2020 – What a change!
By now, every technology leader has torn up their plans and strategies as they began a ten-month tactical, fire-fighting effort to move their organization to virtual. In some cases, they were able to assist with changing how people performed their jobs, not just their staff but everyone, in which case they now joined the Digital Age.
CIOs further realized that moving to digital required a move to the cloud, and with it completely new ways of working that took advantage of the internet capabilities and bandwidth. Transferring your data center to a cloud service provider is no more going to cloud than moving your teams to Zoom makes you digital. Cloud requires a different mindset, skillset, and culture on how technology will enable your organization.
2021 is the year CIOs can own the Digital watercooler and change their role to being a Business Technology Officer, integrating software into every aspect of how their company performs tasks and services customers. But first, CIOs must address new ways of hiring, financing, and benefitting from technology, their people, their processes, and their IT. Accelerating the path to digital and cloud is the only way to remain sustainable, competitive, and compliant going forward.
The path has two main steps: funding and the creation of a new operating model
- The innovation funding model – iterative investments using VOI as the guide to obtain technology value sustainably
Before you decide on your cloud service provider (CSP) partner and how to migrate your applications, you will need to determine how you fund the migration to enable your organization to do work better, sooner, and safer. You need to separate the process of budgeting – a plan on what resources will be required – and funding, which is the action of providing those resources.
Current budgeting practices limit moving to the cloud and digital by:
- Asking individuals to annually decide what they will need – and how would you know in this VUCA world?
- Constricting work to be feature-focused but with no indication of what it will add to customer satisfaction or help staff perform better
- Adding to technical and cultural debt with no strategy as to paying it off
The central dilemma of every executive board is how to plan, fund, and prioritize technology activities. The current best practice is not to use cost savings as a goal and instead let that be an outcome as you do things differently aided by software. You can prioritize by:
- Application review
- Moving from a Project mindset to a Product culture
- Cost of Delay
- Creating platforms for products
- Decide on the WHY of moving to the cloud and digital, on HOW it will help, and WHAT tasks will accomplish your goals
- Faster time to market
- Reduction of manual activities
- Making work more compliant
- Creating workflows that provide agility and flexibility to meet customer demand, staff requirements, competitive threats, and external issues such as Brexit or COVID19
- Get your entire workforce and significant suppliers to be part of the planning and allow them to focus and contribute to the proposed strategy
Shift-left! Think as your customer or staff and deeply analyze your applications, products, and services. Which ones are unique to you, and which ones could you source from a SaaS provider? Which ones do you no longer need? Now group the applications into product groups and allow your IT teams to create platforms (see next section) to service these groupings from the cloud.
Many organizations follow McKinsey's advice to create a FinOPS team of cross-functional product business leaders or at least a team comprised of IT, Finance, Risk, and HR. FinOPS will frequently negotiate with stakeholders to allocate resources (money, people, etc.) to continue the innovation or improve services. They will base their decisions on the value of investment towards the company. Frequently repeating and communicating this interaction creates the ability to pivot or stop work quickly, creating new behaviors, and embedding new disciplines on technology use.
FinOPS will rely on analytics, reporting dashboards with real-time data, and automated processes to make decisions visible and linked to business activities. Leaders will have to coach a new culture of moving from CAPEX funding to OPEX. This team will also introduce training to upskill the entire organization on how technology is applied and that by making use of cloud and digital, they will not lose their roles.
Where needed, a partner such as Atlassian and Praecipio Consulting can help you begin this journey of becoming a sustainable business, maximizing resources while reducing costs and making the entire process transparent.
2. You have the funding model, and now you need the digital cloud operating attitudes, behaviors, and culture to achieve scalability, agility, and continuity
Can you answer these questions?
- Which business workloads are most important to your company?
- What are your goals by business line for the next quarter and year?
- What are your obstacles to these goals?
- What are your strengths for achieving these goals?
Taking the answers to these questions, review what activities you have planned in your IT department. If a user story or request is not helping solve a problem or achieve a goal, stop it. The FinOps should ask these questions monthly, which will influence resource allocation decisions for technology tasks. Visualizing findings to the company will illustrate the importance of product stories while embedding the capability of pivoting or stopping work, as necessary.
Your operating model will require:
- A compensation model mapped to the technical activities that are not divisive
- A full review of your applications mapped to the business lines
- A map of the way data flows throughout your organization
- What it entails
- How it is used
- Storage, archival, and continuity requirements
- Security and access obligations
- Tools that maintain the applications
- A full list of proposed enhancements
- Server, network, storage, and operating system supporting them
- If provided to a specific location, why and how
Using this list, technology leadership needs to help the company move from a project model to a product model. Services must be led by an owner fully accountable for the resources and associated workload, including packaging software into chunks (platforms) that can be used interchangeably throughout the company.
FinOPS and the Product Owners can collaborate on which business domains would benefit most from enhancing the applications used to provide their services. Management can utilize the model to ensure that the right CSP is chosen for each platform. As you mature, you can empower your development teams to decide the best CSP for designing and deploying platforms, be they SaaS or containers. At the beginning of your journey, the strategy should be to communicate the intent and collaborate on the outcomes.
FinOPS also needs to be cloud-savvy. The pricing and SLA options are numerous and complicated. You need to ensure that what you choose is the right decision. You also need to affirm the best path for migrating your application and data to the CSP. Should you port it as it is (provides little benefit), rewrite the application, switch the workload to a SaaS provider? Remember that the avoidance of technical debt, adding to cloud migration's complexity, must be avoided.
There is no shortcut or other option to having Product Owners. You cannot interject a translator or business analyst between what people call the business and your IT. You are all part of the same company, and technology needs to be owned by the business area that provides that service. Further, the people that support these services need to feel that they also own and contribute to these services. This change in attitude and behavior will reduce incidents, increase innovation agility, and enhance your employees' satisfaction, who will feel empowered to see their contribution to the business goals.
The cloud offers the capability of completely altering the way you use technology. Do you need a new instance or environment? Build it, use it, dismantle it, and all within a few minutes at a minimum cost. The software lifecycle of products will be a combination of IaaS, PaaS, and SaaS, depending on the services' platform. Data lakes can share information across the company powered by analytic and reporting tools that would not be accessible to you unless you are quite large.
Security and continuity are other strengths of the cloud as you adopt the framework used by your CSP. Using IAM and Zero-trust security concepts will ensure that you do not become front-page news. Product Owners will have to maintain the governance model required and test it as part of any software change using DevSecOps practices. Scalability, both up and down, is another cloud and digital feature, enabling you to offer new products that can sense and respond to demand.
Are you worried about regulations? Globally FinOPS and Product Owners are finding that regulatory bodies, such as the Bank of England, are moving to the cloud themselves and more than willing to help ensure that their mandates are provisioned accordingly by your CSP. Even if you use a hybrid approach of more than one CSP, which leadership needs to consider, the governance and management models exist via SIAM® to support cloud and digital operating models' best strategies.
The business product operating model is not to become vendor dependent but instead use microservices and containers so that you can migrate your applications as needed to another CSP or a different offering with little effort. This abstraction mode offers the best efficiency in technology enablement. The FinOPS and Product Owners will help to create the loose guardrails to be used by your staff and IT teams as they develop software provisioned products and workloads of your business
Done correctly, the number of technology instances and applications you currently maintain will decrease but not the requirement of technical skills. Your business flexibility behaviors should be to create agility via innovative use of software, cloud, and digital. Done correctly, the time to market and lower technology costs will be your outcomes. Let all of your organization be involved in the migration strategy as you join the Digital Age, and if you need help, Praecipio Consulting is here for you.