The CIO, the Board and the challenge of the cloud

Late last year Bloor Research (an independent IT advisory venture) and RP International (specialised in telecoms and technology recruitment) brought together four senior CIOs from diverse business backgrounds to compare their experience and insights into ‘the challenge of the Cloud’. Bloor invited the Group CIO of one of the world’s leading real estate companies, the Global Systems CIO of a major global telecoms operator, the financial services-experienced CIO of a new banking venture, and a CIO with extensive experience in the media sector to a round table that I had the privilege to lead.

In my December blog I detailed the three transformational drivers that shape the enterprise’s interactions with the cloud. Our round table mapped the practical insights of the four CIOs onto this framework.  

Our first conclusion? This is a business agenda, not a technological agenda. There is, to be sure, a very substantial underlying technological revolution in play. The ability to create and manage data storage, data processing and data networking as integrated software structures, combined with virtualisation and automation in the data centre, in the network, is creating a new world of rapidly accessible and very cost competitive services. But it is the way that these services are now being exploited that becomes the real focus for the business – transformation & disruption in its markets, new (at times radical) approaches to the delivery of its operations.

This challenges the CIO to bring new personal capabilities into play. She or he has to understand, envision, articulate the wider business dimensions of the impact of the Cloud – and thus to our second conclusion – this is a board agenda. The potential for transformation & disruption of business models and markets, the potential for new approaches (more cost competitive, more flexible and agile) to the delivery of business operations – all points towards the need for the board to fully master and grasp the challenge. Not an agenda to be left with the CIO to deliver in functional isolation!

Thus a determined focus on board training [and on recruitment & selection?]. The board will need to invest time in ‘putting its arms around’ the wider aspects of how the cloud impacts its strategic vision of, and its leadership & governance of, its business.

And (our third conclusion) – recruiting staff who are in tune with the newer ways of working. Changes to the business engendered by the cloud will impact its modus operandi. In the age of social media a good levening of staff whose experience and mentality is more atuned to this new world will be a big plus. This may be the single biggest change issue a business can face – developing a staff culture unrestrained by traditional views and approaches to their work.

The ‘elephant in the room’ is frequently legacy systems (our fourth conclusion). Start ups have the freedom of manoevre to build operations on the basis of cloud services without the retraints of any legacy inheritance. Established enteprises do not! Yet legacy systems encompass the accumulation of years of operational experience and vital customer data. One real technical challenge for the CIO and her/his team is how they ‘decouple and transform’ complex legacy systems while capturing and re-exploiting that vital experiential inheritance and extensive customer data.

And thus our fifth (and perhaps most important) conclusion. The Board with its CIO needs to scope their own transformational agenda – set out their intended destination – detail the transformational journey that will get them there – a journey that will deliver a mix of performance, operational, and technological change – a journey that will likely significantly restructure vendor relationships and contractual arrangements – and a journey that will include at times radical reworking of the modus operandi of the business – and of its cultural and behavioral contexts.

The design of this journey has to address the issues of assurance in the virtual : assurance that systems security and the cybersecurity challenge will be met: assurance that data protection and privacy regulatory requirements will be met: assurance that, in the event of some major systems failure, disaster recovery will operate and business continuity assured: assurance that, in the event of the bankruptcy of some key vendor in the services value chain, business data will be secure and rapidly recoverable.

This is a CIO and Board agenda rooted in a new set of key words that are now in more common business usage courtesy of the cloud: services, journey, assurance, resilience, disruption, transformation, legacy, cultural, behavioural. Words that serve to emphasise the primary conclusion from our two hour round table – for a business addressing the challenge of the cloud it is a business and board agenda not a technology agenda.