Tuesday, August 9, 2011

Cloud Computing Decision Sequence

Cloud Computing Decision Sequence

Author: Shaun White

Why provision application services externally? Since the Cloud Computing market is still emerging, you should only consider Cloud Computing if the value propositions are directly translatable into business advantage for your firm. You should clearly understand the underlying business forces, competitive pressures, and urgency that may make Cloud Computing an attractive option. Is first mover advantage for a greenfield operation or spin-out likely to translate into lasting competitive advantage? Is flexibility to exit a business, or rapidly ramp up business volume important? Can you reliably forecast the transaction processing scale required of your technology infrastructure twelve months in the future? Could the wrong in-house technology decision now create an unscalable wall that blocks business growth? Should you ration capital funds, and focus them solely on core, differentiating assets, not operating infrastructure?

 Cloud Computing Basics : Cloud Computing Decision Sequence

In the first stages of the decision processes, it is necessary to carefully determine and assess the underlying forces that are compelling change in your IT infrastructure or business. In some cases, the reason could be that external competitive pressures are forcing your enterprise to develop new eBusiness services, or to go to market in a different way. Or the external pressures could be simply along the low-cost provider trajectory. In any case, there can be a variety of external forces that will compel the organization to make significant changes in its business processes and how it delivers IT support to make them work.
At the same time, significant internal pressures can be a driving for adoption of the Cloud Computing model. For example, if there is a chronic shortage of IT personnel, then it may be completely impossible to deliver the required IT services any other way. There may be core competency issues coming to the surface, (e.g., if there is consensus around the idea that many IT services should be done by outsiders, leaving key personnel to focus on activities that support core competencies of the organization, instead of frittering away their talent elsewhere).

What are the specific business results and performance levels the Cloud Computing solution must deliver? Since few vendors have tackled the end-to-end service delivery chain (and demonstrated consistent competence provisioning each specific service), it\'s critical to understand the performance characteristics and limitations of the applications, networks, infrastructure and support services (starting with help desks) that make up your Cloud Computing delivery chain. Are the application's business process design and the Cloud Computing technology integration sufficient to support everyday business operations? Will the technology infrastructure (network and operations) prove reliable, and sufficiently robust, to meet transaction processing needs? Should you limit the number of vendors providing service to reduce finger pointing, or should you consciously involve sufficient partners to optimize contingency and exit planning?

Who should you choose as your providers? And should the arrangements be viewed as transactions, or as longer term strategic partnerships? Since contracts are predominantly short-term, the accepted rules for prioritization, risk, and relationship management could shift dramatically. Should you structure arrangements to capture intended financial advantages quickly, while hedging your company\'s most critical risks? Or should you take the time to negotiate arrangements that address each potential issue in advance? Will your service level agreements be little more than mutual goals in a situation where contracts may expire before default agreements and remedy options can be enforced? This forms the baseline against which the Cloud Computing model is compared. After the base line costs for providing the service internally is established for a period of time, usually 2-3 years, the next step is for the user to contact different Cloud Computing vendors and begin their selection and development of contracts.

How should you organize to manage transition and ongoing operations in an Cloud Computing-based service model? Is 'service sourcing' destined to become a key competency in your organization? Will dramatic changes redefine the role of your IT organization, or will the continuing evolution away from custom development be sufficient? Will traditional internal application maintenance and support become obsolete? Can technology and service integration be outsourced, or will rapid integration become a core competency that distinguishes operational and technology leaders? This has several implications and challenges:
  • IT Organization. The IT organization must readjust itself to working and 'interleaving' with an outside service provider. This can mean either that people will be re-assigned to more ‘core' activities for the company, or they will leave. Support structures and how the help desk operates must be debugged, and changed so that users or customers are not disadvantaged by the transition to the new model.
  • Project Management. The way in which the IT organizations, and the business units that drive priorities in IT must change to accommodate the new Cloud Computing delivery model. Instead of making demands against internal resources, now it is necessary to work with partners, and this changes completely how the budget approval and planning process operates.
  • Business Processes. Finally, in order to make full use of the Cloud Computing provisioning of IT services, it is clear that many if not all business process must be changed, or at least modified, in order to adjust to the new model. For example, policies for handling sensitive data that is going to be stored and processed by the Cloud Computing must be worked out. Also, it is important to keep track of business processes over time to see if any significant potential for synergy or consolidation appears.

In summary, the Why-What-Who-How framework for choosing Cloud Computing starts with the large 'macro' forces that are shaping the utilization of IT in the organization, then narrows down the options by first understanding the scope of what is required. After that is determined, the nature of the required application set determines the general type of Cloud Computing to choose. After that, pro forma cost estimations are made to establish a base line for cost and expenditure that is a point of comparison for the Cloud Computing model. Cloud Computing are then selected on a variety of both financial and non-financial data, and contracts, including SLAs are negotiated and registered. After that, still the organization faces a serious amount of work in adapting to the new provisioning model.

Article by Shaun White Sacher Partners Ltd

Article Source: http://www.articlesbase.com/information-technology-articles/cloud-computing-decision-sequence-4854061.html

About the Author
Highly skilled IT/IS Director with over 15 years experience in engineering management and software development, cloud computing, including managing £10M/quarter department budgets, defining department and company strategy, creating and tracking product schedules, creating and delivering RFPs (Requests for Proposals) to win bids, building a global team of up to 100 people in 8 different countries