a.k.a. What does a sales guy know anyway?
My favorite part of my job is that I get to speak with a diverse group of technology leaders (VPs, CIO, Senior managers) across a wide range of industries about their IT infrastructure challenges. Most often, those conversations turn to their infrastructure modernization efforts and how they are plan to adopt a cloud-first approach.
The most surprising realization I’ve had from my conversations is that challenges are so similar across industries and companies, yet each believes itself to be facing them in isolation. While yes, each company has its unique set of challenges, on the whole everyone seems to face the same three major hurdles: Cost, Culture, and Complexity.
Cost: the most visible hurdle
Of the three key challenges, the most visible from the start is cost. “How can we understand costs across environments so we can make decisions on what should stay on-premise and what should move to the cloud?” AND/OR “How can we gain visibility into our costs, and then create a chargeback model to better understand who is responsible for what?”
I’ve noticed that this challenge stems from two primary factors. The first is the “promise” of greater efficiency and lower cost in the cloud. However, most organizations are finding that they are spending 30-60% or more than what they expected. Worse yet, they are unable to decipher exactly where those costs are coming from. This cost issue is really a symptom of the underlying lack of governance and cost management strategy which results in organizations running inefficiently in the cloud. The second is that once you transition into cloud, you have a different set of stakeholders that are more vigilant of the day-to-day operations: Development, Operations, Finance, and Security. Traditionally, these stakeholders would be involved at one crucial decision point. Today, cloud’s consumption-based operational model forces these groups (particularly Finance) to care about fluctuations, shadow IT (and their unmonitored usage), and ultimately cost sprawl.
Every time I hear a VP go over their challenges it reminds me of how my parents used to yell at me to turn off the lights when I lived at home. As an “end-user” of electricity, I would inadvertently leave lights on everywhere, not worrying too much about the implications. My parents, responsible for paying those bills, had to tell me, “Hey, turn off the lights! What do you think we are? The utility company?” With only two kids, my parents were able to manage this fairly effectively. But scale this to an enterprise with a distributed workforce and hundreds of workloads running in complex environments and on multiple platforms… it’s no surprise this becomes difficult to manage.
That leads me to a third realization about cloud costs: while usage fluctuates, there is also baggage/residual costs for which a company becomes responsible. Let me explain. Let’s say you have 100 developers each running an instance in AWS. One day, 10 developers leave and you decide to add another 20. Now you are a team of 110 developers. If, for whatever reason, you forget to turn off one of the environments for your outbound developers, you’ll carry that as baggage. When your 20 new developers provision their own instances, you’ll be paying for 111 instead of 110. Should this happen another 9 times, you’ll be left carrying a total of 10 additional accounts that can be considered baggage. So with cloud there is this creation of fixed costs from poor management that negatively contributes to the gains of consumption based costs. Instead of technical debt, you are now acquiring poor cloud management debt. This and other cost-mishaps are more common that I would have thought.
Most organizations understand the general premise of how cloud and on-premise cost differ. As one of my prospects put it, “to reap the most benefits is to run only what you need when you need it. We need a magic wand to help us automate and orchestrate that.”
It all starts with Culture
The second challenge I hear a lot of is that the “legacy mindset” of some people within organizations are bottlenecks themselves. So many of the groups that I speak with point to a desperate need for cultural change: “We need to shift how our people approach the challenges ahead.” As an industry, we spend most of our time searching for technical solutions. I see so many vendors failing their customers by not taking PEOPLE into the consideration when determining the value (or lack thereof) of their solutions. Many times we focus on where we fit and how much it will cost, but we forget to ask simple questions like “does your team feel overwhelmed with the rate of change?” or “why is your team struggling to adopt your cloud-first strategy?”
As with cost, this challenge stems not from a technology problem, but from our habits and mentalities. To begin with, the days of traditional IT are numbered. The IT organization no longer holds the keys to the castle – anyone can set up a cloud account and tap resources they once had to submit tickets for. It’s frustrating… IT now has to deal with all the rogue folks who are well intentioned but not operating under the established processes. One of the Fortune 100 organizations we work with had two choices: force people to adopt compulsory policies and technology OR see themselves as a enabler to the business. They opted for the later. Their strategy was simple; to offer a better service to the end users and allow teams to buy-in through their own decision making. This worked because as soon as one group became successful with central IT’s new offering, every other group jumped in. It reminds me of Geoffrey Moore’s book “Crossing the Chasm”. IT needs to find the early adopter group, treat them like kings/queens, and if they provide great value, then they will successfully cross the chasm into the majority of their organizations.
Additionally, as business and IT continue to cross pollinate, a new set of skills is emerging. When I worked at Mendix, we had a term that I loved – Business Engineer, folks who can deliver technology solutions with the business in mind. In order be agile and deliver new solutions fast, you need teams who understand one another. Take for example:
- Atticus Tysen, CIO at Intuit. His career progression is fascinating because he started in business and transitioned into the role of CIO. He admits “when I was running Product Engineering teams, I really did wonder why it was taking IT so long to do things.” However, instead of continuing down that path, he decided to jump head first to understand why. The success he has had is evident in shifting Intuit’s culture to one that is cloud first and business centric.
- Sy Esfahani, CIO at MGM Casino & Resorts. Sy has a unique understanding of his role and how it fits into a business, he no longer sees IT as a support function but as a business unit itself. “Every CEO is looking at how technology can increase revenue,” Esfahani said. “As CIOs and CTOs, you need to look through that lens – how do you help your CEO drive revenue?” More importantly Sy has identifying with the importance of culture and embracing Peter Drucker’s “culture eats strategy for breakfast”.
- Mindy Simon, CIO at Conagra Brands. Mindy’s career started in finance at ConAgra and she transitioned into an IT role. However, being rooted in a business practice outside of IT, Mindy brings a unique perspective and you can see in how she executes her role. She understands that her role is to remove friction as ConAgra becomes a digital organization. In a recent interview with Martha Heller, two things about Mindy stuck out to me. First, Mindy is always asking, “are we relevant?” seeking to drive down costs while driving growth. Second, Mindy understands she needs to educate her business partners on the potential of emerging technologies. Instead of getting frustrated by the gap between business and IT, she takes it upon her team to educate and deliver.
What is the most evident trend here? Strong leadership and a laser focus on bridging business and IT and a change management process which aligns the right people to the right role at the right time are key to solve the culture paradigm.
On the vendor front, decision makers need to ensure that the vendors they work with understand the changing market and the ecosystem of technologies available. If you are speaking to someone who is not staying relevant in a fast moving market or are not able to educate you on how they fit into your IT landscape…run the other way. Vendors are responsible for making themselves relevant to you and your teams.
Complexity of existing ecosystems
The final challenge is ecosystem complexity. Enterprises are now faced with a proliferation of tools and platforms to manage. Enterprise companies ARE NOT startups and thus cannot operate like one. Thus a lot of the terminology and practices adopted by startups are not transferable to enterprises. Why? Complexity. An enterprise operates at a much larger scale and complexity which requires software specialized for those challenges. From what I have seen, many startups who sell to the enterprise don’t start with this core challenge in mind. If an Enterprise doesn’t take this into consideration, then it’s likely that product will fail, become shelfware, and reduce that Enterprise’ appetite to evaluate new vendors that could help them.
My only recommendation here is to push your vendors. The best vendors ask questions and take time to understand your technical requirements and business challenges. Not just providing vaporware or SLIDEWARE (my new favorite word!). Companies like Gannett, Erie Insurance, and Alaska Air Group are exciting because they are pushing the limits of their organizations. More than that, they work and push their vendors to help them get to that next iteration of their IT organization. It’s an exciting time to work and collaborate in IT because every company is turning into a software company.
Leaders responsible for modernizing their infrastructure environments and enabling cloud adoption across the enterprise have a tough job. It certainly doesn’t help that IT infrastructure is under-appreciated. I typically hear “the best infrastructure is invisible.” I rarely hear people voice their gratitude for the infrastructure they depend so heavily on, simply because they don’t even know it. A civil engineering professor of mine once told me, “you have to understand that civil engineering and infrastructure design is the most under-appreciated work you can do as an engineer. It is just expected to work. When is the last time you got on a bridge and your mother asked you to call her when you crossed? As miraculous as this type of engineering really is, it’ll never have the hype of building a plane, or a rocket.”
Today, all of the business and IT folks delivering on modernizing infrastructure initiatives are being asked to completely rethink their organizations while operating at speeds never before seen. The move to the cloud is certainly a challenge, but it’s also exciting. I’m thankful for the opportunity to work at the intersection of business and IT, with ambitious leaders who are driving transformation for their companies.