cloud computing conference 2011 - carl michael, australian unity

Carl Michael Australian Unity

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Capability On Demand

Governance and Architecture

for Businesses to Leverage

Cloud Computing

Carl Michael

Enterprise Architect

Australian Unity

31st May 2011

Sydney Convention & Exhibition Centre

Cloud Computing Conference 2011


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This presentation is a journey and it has been structured in terms

of Boyd’s OODA feedback loop.

Approach OODA

OBSERVE

• We observe the on-demand world and the impact of cloud computing in general to understand the shift in business and consumer expectations.

ORIENT

• We then orient ourselves with the changes that enterprises and IT face in keeping up with future trends as exemplified by the cloud.

DECIDE

• Following that we decide on an effective strategy, governance and architecture for enabling the enterprise through cloud computing. We then act.

ACT


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The on-demand world sets the context for cloud computing and

for the enterprise.

A key driver in the on-demand world is the consumerisation of

information technology. The exploding number of customers

means huge growth in database sizes and processing speeds.

Many enterprises cannot easily provide this.

The trend among consumers is toward on-demand delivery of

products, for them ownership is less important than access and

availability.

In this on-demand world, the development of cloud computing

itself is a necessary precursor to the semantic-web we desire.

In the on-demand world: ‘better, faster, cheaper’ is now more

than a policy, more than a philosophy, it is literally a way of life.

The On Demand World OBSERVE


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In the on-demand marketplace, just as industrial technology

resulted in assembly lines and economies of scale, as exemplified

by the first car production lines, cloud computing will enable agile

and responsive enterprises that deliver profits in response to

continually changing market conditions.

Agile enterprises, by necessity, need to use variable cost

operating models because it will be too expensive and too risky

to be agile using fixed cost models. Fixed cost models only work if

market demand is reasonably predictable and if service delivery life cycles are reasonably long.

In the on-demand marketplace, agile capabilities make for agile

enterprises.

The On Demand Marketplace OBSERVE


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Business capabilities provide for

interaction between the business and the marketplace.

A capability defines the enterprise’s

capacity to successfully perform

unique business activities.

A capability based approach

creates alignment by providing

common ground for business & IT.

Business Capabilities

A capability map (displayed above) provides a structured view of

the high level business capabilities of an enterprise, defined in the

context of a value chain. The model provides a common

understanding of where processes, resources and IT fit together, and is a useful tool for managing cloud computing.

OBSERVE


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Business capabilities relate to the on-demand marketplace.

‘Capability on demand’ or outcomes on demand, is the

provision of business services that deliver desired business value

outcomes which need very little set-up by managers.

‘Capability on demand’ is as close to business process outsourcing as it is to cloud computing because it addresses

value outcomes just as much as it addresses process automation.

Delivering ‘capability on demand’ requires significant business

planning and coordination. Maturity in this area and the cloud

computing approach necessary to enable it will be heavily

impacted by risk and compliance complexities.

Capability On Demand OBSERVE


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Cloud Computing Model

The final observation is about the cloud

computing model itself. Cloud computing

is a strategic approach. It provides on demand business capability resources

that can be rapidly provisioned or

decommissioned with minimal business

management effort.

Cloud computing has multiple layers:

• Software as a Service (SaaS)

• Platform as a Service (PaaS)

• Infrastructure as a Service (IaaS)

Cloud computing can be delivered:

• Publically via external providers or

• Privately, if it is delivered in house.

(Diagram: Current vs. Future Focus)

OBSERVE


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We need to orient ourselves to the business impact of the cloud

and the changes that this will create for enterprises and for IT.

Computers and servers which provide the foundation for cloud

computing have already been commoditized. What we see

happening now is the commoditization of computing itself.

When we consider the incorporation of client servers and the

internet into enterprises, we can see that we are now at another

strategic inflection point. This one relates to the cloud.

In the on-demand world, enterprises will still need to control the cost of their services and the cloud addresses that need.

Business Impact of the Cloud

YEAR PERIOD HARDWARE INTEGRATION

1990 10 years Client Servers Functional Integration

1995 10 years Internet Adoption Systems Integration

2010 10 years Cloud Computing Virtual Integration

ORIENT


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In the end, cloud computing is a business enabler, it’s not just

about IT.

The cloud and elastic capability-on-demand will provide the

impetus for new business models which will empower entrants

faster than ever while reducing their competitive and entry costs.

Mature adoption of cloud computing will be dependent on the

ability to clarify strategy and governance, develop cloud

oriented business architecture and business cases and conduct

the necessary benefits analysis.

IT leaders need to think about the impact of cloud computing on

the business, just as much as on IT.

The advent of ‘capability on demand’ and cloud oriented

business architectures will dramatically change the mission, role

and skills of IT.

Cloud Business Architecture ORIENT


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As the enterprise and the cloud evolve together we will see long

term changes.

In future-oriented agile enterprises, business units and business

processes may not be able to rely on centralized command and

control systems, but rather will have to manage themselves as much as possible.

To take enterprises to new levels of productivity and profitability,

self-adjusting feedback loops should be harnessed to improve

business processes as efficiently as they were harnessed to improve mechanical and electrical processes.

Cloud Evolution in the Business

To improve the rate of decision making, one

should use constructs such as Boyd’s observe-orient-decide-act (OODA) continuous

feedback loop.

ORIENT

OODA

LOOP

OBSERVE

ORIENT

DECIDE

ACT


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The cloud throws up just as many questions as it provides

answers. One must consider answers to questions such as:

• How should the enterprise exploit cloud computing?

• How should high value business opportunities be identified and

prioritized? Which non-core business processes ought to be cloud-enabled?

• How should enterprise capabilities and architecture evolve?

• How should the enterprise deal with performance and

integration with existing assets, relative to the cloud?

• How should the enterprise ensure business process continuity

and "end-to-end" control of processes, relative to the cloud?

• How should the enterprise ensure cloud vendor viability?

Cloud Considerations ORIENT


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Business capabilities ought to be defined in cloud lifecycle terms;

categorized as unique, common, standardised or commoditized.

We need to define how the cloud fits with sourcing strategy:

• Categorise business processes relative to the cloud: Should

they be in-house, in-sourced, outsourced or partnerships?

• Ensure synergy with sourcing directives such as for operational

efficiency, for tactical support or for strategic impact.

Cloud Adoption Lifecycle

The diagram shows processes categorized as

‘mission critical’ and ‘core processes’ to decide which processes are currently appropriate for

being cloud enabled.

In terms of adoption of the cloud, business leaders

should beware of the cloud happening by stealth. If leaders are reactive, rapidly changing

events might overtake them.

ORIENT


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We need to decide on an effective strategy and architecture for

enabling the enterprise in the context of the cloud.

Cloud computing ought to be manifesto driven from the top

down and not from the bottom up by IT infrastructure. Defined

strategy should allow for an emergent strategy. Enterprise architecture is now more important than ever, and needs to use a

holistic top down architectural approach.

Cloud strategy should be business centric and address business

architecture and BPM enablement, while bearing in mind the need to manage the transformation of the existing architecture.

Hybrid clouds are inevitable, and one should accept the fact that

it will not be possible to realize intended strategies completely.

Any strategy should incorporate an incremental, maturity-

improvement based approach to building cloud capabilities.

Cloud Computing Strategy DECIDE


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Cloud computing's silver lining is not a given. Strong governance

will make the difference between success and failure of cloud

initiatives.

One should treat the cloud as a combination of Business Model,

Sourcing Model, Operational Model, Utility Model and IT Model.

Layered governance, which is critical to managing outsourcing

must be used. Cloud governance will require extensions to

existing policies and enforcement.

As IT capabilities are delegated to the cloud, a cross-domain system for overarching governance is vital because IT may no

longer provide the necessary controls.

Governance of cloud availability needs to be defined with

reference to more than one entity because cloud computing is

an overlap between the business and the providers.

Cloud Governance

DECIDE


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Decisions must be made about orchestration of cloud components.

As IT capabilities are dynamically delegated to the cloud, the

business relationship and service-provision relationship between

consumers and providers will be a challenge that must be

addressed.

This means that an automated cross-domain system that performs

overarching collaboration and orchestration for cloud services will

be necessary. Policy Based Management is an effective

mechanism to orchestrate distributed systems.

Policy Based Management

On Demand

On Schedule

On Change Control

On Change

Prevent

Policy Based Management can be used for effective management of various types of

services across the cloud and it can be used to

manage resources within and across service

boundaries.

DECIDE


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Enterprise Architecture for both the cloud and the enterprise must

be principle-driven, technology-neutral and service-centric. EA

decisions/planning should start with the end results in mind and

then move back toward the current position.

Three areas that ought to be addressed for improving the

maturity of cloud oriented enterprise architecture are:

• Expertise Maturity: Increase the maturity of business

architecture and ensure closer relationships with security, risk

and procurement.

• Technology Selection Maturity: Improve knowledge about

when to leverage new cloud technology and services and

how to balance the rewards and risks.

• Managing Complexity Maturity: In the near future the more complex hybrid cloud will be the most common model

because the bulk of solutions may not be sent to public clouds.

Cloud Enterprise Architecture DECIDE


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Agility

Accuracy

Accessibility

Availability

In the context of cloud computing, Security = Risk Management.

IT Risk Management decisions must be proactive and must be tightly integrated with Enterprise Risk Management.

Cloud Computing should be used as an opportunity to invigorate

Enterprise Risk Management’s links with IT Risk Management.

In addition to technology, cloud risks should be considered from the perspective of:

• Huge existing & continuing current investments in IT

• Existing contracts and obligations

• An IT risk hierarchy such as Westerman’s. (diagram)

Cloud computing risk measures should:

• Ensure risk metrics for core areas and

• Link risks to ROI metrics and to user controls.

Security = Risk Management DECIDE


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Today, change is truly a constant, customers don’t want the

old ways and neither do we. To be agile, cloud architecture

must be change-centric.

The appropriate governance and architecture for the cloud will position IT transformation for success.

Because of the cloud, the reallocation of costs from

infrastructure to projects will create capabilities that will

transform the enterprise as well as the customer experience.

Act to Transform

This is the last slide in our cloud computing journey and we have

reached the point where we need to act. When we act, those of

us in IT need to remind ourselves that the cloud is just a means to

an end, and for the business that end is greater profitability.

The four key areas for transformational change, as shown in the

diagram, ought to be addressed.

ACT


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Carl Michael Enterprise Architect

Australian Unity

[email protected]

31st May 2011

Sydney Convention & Exhibition Centre

Cloud Computing Conference 2011

mailto:[email protected]

cloud computing conference 2011 - carl michael, australian unity

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