How to Make Private Cloud Initiatives Matter to Your CEO

July 17, 2012 4 Comments »

Chief information officers understand the private cloud and the benefits associated with the technology, but they still need to sell the initial investment to other executives – CEOs and chief financial officers.  To C-level leaders, the CIO’s ability to explain concrete return on investment and demonstrated value makes all the difference between embracing cloud computing or abandoning cloud initiatives that could have been hugely beneficial. So how can CIOs present the business-friendly benefits of the private cloud to their bosses?

The value of private cloud education

For starters, CIOs need to look at themselves as educators. Some might feel this is less necessary than it once was. Last fall, for example, the Computing Technology Industry Association (CompTIA) surveyed a group of 500 IT and business professionals and 400 IT firms. Among its findings were positive indicators about executive understanding of the cloud. The 58 percent of executives and IT staff who said they had significantly increased their knowledge of the cloud suggests that the CIO’s role as educator should actually be shrinking.

However, there is still a serious disconnect threatening the adoption of private clouds. CIOs and business-focused executives are not necessarily always on the same page about this technology or its benefits. CIOs not only understand private clouds and the benefits associated with automation and management solutions, but they are also actively trying to sell it internally. To do so, CIOs need to think like business leaders, and prepare for the questions CEOs are likely to ask:

Didn’t we just invest in virtualization? Virtualization was on the IT must-have list years ago, and it required CEO and CFO convincing back then, too.  CIOs need to explain that virtualization was only the beginning of their companies’ journeys to private clouds. Yes, virtualization delivered increased flexibility, agility and cost-savings. CIOs should tout those benefits when they bring up private cloud investments, and focus on leveraging the current investment in the virtual data center as a key component to transforming the way they deliver and manage infrastructure.

But are we about to lose technology for which we’ve already paid? For CIOs who pledge to embrace a pragmatic path toward a true private cloud, the answer to this question should be “no.” No CEO wants to rip and replace recent IT investments, and the right steps toward the cloud should not require that kind of sacrifice. The smart CIO answers this question quickly and emphatically.

Is infrastructure a critical need right now? The way we think about private clouds is evolving from an infrastructure investment that supports the business to a strategic enabler that not only drives down costs but also improves customer service and the speed of delivery. Private clouds are about far more than infrastructure and fundamentally about leveraging the speed and agility of virtualization with repeatable, standardized, and highly optimized processes. Therefore, CIOs should move infrastructure conversations to more compelling arguments about competitive advantage in the market.

What challenges would private cloud introduce? Communication is the key to avoiding the pitfalls that can derail valuable initiatives before they ever begin. CIOs should work hard to avoid confusion about expectations, results and deliverables. The creation of a cloud requires people, processes and technology, and CEOs should be made aware of that fact from the start. Process re-engineering, aligning business goals with IT objectives, and ensuring the right measurements and people are in place are essential to eventual success. Is the CEO on board? The CIO needs to know early on in the initiative.

How long is this going to take? CIOs should go into meetings with their CEOs and CFOs with recommendations on solutions that quickly and effectively deliver quantifiable private cloud computing competencies. If you cannot measure or commit to actual results in a reasonable timeframe, expect to be met with reluctance and resistance. Clearly document objectives that align to organization requirements with a common understanding of the deliverables associated with a private cloud (self-service provisioning, IT costing & showback, service catalogs, etc.).  In doing so, expectations and timeframes should be aligned with a unified vision of what is actually getting delivered.

Benefits of Private Cloud for IT, benefits for business

Once the questions and concerns are addressed, the CIO can turn the focus to the benefits of delivering IT in a private cloud. The conversation between IT and business should focus on quantifiable and tangible benefits of moving towards a private cloud.  For example, improvements in provisioning and approval times, reduction in costs (if chargeback is being used), and improved customer service through self-service management portals.

IT teams can meet CEOs’ financial expectations once they hit more strategic phases of virtualization deployments by integrating features such as IT cost visibility and chargeback. In terms of transparency, administrators and executives want to know what resources are going into the private cloud and how to curb consumption wherever possible.

This is an opportunity to promote the value of speed, agility, and the simplification of data center management since cloud management solutions automatically calculate costs, automate routine administrative tasks and help optimize the performance of configuration of the virtual data center..  With constant access to the benefits of the cloud and IT costing at their fingertips, CEOs and organizations are better equipped to quantify, justify, and when appropriate, charge back infrastructure investments.

The efficiency story should also appeal to CEOs. When IT is more productive because business users can appropriately self-provision resources, the business – overall – is better off. C-level leaders should also be moved by the ability for monitoring, measuring and managing IT consumption and show back that comes with cloud deployments.

Bridging the understanding gap

Private cloud adoption can transform the way IT delivers services to end-users but typically starts with buy-in from executives beyond the data center. If CIOs and CEOs are committed to private cloud adoption, expectations, perceived value, and deliverables of the cloud must be clear from the beginning. By anticipating the questions of business leaders, by communicating honestly and completely, and by embracing the role of educator, CIOs can bridge gaps that might otherwise derail business-critical cloud pursuits.

Jason Cowie is the vice president of product management at Embotics and oversees product direction and strategy.  Previously, Jason was the general manager at EMC responsible for the server management business, and he played a key role in the acquisition of Configuresoft. 

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