Internal departments buying their own IT may force the hand of the CIO into making an early move to the cloud. But that shift will alter the traditional role of the CIO forever, says Steven Salmon.
Over the next few years, cloud computing is set to transform the way CIOs operate. More organisations will turn to cloud products such as software as a service (SaaS), which will continue to mature. Driving the increased uptake is the attractive prospect of a computing model that quickly delivers capacity on demand with potentially significant cost savings.
But at the same time, boards will continue to be concerned about information security, regulation, performance and commercial models, presenting the CIO with a difficult decision: wait for things to settle or make the move now?
Departments sidestep internal IT
Waiting is no longer an option for the CIO. We are already seeing a trend for business departments looking to sidestep internal IT - lured by the pace and cost promises of cloud - and contract directly with providers for specific services.
That trend runs the risk of fragmenting the IT ecosystem and introducing the very threats CIOs are trying to avoid. By waiting, IT heads also risk being perceived as business laggards, rather than the leaders they need to be.
As adoption increases, sector-specific strategies will emerge. For example, in highly regulated markets, such as financial services, a cautious approach is likely. Here, cloud adoption will focus on SaaS in the short term, and the development of private cloud for platform-as-a-service and infrastructure-as-a-service environments internally.
Smaller firms, on the other hand, will have more appetite for off-the-shelf cloud services, offering pace, lower cost of entry and the ability to access IT systems previously only available to their enterprise competitors.
Skills and business presence
The CIO should look to use cloud now, developing the skills and business presence to lead cloud innovation and enable new commercial models. By adopting cloud, the traditional role of the CIO will change both in focus and skillset. IT leaders will increasingly experience some of the following trends:
- Cloud business strategist The CIO will become more embedded in the business, developing a single-view cloud strategy addressing the business model, business opportunities, risk appetite and regulatory requirements. This approach will provide the CIO with management and oversight of cloud adoption and prevent ad-hoc procurement that could disrupt the IT ecosystem and introduce interoperability issues with other business-critical services.
- Cloud service provider Depending on the business and sector, some CIOs will first develop an internal private cloud, providing services to internal consumers and indeed the wider market. With this approach, information sharing and collaboration between business partners can be transformed.
However, this path will commercialise IT in the eyes of the business community, so the CIO will increasingly need to be able to manage services and model costs accordingly. Developing a private cloud first will arm the CIO with the skills and experience to manage the transition to public cloud and the vendor market.
- Cloud vendor manager The CIO will become more aligned with business procurement, providing IT insight into cloud tendering activities. As more commoditised IT services move to the public cloud, CIOs will manage the interface between businesses and vendors; brokering commercials and service levels and providing a layer of oversight and governance.
The businesses will see the CIO as the person for cloud, enabling, not stalling, transactions. To inform IT contracts and lifecycle management, IT leaders will need a deep understanding of the vendor marketplace, the security appetite and regulatory requirements of the business, and the related IT challenges.
As cloud matures and more internal IT moves to the public cloud, these roles will change and reduce somewhat in scope and effort, further threatening the traditional role of the CIO. While cloud will increasingly commoditise IT, the opportunity is ripe for CIOs to position themselves as innovators.
By enabling business change through the adoption of technology, IT leaders will increasingly reposition themselves, away from IT's traditional cost centre role and towards the creation of tangible business value.
Steve Salmon is a principal adviser at KPMG Performance & Technology, focusing on the business implications of technologies for the CIO. He has been with KPMG for the past six years. Before that he worked in the supply side of the industry, where he was involved in the design, implementation and management of technology and associated outsourced service provision.