On one hand, cloud computing has unleashed a new degree of innovation, enabling line-of-business users to become incredibly nimble. Gartner last year famously predicted that CMOs would spend more on IT than CIOs within the next five years. We see that happening already in organizations such as Vail Resorts, where the CIO and CMO are collaborating to make consumer-facing apps that drive their business forward.
On the other hand, central IT departments face growing pressures to manage costs, security, and other aspects of governance that are critical to the overall success of their organizations. Robert Grazioli, CIO of SAP Cloud, recently wrote a great primer on tackling cloud fears.
This tension between a central organization that manages risk and line-of-business groups who are compelled to innovate isn’t new. We saw it in the ’90s with the advent of client/server software. And, as I learned on a recent trip to a Santa Barbara McDonald’s with my young son, it was present in the food industry in the early 1970s.
In the late 1960s, a McDonald’s franchise owner in Santa Barbara, Herb Peterson, created what became a locally popular breakfast dish – the Egg McMuffin. The problem was that he broke all of the corporate franchise rules when he started selling this sandwich. When McDonald’s corporate executives discovered Peterson's unauthorized breakfast offerings, they threatened him with a number of penalties for breaking the franchise agreement.
Luckily, McDonald’s CEO Ray Kroc saw the potential for a new revenue stream in Peterson’s creation. McDonald’s had never served breakfast before. On the back of the Egg McMuffin, McDonald’s rolled out breakfast as a major new revenue generator the following year.
This tension between managing risk and driving innovation will always be a part of corporate America. With cloud computing, for instance, enterprise teams need governance solutions to control costs and compliance, yet need the freedom to give individuals tools to unleash the creativity that can help their business innovate and grow.
Here are three ways you can balance innovation and control using cloud computing:
- Enable line-of-business innovation: The cloud provides organizations with fast, inexpensive access to powerful computing resources. One effective approach we see is when companies create an “IT vending machine,” where developers and anyone else who need IT resources can get self-service access to the cloud resources they need, constrained by any necessary governance the organization designs in. Leveraging this approach, a company can successfully provide developers and end users with standard configurations that they can launch without having to create a ticket or make a request for service or a phone call. Provisioning a new server can take 15 minutes or less, and no one in IT has to take time to make it happen.
- Enable governance and security: As a number of industry thought leaders said earlier this year in this video, security and governance are completely manageable in the cloud, and using them to an organization’s advantage is a matter of focus and experience. You don’t have to lose IT agility when you use cloud securely and govern your cloud usage appropriately. As the 2013 RightScale State of the Cloud report detailed, the more you use computing in the cloud, the better you get at things like security.
- Accurately forecast cloud costs: Trying to forecast cloud costs is complicated and sticker shock can slow down enterprise cloud usage and innovation. Forecasting costs accurately using a spreadsheet is nearly impossible. Use websites such as PlanForCloud.com that make forecasting easy and accurate with more than 12,000 cloud data points across major cloud providers and servers, storage, databases, data transfer costs, etc.
From a cloud computing perspective, enterprises are at a point where they can have it all. They can enable solutions that help line-of-businesses users move quickly and innovate, and at same time help central IT groups with governance, security, and cost control.Cloud usage in the enterprise is growing rapidly and improving the ways smart companies work, grow and innovate. Ray Kroc would approve.
By Bret Clement