1143RA Cloud Business Summit 2012: What to do About Innovation as a “Triple Threat”

What is Happening?  This week, Saugatuck Technology hosted its annual Cloud Business Summit in New York City. The invitation-only event featured panels and close discussions with large enterprise CIOs and CTOs about their real-world experiences in enabling, building, and managing the business and IT in the emerging era of the Boundary-free Enterprise™ (BfE). Discussions and presentations with IBM, SAP and PWC spotlighted experiences, challenges and solutions on the vendor/provider side, which is equally challenged as buyers and users fast-track more types of business operations into Cloud and hybridized environments.

A core theme in every formal and informal discussion was innovation – especially, the needs to innovate how we operate as IT leaders and organizations, given how the pace and scope of technological and business innovation is increasing, mostly as a function of user adoption and innovation with Cloud-based IT and business services. Most compellingly, we learned how innovation is a threat, an opportunity, and a critical need for any type of size of enterprise IT group.

Why is it Happening?

In the weeks leading up to the Cloud Business Summit, we noted how the pace and scope of business innovation threatens who we are and what we do as IT leaders and organizations. Here’s what we said on Nov 1:

The pace of Cloud-driven business innovation is outstripping even the accelerating pace of IT innovation – and therefore is outpacing the abilities of established IT and business management organizations and structures (1138RA, Cloud Business Summit 2012 – The BfE Comes to NYC, 01Nov2012).

The insights and experiences shared during the Summit this week confirmed the pace of business innovation being driven by Cloud-based IT and business services. This poses a threat to IT organizations and leaders because of the unique and vast combinations of unknown, ungoverned, nonstandard and unaccounted-for adoption and utilization throughout and between enterprises. That threat includes the very real disintermediation of IT organizations and governance – which should be viewed, by the way, as a threat to enterprises’ ability to do business securely and cost-effectively, and not as a threat to the power and influence of IT orgs and leaders.

That is because within that threat lies tremendous opportunity to rethink and repurpose IT roles, structures, and yes, power and influence. Saugatuck has laid out a set of changes and stages of occupation and influence that we see IT orgs and leadership going through as enterprises shift from more traditional ways of doing business through hybridized environments toward more and more Cloud-delivered services and capabilities.

Figure 1 (which was featured in this week’s Summit and previously examined in depth for Saugatuck research clients) lays out the basic progression of roles, responsibilities and influence through these stages (1080CLS, Change, and Change Again: The Shape of IT Orgs to Come, 08June2012).

Figure 1: Changing IT Roles, Responsibilities and Impacts of IT Orgs

Source: Saugatuck Technology

Market Impact  The resulting critical need is a rapidly-growing need for innovation, and improvement, in IT leadership and influence. And as we found in conversations at this week’s Summit, that is where most mistakes are being made today.

Most of the Summit discussions centered on what has been learned, and what best practices are emerging, so that significant mistakes can be avoided and known challenges can be managed cost-effectively. In the coming weeks, Saugatuck will publish a series of Strategic Perspectives and in-depth research reports that provide greater insight and guidance for our subscription research clients. For our Research Alert audience, examples of leadership insights and best practices from the Summit discussions include the following:

• Users first. The widespread scale and scope of easily-adopted, Cloud-enabled, individual productivity capabilities shifts power and influence more toward Business users, not Business organizations. Specific Business processes and functions are the initial means of Cloud incursion into the enterprise. Users are doing things the way(s) that they want to (finally), and that is helping them forget about or ignore IT orgs and rules – until things go wrong. That means that…
• Alignment is ever more critical. This is not a new position or idea by any means, but it is one of increasing importance as too many IT groups slip further away from business user involvement because of Cloud adoption and use (803MKT, Free-Range Knowledge Work Spotlights IT Dissociation and Future, 30Oct2010).
• Alignment builds from involvement. As users become increasingly independent of traditional IT orgs, operations, and influence, it is up to IT leaders to figure out and improve means of getting and staying involved with the users –and not in an overtly restrictive manner. The best practice is to develop, lead, and promote empowerment and enablement efforts that emphasize how users’ abilities to not just do business, but to improve their own individual value to the enterprise.
• Involvement leads to influence. The more involved IT orgs and leaders are in building the value of individual users to the enterprise, the more those users will build trust and reliance upon the IT org.

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