At our recent annual Webforum company conference just outside Stockholm, Pelle Hjortblad (formerly CEO of Project Place and now on the Webforum Europe board) gave an introductory speech on Cloud Computing and the impact it will have on companies everywhere.
A lot is written about this subject and like everything potentially disruptive there is often a lot of hype on what it will mean and how it will change things. Here we explore a few of the many questions in the subject and take a decision-makers perspective.
The changing face of the IT department – why do it all in-house?
IT has faced change as computer power has increased and moved from centrally run machines to PCs on every desk and then the expansion of internet usage to communicate and transact with the outside world. This evolution has shifted control and even power to internal IT departments and formed a large share of a company’s costs.
Most companies had a large IT department requiring high internal knowledge to understand business needs, manage changes and upgrades to infrastructure. Add to that the need to keep up with advances in technology and not to mention the latest security threats. Often companies IT expertise exceeded that of their core business.
Cloud computing is changing that strain on the IT department to be experts in all areas of technology by shifting the responsibility for many functions to vendors and their specialist data hosting providers. This should allow IT to focus their valuable resources on the needs of their company rather than just fighting to keep systems operational.
Information security: the cloud is probably already in your company
With the increase in free or very low cost personal management tools for sharing files and other information many teams within organisations are bypassing the IT department and just using these to help them be more productive.
Do you know who has access to what information as well as whether data integrity and audit trails are being maintained according to company policies? After all certain company information is more likely to be of more interest to internal staff than anyone external – it is not just overall access but the ability to control who has access to what.
With the spread of social media and demands on project productivity making the right tools available is still essential. Using online enterprise-class tools for collaboration and information management gives access to the right people while maintaining oversight.
System integration – the IT department’s ongoing challenge
Cloud computing has accelerated the use of APIs (Application Programming Interfaces) to allow different systems to connect to each other and pass data to each other. This method is much more standard than some of the interfaces that are often built internally within a company.
Cloud-based solutions when dealing with a significant number of customers and potential other systems they wish to integrate with are forced to provide standard interfaces. With that standardisation means that the time and cost spent connecting a cloud system to another one is significantly reduced and often more consistent results.
Replacing and updating systems – the hosting trap
Ask your IT department on the hosted software that is being used and how easily that can be upgraded or migrated to other software. The cost of each upgrade and replacing hosted software is often high and repeatedly so.
Many in-house systems may well have been embedded in your organisation with bespoke development and you need to consider changes in the operating systems – how many companies are using old and even unsupported versions for this very reason?
Cloud solutions in having to cater for a large number of customers and users can’t allow for customisations otherwise this would not be efficient. Systems tend to be parameterised with tested features that can be switched on or off. They also take care of upgrading operating systems and offer solutions to migrate data off hosted software.
Finance – the shift from CapEx to OpEx
Cloud computing, with fast deployment, minimal project start-up costs and predictable ongoing operating costs: the vast reduction in capital expenditure is likely to be very attractive for the Finance department and company shareholders / directors alike.
In many cases such projects would not have even got even considered for SMEs at all or in larger companies not at some points in the business cycle.
Often cloud solutions can be scaled down as projects finish, needs change or demand weakens. With large up-front capital costs of hosted or in-house solutions the investment is made regardless of whether it is needed a year or two later.
Catering for business needs
Very few businesses have a need to be unique in their IT function as it is not their core business; this may be in accounting, project management or other areas. The cloud is shifting even more away from bespoke systems as most features are common to a particular discipline or industry.
Good enterprise cloud systems have been developed with the requirements of many different businesses taken into account. Where there are differences they also allow for individual configuration where this is of benefit.
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