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How IT is transitioning from supporting the business, to being the business

26 May 2022

The title of this blog is almost a direct quote from the distinguished John-David Lovelock, VP of Research at Gartner and it speaks to the scale of digital transformation underway across business globally. ‘Digital Transformation’ appears in many forms of course; ‘Hyper-Automation’ and ‘Application Modernization’ being current flavors of the week, but the relentless driving force remains the same. The need for digital transformation has never been clearer, or more urgent. Even in the lingering wake of pandemic, the competitive advantage to those businesses that have been able to modernize, adapt and transform their ability to reach new markets and perform, are now being felt.

This is precisely how digital transformation is no longer a long-term pipedream of technology evangelists; it’s real and it’s critical, now.

As John-David Lovelock of Gartner recently put it: “spending on technology shifts from a cost of operations (selling, general and administrative [SGA]) to a cost of revenue (COR), or possibly cost of goods sold (COGS).

In this sense, there has never been as much pressure on CIOs to deliver the all-time great balancing act – ensuring your business remains relevant and performs, whilst reducing cost and expanding revenue.

The cloud ace up the sleeve

Whether the advent of cloud technologies have driven digital transformation or whether the need for modernization drove the cloud is perhaps debatable – AWS has been around since 2006 after all and although growth has been substantial, the year-on-year rate of that growth was on a downward trend thanks to competitors and market forces until the global-crunch of Q4 2020. Now, AWS growth is back with a vengeance – up to 39%. For perspective, AWS is growing so fast, its revenue makes it bigger than Cisco or HP.

Transformation is happening and there is no doubt that cloud has been the great enabler – or even savior for many businesses.

How do we manage and control this new world?

Managing cloud resources as business assets is still relatively new for many. That is – managing these resources not just in terms of provisioning or migrating workloads to them, but controlling cloud costs to the business with meaning. These costs need to be understood, justified and controlled with unprecedented accountability across business functions, representing the business need for which these new premium resources are consumed.

The answer to this challenge is classic: People, Process and Technology. However, due to the cross-functional operating models that cloud requires, the people, processes and technology need to be even closer together, even faster, with clearer communication and a unified understanding of cloud management based upon real-time intelligence. Without which, the traditional business structure of ‘back office’ teams like Finance or Procurement, can be so removed that they effectively slow-down and almost negate the agile benefits of a cloud-first strategy.

So, what are the main blockers to overcome?

1.      Processes

Structural concepts such as FinOps are designed to tighten the cross-functional, structural challenges across the business; stakeholder buy-in, communication and accountability for cloud costs. Similar to how DevOps truncates processes and provides a framework for teams to communicate – FinOps is a parallel concept for cloud cost optimization. We have a detailed Certero Guide to FinOps that can be downloaded here.

2.      Technology

Dealing with just vendor portals or too many ‘dedicated’ (limited) tools to see and understand hybrid, multi-cloud environments can similarly create the same operational blockade as not having cross-team communication to perform processes. The key here is to modernize and unify the asset management solutions in use and not just rely on cloud operations tools; the financial management of cloud as business assets is more complex than simply seeing resources. Cloud Asset Management goes beyond the technical, helping to streamline the cross-functional communication, understanding and stakeholdership across business units, finance / procurement, leadership, governance as well as infrastructure. This collaborative working to a unified source of multi-cloud intelligence is key to transforming the speed and confidence with which the business operates with cloud resources.

Technology’s impact upon the vertical communication structure within IT is also not to be understated. Whereas once upon a time, dedicated experts were required to run asset management tools and all versions of truth came via those gatekeepers’ reports; now, easily customized ‘dashboard’ style reports can be made for CXOs and none-technical staff, providing immediate, live and direct understanding of progress and immensely valuable bigger-picture insights. Indeed, once you start communicating in this way, faster access to more accurate information changes everything.

Unification is the key to automation and communicating with a single complete, reliable source of information available in real-time; enabling skilled people and processes to operate from a single, unified understanding of what’s out there – whether it’s on the network or in the cloud.

3.      People

Whereas structures for processes and unifying technology like Vitado by Certero are readily available, unfortunately skilled cloud people are not – there is a significant cloud skills gap across the industry.

An answer to this challenge however, may also be embracing Digital Transformation in another form – that of consultancy services and Managed Services.

The UK is currently a great example of this as reported by Gartner; the signs are that the UK may be further down the path than other markets across EMEA in embracing the ‘skills on demand’ capability of services and technology delivered with unprecedented speed and efficiency, as-a-service. Elsewhere, the traditional approaches of developing and retaining skills in-house are still prevalent. This may offer more consistent costs, but in an environment where CIOs will increasingly use cloud alternatives to secure the quickest time to demonstrate value from their IT investments, surely the same philosophy would benefit operations when it comes to acquiring, scaling, and retaining skills?

The cloud has, after all, helped to digitally transform the ways in which technology services – capabilities and solutions – can be delivered, as Certero CEO John Lunt explains:

Prior to their being a cloud-hosted SaaS option for our ITAM (IT Asset Management) & SAM (Software Asset Management) technology, we could implement the product extremely quickly, but still nowhere near the mere minutes that it takes to provision a solution for a customer now”.

He continues; Even in services engagements, that implementation step was always out of our hands – subject to delays, slow procurement processes for extra resource and all the normal things that were essential but stood in the way of our experts using the technology to deliver business value. That has all gone now – we created a cloud-native platform that allows ultimate flexibility to just ‘turn on’ the hardware, software, SaaS, or Cloud asset management solutions you require, as well as the expertise from our consultancy team to get value from that investment.”

For organizations that steer clear of services engagements because of the lack of longevity and lack of deep insight that you get from owning and running a piece of technology like an ITAM / SAM / CAM tool, things have changed too, as John Lunt explains:

The concept of ‘getting less’ from a service because it is ‘temporary’ does not sit quite right in today’s OpEx world of rolling costs and subscriptions – it is all about delivering demonstrable value. How many technology solutions have been sold and the customer never fully exploited the maximum value from that asset? What we have now is really the best of both worlds – the simplicity of turning on a capability quickly as a service; the assurance of achieving business value from your investment and the full access to the deep insight you get from having your own data within a solution. This approach is enabled by cloud, and we call it ‘Technology-Led Services’ – It’s really our Digital Transformation supporting yours.”

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How Vitado can help

Vitado offer helpful cloud management services and a unified technology platform to provide the full visibility and proactive alerting to gaps in processes and standards that helps to streamline cloud management and active cloud cost-optimization. To find out more about the Vitado solution, to arrange a demo or to speak to your local Vitado team about any of our services, simply contact us today.

Find out more:

 

Vitado Guide to FinOps Blog#2: How to Gain Sponsorship and Implement a New Structure

 

A beginner’s guide to cloud tagging– Download the e-book

 

Contact Vitado – Vitado has a global team of experts in managing IT costs, so if you want to begin solving your technology challenges, our unique technology and services are here to help.

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