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Cloud Computing - taking IT to task
The role of the cloud in driving business value
By: Quocirca
Published: August 2010
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The role of the cloud in driving business value

A business is not run "on" or "by" technology - the real value of a business depends on its processes. That technology has become a major part of a business's means of operation can be a double edged sword: if the technology is poor or constraining, then the business will suffer. Taking a new approach where technology is purely there to facilitate an efficient and effective dynamic process environment is key for organisations to help in their global competitiveness.

  • Technology is a means to an end - not an end in itself. It is there to facilitate a business, and needs to be flexible enough to deal with the changes in the business' ongoing processes. A different approach to technology is required, typified by a hybrid internal and external cloud platform.
  • In an average organisation, around 70% of the IT budget is spent on "keeping the lights on" - dealing with fire fighting, patching, upgrades and so on. This is unsustainable, and has to be addressed. This is best done through offloading variable management costs into a more predictable managed environment.
  • An organisation runs on its processes, yet few people within an organisation can adequately describe a process end-to-end. A means of breaking a process down into easily described parts is required. Starting from a point where an individual is in complete control gives the greatest opportunity for gaining a real description of what is truly going on.
  • Individuals may not be able to describe a process end-to-end, but they do understand the tasks they carry out on a day-to-day basis. Through a full understanding of how individuals undertake tasks, the requisite processes can be built up - complete with existing inefficiencies and gaps in how workflows move around the organisation.
  • Individuals have a set of needs or "inputs" for each of their tasks, and these will lead to a set of outputs that feed in to the next downstream task. By setting out the input needs and the outputs created, it becomes easy to identify disconnects in the process flow and so optimise the overall process.
  • Once the organisation's processes have been described, they can be prioritised into those that are "commodity", those that are "differentiated", and those that are "unique". The idea is to shift the emphasis of IT spend from maintenance to investment, to making sure that as much as possible is spent in managing the "unique" processes.
  • A key way of managing the costs of "commodity" and "differentiated" processes is to offload these to external providers, such as found in the hosting and cloud provider communities. By gaining a more predictable cost model at this level, greater optimisation can be gained, and investment in "unique" processes can be improved

Conclusions
Technology has to be seen for what it is - a pure facilitator of the business processes layered on to it. The need for flexible business processes continues to grow and the capability for internal IT staff and platforms to respond has become costly and problematic. Standardisation and re-use of function is increasing, and the need to focus on IT investment to support the business, rather than on patching, upgrades and technical fire fighting is driving a need to change the overall approach to IT. Looking to the cloud to offload commodity technical services and to provide services to higher level composite business processes puts IT back where it should be: at the heart of the business, but not dictating the business.

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