Posts Tagged ‘gartner’

Do CIOs (and CEOs) Have Their Heads Stuck In The Cloud?

Wednesday, November 3rd, 2010
Image CreditSome CIOs Think That They Know How To Reach The Cloud, But Do They Really?

Some CIOs Think That They Know How To Reach The Cloud, But Do They Really?

Ok, enough of this cloud stuff already! The field of IT is just like every other field out there and we have our own share of trendy topics – cloud computing sure seems to the one that we’re dealing with right now. With all of the magazine articles on clouds and conferences going on, you’d think that every CIO and CEO has a good understanding of just exactly what a cloud is. Well, you’d be wrong…

Everybody Thinks That Clouds Are Important

In order to be a successful CIO, you’re going to have to have the support of the rest of your firm’s Senior Management. I guess one good thing is that it’s become clear that firm’s senior management have been reading the headlines and actually recognize the term “cloud computing”. Mark McDonald over at Gartner has been asking around to find out just how deep this knowledge goes.

Back in 2009 (was it really that long ago?) only about 5% of a firm’s senior management recognized the term. That’s popped up to 37% these days (remember that not everyone works in IT!)

To take this one step further, they also appear to know that cloud computing is important. Those senior managers now list cloud computing as being one of their top 5 IT priorities.

One Out Of Three Isn’t Bad, Is It?

Good CIOs understand that in the field of IT, there is no such thing as just one magical technology. Instead, solutions to difficult business challenges are built using multiple IT technologies that all have to work together.

The same level of understanding about how the world of IT works is not shared by the rest of most firm’s senior management. Mark McDonald’s research shows that too little is fully understood about how cloud computing really works.
Clouds are built using three separate pieces of IT technology:

  • Server Virtualization
  • Service Orientated Architecture (SOA)
  • Software as a Service (SaaS)

In order to implement a cloud solution, firms need to adopt all three technologies. However, this point has not yet sunk in with most non-IT senior management.

Gartner’s research shows that most executives have very little interest in any of these technologies despite their belief that cloud computing is the way for their IT departments to go. Furthermore, roughly half of the executives surveyed believed that virtualization alone was the same thing as cloud computing.

What’s Next For Clouds?

Well, at least they all know that cloud computing exists and that’s got to be a good thing, right? Actually, no. Studies of new and emerging IT technologies have shown that they all seem to follow a predictable path.

Right now, most members of your firm’s senior management team are probably quite excited about the potential of cloud computing. Soon, this will change. As it becomes clear that this isn’t a magical cure (and cost reducer) that will solve all of your firm’s problems, cloud computing will move into what Gartner calls “the trough of disillusionment”. This is when people reject a novel new technology because it didn’t live up to its initial hype.

What All Of This Means For You

CIOs understand the true power of cloud computing. It offers a way to efficiently scale a firm’s computing infrastructure while at the same time allowing it to keep it’s IT operational costs under control.

Realizing that your senior management peers don’t quite fully “get” what cloud computing is and that they’ll soon decide that it’s not all that it was touted to be is an important understanding that we all need to have.

CIOs are going to have to continue to focus on finding ways to make use of cloud computing resources while incorporating its supporting technologies into the projects that they are working on today. Cloud computing will eventually arrive on the IT scene and it’s up to you to be ready when it comes.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: Which of the three supporting technologies do you think is the most important to making cloud computing a success?

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What We’ll Be Talking About Next Time

If IT was a game show and you were a contestant on it, right now it sure seems as though you could correctly any question that you were asked by replying “cloud computing”. That’s because basically outsourcing parts of your company seems to be the answer to every question in IT right now. But is it really the right answer?

What CIOs Need To Know About Doing Offshoring In 2010

Wednesday, March 24th, 2010
Image Credit Offshoring Decisions Are A Lot More Complicated These Days…

Offshoring Decisions Are A Lot More Complicated These Days…

The Way That It Used To Be

Remember when using offshored resources as a part of an IT department was such a big deal? These days it’s hard to find an IT department that doesn’t have at least some portion of its work done off shore. When you become CIO, offshoring is something that you’re going to have to deal with. It turns out that things aren’t as simple as they used to be…

When IT departments first started using offshoring there was really only one reason why they were doing it: it provided staffing cost reductions of 40% or more. It all seemed to be so easy: an IT department could move lots of low-value IT work to low-cost locations such as India and the Philippines. Let’s be honest about this: outsourcing was really cost cutting by a different name.

When you become CIO you’re going to be inheriting a different world. The favorite site of IT outsourcing has been India; however, India is changing. One of the biggest changes is that salaries have been going up rapidly. In India, annual raises of 15% have become common. On top of this, in the last year India has suffered from currency fluctuations, terrorist attacks, and financial fraud. When you become CIO you are going to have to be looking beyond India for locations to house your outsourcing.

The New World Of Outsourcing

You’re going to have to do some serious thinking when it comes time to determine how best to use outsourcing with your IT department. Just before the recent global recession the #1 reason that IT departments were using offshored resources was to accomplish cost cutting objectives.

The global recession is going to be your friend in the short term when it comes to offshoring. Over at the consulting firm Gartner, they are predicting that outsourcing prices will drop an average of 10% this upcoming year. However, as CIO you are going to need to be careful here.

It turns out that agreeing to specific IT cost cutting goals isn’t the hard part, maintaining them is. What many IT departments have discovered is that low hourly rates won’t save much money if the total hours needed to accomplish a given task are higher than you estimate.

Another issue for a CIO to consider will be how long your contract with the offshoring firm should last for. The first generation of outsourcing contacts tended to be last for lengthy time periods: 10 years was common. This was being done in order to “lock-in” the cost savings. However, the need to have the ability to adjust to changing market conditions has changed this – CIOs now want shorter-term contracts.

Of course, nothing is ever that simple. It turns out that for certain IT professional services that require a higher percentage of highly skilled workers, the offshore staffing providers will insist on longer-term contacts because the suppliers say that they can’t attract the workers that they need unless you are willing to sign contracts that cover longer time periods.

On the positive side, although with a bit more complexity, you will now have more options for where you can do your offshore work. Some of the most popular outsourcing destinations in a recent survey of firms that were considering it included: United States (22%), China (16%), India (13%). Also on their list was the Philippines, Mexico, Costa Rica, and Jamaica.

What All Of This Means For You

When you become CIO, you will be offshoring some of your IT work. What used to be a relatively simple decision to send some of your low-value IT grunt work over to India has become much more complicated.

India is still an attractive destination for a number of reasons. However, it has become less attractive than it once was and a number of competitive alternatives have now shown up.

It will take time and effort on your part in order to properly evaluate your options and decide what is correct for your IT department. You can’t go wrong with the decision to offshore some of your IT workload, it’s just making the right decisions on where the do the work that will require all of your CIO skills…

What country do you think would be the best place for a firm to offshore it’s IT work today?

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What We’ll Be Talking About Next Time

When you become CIO you will have a number of tools available to you that CIOs never had in the past. #1 on this list is, of course, Twitter. However, wait a minute, is this a good thing or a bad thing? Sounds like you need to figure this out before you become CIO and make a mistake…