Abstract
Earlier chapters have pointed to the promise of cloud. Generically, the promise is: speed, payment based on consumption, lower costs, clearly defined services managed to appropriate services levels, on-demand availability, and scalability. There is simplicity (complexity hidden from view), allowing a focus on business requirements, strategy, and innovation, away from day-to-day maintenance and technology issues.1 We have also pointed to the challenges presented by cloud computing technologies, their likely impacts and their potential for incremental, architectural, and radical innovations for the business. The opportunity is clear:
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Notes
See Willcocks, L. Venters, W. and Whitley, E. (2011) Cloud and the Future of Business 1 — Promise. London, Accenture/LSE Outsourcing Unit.
Interview with Jimmy Harris of Accenture, October 2010. Quoted in Willcocks, L. Venters, W. and Whitley, E. (2011) Cloud and the Future of Business 5 — Management. London, Accenture/LSE Outsourcing Unit.
Simon May of Microsoft, quoted in Sherriff, L. (2011) ‘What the Future Holds.’ Cloud Business July 19.
Chuck Hollis, EMC Chief Technology Officer, speaking at the EMC Inform conference, summer 2011 (www.crn.com.au/News/260029,exclusive-emcs-chuck-hollison-big-data-and-the-private-cloud.aspx). According to the study 1.8 zettabytes of data will be created and replicated in 2011 and that figure will have risen to 35 zettabytes by 2020, equating to a 1000 percent increase in server images in that period. Figures from IDC’s Digital Universe study ‘Extracting Value from Chaos,’ IDC (2011). The study also suggests that by 2020, about a third of all data will either live in, or pass through, the cloud.
For further insight into constructive management responses to this massive data explosion — through data platforms and business analytics — see Nanterme, N. and Campbell, K. (2011) Accenture Technology Vision 2011. London, Accenture.
Horses for Sources and LSE Outsourcing Unit survey of cloud computing, November 2010.
See Overby, S. (2011) ‘CIOs Lack Adequate Cloud Computing Knowledge.’ CIO Magazine August 1, 2011. She reports on a survey of providers and advisors by KPMG Sourcing Advisory.
Interview with Matthew Coates in discussion with Andrew and John Hindle of Accenture, September 16, 2011. Quoted in Willcocks, Venters and Whitley (2011) Cloud and the Future of Business 5.
See Willcocks, L., Cullen, S. and Craig, A. (2011) The Outsourcing Enterprise: From Cost Management to Collaborative Innovation, London, Palgrave, for the most recent detailed account of this history and a description of the retained core capabilities needed by clients to run IT and back-office functions.
This research is distilled in several recent publications. See Lacity, M. and Willcocks, L. (2009) Information Systems and Outsourcing: Studies in Theory and Practice. London, Palgrave; Willcocks, Cullen, and Craig, op. cit.
Willcocks, L. and Lacity, M. (2012) The New Outsourcing Landscape: From IT to Cloud Services. London, Palgrave.
Lacity, M. and Willcocks, L. (2012) Advanced Outsourcing Practice: Rethinking ITO, BPO and Cloud Services. London, Palgrave.
See Willcocks, L., Venters, W. and Whitley, E. (2011) Cloud and the Future of Business 2 — Challenges. London, Accenture, LSE Outsourcing Unit.
Also Willcocks, L., Venters, W. and Whitley, E. (2011) Cloud and the Future of Business 4 — Innovation. London, Accenture, LSE Outsourcing Unit.
Our research in 2000–2002 documented developments in application services provision that were, in retrospect, the prototype for the emerging cloud landscape, but that at the time lacked the further necessary developments and convergence in technology, large-scale supplier investment, and multiple large client take-up. See Kern, T., Lacity, M. and Willcocks, L. (2002) Netsourcing: Renting Business Applications and Services over a Network. New Jersey, Prentice Hall.
We use the term ‘technology function’ rather than the more normal ‘IT function’ to capture the convergence of technologies taking place, the development of cloud computing, and the role of technologists in the increasing digitization of business. The function’s role is shifting, reflected in the changing status of the CIO. This, we are finding, does not stand for ‘career is over’ (perhaps ‘concept is over’?) but the work is changing, with a possible division going to occur between those who keep the current technology base optimal — the chief technology officer — and those who focus on strategy, business, information, and innovation. Already in our model the informed buying capability has been developing to relieve the CIO of responsibility for managing the external supply side.
In our survey of 347 buyers across industry sectors, between 64 and 80 percent of buyers said that they were going to increase their outsourcing moderately or significantly in the next year (Survey by LSE Outsourcing Unit and Horses For Sources, July 2011; see www.horsesforsources.com/research-services and www.outsourcingunit.org).
In this chapter we focus on management of the technology function, which is central to cloud deployment. However, the retained capabilities model we detail also applies, with minor adjustments, to IT-and cloud-enabled business back-office and other functions such as human resources, procurement, accounting and finance, and sales. The supporting case research appears in Willcocks, L. and Lacity, M. (2006) Global Sourcing of Business and IT Services, London, Palgrave, chapters 3, 6, 7, 8.
See also Lacity, M. and Willcocks, L. (2011) ‘Business Process Outsourcing Studies: A Critical Review and Future Research Directions.’ Journal of Information Technology, 26(4): 1–38.
See Willcocks, Cullen and Craig, op. cit. chapter 1.
Interview with Matthew Coates, op. cit.
Quoted in Willcocks and Lacity, op. cit.
Interview with Matthew Coates, op. cit.
This research is from Willcocks and Lacity, op. cit.
We saw a bank and a manufacturer give away their architects, assuming that the task of architecture planning was technical and therefore one for the suppliers. Three years into outsourcing found each of them rebuilding this capability, because they could not understand, let alone talk with and influence the suppliers about, how to address existing and fresh demand through a new technology platform with better economics. See Willcocks and Lacity, op. cit., chapter 7.
Quoted in Hall, S. (2011) ‘Cloud Architect: Triple Play of Skills.’ CIO.com and Infoworld April 5.
David Linthicum of Microsoft in ‘Why the Shortage of Cloud Architects Will Lead to Bad Clouds.’ Computerworld, July 28, 2011.
Interview with Hong Chiong of Microsoft, October 2010. Quoted in Willcocks, Venters and Whitley, op. cit.
Interview with Oscar Trimboli, Partner & Channels Director at Polycom, on April 23, 2013.
See Poston, R., Kettinger, W. and Simon, J. (2009) ‘Managing the Vendor Set: Achieving Best Price and Quality Service in IT Outsourcing.’ MISQ Executive, 8(2): 45–58. These authors draw lessons from how one multinational organization managed its vendor set in the outsourcing of software development and testing activities. They conclude that client managers who outsource to vendors need to establish the appropriate balance between building strong collaborative relationships and encouraging market competition among a set of three or more vendors to ensure best price and service quality.
Taken from case research in Willcocks and Lacity, op. cit., chapter 7.
Interview with Frank Modruson, CIO of Accenture, July 2011. He gave the example of Accenture’s own recruitment and selection process. Accenture is highly reliant on talent, but the secret sauce is who you attract, select, and hire and this is not embedded in the technology and software. As a result, the organization has been a SaaS center for recruiting for six years. Quoted in Willcocks, Venters and Whitley, (2011) Cloud and the Future of Business 5.
Interview with Neil Thomas, Cable and Wireless, September 16, 2011. Quoted in Willcocks, Venters and Whitley, (2011) Cloud and the Future of Business 5.
Ibid.
Interview with Tim Barker of SalesForce.com, November 2010. Quoted in Willcocks, Venters and Whitley, (2011), Cloud and the Future of Business 5.
See Willcocks, Cullen and Craig, op. cit., chapter 5 for a detailed analysis with case examples.
Frank Modruson, op. cit.
Interview with Jim Rivera of SalesForce.com, October 2010. Quoted in Willcocks, Venters and Whitley, (2011), Cloud and the Future of Business 5.
Interviews with Kevin Lees of VMware and Jim Spooner of Glasshouse, November 2010. Quoted in Willcocks, Venters and Whitley, (2011), Cloud and the Future of Business 5.
Interview with Sanjay Mirchandini, EMC, December 2010. Chuck Hollis, Chief Technology Officer of EMC, elaborates on this by suggesting three relatively new roles: cloud architects, process re-engineers, and business enablers. The other key cloud-related roles include cloud service managers, cloud capacity planners, cloud infrastructure administrators, cloud security architects, and cloud governance, risk, and compliance managers. Our own model embraces these roles, using a different vocabulary, and assumes a higher degree of cloud outsourcing than at EMC. Quoted in Willcocks, Venters and Whitley, (2011), Cloud and the Future of Business 5.
Quote from outsourcing research in Willcocks, Cullen and Craig, op. cit.
Interview with Tim Barker, op. cit.
See Willcocks, L., Petherbridge, P. and Olson, N. (2003) Making IT Count: Strategy, Delivery, Infrastructure. Oxford, Butterworth, chapter 8. Also Willcocks, Cullen and Craig, op. cit.
See Whitley, E. and Willcocks, L. (2011) ‘Achieving Maturity in Outsourcing Capability: Towards Collaborative Innovation.’ MISQ Executive, 10(3), 95–107.
Heifetz, R. A. (1994) Leadership without Easy Answers. Cambridge, MA, The Belknap Press of Harvard University Press.
Interview with Sanjay Mirchandani, op. cit.
Interview with Neil Thomas, op. cit.
Fraser Kyne, technology specialist, Citrix: ‘cloud signifies skills change for IT Pros, Citrix says.’ Downloaded from Forbes, June 30, 2011.
Interview with Frank Modruson, op. cit. In very large organizations, he saw e-mail, infrastructure, and stand-alone or isolated systems moving to the cloud quite quickly, and the more deeply integrated systems such as ERP moving on a much longer time frame because of complex requirements and difficulties in finding cloud providers operating at the right scale.
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© 2014 Leslie Willcocks, Will Venters and Edgar A. Whitley
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Willcocks, L., Venters, W., Whitley, E.A. (2014). Management: Building the Retained Organization. In: Moving to the Cloud Corporation. Palgrave Macmillan, London. https://doi.org/10.1057/9781137347473_7
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