CIO strives to tie cloud metrics to business value
As CIOs gain experience in cloud computing, the cloud metrics they use are changing. Read how one CIO makes business value a priority in deciding which cloud services make sense.
When Thomas Phelps IV joined software company Laserfiche as its CIO and vice president of corporate strategy in 2014, the company had only a dozen or so of its 200-plus applications running in the cloud.
Now about a third of them are in the cloud.
Like many other CIOs, Phelps' corporate IT team has focused on getting more of its software out of its own data center and consuming it instead as software as a service.
Phelps is following many other CIOs with a cloud-first approach, but his cloud strategy is more nuanced than simply considering the IT benefits typically attributed to cloud computing -- benefits such as lower cost, elasticity, greater access, and more frequent updates. Instead, Phelps evaluates what should move to the cloud based on metrics tied to business value -- an approach that analysts said more leading CIOs are trying to undertake.
"Some IT organizations focus on cloud metrics that tie back more on budgets. What I like to focus on is how can we help our business be more productive and drive innovation through cloud applications that are built for a particular purpose. That adds a lot of value," he said. "It's less about a cost play than time to market and delivering services."
Phelps added: "I participate in several CIO forums across the country and in every discussion there is a conversation about cloud and how to develop a strategy that's relevant for the business and aligning cloud strategy to that. I think there's been a tempering of cloud and recognition [of the need to determine] in what areas cloud services make sense right now."
First apps to the cloud
Laserfiche's first cloud-based corporate options were a project management application and an application lifecycle management app. From there, it expanded to leveraging cloud for marketing automation, which enabled Laserfiche to more quickly launch marketing campaigns.
"That was a huge value-add, launching those ads quickly," said Phelps, who is also a past president of the Los Angeles chapter of the nonprofit IS industry association ISACA.
Next came a set of cloud tools that allowed the consulting division to track project details, such as progress and costs, and also share those details with customers wherever and whenever they needed to; such access has long been one of the oft-cited benefits of cloud.
The business benefits derived from these early cloud migrations were accompanied by some impressive cloud metrics related to performance, including the quick pace of updates and releases for cloud applications -- every month in some cases versus every six to 12 months for on-premises applications.
Fine-tuning cloud metrics: A checklist
But just as CIOs have adopted the idea that it's not about technology for technology's sake when it comes to bringing new products to the enterprise, Phelps said cloud for the sake of cloud also doesn't cut it. The strategy has to be about what cloud -- its features and its attributes -- actually does for the business.
That means using cloud metrics that cover more than the potential reduction of data center bills.
Thomas Phelps IVCIO, Laserfiche
The customer satisfaction of users (the company employees) is one measurement Phelps uses. "That should be a key lens through which a company looks at their cloud strategy," he said.
Meeting changing customer expectations also factors into his cloud metrics.
"I believe that [cloud] definitely helps to make employees much more productive," he explained. "And these days, with the growing Millennial workforce, their expectations are to start a job and have [immediate] access to key applications. They're used to downloading an app from the app store and to start interacting with that app to get business done. To tell someone it will take three to six months to add functionality is not acceptable anymore."
Phelps said another key cloud metric is time to market. "You can rapidly provision a service to the business with the cloud versus on premises," he said. "You're not taking the same time to identify requirements, design it, go through testing and do a lot of customization. There are a lot of services that you can procure very quickly, and the contractual process is easy."
Security, compliance and risk factor heavily into his cloud metrics, he said, in particular, whether the company wants the additional exposure that could come with putting some applications in the public cloud.
Similarly, he said he also thinks about the increased risk that comes from on-demand self-service models where anyone with a credit card can purchase an app for corporate use -- and the cost of deploying an IT governance structure to mitigate the risk.
Other considerations that go into his cloud strategy include the following:
- the value of having staff engineers focused on building software for corporate services versus the value they'd bring if their time were spent on developing Laserfiche products for the company's clients;
- the need for applications to support collaboration, as well as easily interact with other applications, in order to prevent business areas from working in silos. "They have to connect with their customers, their clients, their business partners. That's driving a need for cloud services that have APIs that allow for integration," he said, as is the growing use of data to flow smoothly for analytics programs;
- the costs and potential downside of being tied in with any particular cloud vendor. "You can't avoid contract lock-in," Phelps said, adding that on-premises applications also require multiyear commitments; and
- the fact that cloud bills aren't always lower than on-premises computing and whether the cost to move or replace some applications, such as proprietary software, is worth it. "If it's not broke, why try to fix it?" he said.
Phelps said the expectation is that his company will continue to move more to the cloud, but only where the cloud metrics show the move makes good business sense.
"Cloud has been around for a few years now, and the CIOs I know have a pragmatic approach. Their cloud strategy is aligned to business drivers -- they're not chasing the next shiny object," he said.
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