What Transitioning to the Cloud Means for IT Organisational Structures

I’ve produced this post as response to one in the Microsoft Tech Community titled “What Transitioning to the Cloud Means for IT Organizational Structures (And why you should pay attention)”. It’s worth looking at the Tech Community post and adding your contributions. I agree with the themes of decentralisation, customer centricity and the need for a strategic steering arm described in the post. My response is more around the overall experience and observations.

Observations of a Civil Engineer

In a prior post, “It’s not an Oscar but…” I describe how I made the relatively late career transition to IT.  With hindsight, I believe that I joined IT at a significant point in the transformation of the industry. 4 or so years ago, the “cloud” was a relatively immature proposition (some may say it still is). Services like Office 365, G Suite, and AWS where starting to gain traction with early adopters. Products like Slack and Workplace by Facebook where still twinkles in the eyes of their developers. At the time the talk was of how the cloud would be transformational but it lacked real use cases or substance. Fast forward 1-year: the use cases started to emerge and as growth in the cloud really started to pick up (as an aside check out this SlideShare for an insight in how the numbers changed). Soon after more conservative organisations started making and executing plans to “get to the cloud”. Returning to the present day and the cloud is well established and the numbers tell a compelling story.

There is now an almost relentless push towards the cloud. Vendors are describing themselves as “mobile first, cloud first” and their on-premises applications as “legacy”. As a relative newcomer to the industry I can see the challenges this presents and in particular in the organisational structures of IT services. IT is a relatively immature industry – it’s only been about 75 years since the first commercial computer was developed. Its immaturity is compounded as the rate of change and demands placed upon it can only be measured with exponential curves or theory’s like Moore’s law. With exponential growth, there is limited opportunity to pause, reflect and mature. Exponential growth promotes a reactionary mindset.

Reactionary environments are difficult for organisations to sustain (IT is not an emergency service!). IT’s struggles with this can be seen in the waves of offshoring, outsourcing, nearshoring, and insourcing undertaken by many organisations was well as the constant flux and application of new process models. A move to the cloud creates a new sourcing model which resembles a mash up of offshoring, outsourcing, nearshoring, insourcing and traditional. The model is heavily influenced by new requirements that have emerged specifically in reaction to the cloud e.g. data residency, sovereignty, and privacy. The mashup presents a fresh challenge to the IT organisation and the process models they operate. However, this challenge need not be hard if the IT organisation looks beyond its industry and peer groups for answers.

An IT organisations move to the cloud should be easy, liberating and empowering. From a civil engineering perspective, it is like building a skyscraper but you only need to worry about the planning and transportation to it. It is the cloud service provider who provides a turnkey service, sinking its foundations, building the skyscraper, installing, and maintaining its services, and extending it when you run out of room. Your staff become customers and consumers who occupy and work in it. Once built the IT organisations responsibilities shift to efficiently and securely transporting their customers to the building, empowering them so they can operate the lifts, know what is available on each floor and how to use what they find. When constructing the skyscraper, the cloud service provider would have installed flexible floor layouts and from time to time they’ll rearrange them, introduce a new bits of furniture or even take them out of use. The IT organisations role is to be aware of these changes and communicate them to their customers.

The transition to the cloud requires a change in mindset and organisational structure. The cloud opens doors to a building full of ever changing possibilities. The IT organisation is no longer in complete control and needs to trust others when it comes to security and availability. Change occurs on a schedule defined by the cloud service provider. The IT organisation takes on the role of Foreman training staff under their supervision, ensuring the appropriate use of equipment, communicating, changing schedules based on availability and maintaining safety and access to the worksite. As Foreman, they will also develop, evaluate and support plans for each item of work to be carried out by their staff.

Sticking with the engineering analogy, in the construction industry we have procurement and delivery mechanism called DBFO. It stands for Design, Build, Finance and Operate. Naturally there are variations on the theme and DevOps can be seen as one of those variations. I think the modes that DBFO represent are really useful as a frame for the organisational structure to provided by IT when it comes to transitioning to the cloud.

Design

In the skyscraper analogy, design is about planning and transportation.

When making the move to the cloud the design team will be focussed upon unpicking the legacy e.g. hub and spoke network models, on premises servers and services and migrating key infrastructure like Active Directory to the cloud. This does not need an IT organisation to change as they normally have people in place to maintain those services. They do need some education and support around security, comparable cloud workloads etc. and that is where a cloud partner can help. Like any good mechanic as they know how the service works they should be able to take it apart and reassemble elsewhere.

Thereafter design for the cloud is all about enablement, user experience and usability. It’s about enabling your staff unfettered access from anywhere, at anytime, on any device. User experience and usability is not about the cloud services themselves as the cloud service provider will have that covered. It is about how your customers interact with the services in the context of your organisation, apply organisation specific use cases and as well as the “what to use and when” whilst satisfying the “what’s in it for me”.

With perhaps the exception of the infrastructure needed to connect to the internet it is not about physical hardware. It is about knowing how and when to use, say, a virtual machine, Docker container or blob storage. Design is focused upon providing on-ramps to cloud services, security, data models and configurable solutions that can be handed to customers. Designs need to be applied in a more holistic way as every organisation is becoming a digital organisation where their knowledge, content and networks are their unique selling point.

In order to support the production of designs and react to changes the IT organisation needs to take a new approach to servicing design and in doing so look to change its mindset. A mindset of “that’s how we’ve always done it” will become a barrier as the solutions and services offered by the cloud are in a constant state of flux. Designers need to be holistic, open-minded and up to date. Their designs need to be lighter, faster to implement and ideally based around configuration rather than bespoke code. Given the pace of change IT projects cannot afford to run for many months or worse still a year or more as solutions designed now and implemented next year may find that the code has changed or worse still deprecated for the latest shiny new toy. The shiny new toy will become the designers friend and enemy… Finally designs need to be integrated holistically so that the user experience and usability of the entire set of IT services is coherent, frictionless, and accessible.

Build

It is the cloud service provider who actually builds and provides the services for you to consume. Therefore, in the move to the cloud, the focus of building shifts away from hardware and services to consistency, configuration, and applications. Crucially cloud services are designed to shift the focus away from IT and empower the end user to build through configuration and no-code solutions. Building is also about allowing staff to exploit knowledge, content, and networks to increase their speed to market, ability to deliver and innovate at their pace.

Empowering staff to undertake their own builds requires empowerment, not just through permissions but knowledge. This requires the IT organisation to change its approach to permissions, trust, and knowledge sharing. It also means that they need methods to ensure consistency in configuration and the ability to industrialise a configured solution so it can be deployed many times e.g. as a containerised app in Azure or a site template in SharePoint.

I find the skyscraper analogy useful as it highlights the role of IT organisation to transport their customers to the building. An example of transportation is that customers should not need to know how to set up the Engineering Simulation service in Azure. I believe it is the role of the IT organisation to have the set up ready (a clear path to the service, firewall exceptions etc. in place) and waiting so that all the customer has to do is add their content.

Finally, by empowering through configuration and transportation routes requires the IT organisation to take more of a continuous delivery approach. This changes roles in an IT organisation as staff become more customer facing and responsible for the design, build and operation.

Finance

Finance is an area that is already changing in IT organisations through a shift from perpetual licenses to subscription models. A transition to the cloud introduces another set of subscriptions to manage as well as on demand charging and app stores. On demand charging is likely to be an area that is new to the IT organisation and one that they may be uncomfortable with. The discomfort arises as to the predictability and scale of the likely charges. Hard work then follows in the process to recover the costs from the appropriate internal cost centre.

In making the transition to the cloud an IT organisation can expect the teams responsible for Software Asset Management (SAM) and Governance to grow as their scope increases. A move to a cloud service like Office 365 can introduce a dozen or more licenses to manage. Services like Azure and it’s ability to support applications in virtualised environments will challenge the SAM team in areas like knowing what software has been used, whether it is permissible to run the application in a virtualised environment, how to provision a packaged application into a virtual environment etc.

The availability of apps through an app store stoked by the familiarity of customers with consumer app stores increases the scope and demands upon the IT organisation. App stores empower and encourage devolved purchasing. However, customers are unlikely to check the terms and conditions of the app or calculate the financial impact, you can imagine the conversation “But it was only £9 to install”, “But that’s £9 per person per month and you’ve opened it up to 1000 people”. IT organisations need to be wise to this and scale their SAM, Governance, and Finance teams accordingly with staff who are comfortable face-to-face contact and with backup from their legal or purchasing experts (to wade through items like Terms and Conditions).

Operate

My observation is that IT used to be good at operations and in particular keeping the lights on. It’s a mode that IT have successfully delivered since the first machines. However, the move to the cloud has instigated a change in the operational model and mind set. The result is that career IT Pro’s are struggling to catch up or adjust.

The struggle arises through the change in expectations set by the cloud. Moving to the cloud opens possibilities of services on any device, anytime, anywhere. That shifts operational support to helping users with their own devices, safeguarding and securing data across an infinite range of devices, reacting to tickets outside of office hours etc.

Our personal consumption of high availability services like Facebook and Twitter has raised our expectations of operational performance when we are at work. Our customers want internet connectivity that matches or betters what they can get at home or on a 4G device. This places an operational strain as corporate networks are typically hub and spoke with internet breakouts located at the hub. The hub and spoke model worked well a couple of years ago, when the majority of traffic would remain within the organisation. With the shift to the cloud we are seeing total inversions of traffic flow with the majority of traffic now needing to leave the confines of the wide area network. We are also seeing increased volumes of data being transferred as the digital organisation emerges. This increases the operational pressure at pinch points like Datacentre breakouts and firewalls. In turn this places pressure on IT to change the topology, which is easier typed than done! Our consumer based expectation is that this is a quick process. Anyone in IT who has had to unpick a network, convert it to using local internet breakouts and right sizing those connections knows that it is not an overnight task. The delay merely ramps the pressure up on the operational team.

Once converted a new challenge emerges in that staff who are used to maintaining a network that they had complete operational control over no longer have that control. Their network is now in the hands of the local ISPs etc. and they are limited to what they can do. In one respect this helps as it delivers an operational cost saving as there are fewer flashing lights and wires to maintain. However the shift is more profound as their operational focus is now relationship management with their consumers and ISPs. This may need a different type of person.

Opening more doorways to the internet also means opening more doors to bad people. The effect is that the IT organisation needs to develop, and develop quickly, increased capacity in the dark arts of cyber security. Operationally this is challenging given the pace of change and shortage of skilled staff.

Operational challenges do not stop at the network. Operate largely becomes the challenge for the cloud service provider. It’s the cloud service provider’s role to keep the service secure, the servers up, the data flowing etc. As mentioned earlier in the skyscraper analogy the operational role of IT shifts to a mode of empowerment and enablement. Operationally this means keeping a finger on the evergreen pulse of the cloud services and supporting customers in understanding the capability and appropriate use cases for different solutions.

Operations will be a long-term partnership between the IT organisation and the cloud service. If the relationship is not managed like partnership, then it will fail. The partnership may include a third party cloud services partner to whom you may outsource a number of activities (even if it is to get you over the initial transition).

Summary

In my opinion what transitioning to the cloud means for IT organisational structures is a change in mindset and approach. The cloud is not a static environment where the focus is simply keeping the lights on. I think IT organisations can improve their chances of success by looking beyond its industry and peer groups for answers and staff.

I think every IT organisation should pay attention as every company is becoming a digital organisation. The cloud is the construct that will truly enable the digital transformation. Organisational structures need to change as your companies staff become your customers. Your customers become information managers, digital curators, and configurators. IT becomes an enabler, a guide, a guard, and a teacher. Every member of the IT organisation becomes customer facing and takes responsibility for services from their design through to operations.

In changing the organisational structure of IT to align more with the continuous cycle of design, build, finance and operate you are building the foundations that enable your company to reach for the clouds.

I thought I’d end this post with some strategic thoughts and a concept for an organisational structure.

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Post script

Konrad Zuse, the inventor of world’s first programmable computer, was also Civil Engineer.

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