The evolution of IT in the era of cloud computing

We sat down with Concur Chief Technology Officer Mark Nelson to talk about the impact of cloud computing on the role of CIOs and IT departments. In his role, Mark is responsible for running all IT for Concur, including the company’s cloud services offerings for customers and internal IT operations for the company. Prior to joining Concur, Mark was responsible for Oracle’s cloud infrastructure, including its Infrastructure as a Service, Java Platform as a Service, and Infrastructure for Fusion Applications SaaS offerings.  

 

  1. What is the biggest change in IT landscape with the advent of cloud computing?

With cloud computing, we’re seeing the traditional role of IT changing quickly. Cloud companies are coming in to sell line of business (LOB) leaders discrete, cloud solutions for their functions. More and more, it’s the LOB, not IT, that’s buying cloud-based solutions, which naturally creates tension between IT and the business.  IT organizations’ primary function is becoming integrators of cloud solutions purchased by lines of business.  

 

  1. Why are lines of business going direct to cloud companies instead of through IT?

LOB leaders are going around IT because they perceive it’s a faster, better route to achieving their objectives. If they have budget, the line of business will buy the vendor promise of greater, more rapid return on investment. It seems like nothing but upside at the outset – the benefits of the solution without the headache of implementation.  

 

  1. What are the challenges with this approach?

The line of business thinks it’s more expedient but the reality is there’s a limit to what they can actually achieve on their own. When it’s time to roll out a new solution, the business discovers that for the application to really work, it needs to hook up to other internal systems – like payroll or ERP. They don’t have the skill set to do that integration – only IT does – so they need to go back to IT for help. IT is accustomed to owning the entire data center and infrastructure; being brought in at the tail end to address or fix a gap not considered at the outset is inefficient -- and likely frustrating.

 

  1. How are CIOs and IT staff managing this new dynamic?

I think some CIOs and IT professionals are trying to hold onto the way things used to be – even just five years ago – when they were the center of the universe: implementer, integrator, governance body and security. They’re dragging their feet and saying “no” to a line of business requests in order to try to maintain control.  

 

  1. What’s the answer? Is there a better way?

CIOs and IT staff need to recognize that the role of IT has changed. They need to accept that IT is no longer the implementer; this role goes to cloud companies. That said, IT is still the keeper of all of the good things that naturally came out of owning the data center – integration, security and governance. They’re still responsible for institutional control. The question for IT isn’t “how do I stop the businesses from doing what they want to do so that I can maintain control?” but instead: “How can I help the business achieve what it wants to do AND keep control?” They need to shift to this mindset even when the business is chasing the shiniest cloud object and not thinking about the last mile upfront.

 

  1. Are there any best practices for CIOs or IT?

The biggest thing CIOs and other IT leaders can do is reimagine where they can add value to the business, be proactive and start the dialogue with the lines of business. The sooner they can get into the mindset that lines of business don’t have to come to IT anymore, but that they should come to IT, the better off everyone will be in the end. It really comes down to having proactive partnership dialogues with the lines of business.  

 

  1. What do organizations moving to the cloud for the first time need to think about?

First, you need to think about integration. What are all of the touchpoints of the solution you’re buying? What does it really take to run this application? For example, user provisioning and de-provisioning: how do you know when people join or leave the organization? How do you ensure appropriate access?More broadly, how do processes flow, how does data flow? What does it mean to move outside of your organization what traditionally happened within your four walls?

And of course, security and compliance. What is the worst that could happen and if it does, what are you going to lose?What guarantees and financial remedies are in place? You need to think about these things upfront and build them into the contract. The HR department isn’t going to be well-versed in these areas. It’s the role of the CIO or CSO to help guide at the outset rather than pick up the pieces. IT needs to find a way to be in that conversation early.  

 

  1. What are the biggest benefits to be gained by going to the cloud?

Integration is the lowest friction way to run your business. Integration is why cloud services are services. All the benefits you can get in terms of integration, such as access to new functionality/value-added services and relationships with vendors, couldn’t be achieved with just software.  

 

  1. What should companies look for in a cloud vendor or solution?

The most important criteria in a cloud vendor is acknowledging the need for an ecosystem to run the business. No one runs their business on just one thing, so you shouldn’t invest in stand-alone solutions that don’t connect easily or integrate with others. An ecosystem supported by a powerful, open platform that integrates with ERP is critical to implementation and functionality.  

 

  1. What does a good cloud product provide from a CIO’s point of view?

A cloud product needs to be a great solution not only for the line of business functionality it provides, but also for being built for integration.  A great cloud product will have easy to use and up to date connections for the most common systems that you use to run the rest of your business -- and in particular your ERP system.  The cloud solution provider will also have thought about security and governance issues up front to help the CIO and the business effectively integrate the use of the service  into their business.

 

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