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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

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Speeding Transition to the Cloud: Cloud Strategy

When someone mentions the cloud, it can illicit different feelings from fear to excitement. The cloud concept is simple – the cloud allows organizations to procure technology as a service. However, what is not as simple is determining how the cloud best fits into your organization.

As we discussed in our past article, there are several steps that can help speed the transition to the cloud and becoming a digital business. One imperative step is developing a comprehensive cloud strategy which differentiates between top line and bottom line improvements.  A sound cloud strategy provides a practical approach that addresses short-term benefits as well as a long-term foundation for performance improvements.

A few points to consider when creating your cloud strategy:

  1. It’s not a separate initiative: Most organizations make the fatal error of creating a separate cloud initiative instead of integrating cloud technologies that address aging IT infrastructure and legacy applications. Adopting the cloud will impact governance, your organizational model, sourcing and vendor management; therefore it’s imperative to integrate.
  2. Develop a Cloud Roadmap: Undertaking cloud adoption will require IT organizations to develop a roadmap that not only integrates cloud technologies but also includes business strategy. A successful cloud strategy must have both.
  3. Optimize, optimize, optimize: When crafting your cloud strategy, develop ways to optimize your existing IT capabilities instead of creating net new capabilities. Cloud services are change agents and can change the way business processes are executed and, as a result, reveal hidden opportunities.
  4. Many Services, Many Value Propositions: The cloud does not have a single value proposition for all services; as a result, organizations need to take that into consideration when developing their cloud strategy.  When developing your cloud strategy, be flexible and recognize that some services are cloud-compatible but might be too costly to make cloud-ready. However, there are some services that are perfect for the cloud and have considerable cost savings, but remember there are others that are not.
  5. Standardization: Standardization is required for the cloud and can be the fas vehicle to cost savings, but is not easy to adopt.
  6. Business and IT Partnership: Cloud adoption will change the way business and technology interact at the strategic  With cloud adoption, the business will view IT as a strategic partner in creating a more agile, high performing business, which reinforces the need for integration.

In summary, with any cloud adoption strategy organizations must first determine where they can benefit from the cloud. There is an opportunity for IT organizations to turn the cloud into a new core competency which will move IT from being a provider of services to a hybrid IT organization that delivers and brokers services in multiple ways to drive more powerful business value. Once you have figured out a sound cloud strategy, you are moving in the right direction to become a digital business.

For help in developing your cloud strategy, contact us.

-Yvette Schmitter, Sr. Project Manager

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The Public Cloud – Planning for 2015

With every new year comes a new beginning. The holidays give us a chance to reflect on our achievements from the previous year, as well as give us a benchmark for what we 2015want to accomplish in the following year. For most individuals, weight loss, quitting a bad habit, or even saving money top the list for resolutions. For companies, the goals are a little bit more straight forward and quantitative. Revenue goals are set, quotas are established, and business objectives are defined. The success of a company is entrenched in these goals and will determine; positively or negatively, how a company should be valued.

Today’s businesses are becoming even more complex than ever, and we can thank new technologies, emerging markets, and the ease of globalization for helping drive these new trends. One of the most impactful and fas adopting technologies that is helping businesses in 2015 is the public cloud.

What’s amazing, though, is that how businesses are planning for the adoption of public cloud is still unknown to most. Common questions such as “Is my team staffed accordingly to handle this technology change?” or “How do I know if I’m architecting correctly for my business?” are coming up often. These questions are extremely common with new technologies, but it doesn’t have to be difficult if you take these simple steps.

  • Plan Ahead: Guide your leadership to see that now is the time to review the current technology inventory being utilized by the company and strategically outline what it will take to help the company become more agile, cost effective, and leverage the most robust technologies in the New Year.
  • Over communicate: By talking with all the necessary parties, you will turn an unknown topic into water cooler conversation. Involve as many people as possible and ask for feedback constantly. This way, if there is anyone that is not on-board with this technology shift, you will have advocates across the organization helping your cause.
  • Track your progress: Keep an active log of your adoption process, pitfalls, to-dos, and active contributors. Establish a weekly cadence to review past success and upcoming agendas. Focus on small wins, and after a while you will see amazing results for your achievements.
  • Handle problems with positivity: Technology changes are never easy for an organization, but take each problem as an opportunity to learn. If something isn’t working, it’s probably for good reason. Review what went wrong, learn from the mistakes, and make sure they don’t repeat themselves. Each problem should be welcomed, addressed and reviewed accordingly.
  • Stay diligent: Rome wasn’t built in a day, and neither will your new public-cloud datacenter be. Review your plan, do constant check points against your cloud strategy, follow your roadmap and address problems as soon as they come up. By staying focused and tenacious you will be successful in your endeavors.

Happy 2015, and let’s make it a great year.

-Blake Diers, Alliance Manager

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How to be Your Company’s Cloud Champion in 2015

Implementing Cloud Infrastructure in the Enterprise is not easy. An organization needs to think about scale, integration, security, compliance, results, reliability and many other factors. The pace of change pushes us to stay on top of these topics to help our organization realize the many benefits of Cloud Infrastructure.

Think about this in terms of running a race. The race has not changed – there are still hurdles to be cleared – hurdles before the race in practice and hurdles on the track during prime time. We bucket these hurdles into two classes: pre-adoption and operational.

Pre-Adoption Hurdles

Pre-adoption hurdles come in the form of all things required to make Cloud Infrastructure a standard in your enterprise. A big hurdle we often see is a clear roadmap and strategy around Cloud. What applications will be moving and when? When will new applications be built on the Cloud? What can we move without refactoring? Another common hurdle is standards. How do you ensure your enterprise can order the same thing over and over blessed by Enterprise Architecture, Security and your lawyers. Let’s examine these two major pre-adoption hurdles.

Having a clear IT strategy around Cloud Computing is key to getting effective enterprise adoption. Everyone from the CIO to the System Admin should be able to tell you how your organization will be consuming Cloud and what their role in the journey will be. In our experience at 2nd Watch, this typically involves a specific effort to analyze your current application portfolio for benefits and compatibility in the Cloud. We often help our customers define a classification matrix of applications and workloads that can move to the Cloud and categorize them into classes of applications based on the effort and benefits received from moving workloads to the Cloud. Whether you have a “Cloud First,” “Cloud Only” or another strategy for leveraging Cloud, the important thing is that your organization understands the strategy and is empowered to make the changes required to move forward.

Standardization is a challenge when it comes to implementing Cloud Computing. There are plenty of Cloud Service Providers, and there are no common standards for implementations. The good news is that AWS is quickly becoming the de facto standard for Cloud Infrastructure, and other providers are starting to follow suit.

2nd Watch works closely with our customers to define standards we call “Reference Architectures” to enable consistency in Cloud usage across business units, regions, etc. Our approach is powered by Cloud Formation and made real by Cloud Trails, enabling us to deploy standard infrastructure and be notified when someone makes a change to the standard in production (or Test/Dev, etc.). This is where the power of AWS really shines.

Imagine… A service catalog of all the different application or technology stacks that you need to deploy in your enterprise – now think about having an automated way to deploy those standards quickly and easily in minutes instead of days/weeks/months. Standards will pay dividends in helping your organization consume Cloud and maintain existing compliance and security requirements.

Operational Hurdles

Operational hurdles for Cloud Computing come about due to the different types of people, processes and technology. Do the people who support your IT infrastructure understand the new technology involved in managing Cloud infrastructure? Do you have the right operational processes in place to deal with incidents involving Cloud infrastructure? Do you have the right technology to help you manage your cloud infrastructure at enterprise scale?

Here are some people related questions to ask yourself when you are looking to put Cloud infrastructure to work in your enterprise:

  • How does my IT organization have to change when I move to the cloud?
  • What new IT roles are going to be required as I move to the cloud?
  • What type of training should be scheduled and who should attend?
  • Who will manage the applications after they are moved to the cloud?

 

People

People are critical to the IT equation, and the Cloud requires IT skills and expertise. It has been our experience that organizations that take the people component seriously have a much more effective and efficient Cloud experience than those who might address it after the fact or with less purpose. Focus on your people – make sure they have the training and support they need to ensure success once you are live in the Cloud.

Processes

Cloud infrastructure uses some of the same technology your enterprise deploys today – virtualization, hypervisors, hardware, network, etc. The difference is that the experts are managing the core components and letting you build on top. This is a different approach to infrastructure and requires enterprise IT shops to consider what changes will need to be made to their process to ensure they can operationalize Cloud computing. An example: How will your process deal with host management issues like needing to reboot a group of servers if the incident originates from a provider instead of your own equipment?

Technology

Finally, technology plays a big role in ensuring a successful Cloud infrastructure implementation. As users request new features and IT responds with new technology, thought needs to be given to how the enterprise will manage that technology. How will your existing management and monitoring tools connect to your Cloud infrastructure? To what pieces of the datacenter will you be unable to attach? When will you have to use Cloud Service Provider plugins vs. your existing toolset? What can you manage with your existing tools? How do you take advantage of the new infrastructure, including batch scheduling, auto-scaling, reference architectures, etc.? Picking the right management tools and technology will go a long way to providing some of the real benefits of Cloud Infrastructure.

At 2nd Watch we believe that Enterprise Architecture (in a broad sense) is relevant regardless of the underlying technology platform. It is true that moving from on premises infrastructure to Cloud enables us to reduce the number of things demanding our focus – Amazon Web Services vs. Cisco, Juniper, F5, IBM, HP, Dell, EMC, NetApp, etc.

This is the simplicity of it – the number of vendors and platforms to deal with as an IT person is shrinking, and thank goodness! But, we still need to think about how to best leverage the technology at hand. Cloud adoption will have hurdles. The great news is that together we can train ourselves to clear them and move our businesses forward.

-Kris Bliesner, CTO

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