3-4 April 2019 / Manchester Central

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CIOs Are Feeling the Need for Speed

Wednesday 21 March 2018

Is Fast IT an incremental change or a wholesale abandonment of all that went before? Experts weigh in.

 

By Paul Mercina, Director of Product Management, Park Place Technologies

The warnings have been out there: Mobile and social accelerating customer interactions. Big data providing deep lakes of potential knowledge. Billions of connected gadgets bringing forth a global Internet of Things (IoT).

The pressure is on as IT leaders compete to harness this incredible onslaught of information most rapidly and to the greatest advantage. As such a data-laden asteroid nears, the executives most comfortable within the traditional confines of core IT can be forgiven for wondering: Is this an evolution, a revolution, or an extinction-level event?

That’s because huge, laborious IT projects have become dinosaurs in this environment. They take too long and entail too much risk. Instead, IT is being urged to “fail fast and fix it.”

And if they don’t? Cloud and aaS have freed internal customers to purchase nearly any IT service with the swipe of a corporate Amex. To them, IT’s protests about governance and compliance are little more than the babble of Charlie Brown’s parents.

This shadow IT is variously estimated to be between 30% and 50% of total IT spending. Auto-renewing zombie contracts —like that forgotten web marketing service a former director bought but never used—are bloating the budget. Lack of interoperability, security risks, and other issues are creating more problems.

CIOs have realized they need to be the gateway to technology consumption and trusted advisors to the lines of business when it comes to their digital aspirations. But to achieve that position, the IT organizations they oversee must go faster.

Bring in the IT Lamborghini

The field of IT has reached middle age. Whether you look at the ARPANET introduction in 1969 or the coining of the term “Silicon Valley” in 1971, the industry is approaching 50 and ready for a sports car.

CIOs are looking in many directions in their quest to accelerate: agile, cloud, DevOps, and nearly everything as-a-Service (XaaS). Cisco put the entire trend under the helpful shorthand, Fast IT .  

The tactics aside, there is a fundamental shift from owning the IT function to being a technology broker capable of giving the lines of business what the need, when and how they need it. IT itself must operate like a business and provide competitively priced services and insight to internal customers.

A successful end result may appear as simple as a corporate App Store, which customers can use to provision IT services. Implementation, however, is complicated. A consistent infrastructure, software and automation, and a flexible, scalable consumption model are required .

Bringing these elements together in a secure, efficient architecture is a challenge. Too bad most CIOs struggle to marshal the necessary resources or even the corporate attention to define how much speed they need.

Hybrid or Bimodal IT

Many IT leaders are left wondering how fast to go. Is everything the Autobahn, or is there room for a more considered approach as well?

There is no unanimity of opinion on the matter. There are some who argue the accelerated model must encompass all IT functions, and that even governance could be handled in an agile, automated way. To such enthusiasts, traditional IT and all its trappings are fossils. And for CIOs who can’t or won’t adapt—extinction-level event.

It’s fair to say most industry watchers disagree. They see more life for core IT management as a substrate of this “Fast IT” layer. Gartner, for one, has pointed vigorously in the direction of bimodal IT . This approach involves breaking IT into two streams, one that pursues agility and the other that works toward stability.

Although each enterprise will segment operations differently, three places where core IT may live long and prosper include:

  • Legacy applications. Those weighty systems of record aren’t going away just yet. Most represent large investments, which cannot be easily redeveloped. With mobile and APIs unlocking the data they contain for new uses, they are more valuable than ever.
  • Infrastructure. Then there is IoT falling on the heels of big data analytics. With a deluge of potentially useful information comes the need for more storage, more compute, and more connectivity. Some of this will move to the cloud, but current trends are toward a hybrid approach of public and private, hosted and on-premises. That means most organizations can’t purge their operations of enterprise storage and networking routers.
  • Software Assets. We can’t take high-profile, new development off the core IT table, either. For businesses based on software, they will want to own and operate the products giving them the leg up and make bold, multi-year investments in proprietary technologies. Even when spawned in the fast lane, differentiating technologies may be reabsorbed, refined, or even redeveloped under the core IT model.

The bottom line, IT leaders cannot abandon fast or core IT; they must do both. Or to follow the metaphor, CIOs are finding that instead of simply shifting gears, they are being required to drive two cars at once, a stately old Bentley and a Formula 1 Mercedes. It’s no easy ride .

Finding the Resources

Whether we call it bimodal , hybrid , or transformed traditional IT , there are immense challenges in overseeing two different but equally rigorous, necessary, and evolving operations. While public cloud resources will help with bursting, on-site hardware must still be maintained. Digital transformation will be a priority, but its success will often be built on top of heavyweight legacy systems.

Thus the struggle will continue to innovate while keeping the lights on. Here are three suggestions from experts on how to find the right balance:

#1 Tame Complexity

According to Nigel Fenwick , an analyst at Forrester Research, IT has invested too much in software customization for basic business functions, and it’s added complexity and expense while compromising agility. The solution? Implement standardized systems for any business function or capability that isn’t a key differentiator, and focus IT specialization on the two or three areas that do drive competitive advantage.

For instance, UBER is not in the CRM or accounting business, so off-the-shelf solutions should suffice. A customer-friendly, fully functional, integrated app to link riders to drivers, on the other hand, is essential and worth whatever it takes to build, maintain, and evolve.

One problem, says Rita Gunther McGrath , the shift can be a “hard sell.” Be prepared for some pushback from business managers when they are asked to change their work processes to suit the systems rather than the other way around.

#2 Budget Better

Bruce Myers of AlixPartners suggests budgets can be a key issue. He criticizes the practice of benchmarking IT’s entire tab as a percentage of revenue. Instead, he suggests substituting “keeping the lights on” as a percentage of revenue as the better number to manage.

Growth and innovation projects, he says, should be funded by the lines of business. That way, business managers take financial responsibility and ownership. And there’s no need to explain to the CFO why IT is spending so much. The lines of business can be called on to articulate the reasons for their IT requests and the strategic benefits thereof.

Yeah, that’ll make for better meetings in the C-suite.

#3 Control Costs

Unexpected repairs can derail otherwise great planning, consuming time and resources already in short supply. One option offloading such “keeping the lights on” functions—outsourcing.

This doesn’t always mean handing over the keys to the public cloud or a third-party data center management company. On-premises and collocated assets can be maintained by a third party as well. Bringing on a third party IT maintenance provider can drive significant cost-savings and free up budget for strategic projects. The key is finding a quality hardware support partner , one that can:

  • Provide 100% component coverage to eliminate unplanned costs associated with hardware failure
  • Include full-service support for the hardware, software, and firmware to provide further budget protection
  • Proactively maintain systems to extend hardware lifespan and remove these task burdens from internal staff
  • Guarantee expert engineering assistance to ensure that complex issues do not steal resources from innovation projects in progress or planned

An extra benefit, Gartner has found average savings from third party maintenance to be about 60%.

Conclusion

To operate at the speed of today’s business will require CIOs to carefully manage core IT, root out unnecessary customization, account for it in a manner that leaves room for innovation projects, and hand off some maintenance tasks to partners who can increase budget predictability, service quality, and uptime. The best part, once these adjustments are made, CIOs can spend more time in the fast lane on exciting projects that will define their companies and their careers. 

Park Place Technologies will be at Stand N312 exhibiting at IP EXPO Manchester 2018. 

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