1-888-317-7920 info@2ndwatch.com

Cloud Transformation Through ITIL Service Strategy

For some IT organizations the cloud computing paradigm poses critical existential questions; How does my IT organization stay relevant in a cloud environment? How does IT still provide value to the business? What can be done to improve the business’ perception of IT’s contribution to the company? Without a clear approach to tackling these and other related questions, IT organizations stumble into a partially thought-out cloud computing strategy and miss out on capturing the short and long-term financial ROI and transformational benefits of a cloud-first strategy.

Several key concepts and principles from ITIL’s Service Strategy lifecycle stage lend themselves to defining and guiding a strategic approach to adopting and implementing a cloud-first strategy. In this article, we’ll highlight and define some of these key principles and outline a tactical approach to implementing a cloud-first strategy.

One of the key concepts leveraged in ITIL’s Service Strategy is the Run-Grow-Transform framework from Gartner.  From an executive management perspective, the IT organization’s contribution to the company’s goals and objectives can be framed along the Run-Grow-Transform model – specifically around how IT can help the company (1) Run-The-Business, (2) Grow-The-Business, and (3) Transform-The-Business.

The CIO’s value is both objectively and subjectively measured by answering:

1 – How can IT reduce the cost of current IT operations, thus improving the bottom line?

2 – How can IT help the business expand and gain greater market share with our current business offerings?

3 – How can IT empower the business to venture out into new opportunities and/or develop new competitive business advantage?

We’ll take a close look at each model area, highlight key characteristics, and give examples of how a cloud-first policy can enable a CIO to contribute to the companies’ goals and objectives and not only remain relevant to the organization but enable business innovation.

Run-the-Business and Cloud-First Strategy

Run the Business (RTB) is about supporting essential business operations and processes. This usually translates to typical IT services and operations such as email-messaging systems, HR services, Payroll and Financial systems. The core functionality these IT services provide is necessary and essential but not differentiating to the business. These are generally viewed as basic core commodity services, required IT costs for keeping the business operational.

The CIO’s objective is to minimize the cost of RTB activities without any comprise to the quality of service. A cloud-first policy can achieve these outcomes. It can reduce costs by moving low value-add IT activities (sometimes referred to as ‘non-differentiating work’) to a cloud provider that excels at performing the same work with hyper efficiency. Add in the ability of a cloud provider to leverage economies of scale and you have a source of reliable, highly cost-optimized IT services that cannot be matched by any traditional data center or hosting provider (see AWS’s James Hamilton discuss data center architecture at scale). Case studies from GE, Covanta, and Conde Nast bare out the benefit of moving to AWS and enabling their respective CIOs to improve their  business’ bottom line.

Grow-the-Business and Cloud First Strategy

Grow the Business (GTB) activities are marked by enabling the business to successfully increase market share and overall revenue in existing markets. If a company doubles its customer base, then the IT organization responds with timely and flexible capacity to support such growth. Generally, an increase in GTB spending should be tied to an increase in business revenue.

Cloud computing providers, such as AWS, are uniquely capable to support GTB initiatives. AWS’ rapid elasticity drastically alters the traditional management of IT demand and capacity. A classic case in point is the “Black Friday” phenomena. If the IT organization does not have sufficient IT resources to accommodate the projected increase in business volume, then the company risks missing out on revenue capture and may experience a negative brand impact. If the IT organization overprovisions its IT resources, then unnecessary costs are incurred and it adversely affects the company’s profits. Other similar business phenomena include “Cyber Monday,” Super Bowl Ads, and product launches. Without a highly available and elastic cloud computing environment, IT will struggle to support GTB activities (see AWS whitepaper “Infrastructure Event Readiness” for a similar perspective).

A cloud’s elasticity solves both ends of the spectrum scenarios by not only being able to ramp up quickly in response to increased business demand, but also scale down when demand subsides. Additionally, AWS’ pay-for-what-you-use model is a powerful differentiating feature. Some key uses cases include Crate & Barrel and Coca-Cola. Through a cloud-first strategy, a CIO is able to respond to GTB initiatives and activities in a cost-optimized manner.

Transform-the-Business and Cloud Computing

Transform the Business (TTB) represents opportunities for a company to make high risk but high reward investments. This usually entails moving into a new market segment with a new business or product offering. Innovation is the key success factor in TTB initiatives. Traditionally this is high risk to the business because of the upfront investment required to support new business initiatives. But in order to innovate, IT and business leaders need to experiment, to prototype and test new ideas.

With a cloud-first policy, the IT organization can mitigate the high-risk investment, yet still obtain the high rewards by enabling a ‘fail early, fail fast’ strategy in a cloud environment. Boxever is a case study in fail fast prototyping. Alan Giles, CTO of Boxever, credits AWS with the ability to know within days “if our design and assumptions [are] valid. The time and cost savings of this approach are nearly incalculable, but are definitely significant in terms of time to market, resourcing, and cash flow.” This cloud-based fail-fast approach can be applied to all market-segments, including government agencies. The hidden value in a cloud-based fail fast strategy is that failure is affordable and OK, making it easier to experiment and innovate. As Richard Harshman, Head of ASEAN for Amazon Web Services, puts it, “Don’t be afraid to experiment. The cloud allows you to fail fast and fail cheap. If and when you succeed, it allows you to scale infinitely and go global in minutes”.

So what does a cloud-first strategy look like?

While this is a rudimentary, back-of-the-envelope style outline, it provides a high-level, practical methodology for implementing a cloud-first based policy.

For RTB initiatives: Move undifferentiated shared services and supporting services to the cloud, either through Infrastructure-as-a-Service (IaaS) or Software-as-a-Service (SaaS) based solutions.

For GTB initiatives: Move customer-facing services to the cloud to leverage dynamic supply and demand capacity.

For TTB initiatives: Set up and teardown cloud environments to test and prototype new ideas and business offerings at minimal cost.

In addition to the Run-Grow-Transform framework, the ITIL Service Strategy lifecycle stage provides additional guidance from its Service Portfolio Management, Demand Management, and Financial Management process domains that can be leveraged to guide a cloud-first based strategy. These principles, coupled with other related guidance such as AWS Cloud Adoption Framework, provide a meaningful blueprint for IT organizations to quickly embrace a cloud-first strategy in a structured and methodical manner.

By aggressively embracing a cloud-first strategy, CIOs can demonstrate their business relevance through RTB and GTB initiatives. Through TTB initiatives IT can facilitate business innovation and transformation, yielding greater value to their customers. We are here to help our customers, so if you need help developing a cloud-first strategy, contact us here.

-Vince Lo Faso, Solutions Architect

Facebooktwittergoogle_pluslinkedinmailrss

AWS re:Invent 2016 – The CUBE

Covanta Energy and 2nd Watch talk with SiliconANGLE Media at AWS re:Invent 2016. Find out why Covanta decided to go all-in on Amazon Web Services and how 2nd Watch helped them make the transition in only 16 weeks.

Facebooktwittergoogle_pluslinkedinmailrss

AWS re:Invent 2016 Session: Lift and Evolve – Making Money with the Cloud Takes Help

Every enterprise knows by now that it can save money by simply lifting and shifting workloads to the cloud, but many are missing the larger opportunity to also make money by moving. While quick costs savings are good for the bottom line, they do little to move the top line numbers. To achieve both savings and earnings, corporate thinking about technologies must change in order to enable faster processes leveraged enterprise-wide.

In this AWS re:Invent 2016 breakout session we explored multiple customer success stories where the customers have evolved from leveraging basic compute and storage products (EC2 and S3) to integrating new services into operations by leveraging Lambda, DynamoDB, CodeDeploy, etc. Once this is achieved, enterprises are enabled to manage and deploy code rapidly in a programmatic and elastic secure network, ensuring governance and security standards across the globe. We also looked at the migration process trusted by hundreds of clients as well as how to cope with the process and people components that are so important to enable agility, while focusing heavily on the technology.

Dive deep into the technology that allows the world’s largest beverage manufacturer to manage hundreds of AWS Accounts, hundreds of workloads, thousands of instances, and hundreds of business partners around the globe. The company’s Configuration Management System has Puppet at the core and relies on over a dozen core and emerging AWS products across accounts, availability zones and regions. This complex and globally-available system ensures all of company’s workloads in AWS meet corporate policies but also allows for rapid scale of both consumer and enterprise workloads.

Facebooktwittergoogle_pluslinkedinmailrss

AWS re:Invent Daily Recap – Thursday

After the deluge of announcements during Andy Jassy’s Wednesday keynote, I had a hard time imagining what else AWS could possibly have left to announce yesterday. Of course, in typical AWS fashion, they had a lot more to talk about.

Summit Keynote

Werner Vogel, Amazon’s CTO, laid out a strong case that developers, data analysts, and basically just about anyone involved with data spend 80 percent of their time preparing data to become usable — and not always successfully — while only spending 20% of their time on the actually analysis and use of that information. He laid out a vision for a new, modern data architecture – one that would flip that equation and therefore transform the way with which we can generate value and insight from all our data sources. The transformer theme, woven throughout Vogel’s talk (and even his shirt), was so pronounced that one wonders why the new AWS Snowmobile didn’t have an Optimus Prime paint job.

New Announcements

In pursuit of enabling this transformation, the Keynote showcased a large number of new and enhanced services, most centered around removing a lot of the scut work that reduces development speed, efficiency, and agility.

AWS OpsWorks for Chef: A fully managed Chef Automation environment that helps take a lot of the work out of continuous deployment.

Amazon EC2 Systems Manager: A suite of tools for task automation, package installation, resource configuration, and patching on Amazon EC2.

AWS Codebuild: A fully managed and extensible build service for compiling source code and running unit s. Codebuild integrates with a wide array of AWS services, and helps make CI/CD pipelines more efficient.

Personal Health Dashboard: Allowing developers to gain visibility into service health issues that may be affecting their application.

Amazon X-Ray: Another debuting tool, X-Ray lets developers analyze, visualize and debug distributed applications and identify performance bottlenecks.

AWS Shield: A new AWS security tool designed to provide layer 3/4 DDoS protection to web applications.

AWS Batch: Batch offers fully-managed, highly scalable batch processing without having to install batch processing software, manage servers, or worry about the finer points of job scheduling.

AWS Glue : A fully-managed data catalog and ETL service that makes it easy to transfer data among data stores while also simplifying associated tasks such as data discovery, conversion, and mapping.

Amazon Pinpoint: A new analytics tool to improve the behavioral analysis and engagement with mobile customers.

AWS Step Functions: Lets developers organize the components of distributed applications using visual workflows. Users can step through functions at scale, improving debugging.

Blox: A collection of open source projects for container management and orchestration.

Lambda@Edge: While just a preview at this point, this service enables Lambda functions at AWS edge locations, as well as execution in response to CloudFront events.

Sessions and Events

As usual, the conference agenda was stuffed to the gills with interesting and useful events, session, and demos. The meat of AWS, of course, is the wide array of breakout sessions. I was able to attend a few, three of which were particularly strong.

Lee Atchison from New Relic gave a particularly interesting talk on cloud monitoring and how best to architect applications and infrastructure to ensure they are fully measurable. This is challenging under any circumstances, but particularly so as applications and their underlying resources become more dynamic, more ephemeral. Gannet News discussed how they were able to transform their systems in this regard, offering a lot of insight into how to create and manage dynamic IT.

More architectural advice, this time with a focus on security, came from an AWS-led session on architecting end-to-end security in the enterprise, while a related session, also AWS-led, explored how to best automate security event response in such an architecture. This last is critical to have scalability and predictability when remediating security issues. In combination, these two sessions helped lay out an approach for highly dynamic, manageable, and secure systems.

The expo hall was very heavily-trafficked, with booths offering monitoring solutions and security analysis and governance being especially busy. IoT was also a topic of great interest during the conference, with several intriguing vendor offerings.

Check back Monday for our full conference recap.

-John Lawler, Sr. Product Manager

Facebooktwittergoogle_pluslinkedinmailrss