n his new book "The Big Switch - Rewiring the World from Edison to Google," Nicholas Carr argues that in the early 1900's companies stopped generating their own power with steam engines and connected to the new electric grid. The driver according to Carr was ubiquitous access to cheap power which set off a domino effect of economic and social transformations that ushered in the modern business world. The book's premise is that a similar trend has begun with the Internet's global 'computing grid', where massive information factories are supplying data and software services to consumers and businesses.
Without debating the nuances of Carr's argument, the sentiment in board rooms is clear. The directive to CIO's is outsource processes that are non-core. Everything's on the table from HR and procurement to IT infrastructure such as email, archiving, and remote backup. A natural tension is brewing between the need to get mean and lean and the entrenched IT processes of organizations. The tensions are not just political; they involve real concerns about privacy, security, application architecture, etc. The tipping point may be a younger demographic that is increasingly comfortable with the inherent risks of online services in general and the concept of placing data in the cloud specifically.
Action Item: The organizational imperative of the cloud is to recognize the natural tension between leveraging low cost Internet services and IT's firm grip on business processes. Organizations must deliberately facilitate discussions between the various constituents (e.g. risk management, audit, compliance and LOB's) to determine the most logical path forward. Key parameters and metrics should factor degree of risk, the value of speed and flexibility, ability to monetize proprietary IT, and costs.
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