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Project risk awareness

Project risk awareness

“Start with the end in mind”

Project results
Organizations are increasingly “managed by projects”. Successful projects are key to enable companies to be successful. However, only a small fraction of all projects is successful. The vast majority of projects struggle with cost overruns, significant delays, and less than the required features or functions.

Research
As reported in many studies the IT project failure rates remain high. Regular performed researches by Standish Group show that project results haven’t really improved over the last years and the figures beneath are still valid.

Standish Group - 2012 CHAOS

 

 

 

 

 

 

Successful: delivered on time, on budget with required features and functions
Failed: cancelled prior to completion or delivered and never used
Challenged: late, over budget, and/or with less than the required features and functions

In many occasions the project success or -failure is already defined at the start. If risk areas are known upfront the right measures can be taken the increase the chance to drive the project to a success.

Project risk awareness
Project Readiness Check - processProject-driven organizations and teams increasingly discover the importance of risk assessment and management. In times of increasing competition and internal budget constraints it is necessary to have insight into the risks within projects, the impact of such risks at the turnaround time, the costs/resources and the quality of the end product. Studies have shown that sound risk management leads to successful projects and that the omission of risk management leads to unsuccessful projects.
Responsibility for success clearly lies with both executive management and the project team. When project risks are known, a proper risk reduction strategy can be defined by the organization to mitigate the risk/impact. Transparency around project risks is a must!

A Project Readiness Check (PRC) provides a transparent overview of project areas with the biggest risks. Five focus areas are validated and reported in an unburdened maturity level graph.

The PRC best can be performed just before or at project start. It is based on a proven knowledge based checklist. This service has following features: Quick, Simple, Comprehensive and Transparent.
It contains three steps:

  • Step 1 – Project Orientation
  • Step 2 – Individual Project Assessments
  • Step 3 – Presentation to management

Project Readiness Check - assessment

 

 

 

* Example of a Project Readiness Check 

Based on this information management can take the appropriate strategic choices to mitigate the risks.

Implementing Agility

Implementing Agility

The rapidly changing marketplace force companies to be more flexible. And as the Business & IT function are more and more integrated it means that both functions need to be able to respond to changing business needs. Being agile means being adaptable, managing change, trying to keep pace with technology and consumers’ ever-evolving needs and desires.

General issues that obstruct organizations to implement agility:

  • Application strategies are not dynamic enough to handle changes in technology, the complex nature of business demands and the unique needs of specific industries.
  • IT organizations find it difficult to use application strategies to help the enterprise reach its goals.
  • When systems, applications are poorly managed, they hinder the performance of day-to-day business activities, prevent the solving of business problems, and limit the ability to compete and innovate.

Beside these general issues the following obsticals are often seen:

  • Companies with major IT Debt (legacy)
    In the past IT debt has mostly been defined as a deferred technical expense. In today’s world it has become a competitive disadvantage, as it is often a blocker to react quickly on the changing business needs.
  • Proceduralized companies
    Although organizations tend to be very agile at start-up stage (being small and often set up to be highly responsive to changing circumstances), they can quickly become more and more proceduralized, slow to act and therefore become rigid over time.

How to solve:

  1. No politics, no blaming, this won’t help….just focus on resolving;
  2. Prioritize with a pace layered system/application strategy, don’t let an ERP or CRM system get in the way of differentiating and innovative applications;
  3. Execute with a high level strategy, start executing with high level requirements, knowing that feedback on each innovation iteration will further shape the concepts/ideas;
  4. Identify areas of opportunity, decouple technical solutions, renew value in past technology (IT Debt) with new user interfaces to streamline or automate inefficient business processes;
  5. Harness the exponential pace of technology, utilize new technologies to make your own technology better, faster, smarter and more adaptive.
  6. Never build anything twice, sharing and re-using application/solution components in a central store assures that time spent building solutions is time spent creating new business value – not reinventing the wheel.

Contact Koornneef IT Consultancy to find out how we together can structure your organization to improve alignment with the business and/or speed up innovation and drive toward better business outcomes.

Agility and Bimodel IT

 Agility and Bimodel IT

Innovation projects look significantly different from traditional application development projects. (Gartner has defined a B-model IT strategy, Bimodal IT: How to Be Digitally Agile Without Making a Mess)
By applying a Bimodal IT strategy in your organization it will help to categorize application/systems based on their value to the business, and therefore determining the right resources (or mode) for development and fast-track strategic business innovation projects.

Bimodel characteristics
Mode 1: Development projects related to commodity of core system maintenance, stability or efficiency. These require highly specialized programmers and traditional, slow moving development cycles. There is little need for business involvement.

Mode 2: Development projects that help differentiate or innovate the business. These require a high degree of business involvement, fast turnaround, and frequent update. Mode 2 requires a rapid path (or IT ‘fast lane’) to transform business ideas into applications.

Bimodal IT and three layers

By separating into two modes, IT teams can ensure that they have the right process, people and technology to support business initiatives without impacting long-term maintenance projects.

 

Contact Koornneef IT Consultancy to find out how we together can structure your organization to improve alignment with the business and/or speed up innovation and drive toward better business outcomes.

Establish alignment by creating a common understanding

IT Alignment

Eliminate uncomfortable business conversations by helping the organization understand how technology will be used to differentiate the business and drive innovation.

Business managers are looking for more flexibility, this is shown in the demand for easy-to-use (cloud based) applications that can be quickly deployed to take advantage of market opportunities or to solve business problems. Meanwhile, the IT organization is striving to standardization by managing a limited set of comprehensive application suites to minimize integration issues, maximize security and reduce IT costs. This seems to be a catch 22 and if these perspectives are not aligned, then they won’t help the organization achieve its goals.

Establish alignment by creating a common understanding
Aligning the business & IT organisation will start with creating a common understanding about the different roles IT (applications/systems) in the business process.

IT (applications/systems) role in business process:

  • Commodity: focus on technical standardization, operational/process highly structured, compliance and cost efficiency
  • Core business: focus on aligning with industry-specific capabilities, optimization of support for business processes, excellent service
  • Differentiation: focus on creating competitive advantage, innovative and flexibel solutions, digitization and rapid app(lication) initiatives

Three layers of IT

Based on the common understanding of the role of IT (applications/systems) in the business process the right decisions can be taken to optimal support the business needs. Have we clustered our IT services scope in line with the role of the business? Did we define the right Key Performance Indicators (KPI’s)? Is our organization organized correctly to provide the defined support?  Is the IT service/sourcing contract in line with the expected role?

By using this framework in cooperation with the business organization enables IT to be responsive to differentiated business needs. It is also a powerful translation device to address the persistent gap between IT and the business, because it provides a common, business-oriented language to define and communicate the application strategy. To truly engage, this conversation must happen in business terms and be in the context of the organization’s overall strategy.

Increasing Complexity of Managing a Global e-Commerce Function

Increasing Complexity of Managing a Global e-Commerce Function

Original posted by Robert Koornneef on Fri, Apr 08, 2011

In the last couple of months I attended several meetings with partners and clients where we discussed trends and experiences in the e-commerce market. One of the topics mentioned during almost every meeting was the increasing complexity to properly manage the growing e-commerce environment. As e-commerce solutions are becoming more and more global, and have several internal clients with country- or brand-specific needs, the complexity to support all of the requirements is increasing. Two drivers can be distinguished that create this complexity:

  1. Increasing demands from diverse parts of the organization
  2. Managing the integration/relationship with “legacy” systems

Three areas that should be considered when thinking about the complexity of global e-commerce are demand, technical integration and responsibility.

Demand
The demand on e-Business teams is coming from multiple parts of the organization. These demands need to be channeled to avoid conflicting directions which will jeopardize the ability to manage the e-Business platform effectively.  In addition, the e-commerce role in CRM continues to expand as organizations adopt elements of social, community and emerging mobile shopping capabilities. Therefore, questions are arising on how to centralize these requests.

Technical integration
Due to the fact that e-commerce services are integrating more and more with “normal” business services and processes, the need for clear organizational structure becomes stronger. This need is the result of more departments going online to sell products and services. To be able to keep track of the amount of changes and the technical integration requirements, organizations must create a governing structure that will regulate the process.

Three distinct functions that will help to structure this are:

  • Direct:
    This function manages the e-commerce strategy/roadmap that is in line with the overall business vision. The direct function is also responsible for managing the coherence between the ‘adjust’ function (e-Business IT demand) and ‘cooperate’ function (e-Business IT supply). To be able to perform this function there are three overall processes/roles present: architecture and IT strategy, IT portfolio and IT program management.
  • Adjust:
    This function channels e-commerce demands (programs/changes/projects) into a cohesive plan. The adjust function is crucial in order to filter the incoming requests for services and truly understand the client’s requirements. In the case of sourcing, this role is vital to prevent an uninhibited stream of requests to the internal or external sourcing partners.
  • Cooperate:
    This function manages the stability and availability of e-commerce services. The cooperate function focuses on IT operation and delivery activities. The direction/guidance is provided by the direct function, the input for new functionality is provided by the adjust function.

Each of these three functions is dependent on the others. In the picture below, the relationships are visualized.

Demand-Supply eCommerce

Responsibilities and ownership

Once responsibilities have been defined, each function will require an outlined ownership. This may involve remodeling of the former traditional IT organization structure. In the conversations that I have had, it appeared that there is no “golden rule” that will fit for every organization.  Some subjects on responsibilities that we discussed were:

  • Which department should be leading the direct function? This includes processes like: architecture & IT strategy, IT portfolio/roadmap and IT program management. Does this function need to be a part of the CIO department, or can it be managed in a more decentralized department?
  • The adjust function is focused on managing the client’s service requests in several formats. Is this function part of the IT organization? Can standard models like business information services library (BiSL) and application services library (ASL) be used to structure these processes? How to manage if a part of your IT knowledge is acquired via sourcing partners or is only available in different time zones?
  • The cooperate function represents a set of core processes and functions to effectively support the IT supply organization’s services through day to day IT operations. Will complexity increase if a broad variety of (multi-regional) vendors is being used for support?

How does your organization manage the integration of the dynamic e-commerce IT environment and the more traditional IT legacy environment? What is your solution for managing this increasing complexity?

 

Global e-Commerce in the Cloud

Global e-Commerce in the Cloud

Original posted by Robert Koornneef on Thu, Sep 29, 2011

While flying at 10,000 feet recently, I tried to structure the overwhelming stream of information on cloud computing. After gathering information at several webinars and seminars regarding cloud computing and its impact on (IT) organizations, I noticed that there is still confusion on cloud solutions and their role in e-commerce.

Based on my observations, there are three different points of view on cloud computing:

Cloud views

  1. Those that are on cloud nine, who believe that cloud computing is the medicine for all IT issues
    (mostly business/sales that identified opportunities to deliver new services from the cloud instead of their internal IT organization).
  2. Those that have lost visibility due to the lack of standardization and increased complexity
    (IT management /CIO, who in reality have their heads in the clouds and have lost sight).
  3. Those that view cloud computing as just another IT environment (mostly IT staff that are worrying about the complexity of managing an extra environment).

The question is: Who is right?

Cloud defined?
As there is no clear uniform definition of what cloud solutions are, it is difficult to understand what cloud computing really means.

Cloud solutions can vary from traditional/virtualized data centers to public cloud solutions.  There are also private clouds, local clouds and other cloud varieties. I even noticed that existing SAAS (software as a service) solutions have been transformed/renamed to cloud solutions.

Suited for all?
It seems like IT is urgently seeking another revolution and cloud computing is at the center of it all. According to leading information technology research and advisory firms, cloud computing is the number one focus area and it seems to be at the top of the priority list of every CIO. The most excitement can be found in the public cloud. This is probably the environment where most of the new cloud business will be done. Organizations that are not hosted by old legacy environments are best suited to quickly adopt and move to cloud computing solutions to take advantage of all the possibilities  that cloud computing has to offer.

So, what to do if you already have systems in place?
Treat cloud computing as any technology change from an architecture perspective for all roles.  What does this mean?

  • Business/Sales
    Make cloud computing part of business innovation.  This can be an opening to quickly introduce new services. When a new service is needed, the availability of cloud solutions offers an additional perspective to the -make or buy- decision. Nevertheless, those kinds of decisions have to be made in line with the business architecture. Before creating a cloud strategy, you will first need to understand your business strategy, and then determine the role technology must play in your organization. The cloud strategy will be much less about platforms or technical decisions and linked more to the innovation of business processes and, for example, your business process outsourcing (BPO) strategy.
  • IT management/CIO
    With the enormous growth of (so called) cloud solutions and missing uniformity it can be difficult to find the best-suited solution. Will all cloud players that are in the market still exist after two years and have you bet on the wrong horse? If you have tuned your solution on a cloud solution will it be easy to move to another vendor/solution? The reality is that there is not one type of cloud. The lack of a single standard makes integration more difficult than creating a hyperlink on a webpage. Most likely, connections between different services/systems need to be forged manually. For example, synchronizing user login details across multiple platforms is not that easy. As e-commerce solutions consist of multiple services running on several (cloud) platforms, it will be a significant task.Besides a technical implementation there are several items that have to be dealt with:- Data classification/ Patriot act / PCI
    – Licenses (SaaS/ Infrastructure as a Service (IaaS)/ Platform as a Service (PaaS)
    – Virtual solutions
    – Legacy platforms
    – Vendor lock- in
    – Ensuring knowledge/information
    – Legislation

    To manage cloud solutions in a controlled manner, it is best to add those solutions to the normal technology roadmap as one of the options. Don’t forget that in order to move applications to the cloud, they must be virtualized. From that perspective, virtualization of the IT environment must be set to priority one on the CIO innovation agenda.

  • IT teams
    In order to get accustomed to the possibilities and boundaries of cloud computing, it should be added to the sandbox/portfolio.  IT specialists have identified that adding a cloud computing solution may also mean adding another environment that needs to be connected and managed. They are mostly worried about the extended complexity of managing an extra virtual environment. Although cloud computing has its advantages, the risk is there that when the set-up is not done under steering of the IT architecture team, the complexity will increase and the possible benefits will not be achieved.

When cloud probably isn’t the right solution

  • Services that store/process sensitive data: customer information, credit card data
  • Many independent/loosely coupled applications, as the need for data integration and processing speed of data can be problematic
  • Services/solutions that require a high standard of control/audit and accountability
  • (3rd party) services/solutions, which do not support virtualization or are not cloud proof (including license strategy )
  • Services which require a lot of customization.

When cloud is likely an “easy” solution

  • Software development and test environments
  • Short-term, high-performance need, e.g. e-commerce solutions which have to deal with regular “unpredictable” bursting (new product release) or with “predictable” bursting (end-of month sale)
  • Temporary solutions: For example, a recall solution, a campaign-related web service, to facilitate a company which requires a temporary environment with little or no need to be integrated and contains no sensitive data
  • Any content delivery network (CDN) services that, inherent in its functionality, is best in the cloud and outside of the organization, like download functionality and/or public video hosting

How to start
As mentioned in one of my earlier blogs, it is almost crucial to make sure that business strategy and IT architecture are aligned and that based on the desired outcome, an innovation portfolio/roadmap will be defined. Cloud solutions must absolutely be a part of it, as well as common sense.

So, as far as the question of  who is right?

They all are.

 

Getting in Control with the Balanced Score Card

Getting in Control with the Balanced Score Card

Original posted by on Tue, Dec 13, 2011

As a result of my previous blog on cloud computing, I have had conversations with many IT executives.  Cloud computing is a trending topic in most organizations. During both face-to-face and online conversations, I noticed that the “need” for cloud services usually is not part of a structured plan or part of an approved IT roadmap/yearly plan, but is treated as a separate project or path. During the discussions it became clear to me that since CIOs have been primarily focused on stripping out costs at an operational level during the last few years, making business-aligned IT plans has become a lower priority.

When I asked how business value is being measured with the introduction of new a cloud solution, I heard a lot of silence.  During follow up meetings it became clear that there is still a need for a model that will link and measure innovation, client satisfaction, internal processes and financial results. This reminded me that a methodology like a balanced score card (BSC) could be revitalized again.

BSC

The BSC was introduced by Kaplan and Norton in 1992 at an enterprise level. The basic principle is that the evaluation of a company should not be restricted to financials only. The additional areas of innovation, internal processes and client satisfaction should ensure future financial results, while driving a company toward its future goals. Therefore, each of the four areas should be evaluated so that managers can get a more balanced view of the organization. For each of the perspectives they proposed a layered model: mission, objectives and measurements.

An IT-strategic BSC links with the business by contributing to business goals. The IT-strategic BSC can be supported by a linked cascade of scorecards (e.g. architecture, development, operations management). This set of BSCs, including measurements, will help to determine how business value is being created.

e-Commerce IT BSC

When the BSC was launched, e-commerce was just at its commercial beginning. What has changed from the ”old days” is that the IT function/role today is more a strategic partner than a service provider. The following four areas can be part of an e-commerce BSC framework: customer satisfaction, innovation, operations and financial control. Below is an example of how we could map e-commerce actions into a BSC. As actions may occur not only for technology, it is beneficial to split actions into the headers: technology, organization and processes.

If you have created a BSC and look at the defined actions, it may appear that some planned actions may benefit in several areas.
Balnced Score Card

Example of an e-Commerce IT BSC

 

Conclusion

As many organizations are in some kind of transformation mode, whether due to newly available technology or changing business needs, it may be a good idea to consider structuring your activities according to a BSC. This will ensure that the defined activities will really contribute to the creation of business value.

What kind of BSC card or equivalent are you using?

Improving IT & online marketing integration

Improving IT & online marketing integration

Original posted by  Robert Koornneef on Wed, Mar 21, 2012

After visiting several clients to discuss further optimization of their business I noticed that managing an e-store is not always as easy as expected. When analyzing e-store launches, we noticed that a lot of attention was given to topics like:

  • Web design, web functionality, (international) payments solutions, legislations and tax and customer support.
  • The (IT) project management for development until the close of the hypercare period was going smoothly.
  • Outlining roles and responsibilities for maintaining the e-Store.

However, when the monthly results of the online sales figures were reported, it was noticed that the goods sold were not in line with the forecast. But why does this happen?

Process integration
As mentioned in one of my earlier blogs the interaction between sales, online marketing and IT is critical to become successful in the online world. It is essential that the processes between these functions are linked and where possible are integrated. Several international consultancy/analysts firms have been reporting on the importance of integration of e.g. online marketing in relationship with successful management of an online store.

Most organizational structures do not encourage communications between departments, as the reporting lines are often not in line with the process structure. Therefore it is preferred to implement functional processes that enforce the communication between the different organizational teams. This could be done with a matrix organization or a temporary project structure with sufficient mandate to implement change. When those procedures, communication and reporting are clearly defined and managed it will help to achieve the objectives and provide the mechanism to steer and align activities.

Organizational implementation
If we examine existing e-store implementations we notice that a clear split has been made for the operational functions. What frequently is seen is the following organizational implementation:

  • e-Commerce shop management function is (part-time) performed by the client
  • IT Web store management is outsourced to an external party
  • Payment processing mostly outsourced to a specialized provide
  • Customer services is performed by the same or another external party
  • Fulfillment is performed by the same or another external party

What is being noticed is that even having a fabulous designed web store that is technically functioning superb it is no guarantee for success. If your website can not be found online by your potential customers the success will be limited. Therefore the importance of the eCommerce shop management function is vital for launching and maintaining a successful web store.

Requirements for sourcing models
To ensure that e-commerce shop management will contribute significantly, it is a valid option to have an experienced/specialized party involved to do the set-up of the shop management function. Based on their knowledge and use of supporting tools/techniques they can do the initial set-up and implementation of this function. When your own organization wants to and is capable of performing this function on its own, the sourcing contract needs to be flexible enough to provide you with the opportunity to do so without any impact to the other contracted eCommerce services.

Suggested E-2-E communication model
To ensure that the integration of on and offline channels is secured it is desirable to have periodic alignment sessions. During these sessions a check is performed on brand strategy, strategic marketing planning and related items.

Suggested E-2-E communication model
The online marketing function is more and more an integrated part with the other (technical) functions needed to support an e-commerce solution.

Conclusion
When outsourcing an e-commerce solution, it is preferred to have the possibility included in the sourcing contract, to insource/re-source the online marketing function. You should have the flexibility to do this without jeopardizing the other services in the contract.

How is your online marketing function organized?

Cloud computing services from a business viewpoint – Part 2: How to implement

Cloud computing services from a business viewpoint – Part 2: How to implement

Original posted by Robert Koornneef on Wed, Jan 30, 2013

As mentioned in my previous blog, the implementation of a cloud solution is not a pure IT project.  Most of the time, an implementation of a cloud solution—especially in case of software-as-a-service or “SaaS”—will have an impact on the entire business.

If you are thinking about implementing a cloud solution, what is the right approach? What is needed to stay in control during implementation and once the solution has gone live?

Cloud “readiness” check
It is best practice to validate that there are no functional limitations or restrictions to migrate or add IT solutions into the cloud. Therefore a check needs to be performed in close cooperation with the audit, compliance, legal and business teams. It is also advisable to review current service level agreements and validate that there are no restrictions based on client contract limitations. Since many contracts or SLAs can be several years old, it’s also wise to check with your clients in case of doubt. A list of items to review could consist of:

Limitations

  • Legacy or complexity
  • Virtualization
  • Licensing model
  • Maturity of the market or solution
  • Governance model

Restrictions

  • Data classification and privacy
  • Data ownership
  • Legislations
  • PCI / Patriot Act / Safe Harbor

Another topic for organizations to consider is the changing influence on the IT solution based on the chosen cloud model. This illustration shows the change of influence for each cloud model:

Cloud -influence

Preparation
When a decision has been made to implement a cloud solution, step-by-step preparation is essential. As mentioned, there is a need to approach the project from a business perspective and ensure that the project team has a clear understanding on the following topics during the preparation phase:

  • Business and client demand: do we have a clear picture of the business services portfolio, the future roadmap and the current financial models?
  • Architecture, both business and IT: Do we know the business solution and its requirements, the related compliancy and legislations and do we know our IT landscape and lifecycle?
  • Usage: have we metrics on the usage of our systems, current volumes and a forecast of the expected volumes?

Implementation approach
Implementing cloud services into your IT solution has the characteristics of outsourcing and the same methodology with four basic outsourcing phases can be applied. The understanding gathered during the preparation phase can be used for the next steps: 

Define strategy

  • Scope of IT, application and service, based on a transformation roadmap and aligned with business and IT
  • Requirements, both functional and nonfunctional
  • Financial models
  • Governance models

Make Selection

  • Market investigation
  • Long and short lists
  • Due diligence
  • Financial scenarios
  • Check on exit options
  • Contracts

Deploy

  • Business and IT project managers
  • Define contingency exit strategy steps during implementation
  • Define governance, roles and responsibilities

Manage and control

  • Set measurement parameters and Key Performance Indicators (KPIs) for usage, performance and finance
  • Innovate and align with business according to volume, forecast and changing requirements
  • Periodic benchmarking

A change in the organization
The implementation of cloud solutions will change the way organizations work. The role of the IT organization will shift more to a facilitator role, to coordinate the business IT requests with the cloud solution providers.  The business teams—especially with the use of SaaS solutions and if they really want to benefit from cloud solutions— need to stick to the standard functionality and avoid deviations. What we often see is that even for software used only for internal process support, the business unit may force the IT team to make adjustments and add-ons to the standard functionality while it is usually more beneficial to in the broad scope to simply make adjustments to the standard functionality, otherwise the benefits of using hassle-free software are jeopardized, especially since future updates or upgrades of the SaaS solution must also then be re-designed

Conclusion
When you are planning to adopt/implement a cloud solution make sure that you are aware that the Cloud Computing market is still changing. Make sure that you stay in control to ensure business continuity. Validate that all legal aspects are known and taken into account. And do not forget that the business needs are leading.

Cloud Computing from a Business Viewpoint (part 1)

Cloud Computing from a Business Viewpoint (part 1)

Original posted by Robert Koornneef on Tue, Oct 16, 2012

Based on a recent presentation that I gave at an IT executive seminar entitled Cloud Computing, When the Mist Has Disappeared,  I had discussions with several CIOs and CTOs on their experiences and views on cloud computing. What was noticed from those discussions was that cloud computing is still being seen as a pure IT topic, regardless if it is an Infrastructure as a Service (IaaS) or a Software as a Service (SaaS) solution. My view is that if an organization really wants to benefit from a cloud solution, such an implementation must be performed as a business project. This as most of the times the implementation will have a change on the business model, especially with implementing a SaaS solution.

Cloud- make-buy

A different approach
It is strange to see that “regular” outsourcing deals are being performed with a lot of control mechanisms and yet the same approach is not always performed for selecting and implementing a cloud solution. The technology part is given much attention but the impact on the business is often overlooked. My first question, likewise for any outsourcing deal, to a cloud vendor is always, “What is your exit strategy?” This as it’s easy to get into a cloud relationship, but it can be very difficult to leave.

Business perspective on cloud computing
Does this mean that cloud solutions are a no-go area? No, as mentioned in one of my previous blogs, cloud computing provides a wide range of opportunities that will help to leverage eCommerce services.

As the current business climate is still unpredictable, business organizations like to gain agility with variable, volume-based costing models. It allows them to be more flexible than ever before.
The benefits of cloud computing are obvious and can be grouped into three categories.

IT on demand- This category emphasizes the IT functionality available “at a finger click.” These characteristics are improved:

  • Flexibility and scalability
  • Availability and manageability
  • Time to market
  • IT resource independency

Service portfolio- This category underlines the ability to quickly add business functionality; the key features are:

  • New (reliable) functionality
  • Responsiveness to market
  • Location independence

Cost optimization- This category contains the benefits that come with the new financial models of cloud computing like:

  • No or less CAPEX
  • Costs aligned with usage
  • “Pay as you grow” 

So, what is new?

There is a lot of fuss about cloud computing. Is it a revolution? No not really, many cloud computing services have been available in the market for many years. Is it about new technology? No, the IT systems are being used for many years. Is cloud computing the next step in the IT as commodity evolution? That’s the most reasonable answer. Based on the increased network capacity, IT services/solutions have become available through the internet.  IT services have become location independent, and due to virtualization, the services can be used in almost any business format. Is it a new flavor? If we put cloud computing in the business perspective it can be seen as a new service model. Until now we had two service options: make or buy. With the introduction of cloud computing services, we have an additional option: rental, also known now as cloud computing.

Control demand management and IT roadmap
As described in my blog Increasing Complexity of Managing a Global e-Commerce Function, it is essential to channel the demand from multiple directions of the organization. The need to channel these demands is increasing to avoid conflicting directions which will jeopardize the ability to manage the IT (internal/external/cloud) solutions in an effective way.  If not managed well, the change for creating sub-optimized solutions is plausible.

The tool used to map available cloud computing solutions in the overall IT roadmap is not critical, as long as the process is being followed.  During the mapping, a validity check needs to be performed on the fundamentals: architecture validity, economic validity and business risk containment.

Beneath a graphic overview of how this can be done:

Transformation roadmap

If such an IT Transformation roadmap has been created it has to be maintained. As cloud solutions in the market mature and many new solutions are being offered rapidly, the need to perform a periodic review and map the available services/solutions into a roadmap is more needed than ever. If a SaaS (Software as a Service) solution has been implemented it becomes an integrated part of the application portfolio.  Be aware that probably not all applications in your portfolio are cloud ready (can be virtualized) and therefore can put boundaries on your ability to migrate solutions to the cloud.