How to Use Cloud Computing to Transform into a Service-Centric IT Organization

By Keith Jahn  |  Posted 2010-03-29 Print this article Print

Most IT executives are approaching cloud services exclusively from the perspective of how cloud services are delivered. What is being ignored, and what can have significant ramifications on the overall IT organization, is what cloud services are and how cloud services are consumed. As Knowledge Center contributor Keith Jahn explains here, it is critical for IT executives to move away from a delivery-only focus in order to create a world-class supply chain for managing supply and demand of cloud services.

In the childhood story of Chicken Little, a frantic fowl travels on a seemingly life-or-death journey to warn the king that the sky is falling. Along the way, she garners support from like-minded friends who take up the cause and join the journey to inform the king. The group eventually runs into a tricky fox who convinces them that he has a better path, one that will enable them to reach their destination much more quickly. There are two popular ending scenarios:

Scenario No. 1: The animals are eaten by the fox and never see the king-espousing the age-old lesson of "Don't believe everything you hear."

Scenario No. 2: The king's hunting dogs intervene and dispatch the fox, enabling the king to hear the story-teaching a lesson about courage and perseverance in pursuing goals.

This story explores a scenario that IT organizations could face in the future, brought about by cloud computing. It's a scenario that forces radical change for IT as we know it-perhaps even eliminating the function altogether. If IT organizations are eliminated, this will quite obviously have a significant impact on the entire technology supply chain.

The natural rhythm in IT is to view cloud as a technology disruption and assess it from a delivery orientation: how can this new technology enable us to deliver solutions better, faster and cheaper? An equally important (but often ignored) dimension to pay attention to is how cloud services are consumed: these services are ready to run, self-sourced, available anywhere, subscription-based or pay-as-you-go.

As cloud services mature and grow, new capabilities will emerge. Businesses will be able to solve new problems that weren't addressable before. In addition, they will be able to solve old problems quicker, cheaper and with higher quality results.

Because of this, cloud services will usher in new business models, which in turn will force IT to reinvent itself in order to remain relevant to the business. This means that IT must move away from its exclusive focus on delivery and management of assets, and move toward creating a world-class supply chain for managing supply and demand of business services.

In this scenario, cloud services actually become a forcing function-forcing IT to transform. CIOs that ignore this fact and fail to take transformative measures are likely to see their role change from innovation leader to CMO (Chief Maintenance Officer), responsible for maintaining legacy systems and services sourced by the business.

Keith Jahn is a Director in the office of the CTO for HP Software and Solutions. During his career as an IT practitioner, architect and strategist, Keith has successfully designed and implemented technology, automation, and service management strategies. He has also led several large-scale transformation initiatives. Keith has a passion for IT-led business effectiveness and has held leadership roles in IT and commercial outsourcing at several Fortune 500 corporations. He can be reached at

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