Managing Cloud for the Enterprise

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New York -- Senior IT executives from enterprises adopting cloud technologies shared their experience and advice last week at a summit forum held by research and management consulting firm Saugatuck Technology.

Among the day’s events was a panel of CIOs from News Corp, The Washington Post and Pitney Bowes, who discussed the inevitable tread of the service economy into the enterprise.

Though the cloud presents immediate cost benefits versus infrastructure and software procurement, CIO and EVP Rich Roseman of News Corp said he doesn’t sell the cloud proposition internally for that reason. Also, he thinks the economics won’t be as favorable in the future. “I personally believe the cost structure will change as we all get sucked into it. I sell it in terms of flexibility and speed to market. It has helped us and we can substantiate this in [our] entertainment programming.” What he called “blips” of high viewership during a disaster or big sporting event no longer require having to own excess infrastructure “and have it sit there empty 200 days a year.”

In areas like social networking where internal expertise was not up to the snuff, News Corp instead hired social networker Jive. “We write the check, they do the work,” said Roseman. “I’m very happy.”

At The Washington Post, CTO Yuvi Kochar says cloud reflects his company’s strategy of moving back to best of breed solutions and involves integrating a variety of software as a service offerings. He recalled looking back at a technology roadmap from five years ago and seeing projects that occupied IT for the entire year. In 2013, “there are so many projects on our plate and so much functionality we are going to deliver in parallel streams at such a pace reflected in this chart. I was struck by how different these two roadmaps looked.”

Kochar says IT this year will do more, quicker and at lesser cost for what will be the same level of functionality that was once implemented internally. “[We have] transformed from a technology heavy team, especially in the corporate office.” Engaging with the business and creating alignment calls for more organizational and business understanding. “It has focused our resources to be more functionally savvy than to be running databases and things of that sort.”

Greg Buoncontri, EVP and CIO at Pitney Bowes, says his company has long pursued outsourcing partnerships, which made the idea of cloud providers more palatable from the start. “After a while it becomes just part of the air that you breathe. We don’t really question this anymore, it’s natural [and] there are a lot of business reasons to look at asset-light configurations…”

Sometimes service providers actually pull their customers forward technologically, Buoncontri said, and “that means we have to be willing to let go of certain things, moving power away from the center and get on the bandwagon.”

That means hiring skills that speed time to value in the modern IT construct, Buoncontri added. It calls for being more open to new ideas less involved with the manufacturing side of IT and more involved with the capabilities in architecture creating solutions. Brokering alliances with networks of service providers, especially at the edges of the organization when as for as long as they are needed, are a big part of success. “We’re not directly managing things, we are producing outcomes.”

Roseman said the reality is that a lot of operational IT workers in organizations will need to transition to roles with service providers. “There’s an expectation out there that the cloud is a panacea and it’s not.” Operating in the cloud, he concluded, is going to be about managing relationships, contracts and service level agreements and resolving issues around those things.

Saugatuck Technology SVP and Head of Research Bruce Guptill, who moderated the session, said IT is aware of and coping with change as much as the business is. The cloud, like every IT evolution, is “a potential mess” in areas of terms of management and risk. But the analyst said it’s an urban legend that IT is intent on ignoring the new dynamics of IT.  “What they’re threatened by is not change, but the scale and pace of change,” said the Saugatuck analyst. “They are compensated and rewarded to make things happen for their business compatriots.”

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