Since the GFC and the subsequent economic slowdown, the economic and technology landscape has fundamentally changed. As with all major economic shifts it’s highly unlikely we will return to the way things used to be. It's what's been termed “the new normal” - and it means business and IT leaders will need to adapt.
Two constraining macro forces – less financial leverage and more government control of the financial sector – have arisen directly from financial crisis and will continue to shape the new economic normal for businesses. Additionally, recent on-going, tough times in The West have sped up the shift in economic power to Asia.
But what’s the impact of these new rules – The New Normal - on technology? Ian Davis, worldwide managing director of McKinsey & Company predicted back in 2009: “Through it all, technological innovation will continue, and the value of increasing human knowledge will remain undiminished. For talented contrarians and technologists, the next few years may prove especially fruitful.”
The shift of technology to the Cloud is a prime example. For cloud computing isn’t so much a new technology strategy as a new business model. It allows organisations to protect scarce, hard to find, capital (the New Normal) by converting capital expenditure to operating expenditure. Now infrastructure, software and services can be rented via a variety of cloud models, rather than purchased.
Equally it allows firms to remain nimble and flexible as the economies of the world stagger back to their feet. Forward planning for business growth in such an uncertain future is complex and risky. Cloud allows organisations to scale their technology investments flexibly. Being able to respond quickly to shifts in demand for your firm’s products or services will, in itself, create a competitive advantage over those less agile.
Why is Cloud the right approach for the New Normal?
Lets start by looking at what’s changing – what are the major influencers of The New Normal? There are three factors:
- Generational shift
- The internet of “Things”
Mobility is enabling a shift in the way we work. It’s affecting where we work, the devices we use, the tools we depend on and how content is accessed and delivered. Tomorrow’s workplace is a fundamentally different place. Work becomes something you do, not a place you go - and that has far reaching implications for workplace culture, representing a shift to a culture based on outcomes.
It’s always dangerous to be too stereotypical about the different generations, but there are some clear differences. Baby Boomers are conversationalists, relying on the phone and email to communicate, whereas Generation X are always contactable. Generation Y, by contrast, are always connected via a multitude of devices and applications. Gen Y employees want to apply the same personal workflows, based on social media style activity, for communication in the workplace. Indeed, the distinction between work and non-work is increasingly blurred. Not work life and home life - Just life. They are very comfortable with technology and are increasingly informed, opinionated and assertive. With consumerisation of technology, they are likely to have more advanced devices than the organisation for which they work. Organisations must be prepared to run a work environment that embraces BYOD.
Organisations must also prepare for scale. Cisco forecast that by 2020 there will be 30 billion connected “things,” and an almost incomprehensible 200 billion intermittently connected “things.” All this means an explosion in data growth – Cisco predicts x44 by 2020.
Which brings us neatly to the central question. Will IT budgets keep pace with this explosion of devices and data?
Clearly not; they won’t even come close.
So the challenge isn’t simply the ability of an organisation’s technology to scale but do so in a highly efficient manner. Organisations must do a great deal more with less; there is a growing demand – delivery gap. This is the New Normal.
How Should CIOs address the New Normal?
There are both tactical and strategic steps CIOs should consider to ensure IT services meet business and employee expectations. The top three tactical steps we recommend CIOs consder are:
1. Consolidate the Data Centre:
The expectations for, and the attributes of, the data centre have changed. The data centre must be able to provide data security, across all devices, in a way that can scale. It must provide automated service provisioning and increased budgetary efficiency.
The first step of this multi-dimensional effort is to bring together compute, storage, virtualisation and implementation to make it happen.
2. Deploy An Agile Infrastructure
The second step is to ensure an “aerodynamic” or agile infrastructure. This means:
- Support of corporate & non-corporate assets
- Set policies and provide visibility and control of devices, using Mobile Device Management (MDM)
- Govern how devices interact with your network and resources, using Network Access Control (NAC)
- Deploy WiFi to support mobility
- Centralise applications and data behind your security perimeter.
3. Adopt Virtual Workspaces
The third step is to improve the delivery mechanism by adopting virtual workspaces, bringing the applications, sessions and data back into your network and getting them off the devices.
Strategic technology considerations for the New Normal
For the CIO, a central strategic consideration is the organisation's posture on outsourcing. Determining which of your activities are “core” versus “context” is the first step in establishing what should be outsourced. Which activities or parts of your IT infrastructure could be considered “context” - that is, they do not provide differentiation.
If these are mission-critical, they are ideal candidates for outsourcing. For example a cloud service to deliver computing and storage. In many cases IT infrastructure is rarely “core” and outsourcing can deliver the same or better service levels at a lower cost.
In the final analysis, your organisation’s approach to cloud computing should be viewed as a key mechanism for addressing the challenges of The New Normal. Cloud computing is not so much about providing cheap computing but rather a way of addressing the new ways of consumption and need for massive scale – a way of closing the growing demand / delivery gap.
Cloud computing is a key enabler of the new emerging landscape. It has the ability to deliver existing or new applications to any device and enable greater agility in speed of deployment. The challenge is how to weave these requirements together into a cohesive, secure business enabled solution.