Given the changes in expectations, approaches and philosophies towards information technology, CIOs today need to rethink their strategies and priorities for cloud.
Photo: Bob Evans
CIO Asia talks to Bob Evans, chief communications officer at Oracle, about what CIOs should be concerned with, especially when talking about cloud solutions.
CIO Asia: There's been a lot of talk about how businesses should take less of a tech-centric approach to solving their problems but more of a wider approach that encompasses the impact of social media, direct customer feedback and whatnot. How should businesses go about doing this?
Bob Evans: Many companies today find that they need to devote 70 to 80 percent of their IT budget to run and maintain infrastructure such as a server sprawl, massively under-utilised storage resources and unproductive data centres, leaving as little as 20 percent for innovation. CIOs need to emerge from this trap by driving their companies towards being a social-enabled enterprise. Many are already embracing the ability of a social-driven revolution in providing real-time customer insights, engagements and processes.
Archaic policies result in a 80/20 trap and are becoming liabilities—these occupy a huge percentage of the IT budget and pose challenges for CIOs to fund new efforts in analytics, cloud, mobile or social. CIOs need to determine which vendors are exacerbating this problem, and which ones offer modern alternatives that are cheaper, faster, and smarter. We recommend that the CEO tie most or all of the variable compensation for their CIOs to changing the deadly 80/20-budget ratio by 5 percentage points a year. CEOs who are willing to tackle the issue will unlock huge value for their companies.
Business agility has always been the "war chant" of the new enterprise. How far away are we from this ideal picture, given cost and time are the biggest constraints to achieving such a goal?
The reality is that business agility is not only achievable but also essential. Enterprises are grasping the value of engineered systems that enhance time to market, reduce deployment time and total cost of ownership by cutting operational costs such as high maintenance support fees for legacy systems.
Having a single-vendor stack will also simplify and reduce the costs associated with purchasing, deploying and supporting IT environments. For example, with Oracle IaaS, enterprises have the option of paying a monthly subscription fee to enjoy the flexibility offered by its Capacity On Demand feature. Enterprises are now able to reduce capital expenses and convert them into operation expenses.
Business agility is achieved as the systems are designed to enable faster time to production by implementing pre-engineered and pre-integrated hardware and software bundles. It then allows enterprises to save time on IT implementation and maintenance, and focus resources towards the core business.
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