CIOs can optimize the benefits of cloud investments by developing and implementing plans for cloud-driven changes in organizational structure and processes.
Adapting to a New Cost Structure
Many companies encounter difficulty when shifting to the new cost structure of a cloud-based environment because legacy infrastructure is typically purchased as an upfront capital expenditure for each department or application based on its individual compute and storage needs. Departments often view the operational cost of facilities to run these applications as “free” because their departments don’t see the cost passed on to them—even when usage spikes cause significant space, power or cooling requirements.
However, cloud technology necessitates a change in the way infrastructure resources are paid for, since these resources are now being provided as a service based on actual use across all cloud-hosted servers, storage and network resources. The IT finance organization must help determine the best way to change IT procurement and payment policies and shift to a new process for charging for services and receiving payment.
One of these challenges is shifting to a chargeback model, which charges each application and business group according to the amount and type of cloud resources they use. CIOs should start with a showback model, which will show business users what the cost of IT resources in the cloud environment will be, based on utilization and performance measurements for each resource. The showback approach helps organizations implement a chargeback model and establish cost accountability.
Overcoming Resistance and Achieving Security Buy-In
Companies often encounter challenges involving staff resistance, but legacy application owners and IT stakeholders must be willing to adapt to change for a successful enterprise private cloud deployment. One of the hardest decisions for CIOs is often whether to retrain or replace the existing operational support organization.
While retraining is generally preferable, an associated mindset paradigm shift may be needed: from running a legacy environment to running a private cloud. The convergence of storage, servers and network requires staff to manage all three, so IT operations and application teams must be able to work across IT silos.
It’s also imperative to achieve buy-in from the security group before deploying a private cloud, since this department is often risk-averse when it comes to new technology. The security group is responsible for ensuring that the transition to new cloud technology will not put the organization at risk.
CIOs should determine whether the security and threat management team is knowledgeable about cloud environments, and then either provide training or hire new security staff well-versed in cloud technology. This includes knowledge of virtualized network security and being able to establish rules for varying levels of security associated with each type of IT infrastructure in the cloud. Taking these actions is vital to minimize issues with cloud security before deployment.
Cloud technology offers many benefits, but adoption does present challenges. One of the best approaches to addressing these challenges is to start by building a private cloud with the capability of “bursting” to the public cloud for certain IT functions and applications, depending on security and management requirements.
CIOs can optimize the benefits of their cloud investments and minimize risks by taking the time to develop and implement plans for cloud-driven change in organizational structure and processes. This approach empowers CIOs to deliver the speed and agility of cloud infrastructure to their organizations while sidestepping common adoption hurdles.
Joy Sim is an analyst at management consulting firm Pace Harmon, which provides advisory services on issues such as strategic sourcing, vendor management and supply chain management.
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