Most of the focus of discussions on cloud computing are on technology questions or cloud service models. It’s easy to forget that fully half the cost of enterprise IT is human cost, and that the source of cloud project problems and successes alike are in the project management and ongoing support of cloud applications. Everyone plays a new role when applications migrate to the cloud. Both IT and line management think the cloud is their own adventure; it’s really all for one, or the cloud’s success is at risk.
Cloud buyers say that the first step, the key step, in harmonizing organizational roles in the cloud is harmonizing the goals of line departments and IT. Not surprisingly, these two groups approach the cloud projects very differently.
For line department management, the cloud offers an opportunity to create an “as-a-service” or “plug-and-play” compute model in which applications can be deployed as needed. Never before has it been possible to deploy an application set, use it intensively for several months, and then pack it up to be used later—or never. The tactical nature of SaaS in particular lends itself to a whole different relationship between computing and business operations, and this is something only the line management can plan for.
The challenge for line management, according to user surveys, is in avoiding cost overruns and cloud project failures because of poor application planning. Some companies have, for example, completely overlooked the cost of data storage—a factor that can more than double total service costs. Others have neglected to ask how the applications would be accessed by workers who needed to switch from one application to another during the processing of an order or the shipment of a product. While integration or professional services are available to line managers who lack technical skills or technical staff to draw on, the cost of outside services can contaminate the cloud business case.
The balancing of benefits and risks that these two issues imply is the reason it’s so important to secure and sustain a cooperative attitude between line/operating personnel and IT professionals during a transition to cloud applications. Few companies will be able to replace internal IT completely, and those who want to adopt SaaS widely for flexibility and responsiveness can easily create a polarized and adversarial relationship between “internal” and “external” IT champions. According to surveys, this will at least double the risk of serious problems with cloud projects and benefits.
IT professionals should be engaged to set the technical parameters for SaaS before the service contract process begins. That means that the SaaS and integration framework to be used to support company IT policies, compliance, and security must be built by IT first, and new services should be assessed to insure they meet the basic requirements of this framework. Where there are deviations, the benefit at the business level has to be balanced against the incremental cost of connecting and securing the application that strays from the norm.
The policy of having IT set the rules and assess the technical linkages creates a clean boundary between IT and line departments when reviewing applications for cloud deployment. If the application fits the technical model, then the selection of candidates is a matter for the line business units to handle, making their decision based on the impact of each candidate on worker productivity and the bottom line. This separation of responsibility reduces friction between line managers and IT professionals and insures that the necessary cooperation will be maintained.
Staffing and savings is another organizational issue that can be difficult to manage. Cloud savings estimates nearly always include some savings in internal support costs, which often means headcount reductions on the IT side. The big question is how much actual work will be saved by a transition to the cloud. There’s no easy model to apply here because some IT professionals maintain hardware systems, software and middleware (the “platform”), others the application software, and still others support the users themselves. Each of these tasks will be impacted to varying degree depending on what applications are cloudsourced, so with each cloud decision it’s necessary to review the assignments of personnel in each of these areas and decide whether work there has been reduced to the point where a corresponding reduction in staff is indicated. Sometimes it’s possible to obtain contract support and technical resources, and this can be considered providing the suppliers of these services have specific cloud and cloud integration experience.
The relationship between line departments and IT is almost certain to be changed by a decision to adopt cloud applications. Since the policy decisions on what applications to use tends to shift to line departments, IT’s role becomes more one of first establishing the rules for application selection and second supporting line decisions that conform to those rules. IT support is more likely to be focused on helping users than on sustaining technology infrastructure, which requires more people skills and often less technical specialization. This can mean adjusting job descriptions, providing training and looking at different career paths for IT personnel.
Anything that changes people’s role or responsibility is likely to generate some tension, and it’s best to deal with these organizational issues in early planning and to consider them as the cloud project evolves. A failure to address these matters can create communications problems, retention problems and ultimately cloud migration problems, and none of these things are good for the project or for the company.
This was first published in May 2012