To the cloud: Get your governance house in order first

Back in November of 2011, Spiceworks—the maker of freely available ad-supported help desk and IT management systems—conducted a survey, the results of which indicated that more than 50% of the SMB market was using cloud-based services in some way.  More recent surveys have confirmed that the SMB market is ripe for cloud adoption, even if those surveys did not corroborate that 50% figure.

Cloud adoption among larger organizations is also commonplace and becoming more so.  It’s evident that the cloud—however one decides to define the term—is and remain a significant player when it comes to the directions that organizations take to meet new business needs.

Cloud services create a new paradigm when it comes to managing and acquiring IT services in an organization.  They create a whole new world of accessibility, which the business can embrace quickly, easily and, sometimes, inexpensively.  At first glance, one would believe that the pot of gold has been delivered and an organization needs simply to avail itself of the cloud-based spoils to thrust the organization to new heights.  In fact, one may wonder why there needs to be a CIO or IT function at all.  After all, if the individual business units can just buy services on their own, that seems to be the best of the options, right?

All is not as it seems.

It’s at times like this when the governance structure of the organization is more important than ever.  Traditionally, new technology services didn’t flow like a fire hose into the organization.  As such, loose governance or only informal governance, while not ideal, could be sufficient to meet organizational needs as they related to service intake.  Often, such governance would involve the CIO and a few people from the business in conjunction with a senior leadership team that occasionally reviewed new initiatives.  This kind of structure is not uncommon.

Today, though, with the fire hose starting to blast at full, informal or lackadaisical governance structures simply don’t cut it anymore.  Too much can happen to quickly and the stakes are high.  There are serious negative ramifications that can result from poorly implemented cloud services, including:

  • Service overlap.
  • Lack of comprehensive integration with existing processes.
  • Disintegration of data and the creation of new, discrete islands of data, leading to poor or ineffective decision-making.

When organizations simply attempt to accept the fire hose of new services, existing integration groups become overwhelmed and efforts become less successful, leading to the effects indicated above.

How can companies avoid the fire hose effect?  The simple answer is to implement strong governance structures and techniques that place a focus squarely on ensuring that only the technology projects and services that meet critical and agreed upon business goals are the ones that are selected for implementation.  It must be remembered that technology resources exist to serve the needs of the organization as a whole and the initiatives undertaken and supported by these resources must meet overall organizational needs, not perceived, unvetted needs or individual unit needs… unless those individual unit needs have been identified as the target of the efforts.

A good technology governance model will include key stakeholders and business decision makers from across the organization.  While it’s expected that people will argue for individual areas, the people selected should have the ability to see the bigger organizational picture.  Policies will exist that govern the acquisition of new technology services, including cloud-based services that might be purchased by individual business units.  Further, the CIO or a designee should be required to be involved in all service acquisitions in order to make sure that selected products maintain process and data integrity.  Most important, technology governance requires executive-level attention on an ongoing basis.  This doesn’t mean that the CEO needs to turn into the CIO, but the CEO should have awareness.

The technology governance structure should act as the control valve to manage—at a very high level—the influx of demand so that what trickles down to implementation staff that is responsible for integrating disparate services can do so in a controlled way.  Personally, I believe that this is a make or break function for organizations as they move forward with “centralized decentralization” of their technology efforts.

  • stu

    Scott – one of the reasons that lines of business turn to cloud services is for the speed (easy to grab a credit card and spin up some Amazon cloud services). It’s this speed and agility that IT organizations need to compete against. In your experience, how long does it take to put proper governance in order?

  •  Stu – it depends on the organization, but it can be anywhere from a few days to a few years, depending on the willingness of the culture to accept the shift.  I’m a big fan of speed and agility, but believe that a “throttle” is critical so that the speedy and the agile don’t run into a brick wall or drive off a cliff.  Some may see the throttle – governance – as an obstacle.  I see the throttle as playing a very necessary part in getting from point A to point B in a successful way.

    I wish IT didn’t have to “compete” with these kinds of services.  In an ideal world, the IT group would be seen as a trusted partner or shepherd of these kinds of services.


  • Coolsport00

    Working at a SMB myself, I’m very surprised at the % # of SMBs Spiceworks says have implemented some form of Cloud. I’m not sure I ‘see’ that as being accurate…I would be surprised if it was 30% to be honest. Regardless, Cloud implementation of some sort is where I’m wanting to take my org. Cost and “trust” to this point are hinderances. I’m awaiting the ‘right’ opportunity (i.e. a refresh cycle, or software license agreement renewal) to further investigate our ROI potential of moving some services to the Cloud.

    Thanks for the post.

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  • This is a great post! I experience this first-hand as like many others. With not only “speedy” cloud services, but also the emergence of mom-and-pop service shops. From getting creative work done, to building websites and mobile apps to cloud/hosting services. Usually the culprits are business folks that have “connections” with such service shops (neighbor, friend, relative). The way they get around it is posing these service shops as “Media” agencies that are focusing on a “marketing” initiative. But the marketing plan also includes website, mobile app, hosting, cloud service etc etc. In these situations a strict governance is a must, but also a culture shift is needed. Otherwise the perception will continue to be that IT is a slow cost center instead of a fast value provider. All CIOs should read this post!

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  • FC

    Very useful information on this post! Thanks for sharing. The
    cloud services are gaining a lot of importance nowadays not only because of the
    speed but also due to the versatility, massive storage and easy sharing
    capabilities. The cloud based services are cost effective for the
    organizations. Even though gaining better governance will take some time, it
    will benefit the business in the long run!!

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