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While putting together lessons learned from our Cloud-related Enterprise Strategy engagements, we consolidated a set of recurring IT drivers.
The improvement of IT services and operations can deliver benefits such as improved service levels and cost savings. The Cloud offers numerous routes to IT optimization.
10 IT Drivers for the Cloud Some of the key IT drivers for the Cloud include:
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“I think it is one of the foundations of the next generation of computing." -- Tim O'Reilly
While putting together lessons learned from our Cloud-related Enterprise Strategy engagements, we consolidated a set of recurring IT scenarios and themes. You may find these useful if you are thinking about cloud opportunities from an IT perspective, and are looking for some common patterns and perspectives.
IT scenarios for the Cloud are technical scenarios that can ultimately be linked back to business scenarios. For any given business scenario, one or more IT scenarios can be defined that expose a clearer picture of how the enabling technologies can be used to reach a solution.
The following are key scenarios to be aware of from an IT perspective. These highlight the alignment of Cloud opportunities with common growth, deployment and management trends.
Cloud IT scenarios are organized into the following categories:
The primary tenants of this scenario are:
An investment in tools, processes, and culture can drive innovation and grow a business through new products, services, and/or processes. For nearly every enterprise, innovation is critical to long-term success. Investing to drive innovation can improve a business’s competitiveness and help it thrive in a challenging economy and shifting business landscape.
In general you can think about the Cloud as an application that fits one of these patterns. Use these patterns to analyze and test potential Cloud scenarios for success. For example, the “On and Off Bursting” scenario is optimal for testing because you can run the application on premises and in the Cloud concurrently.
The Growing Fast pattern is typically represented by a startup company that begins with a minimal IT footprint, but quickly scales up their offerings as demand increases. Similarly, companies that might underestimate usage of their product might need to rapidly scale IT capabilities. Customers get to bypass the overhead costs of hardware and management, and focus on delivering business value.
The On and Off Bursting pattern is commonly represented by a company needing batch processing or computation. For example, a big challenge for hedge funds is acting quickly on data or emerging events. Cloud computing offers the opportunity to come to book large numbers of machines for a short period of time to conduct analysis. The Cloud allows on-demand resource usage that removes the need for heavy capital expenditures on hardware that will sit idle for large portions of its lifespan.
The Unpredictable Bursting pattern occurs when scaling is not predictable. For example, an eCommerce site specialized in selling sporting goods for Spain’s soccer team after they won the World Cup. The Web site traffic surge due to this win was not predictable, and an inability to service the demand spike would cause a substantial loss in revenue opportunity. A site deployed in the Cloud could have additional servers provisioned in short order, or even be designed to dynamically scale server instances to follow the demand curve.
The Predictable Bursting pattern occurs when workload scales up and down based on a predictable pattern. An example of this might be a salary or payroll firm. On set intervals such as the 1st and 15th of each month, there is a spike in demand for computing power to process the payroll. By using the Cloud, the necessary computing power can be scaled to meet the demand, and then subsequently scaled back again to save expenses during the lower demand period.
While putting together lessons learned from our Enterprise Strategy cloud engagements, we consolidated a set of recurring business scenarios and themes. You may find these useful if you are thinking about cloud opportunities from a business perspective, and are looking for some common patterns and perspectives.
The following business opportunities reflect common motivation for Cloud migration:
Achieve cost-effective business continuity Business continuity risk can be transferred to vendors by leveraging cloud solutions. Cloud providers can provide robust and less expensive business continuity solutions than businesses can achieve alone.
Create new revenue streams from existing capabilities Monetize business capabilities as a revenue generator. Leveraging a cloud platform to achieve a business capability can prove profitable through extending the implementation for others to consume on a subscription basis.
Decrease power consumption Reduce power costs and environmental impact through more efficient data center design and optimization. Leverage Cloud resources to outsource workloads gaining greater efficiencies and lower operating costs.
Decrease the time to market for new capabilities With the Cloud, the time to implement applications for pilot projects or production deployments is drastically reduced because of the reduction of environment and infrastructure concerns. This accelerates the time from concept to execution for projects and allows organizations to explore more opportunities overall with much lower cost and risk.
Easily integrate new businesses into your organization Move people onto core systems with self-provisioning. Reduce business disruptions with flexible online business services. Accelerate speed to value by connecting across network and organizational boundaries to integrate acquired systems.
Improve operational efficiency to enable more innovation Enable investment to be prioritized on strategic initiatives through efficient use of available budget. Enable the business to make informed decisions through cost transparency for each IT solution and increase the accuracy in business cases for new initiatives.
Improve the connection with your customers Integrating systems through the use of Cloud services is often easier and lowers the barrier to entry compared with on-premises solutions. When integration is easier, organizations can provide more information to customers. This in turn increases satisfaction, loyalty and revenue.
Provide elastic capacity to meet business demand Leverage the on-demand consumption model of the Cloud to quickly provision and de-provision resources as needed. Increase agility by enabling your organization to react to an urgent business need quickly by applying Cloud-based resources.
Provide Enterprise Messaging from Anywhere Secure, reliable, timely access to the latest enterprise class messaging from anywhere helps maintain and improve corporate based productivity and manage overall, per user messaging costs.
Reduce Upfront Investment in New Initiatives Reduce the size of investment required to launch new initiatives and align the cash-flow requirements with actual solution adoption over time. Reduce the risk associated with upfront investments.
While putting together business scenarios for the cloud, one of the scenarios that came up is “create new revenue streams from existing capabilities.” The business opportunity, solution, and benefits are summarized as follows:
Monetize business capabilities as a revenue generator. Leveraging a cloud platform to achieve a business capability can prove profitable through extending the implementation for others to consume on a subscription basis.
While putting together business scenarios for the cloud, one of the scenarios that came up is “achieve cost-effective business continuity.” The business opportunity, solution, and benefits are summarized as follows:
Business continuity risk can be transferred to vendors by leveraging cloud solutions. Cloud providers can provide robust and less expensive business continuity solutions than businesses can achieve alone.
I’m an avid collector of proven practices for execution and getting results. Execution is your best friend, among changing times and evolving landscapes, especially when you combine your execution with effective strategy.
One of the key practices for successful companies is digitizing their core processes. Digitizing your core processes can create higher profitability, reduce time to market, and get more value from your IT investments, while lowering your IT costs. That may sound too good to be true, but that’s a taste of what some of the data is showing. Regardless of the data, you may have experienced this yourself first-hand, if you’ve seen a company that really has it’s IT act together.
In the book, Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, by Jeane W. Ross, Peter Weill, and David C. Robertson, the authors write about the difference that makes some companies survive and thrive, while others fold.
Higher Profitability, Faster Time to Market, and More Value from their IT Digitizing your core processes can help you in multiple ways. Ross, Weill, and Robertson write:
“We surveyed 103 U.S. and European companies about there IT and IT-enabled business processes. Thirty-four percent of those had digitized their core processes. Relative to their competitors, these companies have higher profitability, experience a faster time to market, and get more value from their IT investments. They have better access to shared customer data, lower risk of mission-critical systems failures, and 80 percent higher senior management satisfaction with technology. Yet, companies who have digitized their core processes have 25 percent lower IT costs. These are the benefits of an effective foundation for execution.”
Leading Edge Companies Pull Further and Further Ahead A good foundation for execution can help you focus, invest wisely, and get ahead. Ross, Weill, and Robertson write:
“In contrast, 12 percent of the companies we studied are frittering away management attention and technology investments on a myriad of (perhaps) locally sensible projects that don’t support enterprise wide objectives. Another 48 percent of the companies are cutting waste from their IT budgets but haven’t figured out how to increase value from IT. Meanwhile, a few leading-edge companies are leveraging a foundation for execution to pull further and further ahead.”
Companies with a Good Foundation for Execution Have an Increasing Advantage A good foundation for execution is an exponential advantage. Ross, Weill, and Robertson write:
“As such statistics show, companies with a good foundation for execution have an increasing advantage over those that don’t. In this book, we describe how to design, build, and leverage a foundation for execution. Based on survey and case study research at more than 400 companies in the United States and Europe, we provide insights, tools, and language to help managers recognize their core operations, digitize their core to more efficiently support their strategy, and exploit their foundation for execution to achieve business agility and profitable growth.”
I’ve seen the force multiplier of strategy+execution, and it’s no surprise why that is the difference that makes the difference between companies that thrive, and ones that die.
Execution is king. That’s what one of my most seasoned mentors taught me, early on at Microsoft.
I’m always on the hunt for principles, patterns, and practices that improve execution, whether at the individual, team, or organization level. Since I’ve joined the Microsoft Enterprise Strategy team, I get to take more of a balcony view across companies, and see different success patterns for execution. It’s been very revealing how technology can help a business thrive. It’s also been revealing how technology decisions can be a distraction or get in the way, if a company doesn’t have clarity on its strategy.
In the book, Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, by Jeane W. Ross, Peter Weill, and David C. Robertson, the authors share their perspective on why some companies execute better.
You Do All the Right Moves, But You Still Can’t Get Ahead Competition is only getting tougher. Ross, Weill, and Robertson write:
“In short, you do everything the management literature says you should, but you still can’t get ahead. And the signs aren’t encouraging for the future. You see Chinese companies taking over manufacturing in industry after industry. Indian companies providing more and more services. Small, agile competitors from around the world picking off niche after niche in your markets. Competition is only getting tougher.”
Yet Some Companies Thrive Some companies thrive while others are lucky just to survive. Ross, Weill, and Robertson write:
“Yet some companies – some of your competitors – seem to be able not just to survive but to thrive. In the face of tough global competition, companies like Dell, ING DIRECT, CEMEX, Wal-Mart, and others are growing and making money. These companies have more-productive employees, get more from their investments, and have more success with their strategic initiatives. What are they doing differently?
They Have a Better Foundation for Execution They digitized operations and created a foundation for business agility. Ross, Weill, and Robertson write:
“We believe these companies execute better because they have a better foundation for execution. They have embedded technology in their processes so that they can efficiently and reliably execute their core operations of the company. These companies have made tough decisions about what operations they must execute well, and they’ve implemented the IT systems they need to digitize those operations. These actions have made IT an asset rather than a liability and have created a foundation for business agility.”
The question I think this brings to mind is, “Have you identified your core and critical operations, and clarified what to digitize?”
This plays right into thinking about your cloud strategy.
“Success is how high you bounce when you hit the bottom.” -- General George S. Patton
Life can have a lot of ups and downs and your ability to bounce back is one of the keys to your success.
Here is a simple model I put together as part of my 30 Day Bootcamp on Getting Results to help you multiply your ability to bounce back in any situation:
I wasn’t sure whether to call my model a 4×4 Force Multiplier Frame or 4×4 Sources of Strength. For now, I’m going with 4x4 Sources of Strength.
If you know somebody who’s been knocked down and needs help getting back up, share this frame with them as a way to help them get back on their feet and find their sources of strength from the inside out.
I tried to keep the model as simple as possible and easy to remember, while giving you a variety of sources of strength and energy to draw from. I wanted this frame to serve as an “at a glance” reminder of how you are a force of one, from the inside out, as well as from the outside in. Change your frame to change your game.
Mind Here are some ways to bounce back with your mind:
Body Here are some ways to bounce back with your body:
Emotions Here are some ways to better balance and bounce back with your emotions:
Spirit Here are some ways to bounce back with your spirit:
Mental models can really help you simplify how you think about a problem. One of the more useful mental models I’ve come across while working across cloud solutions is:
… Move to the Cloud, Use the Cloud, and Be the Cloud.
It’s a simple way to think about the role you play in the cloud arena, or the role the cloud plays in your arena. Here’s a quick rundown of each one …
Use the Cloud Using the cloud is taking advantage of the cloud through consumption of some cloud services. This could be using another company’s SaaS, PaaS, or IaaS offerings to take advantage of the cloud benefits. You can benefit from the elastic capacity and increased flexibility.
Be a Cloud Be a cloud refers to building cloud offerings for consumption by other partners (internal or external), or consumers. This is can be a SOA implementation, or building out a Private Cloud and offering services internally to other organizations within the same company.
It’s a simple model, but I think it helps bring clarity to the table when people are talking about their cloud strategy.