by Diana Bersohn

How to succeed in an as-a-service world

Feb 01, 2017
Cloud ComputingIT StrategySaaS

To take full advantage of cloud opportunities, IT organizations must restructure for the future.

eyeing big data in the cloud
Credit: Thinkstock

The cloud conversation is not new. We know by now that the cloud is a prerequisite to shaping scalable and resource-elastic, variable cost-based businesses. However, companies and their CIOs continue to struggle with how to work effectively in this new model, perhaps because they have underestimated the required changes.

Successful migration to the cloud is not a trivial milestone. In fact, it may be one of the most significant journeys the IT organization embarks upon. It requires changes to the way the organization functions and delivers – and the speed at which it does so. It calls for a full-scale mindset shift as well as new ways of working – no small feat for most companies.

Some businesses understand the scale of the task at hand, but have yet to successfully chart a course forward. According to Accenture Strategy research, 87 percent of executives believe that more than a quarter of their workforce will shift because of cloud. Two-thirds believe up to half of their organization will need to transform. CIOs must begin the journey by starting small in focused areas and achieving demonstrable successes upon which to build the broader journey.

3 ways IT organizations need to restructure in preparation for cloud opportunities

1. Transform the operating model

A cloud-ready organization will move from a “command and control” structure to a flatter, nimbler organization. That does not mean you have to redo the entire structure overnight. Start with a discrete set of services where you can operate differently. For instance, begin with your development and testing environments that do not have production data. 

This will allow for rapid development and it will allow IT organizations to take significant advantage of the utility-based model provided by cloud. Get it right with those basic services, and keep going from there.

Some organizations have achieved success by creating an interim service-oriented structure within the legacy organization. Once the interim organization is in place and functional, migration to the target state begins and evolves over time.

Capital One—one of the nation’s largest banks—began by experimenting with a cloud platform, and went on to now develop, test, build and run its most critical workloads on the cloud. The cloud is a central part of its technology strategy and the bank plans to reduce its data center footprint over the next 2-3 years.

[ Related: Why banks are finally cashing in on the public cloud ]

2. Change the culture

Failure is not readily embraced in most organizations. Yet the cloud-based business environment hinges upon failing fast and being innovative. “Service teams” that work collaboratively across organizational barriers are a way to bring about this culture shift. Service teams should start with services that are easiest to deliver. These teams need to have the right mix of business and technology skills to enable them to rapidly deliver those services as a self-contained team.

Accenture Strategy research shows that 64 percent of senior executives surveyed believe XaaS providers will deliver new capabilities faster than a traditional IT organization. By using XaaS models, internal teams become more agile and can make decisions faster, quickly pivoting to pursue new innovations.

News Corp UK is a good example. The team chose to migrate its enterprise applications to the cloud. The publisher has increased speed and agility, and is saving costs by reducing the need for large internal support teams. Developers are no longer sitting and waiting for new infrastructure to be provisioned.

[ Related: Digital disrupts traditional outsourcing market in 2016 ]

3. Focus on new skills and capabilities

The anything-as-a-service operating modelrequires specific enhanced skill sets for service onboarding, strategic vendor management and account management, among other areas.The CIO can decide to upskill the existing workforce to build extended capabilities, or bring in new talent to fill these roles and bridge the skills gap.

The new organization’s structure should include a mix of service teams that are responsible for end-to-end service development management and operations as well as coordination teams that provide overall strategy, governance and relationship management capabilities.

[ Related: Cloud services now account for a third of IT outsourcing market ]

Fast forward

Cloud adoption is moving at high-speed, but now the organizational structure must catch up. CIOs can help the business effectively migrate to a new operating model by thinking big, but starting small. These incremental improvements will amass and lead to a responsive, agile, innovative IT organization that is poised for the future.

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