Once, there was a pin factory. It employed ten workers – each of whom performed a different task. This organizational structure allowed them to generate 48,000 pins every day. If the people working at the plant were working independently, the output of each would have been limited to 20 pins at most – totaling 200 pins. This story describing division of labor was used in Adam Smith’s 1776 book The Wealth of Nations, as an example of operational excellence (OE).
If your company is to survive in a competitive market, OE must be sought, explained Faisal Hoque in Fast Company. In other words, the enterprise must “identify, understand and create the capabilities, behaviors and focuses necessary for repeatable, continuous and measurable operational improvement,” said Hoque.
True. However, multi-vendor cloud hosted environments can make achieving OE feel particularly complicated and challenging to accomplish, especially because this technology is growing so quickly. Over two-thirds of firms in the United States are budgeting more for cloud systems in 2017 than they did in 2016, according to a poll of 300 IT professionals from B2B research company Clutch. To specifically look at infrastructure as a service (i.e., cloud hosting), it is actually the fastest growing segment; skyrocketing at 36.8 percent per Gartner, IaaS is expanding more rapidly than either cloud platforms (PaaS) or software (SaaS).
Cloud’s rapid growth should not be an excuse to set operational excellence aside, but a call to action to ensure that you have instituted OE strategies into the way that you partner with cloud services. Let’s explore this topic by answering five critical questions.
1. What issues come from the multi-vendor cloud?
The cloud systems that are available to businesses are proliferating, and (as indicated by the above figures) adoption rates are staying strong and even increasing in some segments. If you are a CIO at an enterprise that is in the process of transitioning from an extensive in-house application hosting architecture to cloud hosting, you want to maintain your company’s standards (and your own) for computing operations throughout.
When your hosting is multi-vendor, tasks you need to complete for your IT systems that can become difficult to manage include remote system monitoring; disaster recovery and business continuity planning; transaction processing; task scheduling; and administration of system changes. There is a general tendency to assume that these types of activities do not demand as much attention in the third-platform world as they did previously, but it is necessary to integrate all your operations, even if a multi-vendor or multi-cloud scenario makes that seem daunting.
When you are cloudifying legacy systems, the challenging thing is really that you are throwing numerous elements into the air and having to make a bunch of adjustments at the same time. Well, perhaps that’s overly dramatic, but you do have to align various operational aspects in fast succession.
Tim Porzio, Vice President of Operations and Infrastructure at Sodexo North America, discussed this complexity in CIOReview. It is necessary to modify your operational standards, tools, and policies and procedures proactively, Porzio noted, so that your ability to provide application hosting services smoothly throughout your ecosystem continues to exemplify the principle of operational excellence.
Moving over to cloud involves making choices. The goal of the CIO should be to blend all elements into a coherent, detailed and comprehensible operational excellence management system (OEMS). A positive way to view this work is that it is often neglected, so performing it well can be a differentiator. It is an opportunity to define your expectations from cloud partnerships. In the absence of this effort, your data and disaster recovery are placed in the hands of remote services, a hodgepodge of external hosting at companies that have undergone a range of different assessments.
2. What does operational excellence mean to you?
When you are moving to cloud aggressively, you want to be clear there is a common perception of operational excellence. To get there, it helps to build standards through a cloud services model, including tiers of service. Since service accountability with cloud is substantially different, it must be conveyed that services will not necessarily be the same with cloud as they were prior to the transition. This model should introduce your OEMS. Plus, you want to list requirements of any specific providers. There should be service levels, or tiers, and a listing of tasks that are performed accompanying each of your cloud partners. You then want to do the same with your applications: assign each to a tier depending on the extent to which they are mission-critical.
Once this model or framework is complete, you should see that you may not have identical services to your on-premise offerings; and that, while service accountability may be challenging to manage, you can control your IT in the expanding cloud environment through conscientious tiered planning.
Standardize the management system in order to integrate its disparate components. That way you can deftly manage all aspects – from operational monitoring to escalation, from tracking of system modification to governance.
3. How can you achieve OE in tandem with providers?
Now, with your OEMS in hand, meet with the cloud provider. It must be clear that the partnership is based on mutually understood expectations. Talk about the process that will be followed, how you will communicate, governance, key performance indicators and your legal agreement.
4. How do you handle governance of OE?
Establish a formal, built-in way to communicate at predefined intervals (monthly or quarterly) to be sure that service quality is strong. Rate the provider before each meeting, and then review the rating when you talk. Mention improvements that could be made. Verify that any issues will be resolved.
5. How can you protect your cloud relationships?
You want the points of view of each of your stakeholders to be infused within the operational excellence management system; otherwise some will view it as bureaucratic nonsense, despite its merits. Send your colleagues notes from your periodic governance assessments, or encourage their active participation.
Consider the key performance indicators of value to IT, as well as how reliable and supported the system is, so that you can quickly and effectively measure how well the service is being delivered and experienced.
It should be clear by now that cloud computing and OE are not mutually exclusive. In fact, this technology is being increasingly adopted by enterprises precisely because it improves their operations. How? Well, various ways, but one is very simple and straightforward. When you move a system to an external hosting provider, it means that maintenance and security is being handled beyond your walls. That means you are able to focus on development rather than spending all your time making sure your infrastructure is up to snuff.
Keep in mind, just because you can passively enjoy some amount of operational excellence simply by moving to the cloud, it is ridiculous to think that anything “excellent” will come easily. By reviewing the above points and discussing your OEMS with providers, you can make sure that you maintain your own operational standards even as your infrastructure becomes increasingly diverse and complex.
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