on Cloud Computing Intelligence in January 2015.
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