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A cloud migration project can be a relatively simple exercise, where applications are migrated ‘as is’, to gain benefits such as elastic capacity and utility pricing, but without making any changes to the application architecture, software development methods or business processes it is used for.

There may be a clear business for doing so, such as the hardware platform becoming obsolete; however the organisation overall won’t realise any additional benefits – there is no business transformation as part of this move.

With senior executives potentially expecting broader strategic capabilities as a result of a move to the cloud, it’s therefore important that clarifying this scope is the very first step in planning a cloud migration, and the OMG’s Architecture Driven Modernisation (ADM) methodology is ideal for this purpose.

As the ADM ‘horseshoe’ model articulates, and this Carnegie Mellon article shows, a migration project can be considered with three distinct tiers of scope possible, increasing the size and length of the project with an increasing level of associated business benefit.

This begins at a technical migration, meaning the application is migrated ‘as is’ to a new hardware infrastructure service without modification.

Breaking innovation gridlock: harnessing DevOps and microservices

Higher levels then include application and data architecture and business architecture, meaning that as well as shifting platforms the application itself is also transformed and then furthermore, so is the business model that it enables.

As the horseshoe describes, these increases in scope mean a larger project that takes longer, because each is delivering a larger scope of business benefits, impacting a larger group of stakeholders and requiring a larger business transformation exercise.

Exploring the nature of these benefits can help specify exactly what business executives are hoping to gain by moving to the cloud, and this can be headlined by a theme of “breaking innovation gridlock”, described in this whitepaper from HP.

In short, this described how most large enterprise organisations have a legacy application estate, made up of elderly technologies like mainframes running COBOL, that perform the core business processes of the organisation and are thus central to the business value they provide, but because of their age have become rigid, inflexible and fragile business systems.

Due to the complexity of these environments and the lack of staff skilled in these technologies they essentially become untouchable black boxes, the CIO can’t take the risk of downtime by trying to make changes, and due to their age their maintenance is very costly, consuming the majority of their budgets as HP describes.

Thus they have become trapped in a state of innovation gridlock, unable to afford investment in new digital-enabling platforms and unable to adapt legacy systems to offer new customer-centric processes.

Enterprise DevOps

Although moving to IaaS can deliver benefits such as elastic capacity and utility pricing for infrastructure level components, this isn’t really of strategic value to most large organisations as they aren’t constrained in these areas.

Instead where the major business value will come from is modernising this legacy environment, transforming the core enterprise applications to new cloud-centric approaches so that innovation gridlock is broken and a faster cycle of development throughput is achieved.

A variety of tools are available that can automate the process of transforming legacy code like COBOL into their modern equivalents on Java and .net, meaning they can be re-deployed to private or public Cloud services and most importantly, then much more easily modified by software developers, setting the scene for an agile Enterprise DevOps culture and faster change cycle achieved through Continuous Deployment practices.

Furthermore leading edge Cloud architecture principles can also be utilized, such as ‘Microservices’. This means breaking up large monolith software, like mainframe systems, into an array of small self-contained services making it even easier to implement change at a faster pace. As described in our Microservices section pioneering organizations like Nike have adopted this approach.

Conclusion

An especially powerful aspect of these legacy transformation solutions is that they can also automatically generate the new code required for key features such as a web front-end and mobile client.

This would provide the foundations for achieving the enhanced functionality that senior executives are likely hoping for from their cloud investments. As they seek to pioneer their digital strategies enabling ‘omnichannel’ access across web and mobile interfaces the IT team would previously have faced a considerable challenge achieving this goal when working with aged application environments.

By employing the full scope of architecture driven modernisation they can quickly accomplish this important capability while also transforming the environment so that additional innovative enhancements can more easily be engineered too on an ongoing basis.

With web and mobile platforms established this then makes possible the full three-tier scope of ADM transformations. Business executives can more easily build social communities around their core business processes, explore dynamic new mobile commerce scenarios, and so on. In short the only limitation of the innovative business models they might pioneer would be their imagination, not the IT estate.

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Adapting a large enterprise to exploit the new business opportunities presented by the On Demand Economy is no small feat. However, considerable resources now exist to explain and map how cloud computing can provide a platform for accelerating this capability.

Adopting cloud computing services can be a simple, tactical exercise to meet some immediate infrastructure needs, or it can be the catalyst to embracing an entirely new strategy for IT as a whole. This can drive an entire transformation of how the organisation works thanks to how it deploys technology.

The critical improvement is better ‘Business IT alignment’, meaning IT increasingly becomes a strategic asset for the organisation, rather than simply a back office commodity. The traditionally operational CIO can also evolve to become a ‘CDO’ – Chief Digital Officer, a board level executive reporting to the CEO and proactively defining how technology can play an integral part in strategic planning, not just operational fulfillment.

The strategy focused IT organisation

Robert Gold documents a repeatable maturity model for this in his article Enabling the Strategy-Focused IT Organisation. This covers the issues that arise that cause business management to perceive IT to be overly expensive and failing to align these costs with benefit to their business units, and so instead this chart describes how to build the shift to a more business-centric alignment.

Fundamentally Gold defines a scale where at one end IT is perceived and managed as a cost and at the other end where it is integral to the strategy of the organization and treated as a high priority board level topic, with a maturity model to grow the IT organisation from one to the other.

Different practices, technologies and vendor products can be used as the building blocks for the individual elements of this framework, each directly linked to the capability improvements that Gold describes. So this maturity framework can drive a related procurement and adoption program, including quite specific expectations of different areas of investment.

For example in the Agility section Gold describes:

“Methods are applied to reduce development cycle time”.

This is the primary benefit of the new cloud-centric software development method known as ‘DevOps’. Through new software architectures like ‘microservices’, the use of PaaS (Platform as a Service) and best practices like Continuous Deployment, pioneers like Netflix have greatly reduced their time to market for new application features and enhancements. Thus they can be called upon to achieve this particular improvement step.

He also articulates the common sense need to ensure cost reductions and other value for money steps are taken.

“Technologies are used in innovative ways to reduce IT costs”.

This also corresponds with the advice of industry experts. For example the McKinsey article Find Your Digital Sweet Spot describes how organisations should seek cost savings as well as front-facing customer improvements as part of their digital strategies.

IT value transformation – breaking innovation gridlock

Achieving a more strategic organisation requires that the most fundamental challenge of enterprise IT is addressed. Innovation Gridlock research from HP describes “a situation where the IT organisation is blocked from driving new business innovation because the majority of funding is consumed in operating the current environment.”

With so much of their focus and resources consumed in simply maintaining the existing legacy estate then little is left over to deploy new innovation-enabling technologies, and so this gridlock is a constraint that needs addressed.

A headline resource from VMware to explain this in more detail is this study commissioned from the IT Process Institute, their white paper: ‘IT Value Transformation Roadmap‘ (24 page PDF).

Specifically the paper makes the point that this evolution results in the CIO being recognized for delivering strategic IT value:

“What is strategic IT value? Strategic IT value is demonstrated when IT plays a key role in a company’s achievement of overall business strategy. In other words, when IT is keenly focused on business outcomes and plays a significant role in optimizing and improving core value-chain processes. Or, when the IT organization drives innovation that enables new technology-enabled product and service revenue streams. When IT is effective, results can be measured by improved customer satisfaction and market share gains.”

In contrast many CIOs can find themselves boxed into somewhat of an operational corner – Responsible for keeping the lights on but perceived as poor value-for-money and as a result  unable to attract new funding to modernize the deadweight legacy systems, a paradox and trap.

The IT Process Institute describe how CIOs can break this constraint cycle and shift from a cost focus to delivering strategic value for the business, through this three-step progression, and by doing so, breaking the Innovation Gridlock.

In this document they offer a blueprint for a Cloud Maturity Model, a ladder of maturing capability that you can compare your organization to, and use as a framework to plan your own business transformations, where:

“This cloud computing strategy brief presents a virtualization- and private-cloud-centric model for IT value transformation. It combines key findings from several primary research studies into a three-stage transformation road map.”

In short this is an ideal strategy blueprint for any existing VMware customers – It proposes a 3-Step maturity model that begins with virtualization and grows into full utilization of Cloud computing across three stages of:

1. IT Production – Focus on delivering the basics and proving value for money.
2. Business Production – Utilize technology to better optimize business processes.
3. ITaaS – Fully embrace utility IT as a Service, and leverage technology for enabling new service innovation.

This corresponds with an increasing maturity in the use of virtualization, SaaS and other Cloud architecture principles and external services, that begins with where many customers are now, mostly half way through phase one, completing their adoption of internal virtualization.

Technology is embedded in the firms value proposition

The same improvement steps are repeated in the IT Strategy Alignment work also from the IT Process Institute, where they build on previous research from McKinsey that describes three main ‘IT archetypes’, three distinct stages of assessing IT organization maturity:

1. Utility Provider – The IT organizations is predominately operational, only responsible for running the common IT infrastructure, such as email or servers for the accounting software, but playing no role in defining how they are strategically employed. Typically they report to the CFO as a cost centre.
2. Process Optimizer – Increasingly the IT team starts to engage more proactively with the business, at the individual department level helping them better optimize their business processes.
3. Revenue Enabler – Technology becomes a core component of strategic planning, directly enabling product innovation and competitive advantage, reporting to the CEO.

This corresponds with the same end goal of Robert Golds matrix, where the pinnacle of achievement is that “technology is embedded in the firms value proposition”.

It is eloquently described by the world’s most regarded management guru Michael Porter, who recently described that we are entering a third era of how IT can be applied to achieve competitive advantage, the era of the Internet of Things.

Previously technology wasn’t an integral part of products, it was used only to automate their surrounding operations like sales and distribution.

Now, through embedded sensors, processors, software and connectivity, technology is becoming part of products directly, and from this new opportunities for competitive advantage emerge. Businesses that integrate technology directly into their products, like ‘Wearables’, are achieving this ultimate position of technology maturity, embedding it into their firms value proposition.

Investing in dloud computing will build a platform for the IT organization to progress through these maturity scales, first enabling greater process optimisation and then ultimately becoming a strategic asset that underpins new growth for the organisation.

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The OIX (Open Identity Exchange) is a new Internet standards organization that provides the framework to implement Assured Identity.

An example of this in practice is explained in this case study published by the new UK chapter of the OIX, for South Yorkshire’s Digital By Default project.

Bridging the Digital Divide

This is an excellent, leading edge case study (featuring SecureKey) that explains this technical field, and it is also notable for its pioneering work with regards to the concept known as ‘Bridging the Digital Divide’.

For example in the South Yorkshire case study, they describe:

• Enabling new financial e-services for the “unbanked”.
• Overcome two-way distrust: The person of the system, and the system of the person. Identity proofing issues were too demanding of this group, and they themselves did not feel their money was safe virtually.
• The goal is to enable more use of virtual money, via changing payments to be via an O2 Money prepaid VISA card, however this group would fail the required Identity proofing procedures or they would be too onerous.
• The solution is achieved through a combination of Identity federation and ‘trust networks’ – The financial sector trusts the Credit Union process to implement a suitably robust enough procedure, and they in turn make better use of their on-premise relationship to make it simpler for the customer.

Driving Business Value

We can see the critical role Identity systems will play in helping governments realize the business benefits of Digital Government.

As the SOCITM report identifies the cost to government to perform customer interaction activities drops dramatically the more the process moves online.

This case study is so important because not only does it identify how this cost reduction can be achieved but also does so for a group who are the least connected and have no ‘digital footprint’ at all. Helping this group move online not only validates that the service is universally accessible but also how it can play the critical ‘bridge’ role needed to actually cross the Digital Divide.

In this scenario the project targeted those with no ‘digital footprint’, ie no online use of any kind, and who experienced poverty, social exclusion etc.

In particular the project identified:

“The project aimed to test the hypothesis that if Credit Union customers had a familiar authentication mechanism they would be more inclined to access services digitally, and less inclined to use telephone and face-to-face access channels.”

The initial pilot scope proved successful, where the the CU could perform the Identity ‘enrollment‘ process, creating a one time link between an in-store visit by a customer, their payment card ID and also an online identity entry that includes the same photo. SecureKey created a mechanism where the photo and authorization tokens were linked via a unique identifier.

This means any one who accepts the card can also use it for their own identity proofing procedure, for example the local pharmacy accepted the card in this case, with others such as GPs expressing interest to do so too. So in short the answer is yes, these improved tools do indeed make service access easier and more inviting.

It also helped with adoption too. For example a concern was virtual money would be harder to manage, more easily spent and uncontrolled, when actually features like receiving a balance update via text alert after each purchase, helped improve this too.

A key trend noticed was that while there was little existing use of the Internet or email, there was a high usage of smartphones, so these features could be exploited for this reason, better empowering each individual as well as smoothing some of the many corners they face each day.

As is:
$14 per person per identity proof process
Duplicated ID checking procedures – manual paper-based

To be:
$0 – Cash sent straight to money card
Eliminated visits