Cloud - Challenges to Keep Control

Eus Pontenagel Director Consulting

Quint Wellington Redwood

Munich, 19 November 2014

Challenge to keep control

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Index

Hyperconnected World

Take Aways

Impact

Introduction Quint Wellington Redwood

Introduction of Quint Wellington Redwood

Independent Management Consulting & Education Group:

Founded in 1992;

> 380 consultants globally;

Servicing global & local clients operating in more than 49 countries and across all continents.

Focusing on organizational IT-management challenges across 5 consulting practices and 1 education practice.

Extensive knowledge and insight into the IT and Sourcing marketplace gained through continual market research and well-established relationships with partners (i.e. APMG, ISACA, IAOP) and service providers.

Proven IP, methodologies and tools. Recognized ‘Thought Leader’ in the industry.

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Architecture &Innovation

• Strategy• Business Information

Management• Assessment• Design• Innovation • Rationalization• Audit

Agile & Lean IT

• Strategy• Assessment• (Re)design• Improvement • Transformation

Sourcing & Benchmarking

• Strategy• Supplier Selection• Contracting•Mediation• Benchmarking• Transition• Shared Services •Offshoring

ITGovernance

• Strategy• Design• Implement• Innovate• Co-source• Collaboration

Assessment

IT Performance

• Strategy• Assessment• Design• Improvement• IT Audit• IT Compliance

Government & Healthcare

FinanceTrade,

Transport & Industry

Retail & Services

Utilities Telco

Quint Consulting & Learning Services

Quint Academy

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Index


Take Aways

Impact


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We live in a Hyperconnected World

Everything is connected in Business and Society. No more boundaries, business is society and vice versa

Information is key.

Question : “How do we utilize information with what help of technology”?

Theme of this Forum : Human Centric Innovation 3 dimensions : People, Information, Infrastructure

HUMAN EMPOWERMENT ; Connect people and empower = SOCIAL INNOVATION

CREATIVE INTELLIGENCE ; Create knowledge from intelligence = BUSINESS INNOVATION

CONNECTED INFRASTRUCTURE ; Connect everything and optimize business and social infrastructure = ICT VALUES

ICT Values : Flexibility, Agility and Business Continuity

ICT Optimization in the cloud

Why ? Because “On demand everything” Provide all that is requested!

Enormous number of people, data and end points

Impact on Sourcing strategy, selection, contracting ; E2E service integration

“Challenge to keep control”

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New Channel

Hyperconnected world is demanding ‘availability’ of everything ; in this case information or data ; everything, anywhere, any time, any device.

Availability ; access, internet centric :

This is changing the way of providing the information, the way of storage, the way of archiving, the way of securing.

New ways of providing data ;

Easiness of availability and access : Cloud seems to be solution.

Cloud

A buzz word, a hype, a marketing term for low cost service provision, a charade to cover what’s actually behind it, basically no different than IAAS, PAAS or SAAS.

Let’s agree that ‘cloud’ is a services provision channel. On demand everything, all this requested?

So a new channel ;

should we impose our traditional rules and regulations upon this new kid on the bloc or should we accept that this ‘channel’ has its own ‘dynamics’ and rules and regulations

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…, however, IT is reluctant to adopt

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Arguments Percentage

Lack of knowledge 18.5%

Level of security offered 31.4%

Privacy of data 42.5%

Do not want to share systems with other companies (multi-tenancy) 20.3%

Does not comply with applicable laws & regulations 14.8%

Lack of laws & regulations 27.7%

Service levels offered not adapted to needs 16.6%

Insufficient possibilities for parameterization or customization 16.6%

Uncapable to govern it yourself 18.5%

Our current environment is not suitable 22.2%

Not invented here 1.8%

Lack of standards 14.8%

Fear of vendor dependency (vendor lock in) 33.3%

Limits innovation 5.5%

Need to upgrade network capacity 12.9%

Need to invest in application delivery / network traffic management 1.8%

Other 20.3%

Source: cloud computing research in the Netherlands (Quint Wellington Redwood, CloudWorks Magazine, Hogan Lovells)

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Index


Take Aways


Impact

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A paradigm shift within Service Design

Process Impact

Service CatalogueManagement

Difficult to keep track of all the different cloud services used by end usersDifficult to provide a single consistent source of information regarding all agreed services.

Service Level Management

Traditional service levels are aggregated from the service levels of the underlying assets. Cloud Services should be considered a black box and organizations should use different methods to measure true key metrics.

Capacity and Availability management

Capacity and availability management shift to the cloud service provider. Both availability and capacity should be considered a given.Focus will be on network availability and capacity.

Information Security Management

Uncertainty in location, handling and using public lines need to be considered carefully when using Cloud Services. Cloud requires a paradigm shift for security.

SupplierManagement

Increasingly important as organizations will use more and different cloud service providers.

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…within Service Strategy

Process Impact

Financial Management

Cloud Services are billed on a PAYG (Pay-as-you-go) basis. Financial planning should take shorter cycles into account. Aggregation of financial data is more complex with multiple cloud service providers

Service Portfolio Management

Cloud services are easily accessible and implicitly extend the services portfolio without explicitly maximizing business value with the available resources.Approval of cloud service usage is by swiping the credit card.Service portfolio management should be aware of the different dynamics within cloud development.

Demand Management

Understanding and influencing customer demand is more important than ever. Client facing roles are becoming increasingly more important.Cloud computing is considered a new form of Outsourcing.

Supplier Management

Define an exit strategy to prevent a vendor lock in.

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within Transition

Process Impact

Service Management

Cloud Service providers use their internal development cycles, which mostly cannot be controlled by individual clients.

Service Portfolio Management

Cloud Service providers have to take many different clients into account when introducing, migrating or changing to a new version of a service.

Release Management

Uncontrollable release cycles for Cloud Services which are linked to non-Cloud Services.

Supply Management

Cloud Service providers make extensive use of virtualization, which results in a vast number of virtual assets.

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…and within Operations

Process Impact

Event Management Events can occur outside the premises. Event management should be extended to include cloud services.

Incident Management

Incidents should be brokered to cloud service providers.

Problem Management

Due to black box nature, root cause analysis will be more complex and without proper measures result in unresolved problems.

Access Management Access management is for each Cloud Service different and differs from traditional access management. Responsibilities and authorizations should be reconsidered. Standards are being developed but are not widely implemented.

Common Service Operations

Many common service operations for cloud services have shifted to the cloud service provider. Focus should be on managing the interfaces between cloud providers and the internal organization.

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Impact on Service Operations ……….

“The purpose of Service Operation is to deliver agreed levels of service to users and customers, and to manage the applications, technology and infrastructure that support delivery of the services.”

Impact of Cloud Computing:

Technical management of applications, technology and infrastructure will be shifted to the Cloud provider.

The IT organization should/could become a broker/aggregator of cloud services and a director.

Service orchestration

Players in the field:

As a customer will you demand for integrated service provision out of the cloud?

Will you be or look for a Integrator or will you look for a broker?

Will you accept these roles to be provided by one and the same Service Provider?

As a service provider are you just a service provider, or an integrator or yet, also a cloud broker?

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From Traditional Sourcing Strategy…………..

Traditional Sourcing Strategy.

The WHY is addressing our objectives, the WHAT our scope, the WHO our vendor profiling and the HOW, the way we are going to contract and manage the sourcing.

Cloud impacts two very basic questions from your sourcing strategy;

WHAT am I sourcing; scope

WHO is going to source this; what is the vendor’s profile I am looking for ?

The WHAT is not really impacted. We still need to look at the scope and determine what is provided by a other source.

The traditional WHO however is impacted ;

Strategic match, partnership, cultural alignment ; this means we need to ‘personally’ engage.

Comparing this process with ‘getting married’, we personalize ; our personal Responsibility, Accountability is transferred to SOMEBODY ELSE.

But Cloud means : we can not identify and personalize anymore ; we need to accept the new rules and regulations of the new dynamics.

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To a Cloud Service Strategy ……..

Sourcing Strategy to adapt to be a Cloud Services Strategy

Address Data classification, Risk analysis, types of Cloud (private, public, hybrid)

Address a “Decision Tree”

Scoping and sourcing in line and linked to the ‘vendor profiling’

Guideline for the Cloud Service Strategy

A good Service Strategy needs to take the characteristics of cloud computing into account

“The service strategy of any service provider must be grounded upon a fundamental acknowledgement that its customers do not buy products, they buy the satisfaction of particular needs.“

Cloud Services are “pure” services, it’s underlying technology should be considered a “black box”.

Cloud Services form a combination of the “Managed Service” and “Utility” provisioning models.

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Challenge to keep control

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you buy a cloud service or you buy a service from the cloud ;

means you will be contracting in a different format ;

One size fits all with as little as possible customization (off the shelf)

Short term contracts with pay per use and easy to exit clauses

Cloud computing requires certain contractual terms to be addressed differently:

SLA specific to a contract and Provider’s rights to change services

Data storage, protection and ownership (where, how and security provisions)

Interruption of services and consequences

Termination options and effects (SaaS is difficult to partially terminate)

Audit approaches and requirements

Geography and legislation

IPR

Bottom Line ; challenge to keep control

‘cloud’ is a services provision channel that opens new services and new service providers

But you will still have to scope and select the service provider ;

You still need E2E services provision to work and you still need governance (contract management) to control your service providers

Governance

But then again. What do you want to control and why? IP, privacy, competitive edge?

All you have digitalized is out there;

Are we not creating ‘fake security’?

Off course but for the time being we have to safeguard and assure usage is according to rules and regulations.

That’s why we want and need to control!

Governance for a new consumption and delivery model

Continuous alignment for fast changing service requirements

Relationship management with Cloud Service Providers.

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How do we control ; we adapt our Governance to the cloud dynamics

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Index

Take Aways

Impact



Take aways

“Cloud Computing is mainly a technological development” ; NOT TRUE

Cloud Computing is a combination of technological advancements and socio economic changes.

‘Cloud’ is a services provision channel, that impacts the answer to the WHAT, WHO and HOW basic questions from your (cloud) sourcing strategy; A company sourcing (cloud services) strategy is mandatory

The Cloud Decision Tree should be part of this sourcing strategy.

E2E services provision requires Integration, regardless where or by whom ?

Adapt your Governance to the Cloud dynamics. Accept Governance instead of regulation.

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w w w . q u i n t g r o u p . nlFor further information or questions, please contact:

Eus Pontenagel e.pontenagel @quintgroup.com

+31 6 31 01 39 54

De Oude Molen 1, 1184 VW Amstelveen, Tel. +31 20 - 30 53 700

D a r e t o c h a l l e n g e

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Mr Eus Pontenagel, Quint Wellington Redwood

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Director Consulting Works for Quint Wellington Redwood since 2007 Certified Outsourcing Professional, IAOP Master degree Civil and Commercial law, special in Health Care law and

Master degree International law, special on EEC law. Large experience in International Business Development and Program

Management in multinational matrix organizations, highly focused on business management in sales and services delivery, with substantial experience in change management in the field of outsourcing.

Extensive outsourcing knowledge and experience around the globe Bull Benelux 1993-1995 Integris Benelux 1995-1997 Siemens Business Services EMEA 1997-2001 Siemens Business Services China in 2001-2003 Program Director for multinational outsourcing deals in EMEA & NA in

2003-2004 Head of Transition & Transformation of Siemens Global Shared Services

2004-2007

Cloud - Challenges to Keep Control

Technology

Transcript of Cloud - Challenges to Keep Control