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More reasons why the IT/business contract needs resetting for cloud

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This blog post is the third in a series of articles on reimagining enterprise IT in the age of social and mobile with open cloud

In the previous post, I said that the contract between IT and users needs resetting, as historical expectations are now restricting IT from delivering on user expectations.

The two reasons I presented that are holding back IT in that post were:

• Project-based funding
• Standard builds for servers and applications or lack thereof

In this post I look at two more reasons.

Mismatched objectives

Objectives and incentives direct human behavior.

I hear sales people frequently described as being coin operated, as it is clear to see how they are motivated.

However, it does not take a financial incentive to pit two halves of an organization at each other.

• The two halves of IT have competing objectives:

o Operations is rewarded for uptime and stability
o Development is rewarded on the delivery of function

• In this context, operations knows that the best way to provide stability is to accept no changes and development has little incentive to focus on code quality.

• The question is how can development ensure greater stability and quality of the applications it develops and operations accept a high rate of change?

• If the overall objectives of the business are going to be achieved, it requires the measurements systems to be brought into line with shared ownership of results, as metrics drive behavior.

My viewpoint is that greater cooperation between development and operations, through adoption of a DevOps style of delivery built on infrastructure as a service (IaaS) can help to address this clash of objectives.

I will explore the value of DevOps to enterprise IT in more detail in future posts.

Chargeback

If costs are obscure and paid centrally, how are users incentivized to become more efficient with the IT resources they consume and release those they are not using?

• I think this directly links back to the previous point on objectives. Developers and application owners will hold onto development and test environments if they believe that letting go will impact their productivity and hence their metric of success.

• Project-based funding also plays into this. If the money has already been paid, who cares what the cost is?

• In most organizations I’ve worked with, chargeback is a taboo subject. I have heard many statements of “we don’t do chargeback as an organization,” without any reasoning of why. My conclusion is that as it is a major head to toe cultural change for IT, there is no appetite to take it up.

• As a whole business, the benefit of a usage-based charging model is recognizable. Though I frequently see that for individuals and IT as an organization, the ability to achieve against existing metrics of success reduces the desire to make the necessary big changes.

• The adoption of public cloud has exposed users to paying for what they use. In some cases they have also found that public cloud is not as low cost as expected due to hidden costs. They would come back to IT if they could get transparency of costs.

A private IaaS service provides a platform on which to begin building component services that can start the move to a consumption-based model for IT. Chargeback to lines of business could start with just this one service and grow as capabilities are added.

The big change here is not that charging becomes consumption-based, but that the underlying contract and assumptions between the business and IT change.

The next step

So what is holding IT back from changing and delivering the agility, flexibility and lower costs that users are looking for?

In these two posts I have looked at four of my thoughts on why IT is held back. Unsurprisingly these have nothing to do with technology and everything to do with people, culture and organization. Reimagining enterprise IT has more to do with these elements than with cloud technologies themselves.

Do you agree that these reasons are holding IT back? Are there others in you have seen? I would be interested to hear. Comment below, or connect with me on Twitter @SteveStrutt.

More from Steve Strutt: 

Four IT innovations to deliver mobile and social

Why the contract between IT & the business needs resetting for cloud

The seismic impact of social and mobile on IT

Reimagining enterprise IT in the social, mobile age with open cloud

Will improved efficiency lead to increased consumption of OpenStack products?

Dispatch from IBM Pulse: Standing room only at OpenStack Summit

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