The reality is if your IT organization is working to transform into an IT-as-a-Service model to meet changing user demands, you didn’t just wander onto that path. Transformation is typically not something you do when everything is good… it’s a response to disruptive influences that make the status quo increasingly untenable.
To understand what’s driving today’s IT transformation groundswell, you need only look at the escalating pressures facing the CIO in a traditional IT operation. On one side, you have external IT service providers, promoting standardized offerings with friction-free consumption experiences and pay-by-the-drink pricing selling directly to the lines of business in competition with corporate IT. On the other side, many CIOs contend with Corporate Finance models that want to treat corporate IT like a regulated monopoly–rationing the supply of IT in order to keep total IT costs in check.
While corporate IT may have once been somewhat of a monopoly within an enterprise, those days are long gone. Increasingly tech savvy business users, empowered by consumerization trends and an explosion in IT services offered from the public cloud, are finding alternatives to corporate IT. They perceive IT as too slow, too expensive, too restrictive and too rooted in traditional thinking.
And while CIOs may have a desire to operate IT more like the service providers they find themselves having to compete with, they are constrained by aging, complex and fragile customized legacy solutions, manual-intensive and error-prone operations, and a mindset of “keeping the lights on.”
Against this backdrop, most CIOs are struggling to earn a seat at the table. They’re struggling to maintain the relevance of their organization in this new world. This is the essence of why transformation is now a mandate. It’s not about speeds and feeds; it’s about the business model of IT and making sure it maps to what the business needs going forward.
On one side of the coin, unless they transform themselves, IT organizations face the threat of becoming completely irrelevant. On the other side of the coin, however, information technology has never been as important to businesses as it is today, and that trend will only continue to intensify.
IT organizations that are able to transform themselves to run more like a business have a huge opportunity to contribute in a much more strategic and influential capacity than they’ve ever had in the past, driving new revenue opportunities and game-changing capabilities that provide true competitive advantage.
We at EMC IT felt many of these pressures in the mid-2000s and consequently that is when we began our IT transformation journey.
We recognized that an agile, elastic, scalable and reliable infrastructure was a foundational requirement. We made some big bets on technology standards in an effort to take unnecessary complexity out of our infrastructure and to drive a level of consistency that was an important prerequisite for future automation efforts.
We made a big bet on multi-tenancy (running multiple application workloads on a single infrastructure) and created incentives for our application teams to move their applications from their older dedicated, physical environments into our multi-tenant virtualized infrastructure. This, in turn, enabled us to drive down unit costs, drive up utilization and drive up our speed and ability to respond to our customers’ business needs.
Having the best gear in the world, though, doesn’t necessarily solve the business problem. Much of our business problem was self-imposed by virtue of how we were organized, how we governed ourselves, the business model we presented to our end consumers, and the way we thought and behaved. It was all “traditional IT.” Even though our new infrastructure gave us the ability to provision things quickly, we were putting business users through the same old IT governance hurdles that were put in place years ago to ration supply and discourage demand.
We needed to change just about everything and reinvent ourselves more like a professional service organization. We needed to adopt different processes. We needed new skills, roles and organizational constructs. And in some cases, we needed DNA transplants.
Let’s face it: Most folks who gravitate to careers in IT are more comfortable responding to requests than they are promoting and selling services. Folks in professional services organizations understand that without promotion and selling, you have no customers!
To get started, we defined attributes of the target state we were trying to achieve. This became our Cloud Operating Model:
– Standardized services: having as little customization as possible keeps costs down, increases quality and efficiency, and promotes the use of automation.
– Self-provisioning: Putting the power of provisioning in the hands of the consumer.
– Consumption funding: In exchange for empowering consumers with self-provisioning, we must also hold them financially accountable for their choices.
– Financial transparency: Consumers need visibility into what they are spending, what value they are deriving, opportunities to optimize their spend, and how our services compare in cost, features and SLAs to external services.
– Automated operations: Enables us to drive costs down and drive quality up. The more things you are doing manually, the more problems you introduce and the longer it takes to do things.
Fully achieving this Cloud Operating Model is a multi-year journey. However it is not an all-or-nothing proposition. Early wins with a small number of standardized services, automated, self-service provisioning and consumption funding helped us work the kinks out and learn about where the beautiful theory collided with the practical reality. We built on those experiences, changing course as necessary along the way.
We established new governance, processes, and a new financial model to reinforce the behaviors necessary in the new world. We established new roles and organizational constructs to support those new ways of working. That said, we haven’t been able to entirely abandon the old world either. Consequently, some of the greatest challenges we’ve encountered are a result of straddling the old and new worlds.
One of the most difficult steps has been changing the mindset of IT after decades of thinking in terms of rationing services and quelling business user demand. It is something we struggle with every day—reinventing ourselves as business people with markets to win and customers to earn, and operating with a P&L mindset.
The good news is that that IT organizations stuck in the middle of increasing financial and business pressures can transform their IT operation into an IT-as-a-Service model as we at EMC IT and many others are in the midst of doing. It is a long journey and we still have much ground to cover. However, we’ve already gained some tremendous benefits along the way and have a lot more opportunity ahead.
In subsequent blogs, I will be sharing more details about the stages of IT transformation, the lessons we’ve learned and the strategies that will hopefully help you in your own journey. In the meantime, let us know how you are transforming YOUR organization.