In our recent book, Competing
for Customers, we describe the new hyper-competitive pressures that technology
companies face as they move to cloud-based, subscription services. Our thesis
is that these companies must adopt new business practices that optimize their
ability to listen to customers needs, engage customers to define and quantify
the value proposition, and ensure business value is attained through adoption
services. But what about the customers of these companies? How can they thrive
in the age of the cloud? What should they expect from their technology
providers and what new pressures will CIOs encounter in this market transition?
With the advent of the cloud, CIOs are experiencing a
revolutionary change in their roles and responsibilities. Subscription-based solutions
can now be “turned on” vs. “implemented,” greatly reducing the IT requirements
for deploying and maintaining these solutions. With cloud services, limited or
no systems integration is required, minimal support services are needed, and
the data center isn’t impacted. All of this is changing the fundamental nature
of IT organizations, as “Shadow IT” gives way to what we call “Shallow IT”.
What does “Shallow IT” mean for CIOs and IT organizations? Is
the gig up? Not at all. Rather, we believe this next-gen IT organization will mean
a renaissance for IT teams. Thinks about it: For decades, IT has been the black
sheep of most businesses. Basically, they could do no right. If they delivered
a new IT solution on-time and on-budget, they were merely doing their job. But
if there were any bumps along the way -- even if not of their making -- the
daggers would come out. That’s why the CIO is often the most endangered species
in the C-Suite.
But with the shift to cloud services, IT’s stock is swiftly
rising. No longer is IT a bottleneck to deploying critical new capabilities:
There’s no more waiting to stand up a new data center; large upfront CAPEX
investments are no longer a barrier to new IT solutions; and systems
maintenance or performance issues are no longer directed at IT. The new IT organization
is now free to take on truly valuable tasks, such as identifying and adopting innovative
technology solutions that could redefine the competitive nature of the
business.
For example, what if IT could help a retailer identify
technology-enabled solutions to drive performance for its store network by
researching the marketplace, providing a data-driven selection process, and managing
a pilot-to-purchase process to ensure success? IT has now gone from a “keeps-the-lights-on”
organization to a “consultative” business partner focused on driving business
value.
So many IT organizations will look at their current resources
and ask whether they are equipped to take on the new roles and responsibilities
of the next-generation IT organization. In Competing
for Customers, we discuss ways to facilitate this transition without a
total retool of the IT team. Our research showed that the balance of power between
the technology buyer and the technology provider is going through a massive
shift in favor of the buyer. CIOs can put this new-found leverage to good use,
starting by imposing strict standards and responsibilities on your cloud
technology providers.
Our recommendation for CIOs is to rethink the traditional
services that technology companies provide to your company. In the age of the
cloud, these providers should be providing an end-to-end customer lifecycle
service model that includes:
- Business case services to clearly define your ROI of moving to their solution
- Strategic business use cases that define the current and future business-process impacts from their solution
- Business KPIs including baseline metrics and post-release targets
- Adoption services that provide the change management, education, and training required to move your business users onto the new solution
- Business value realization services to track the progress of the business case and report on the value created on a periodic basis
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In
conclusion, CIOs need to take advantage of the power shift of moving to cloud
solutions, make the necessary organizational changes to adapt to this new
business model, and ultimately position IT as a strategic resource to the
business.
