The CIO’s mission to create the ‘cloud corporation’
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The CIO’s mission to create the ‘cloud corporation’

Chris Middleton — March 2014

London School of Economics professor Leslie Willcocks on why the rise of cloud services puts the CIO at the heart of strategic business thinking.

Leslie Willcocks is one of the few individuals who can legitimately claim to take the long view on cloud computing. As professor of technology, work and globalization at the London School of Economics (LSE), he has worked with colleagues and fellow researchers from other leading business schools to track the effectiveness of all the major forms of IT service outsourcing over the past 20 years — with cloud being just the latest manifestation of that — through a rolling program of interviews and surveys with thousands of IT and business leaders worldwide.

His new book, Moving to the Cloud Corporation: How to face the challenges and harness the potential of cloud computing (co-authored with fellow academics Will Venters and Edgar Whitley) draws on both that historical insight and new rounds of research focused specifically on cloud, with direct input from around 1,000 IT and business executives.

Professor Leslie Willcocks, LSE

His concept of the ‘cloud corporation’ foresees a time — in the next decade — when large organizations will support the vast bulk of their operations through cloud-enabled business services in preference to on-premise IT, making them considerably more innovative and nimble. And his book sets out the steps that organizations need to take in order to ultimately attain best practice in the delivery of those cloud services to the business.

The change, he says, is so significant that organizations need to view it not as any kind of “quick hit” that will take cost out of their IT spend, but as a strategic, business-changing move. In fact, IT and business leaders should see the arrival of cloud services as part of a broader trend in enterprise IT provision: the shift over the past two to three decades away from ownership and operation of systems (and even business processes), towards a culture of business services provided independently of underlying technology.

“Rather than being ends in themselves, cloud computing resources are best seen as a distribution mechanism for service provision. Cloud providers cannot deliver value, but they can offer value propositions that the customer takes advantage of,” he highlights. Cloud is simply accelerating this shift from IT products to business services, says Willcocks, but in the process it will reshape a whole industry sector. Even this year, by his calculations IT vendors will be chasing cloud service revenues of $60 billion worldwide.
Big role for CIOs

In such a service-led culture CIOs need to be even more focused on the needs of the business, Willcocks emphasizes, as the rest of the company will ultimately rely on them to understand how well the different cloud services will serve the organization’s diverse needs. “Business people don’t understand cloud well enough yet [to take over the decision-making around such services]. So the IT department has a big role to play in getting organizations over cloud challenges.”

While certain applications within organizations (notably for sales force automation, service management, email and collaboration, and some HR functionality) have been readily passed to the cloud, that still only marks a piecemeal adoption to date: the strategic adoption of cloud is a less simple story. “The rhetoric of transformation [by consultants, analysts, vendors and others] tends to underplay the complexities of adoption,” says Willcocks.
Ten-year horizon

That complexity means a longer timeline for the switch to the cloud corporation. The LSE research shows that despite the widespread interest in the potential benefits of cloud, the enterprise impacts appear to be emerging more slowly than many commentators have suggested. “We don’t see a rush to a cloud capability; it will be relatively slow,” says Willcocks.

Indeed, to his seasoned eye cloud looks like a classic “10/10 transformation”: 10 years for the technology to be fully developed and 10 years for it to be fully implemented, accepted, institutionalized and exploited by society – though he qualifies that by pointing out that many aspects of cloud computing are already quite far advanced along this technology development timeline.

As a result, the de facto position for most organizations for many years to come will be ‘hybrid.’ “No one is saying that the industry is going in any other direction. Cloud will lead to radical changes but this will not be on an ‘all-change’ basis; rather [it will be] a ‘hybrid’ scenario playing out over a 10-plus-year period,” says Willcocks.

Being both cloud-ready and intensely business-focused today will enable organizations to capitalize on those new developments throughout the transition, says Willcocks. And that means it falls to the CIO to carefully manage that process throughout — from early experimentation to the creation of a cloud corporation.

For practical advice on how to respond to these emerging new challenges of effectively managing cloud alongside traditional systems, downloadThe White Book of Managing Hybrid IT, Fujitsu’s definitive guide to maximizing the cloud, enabling innovation and redefining governance.

First published March 2014
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