How cloud is redefining the relationship between Business and IT

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Deciding to move your business to the cloud is a much more profound change that simply moving your infrastructure from where it is today to a cloud datacentre. It’s an opportunity to fundamentally re-evaluate your business model and goals and better align the business and technology teams. Looking at it as purely another technology project misses the point.

But whose responsibility is it to kickstart this more profound thinking? The IT department, given it’s a technology shift and they should be best placed to understand what the tech can do, or the business side of the organisation who understands where the business needs to go? After all, while the business team might not know what cloud can do, it certainly knows what it wants it to do if it is going to fulfil its purpose.

In truth, it’s neither. In this new age of differentiation through digital services, technology direction and high-level decisions must be discussed and made in the board room, with buy-in from both sides. That is why any organisation intent on becoming a digital-first, cloud-first business needs a first-class CIO on its board to educate and guide fellow board members.

The cloud operating model

Cloud, and the operating model that supports it, is focused on how to drive innovation inside an organisation – and how we continue to innovate once freed from the constraints of an on-site infrastructure. Priced by the minute or megabyte, cloud is quick and cheap to implement and, if you realise you have headed down the wrong path, it is equally easy to terminate.

That is why, when considering cloud, the first thing to think about is how quickly the organisation is changing. For example, is it persevering with unsuitable kit simply because the board is embarrassed to write it off before it has extracted its full perceived value? If so, the business is almost certainly losing more in revenue than it is saving.

Technology has no respect for tradition. There is no guarantee that what is successful today – and has been in the past – will continue to deliver in the future. The growing technological power that start-ups can access is increasing the number of competitors – both actual and potential – by the day. Existing organisations need to meet them head on, by relying less on business-as-usual and the hardware, software and services they already run, and instead adopting the same model as their emergent rivals: cloud.

Cloud is key

Traditionally, fundamental change on this scale has not been easy. Why? Because of the disconnect between the business aims and the IT capability. The business – by which I mean the commercial arm of the organisation – will often say, “wouldn’t it be great if we could do this”, to which IT would usually respond, “yes, it would, but we can’t because of reasons A, B and C”.

Most of the time, those reasons boil down to one thing: a drive to save money. IT has long been seen as a cost centre, and successful companies have traditionally been those that have minimised costs while maximising revenue. That model is increasingly irrelevant.

When contemplating cloud, there are several considerations including change, not costs, and the speed at which it is happening. Right now, that rate of change should be increasing. Ask how many transformation projects are ongoing within your organisation and how long it takes to deliver each one. When was the last time you launched a new digital product or service into the marketplace? Are you using cloud or on-premises kit? How leading- and bleeding-edge are your technology projects? Do you use five-year-old technology, two-year-old technology or six-month old technology?

This last point is particularly potent, as the more up-to-date technology a company is using, and the more risk it is taking in terms of that leading- and bleeding-edge kit, the more it will be setting up for success in the future. That is why it is important not to fixate purely on the bottom line.

Don’t ask how your cloud infrastructure is contributing to revenue, or even how it is helping reduce costs. Ask, instead, how it is keeping your organisation agile in an increasingly competitive environment. Then, ask how it is going to ensure you still have a business in 12 months’ time.

The grand bargain

This sounds like a big job, but actually, it is not. The review of your IT setup is actually a very small piece of work, and it should quickly become apparent whether the processes and technology you are using are functioning as they should. Nine times out of ten they won’t be. When this comes to light – and it will – you will understand that there is a better way of doing things, and then you can start redefining the relationship between the business and IT.

I sometimes describe this reckoning as a new ‘grand bargain’ between the two sides of the organisation, and one in which IT is given encouragement to innovate. It needs a reason to stop being the department that likes to say no, which can only happen both when it has support from the board, and representation on the board itself.

The metrics against which IT’s performance is judged must also be re-thought. When it is incentivised to propose change, it will bring new technologies to the organisation, and demonstrate to executives how the world in which they operate is changing all around them.

So, how does the organisation bring this about? It comes back to the idea of IT being a service centre, not just a support department like security, maintenance or the reception team. The business, meanwhile, is its client, to which it should be actively upselling the potential of the platform in which the company has chosen to invest. With 200-plus services available inside Azure alone, the potential here is beyond anything previously imaginable.

Giving IT this freedom is the most significant step an organisation can take towards becoming the next Netflix and, perhaps more importantly, avoiding the kinds of mistakes that would make it tomorrow’s Blockbuster.

Dan Scarfe, founder, New Signature UK
Image source: Shutterstock/bluebay