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Design an innovation-friendly IT management strategy around the cloud Innovation is either just a hopeful buzzword, or an attitude ingrained in the culture of a business. Get it right, and a transformational mindset will send your business galloping forward. Until recently, technology itself could be complex enough to keep the brakes on, but thanks to the cloud and some innovative management practices, that’s no longer the case.
now have the ability to choose services, join them together, and try things, what we call ‘test and learn’. In the old world you’d spend a lot of time making a plan, evaluating a technology, and then implementing it. In the new world, you’ll string together multiple services, test them and learn from it. The cloud regime gives you lots of opportunity to evolve fast.”
Open the business pages of any newspaper, and you will invariably see two types of story side-by-side. One will be yet another mournful litany of endless recession; the other a company bucking the trend with innovative working practices and remarkable new products. Every business wants to be in the second category, and technology is a very good place to start.
The consumer is tyrant
Peter Boggis, Founding Partner of change management consultants, Formicio, says,” IT has a unique role to play in enabling innovation whether it is through the introduction of Web 2.0-based collaboration platforms, access to cloud-based applications or implementing business platforms based upon integrated packages. For years, businesses have sought the ability to be agile and adapt quickly to new ideas. By implementing agile enterprise architectures, business colleagues can get closer to this goal.” Cliff Evans, Chief Digital Officer at technology consultants, Capgemini agrees that a smart integration of cloud services can help businesses of any size to leapfrog the competition. “What matters is the ability to be adaptable; to move quickly in response to the different needs of consumers. We
But don’t get too comfortable. Innovation is no longer in the hands of middle-aged bearded men in darkened garages. Nor do large companies have a monopoly on good ideas. The consumer is king, and the consumer is fickle, too. They have adopted technologies like mobile and social media, and use them to own outright their relationship with businesses. Not only can they damage your reputation; they can switch to ‘the new thing’ en masse, without warning: think MySpace or Friends Reunited for big examples. Says Evans, “The choice has been taken away from business owners. It’s difficult to predict what the next best thing is, and it won’t be a linear change, it could be a step change, so you need to be able to adapt quickly.” Evans therefore recommends a convincing model of IT management in which the technology in an organisation should move at different speeds of change, where the rate of change increases the closer you get to the consumer. Collaboration tools, a website and customer services, for example, might live in the cloud; customer histories and credit card transactions might belong in a central repository. “Clearly that speed of change is often driven by the
availability of cloud services so we embrace that; but also the idea of how you plug and play different services – both cloud and traditional in-house, to manage it all as a coherent whole. You need a framework which defines your comfort zone of control and security.” A new role for technologists at all levels Rapid-iteration technology, driven by consumer demand, requires that IT managers work in a fundamentally different way; one with new managerial, commercial and technical skills. Boggis says that technologists need to take a wholly proactive role in business strategy: “Most long-standing innovations are technologyenabled and IT’s role must be to identify, evaluate and facilitate their successful application for business value”. Evans endorses this: “We talk about ‘digital ambition’”, he says. “Don’t go to the board with a ‘vision’, go with things you can actually do, fast, measurably, and with clear value to the business.”
What commercial protections are built in to each partner relationship? And how will you manage updates; because each of your providers will have their own update cycles. IT management in a cloudenabled business is about orchestration: marshalling several technical elements so that they always represent the best interests of the business. In the old days, IT managers were fixed on fails - you tried never to have to touch the systems. In the new world, you must assume you’ll always be touching them, because change is simply constant.”
“The choice has been taken away from business owners. It’s difficult to predict what the next best thing is, and it won’t be a linear change, it could be a step change, so you need to be able to adapt quickly.”
Operationally, IT teams need fewer deep technical skills, but must become managers of a federation of externally managed services. “They need to appreciate how these services will connect together”, says Evans. “How will each one work when another link in the chain fails? Because at some stage, it will!
The last line of defence Finally, IT managers, in sync with business owners, must remember that in a federated technology world, they remain the responsible party to their clients. “You’re still ultimately responsible to your customers and for the structures you use”, says Evans. “You must be the owner of and expert in your information architectures; the data flows and what information comes in and out; so that nothing gets forgotten or lost.”
Similarly, Boggis says that IT should become a guardian of best practice: “IT has a ‘duty of care’ in terms of preventing bad things happening. Information access and security are obvious examples. Business colleagues should not be discouraged from being innovative, but sometimes IT has a legitimate right to say ‘we could achieve the same outcome in a different – and safer – way’.” Change is now a default,
and businesses must discover how to turn on a sixpence. A revitalised technology team, aligned with line-of-business and operations, is central to delivering an environment in which ‘test and learn’ can generate whole new business opportunities. Find out more:
Windows Azure
Windows Server 2012
HOW MICROSOFT CAN HELP Microsoft Office 365 brings together online versions of the best communications and collaboration tools from Microsoft. Subscribe to web-enabled tools that let you access your email, documents, contacts, and calendars from virtually anywhere, on almost on any device. Windows 8 is reimagined to support different working styles. It’s more intuitive so you can find what you need faster and easier. The new look of Windows and the new app model make it easier for businesses to create their own line-of-business apps to help improve productivity.
Reliable, scalable tech when you’re the undisputed centre of attention Smart modern businesses are harnessing technology to automate and streamline business processes, connect globally and extend the reach of their staff. Storm Model Management, for example, is famous worldwide – as is its talent roster which includes superstars Kate Moss and Lily Cole. Yet this engine of British branding operates with a staff of just 33. The latest Storm website runs on Microsoft’s Azure enterprise-grade cloud platform, and Madhushan Gokool, IT manager at Storm Models, says the key reason was to support new business processes. “We used to have to send out physical portfolios of models to clients”, he says. “Now booking agents can log into the site and create electronic castings. The system creates an HTML email for the client, which contains a model selection.” Clients can then view selected portfolios in a private area of the site. High-quality photo and video downloads are delivered through Azure Media Services. Azure gives Storm confidence in a fast-moving environment with challenges which many other businesses never have to face. There are peaks in demand: key dates like London Fashion Week see traffic to the site triple overnight, and outages are simply not an option. International traffic is also increasing at 40% year-on-year, so room to scale is crucial. It’s a company whose staff and talent are also in the public eye, and Storm has an enviable reputation for protecting its models, so security
(physical, data and image rights) are also a top priority. Storm expect to realise financial savings of approximately 30% per annum against their previous co-located hosting environment, along with increased back office efficiencies – editing a casting is now almost five times faster for booking agents on Storm’s casting application. Says Gokool, “We are now realising the benefits of a faster, cheaper and more resilient hosting environment. The move to Azure has helped give our web applications a new lease of life and provided us with some breathing space to strategically plan our next technical steps, and avoid making significant capital investment just to maintain business as usual”. The competitive need to break free from “business as usual” is one which will resonate with all ventures. Model booking is a global, timesensitive and highly visual business, and Storm are looking to continue the development of their website in the coming year to leverage more Azure services including Media encoding (for live streaming of portfolio video and key events in the fashion and media calendar) as well as using Azure to drive a range of mobile and tablet applications. Storm’s web strategy and Azure architecture is managed by UK agency, Sequence.
Four steps to making the cloud drive innovation in your business You’ve got some great people. You’ve got access to some great technologies. What alchemy has to happen next, in order for a paradigm shift in the business to occur? There is a raft of recent reports from analysts, consultants and experts who have ‘been there and worn the T-shirt’ to light your way forward… 1. Buy time and cut costs The key initial benefit of cloud services for even the smallest of businesses is to outsource technology provision and risk. If you don’t have to get your hands dirty with keeping your systems working, you can devote time to more strategic concerns. Windows Intune, for example, gives all your PCs antivirus protection, watertight licensing and system management from anywhere. Activate it, and then stop worrying. Whatever you need to achieve, from better collaboration to customer management, the technology can be delivered and managed by someone else who has solved your problems thousands of times before. That frees up your in-house resources, whether IT or line-of-business, to identify new opportunities. Hosting providers, Rackspace, recently conducted a survey of US and UK companies and found that “the cloud has reduced the total IT costs for a whopping 88 percent of cloud users, while 56 percent say that using cloud has helped them increase profits – money that’s being pumped back into businesses and driving innovation.”
2. Make technology look like your business How is that money driving innovation? It’s not as simple as taking money out of technology spending and putting it into more salespeople or creative folks with colourful glasses. The management consultancy, McKinsey, says “CEOs recognise that future revenue growth will come from new business models. Cloud is a lever to decrease costs and reach industry average cost levels [i.e. Step 1, above], but business model innovation is where the growth is.” There are two elements to this. Firstly, we appreciate now that technology has a greater role to play. Where computers used to simply automate tasks which were done manually (for example, using spreadsheets instead of ledgers), we can now take advantage of completely new business models: ecommerce, variable pricing, supply chain optimisation etc. all represent step changes in business through IT. However, there is an intermediate requirement to align the technologies you have with the business you run; and the simplicity of cloud deployment on enterprise platforms like Microsoft Windows Azure is key. If your IT department pushes back on getting new ideas to market, if you cannot map individual IT deployments to specific areas of business activity, or if you feel IT is a barrier to your workday rather than a limitless resource of opportunity, then your technology doesn’t ‘look like your business’, and innovation will be stifled
accordingly. The value of the cloud is that new technology can be appropriated without upfront capital expense or a recruitment requirement in your IT team. It can be scaled from a thumbnail sketch to a full consumer-grade rollout, reducing the barriers to innovation and participation. 3. Try, fail, learn, win Few profitable and long-term innovations in business today are wholly untouched by technology, and the new vista opened up by the cloud is the opportunity to try out new ideas without failure incurring high costs. The quality of our ideas hasn’t changed – we will always come up with a few shockers, and equally many good ideas have no basis in carefully researched fact: they come from gut instinct alone. The cloud, however, allows a business to try out a programme without great expense, either refining the parameters until the model works, or quietly moving on to something else, all at low risk. In a seminal Wall Street Journal article (now four years old, but which should be required reading for entrepreneurs), Erik Brynjolfsson and Michael Schrage write that “technology is transforming innovation at its core, allowing companies to test new ideas at speeds and prices that were unimaginable even a decade ago. They can stick features on Web sites and tell within hours how customers respond. They can see results from efforts to boost process productivity, almost as quickly. The result? Innovation initiatives that used to take months and megabucks to coordinate and launch can often be started in seconds for cents.”
4. Prepare for the next leap You weren’t expecting all good news, were you? Business is competitive by nature. When you have climbed a peak and reached the next plateau, you can bet that the first thing you’ll see is... the next peak! Applying the cloud to business operations will certainly generate competitive benefits; but just as the internet gave us new commercial battlegrounds, so will the cloud. Some forwardthinking commentators are already speculating as to what that might look like. Business analysts, Accenture, reckon that one of the key new horizons will be Big Data: the massive amounts of information generated by online business processes and customer engagements: “The next ten years are going to see a massive scaling of data needing to be managed. In the face of the forthcoming data explosion, the problems organisations have always had with optimising their use of information are just about to get much more challenging. This brings to the fore the need for organisations [to] rethink themselves as digital businesses, and address the importance of business analytics for guiding strategic action and operations.” In short, as bricks-and-mortar retailers fought over commercial property, so data analytics is central to e-driven business. When Amazon knows what book you might like to buy next, or Target knows your daughter is pregnant before you do, that’s data analytics in action. You have been warned!
It’s in the BHAG: The Seven Laws of Innovation Phil McKinney is a world authority on innovation and creativity in companies of all sizes. He is President and CEO, CableLabs, the non-profit R&D lab for the worldwide cable industry; and previously ran the Personal Systems Group at HP. In both roles, his responsibility has been to pinpoint and influence the future of fastmoving technology markets. He is the author of innovation strategy bible, “Beyond The Obvious” and Vanity Fair magazine calls him “The Innovation Guru”. McKinney offers seven rules for encouraging innovation and then nurturing and protecting it through the highs and lows of corporate life. Indeed, he considers these rules to be nothing short of axiomatic; critical for innovation success, irrespective of the size of the organisation, whether it is in the private or public sector, and whether it is a cool tech startup or a humble bricks-and-mortar business. 1. The Law of Leadership. Without committed support from the Board and management team, cultural and budgetary efforts to foster innovation will atrophy. It’s too tempting during tough times to ‘borrow’ budget and talent for tactical purposes, when the strategic value of innovation must be protected. People, money and equipment
must be ring-fenced with sanction from the top, and the executive team must themselves devote time and attention to delivering on innovationbased projects. McKinney cautions, “Listening to status reports from others doesn’t count.” 2. The Law of Culture. It is incumbent upon management to embed a culture of encouraging innovation throughout the organisation, like the proverbial ‘stick of rock’. On a day-to-day basis, this will be evidenced by positive behaviours like teamwork, collaboration and honesty (and the absence of negatives like empire-building, not-invented-here, ‘not our problem’ etc.). However, these positive behaviours require the right culture to thrive in the first place, and there are four key attitudes which managers (both at board and particularly line level) can foster to achieve it: A) People: From the boardroom to the postroom, everyone is empowered to own and further the innovation agenda B) Ideas: Ideas are sought from across the organisation, and valued rather than criticised. Just as in a courtroom, defendants are innocent until proven guilty, or scientific theories are given credit until knocked down by legitimate contrary evidence, ideas should be encouraged until proven unviable by the
intellectual power within the organisation rather than criticised without due consideration.
expense must be justified, but then protected from short-term ebbs and flows.
C) Alignment: The above should create a rich hopper of ideas, but it is the role of management to make effective decisions. Resources must be aligned to support the innovation agenda and ensure that strong ideas are assessed and then delivered effectively.
5. The Law of Process: Innovation includes the refinement of what might start out as harebrained schemes into scalable, replicable and profitable business activity. Ideas should be assessed for value against criteria which are bespoke to the organisation (‘Is this something we know about?’, ‘Do we already have customers who want this?’). The process should cover the gamut of incubation from capture of ideas through to delivery of execution. Each step should be fair and unequivocal for all ideas, offer clear and comprehensible metrics, and allow for lessons learned feed back into the process itself.
D) Communication: Clear and effective communication underpins all of these objectives, and will serve to build engagement and excitement about future projects. Honesty and transparency will also banish many of the negative traits of ineffective management. 3. The Law of Resources: As we saw with the Law of Leadership, a commensurate level of resources must be committed to drive innovation. This resourcing must be committed over a reasonable level of time to deliver ideas and then results. There is no excuse for profligacy, and for small start-ups, resources may mean small groups of people with very limited budgets. Even so, a resource commitment to innovation means taking time out from current operational activity to look to the future. 4. The Law of Patience: Innovation is unlikely to fit into the typical quarters monitored by financial staff or even the annual scrutiny of shareholders. Innovation requires that organisations take the long view, and this may require managers to become experts at making their case. Indeed, making the case for resources should be a required discipline as part of the innovation agenda. Time and
6. The Law of BHAG: BHAGs are “Big Hairy Audacious Goals”: flags around which everyone in the organisation can congregate. BHAGs drive engagement, and they are binary: you know when you’ve reached it. Crucially, management can set the goals, but leave it to the wealth of expertise in the organisation how to get there. 7. The Law Of Execution: As mentioned under ‘The Law of Resources’, it is important to examine the dividing line between the business’ current operational obligations and the requirements of the innovation agenda. Both deserve equal value, and the demarcation must be theoretical, not physical – otherwise the Law of Culture will be broken.
