Design an innovation-friendly IT management strategy around the cloud

Innovation is either just a hopeful buzzword, or an

attitude ingrained in the culture of a business. Get it

right, and a transformational mindset will send your

business galloping forward. Until recently, technology

itself could be complex enough to keep the brakes on,

but thanks to the cloud and some innovative

management practices, that’s no longer the case.

Open the business pages of any newspaper, and you

will invariably see two types of story side-by-side. One

will be yet another mournful litany of endless

recession; the other a company bucking the trend

with innovative working practices and remarkable

new products. Every business wants to be in the

second category, and technology is a very good place

to start.

Peter Boggis, Founding Partner of change

management consultants, Formicio, says,” IT has a

unique role to play in enabling innovation whether it

is through the introduction of Web 2.0-based

collaboration platforms, access to cloud-based

applications or implementing business platforms

based upon integrated packages. For years,

businesses have sought the ability to be agile and

adapt quickly to new ideas. By implementing agile

enterprise architectures, business colleagues can get

closer to this goal.”

Cliff Evans, Chief Digital Officer at technology

consultants, Capgemini agrees that a smart

integration of cloud services can help businesses of

any size to leapfrog the competition. “What matters is

the ability to be adaptable; to move quickly in

response to the different needs of consumers. We

now have the ability to choose services, join them

together, and try things, what we call ‘test and learn’.

In the old world you’d spend a lot of time making a

plan, evaluating a technology, and then implementing

it. In the new world, you’ll string together multiple

services, test them and learn from it. The cloud

regime gives you lots of opportunity to evolve fast.”

The consumer is tyrant

But don’t get too comfortable. Innovation is no longer

in the hands of middle-aged bearded men in darkened

garages. Nor do large companies have a monopoly on

good ideas. The consumer is king, and the consumer is

fickle, too. They have adopted technologies like

mobile and social media, and use them to own

outright their relationship with businesses. Not only

can they damage your reputation; they can switch to

‘the new thing’ en masse, without warning: think

MySpace or Friends Reunited for big examples. Says

Evans, “The choice has been taken away from

business owners. It’s difficult to predict what the next

best thing is, and it won’t be a linear change, it could

be a step change, so you need to be able to adapt

quickly.”

Evans therefore recommends a convincing model of IT

management in which the technology in an

organisation should move at different speeds of

change, where the rate of change increases the closer

you get to the consumer. Collaboration tools, a

website and customer services, for example, might

live in the cloud; customer histories and credit card

transactions might belong in a central repository.

“Clearly that speed of change is often driven by the

availability of cloud services so we embrace that; but

also the idea of how you plug and play different

services – both cloud and traditional in-house, to

manage it all as a coherent whole. You need a

framework which defines your comfort zone of

control and security.”

A new role for technologists at all levels

Rapid-iteration technology,

driven by consumer demand,

requires that IT managers work

in a fundamentally different

way; one with new managerial,

commercial and technical skills.

Boggis says that technologists

need to take a wholly proactive

role in business strategy:

“Most long-standing

innovations are technology-

enabled and IT’s role must be

to identify, evaluate and

facilitate their successful

application for business value”.

Evans endorses this: “We talk

about ‘digital ambition’”, he

says. “Don’t go to the board

with a ‘vision’, go with things

you can actually do, fast, measurably, and with clear

value to the business.”

Operationally, IT teams need fewer deep technical

skills, but must become managers of a federation of

externally managed services. “They need to

appreciate how these services will connect together”,

says Evans. “How will each one work when another

link in the chain fails? Because at some stage, it will!

What commercial protections are built in to each

partner relationship? And how will you manage

updates; because each of your providers will have

their own update cycles. IT management in a cloud-

enabled business is about orchestration: marshalling

several technical elements so that they always

represent the best interests of the business. In the old

days, IT managers were fixed on fails - you tried never

to have to touch the systems. In the

new world, you must assume you’ll

always be touching them, because

change is simply constant.”

The last line of defence

Finally, IT managers, in sync with

business owners, must remember

that in a federated technology world,

they remain the responsible party to

their clients. “You’re still ultimately

responsible to your customers and

for the structures you use”, says

Evans. “You must be the owner of

and expert in your information

architectures; the data flows and

what information comes in and out;

so that nothing gets forgotten or

lost.”

Similarly, Boggis says that IT should become a

guardian of best practice: “IT has a ‘duty of care’ in

terms of preventing bad things happening.

Information access and security are obvious examples.

Business colleagues should not be discouraged from

being innovative, but sometimes IT has a legitimate

right to say ‘we could achieve the same outcome in a

different – and safer – way’.” Change is now a default,

“The choice has been

taken away from

business owners. It’s

difficult to predict what

the next best thing is,

and it won’t be a linear

change, it could be a

step change, so you

need to be able to

adapt quickly.”

and businesses must discover how to turn on a

sixpence. A revitalised technology team, aligned with

line-of-business and operations, is central to

delivering an environment in which ‘test and learn’

can generate whole new business opportunities.

Find out more:

Windows Azure

Windows Server 2012

HOW MICROSOFT CAN HELP

Microsoft Office 365 brings together online versions of

the best communications and collaboration tools from

Microsoft. Subscribe to web-enabled tools that let you

access your email, documents, contacts, and calendars

from virtually anywhere, on almost on any device.

Windows 8 is reimagined to support different working

styles. It’s more intuitive so you can find what you need

faster and easier. The new look of Windows and the new

app model make it easier for businesses to create their

own line-of-business apps to help improve productivity.

Reliable, scalable tech when you’re the undisputed centre of attention

Smart modern businesses are harnessing technology

to automate and streamline business processes,

connect globally and extend the reach of their staff.

Storm Model Management, for example, is famous

worldwide – as is its talent roster which includes

superstars Kate Moss and Lily Cole. Yet this engine of

British branding operates with a staff of just 33.

The latest Storm website runs on Microsoft’s Azure

enterprise-grade cloud platform, and Madhushan

Gokool, IT manager at Storm Models, says the key

reason was to support new business processes. “We

used to have to send out physical portfolios of models

to clients”, he says. “Now booking agents can log into

the site and create electronic castings. The system

creates an HTML email for the client, which contains a

model selection.” Clients can then view selected

portfolios in a private area of the

site. High-quality photo and video

downloads are delivered through

Azure Media Services.

Azure gives Storm confidence in a

fast-moving environment with

challenges which many other

businesses never have to face. There

are peaks in demand: key dates like

London Fashion Week see traffic to

the site triple overnight, and outages

are simply not an option. International traffic is also

increasing at 40% year-on-year, so room to scale is

crucial. It’s a company whose staff and talent are also

in the public eye, and Storm has an enviable

reputation for protecting its models, so security

(physical, data and image rights) are also a top

priority.

Storm expect to realise financial savings of

approximately 30% per annum against their previous

co-located hosting environment, along with increased

back office efficiencies – editing a casting is now

almost five times faster for booking agents on Storm’s

casting application.

Says Gokool, “We are now realising the benefits of a

faster, cheaper and more resilient hosting

environment. The move to Azure has helped give our

web applications a new lease of life and provided us

with some breathing space to strategically plan our

next technical steps, and avoid making significant

capital investment just to maintain business as usual”.

The competitive need to break free

from “business as usual” is one

which will resonate with all ventures.

Model booking is a global, time-

sensitive and highly visual business,

and Storm are looking to continue

the development of their website in

the coming year to leverage more

Azure services including Media

encoding (for live streaming of

portfolio video and key events in the

fashion and media calendar) as well

as using Azure to drive a range of mobile and tablet

applications.

Storm’s web strategy and Azure architecture is

managed by UK agency, Sequence.

Four steps to making the cloud drive innovation in your business

You’ve got some great people. You’ve got access to

some great technologies. What alchemy has to

happen next, in order for a paradigm shift in the

business to occur? There is a raft of recent reports

from analysts, consultants and experts who have

‘been there and worn the T-shirt’ to light your way

forward…

1. Buy time and cut costs

The key initial benefit of cloud services for even

the smallest of businesses is to outsource

technology provision and risk. If you don’t have to

get your hands dirty with keeping your systems

working, you can devote time to more strategic

concerns. Windows Intune, for example, gives all

your PCs antivirus protection, watertight licensing

and system management from anywhere. Activate

it, and then stop worrying. Whatever you need to

achieve, from better collaboration to customer

management, the technology can be delivered

and managed by someone else who has solved

your problems thousands of times before. That

frees up your in-house resources, whether IT or

line-of-business, to identify new opportunities.

Hosting providers, Rackspace, recently conducted

a survey of US and UK companies and found that

“the cloud has reduced the total IT costs for a

whopping 88 percent of cloud users, while 56

percent say that using cloud has helped them

increase profits – money that’s being pumped

back into businesses and driving innovation.”

2. Make technology look like your business

How is that money driving innovation? It’s not as

simple as taking money out of technology

spending and putting it into more salespeople or

creative folks with colourful glasses. The

management consultancy, McKinsey, says “CEOs

recognise that future revenue growth will come

from new business models. Cloud is a lever to

decrease costs and reach industry average cost

levels [i.e. Step 1, above], but business model

innovation is where the growth is.” There are two

elements to this. Firstly, we appreciate now that

technology has a greater role to play. Where

computers used to simply automate tasks which

were done manually (for example, using

spreadsheets instead of ledgers), we can now take

advantage of completely new business models: e-

commerce, variable pricing, supply chain

optimisation etc. all represent step changes in

business through IT. However, there is an

intermediate requirement to align the

technologies you have with the business you run;

and the simplicity of cloud deployment on

enterprise platforms like Microsoft Windows

Azure is key. If your IT department pushes back on

getting new ideas to market, if you cannot map

individual IT deployments to specific areas of

business activity, or if you feel IT is a barrier to

your workday rather than a limitless resource of

opportunity, then your technology doesn’t ‘look

like your business’, and innovation will be stifled

accordingly. The value of the cloud is that new

technology can be appropriated without upfront

capital expense or a recruitment requirement in

your IT team. It can be scaled from a thumbnail

sketch to a full consumer-grade rollout, reducing

the barriers to innovation and participation.

3. Try, fail, learn, win

Few profitable and long-term innovations in

business today are wholly untouched by

technology, and the new vista opened up by the

cloud is the opportunity to try out new ideas

without failure incurring high costs. The quality of

our ideas hasn’t changed – we will always come

up with a few shockers, and equally many good

ideas have no basis in carefully researched fact:

they come from gut instinct alone. The cloud,

however, allows a business to try out a

programme without great expense, either refining

the parameters until the model works, or quietly

moving on to something else, all at low risk. In a

seminal Wall Street Journal article (now four years

old, but which should be required reading for

entrepreneurs), Erik Brynjolfsson and Michael

Schrage write that “technology is transforming

innovation at its core, allowing companies to test

new ideas at speeds and prices that were

unimaginable even a decade ago. They can stick

features on Web sites and tell within hours how

customers respond. They can see results from

efforts to boost process productivity, almost as

quickly. The result? Innovation initiatives that

used to take months and megabucks to

coordinate and launch can often be started in

seconds for cents.”

4. Prepare for the next leap

You weren’t expecting all good news, were you?

Business is competitive by nature. When you have

climbed a peak and reached the next plateau, you

can bet that the first thing you’ll see is... the next

peak! Applying the cloud to business operations

will certainly generate competitive benefits; but

just as the internet gave us new commercial

battlegrounds, so will the cloud. Some forward-

thinking commentators are already speculating as

to what that might look like. Business analysts,

Accenture, reckon that one of the key new

horizons will be Big Data: the massive amounts of

information generated by online business

processes and customer engagements: “The next

ten years are going to see a massive scaling of

data needing to be managed. In the face of the

forthcoming data explosion, the problems

organisations have always had with optimising

their use of information are just about to get

much more challenging. This brings to the fore the

need for organisations [to] rethink themselves as

digital businesses, and address the importance of

business analytics for guiding strategic action and

operations.” In short, as bricks-and-mortar

retailers fought over commercial property, so data

analytics is central to e-driven business. When

Amazon knows what book you might like to buy

next, or Target knows your daughter is pregnant

before you do, that’s data analytics in action. You

have been warned!

It’s in the BHAG: The Seven Laws of

Innovation

Phil McKinney is a world

authority on innovation and

creativity in companies of all

sizes. He is President and CEO,

CableLabs, the non-profit R&D

lab for the worldwide cable

industry; and previously ran the

Personal Systems Group at HP.

In both roles, his responsibility

has been to pinpoint and

influence the future of fast-

moving technology markets. He

is the author of innovation

strategy bible, “Beyond The Obvious” and Vanity Fair

magazine calls him “The Innovation Guru”.

McKinney offers seven rules for encouraging

innovation and then nurturing and protecting it

through the highs and lows of corporate life. Indeed,

he considers these rules to be nothing short of

axiomatic; critical for innovation success, irrespective

of the size of the organisation, whether it is in the

private or public sector, and whether it is a cool tech

startup or a humble bricks-and-mortar business.

1. The Law of Leadership. Without committed

support from the Board and management

team, cultural and budgetary efforts to foster

innovation will atrophy. It’s too tempting

during tough times to ‘borrow’ budget and

talent for tactical purposes, when the

strategic value of innovation must be

protected. People, money and equipment

must be ring-fenced with sanction from the

top, and the executive team must themselves

devote time and attention to

delivering on innovation-

based projects. McKinney

cautions, “Listening to status

reports from others doesn’t

count.”

2. The Law of Culture. It

is incumbent upon

management to embed a

culture of encouraging

innovation throughout the

organisation, like the

proverbial ‘stick of rock’. On a

day-to-day basis, this will be

evidenced by positive

behaviours like teamwork, collaboration and

honesty (and the absence of negatives like

empire-building, not-invented-here, ‘not our

problem’ etc.). However, these positive

behaviours require the right culture to thrive

in the first place, and there are four key

attitudes which managers (both at board and

particularly line level) can foster to achieve it:

A) People: From the boardroom to the postroom,

everyone is empowered to own and further the

innovation agenda

B) Ideas: Ideas are sought from across the

organisation, and valued rather than criticised. Just as

in a courtroom, defendants are innocent until proven

guilty, or scientific theories are given credit until

knocked down by legitimate contrary evidence, ideas

should be encouraged until proven unviable by the

intellectual power within the organisation rather than

criticised without due consideration.

C) Alignment: The above should create a rich hopper

of ideas, but it is the role of management to make

effective decisions. Resources must be aligned to

support the innovation agenda and ensure that strong

ideas are assessed and then delivered effectively.

D) Communication: Clear and effective

communication underpins all of these objectives, and

will serve to build engagement and excitement about

future projects. Honesty and transparency will also

banish many of the negative traits of ineffective

management.

3. The Law of Resources: As we saw with the

Law of Leadership, a commensurate level of

resources must be committed to drive

innovation. This resourcing must be

committed over a reasonable level of time to

deliver ideas and then results. There is no

excuse for profligacy, and for small start-ups,

resources may mean small groups of people

with very limited budgets. Even so, a resource

commitment to innovation means taking time

out from current operational activity to look

to the future.

4. The Law of Patience: Innovation is unlikely to

fit into the typical quarters monitored by

financial staff or even the annual scrutiny of

shareholders. Innovation requires that

organisations take the long view, and this may

require managers to become experts at

making their case. Indeed, making the case for

resources should be a required discipline as

part of the innovation agenda. Time and

expense must be justified, but then protected

from short-term ebbs and flows.

5. The Law of Process: Innovation includes the

refinement of what might start out as hare-

brained schemes into scalable, replicable and

profitable business activity. Ideas should be

assessed for value against criteria which are

bespoke to the organisation (‘Is this

something we know about?’, ‘Do we already

have customers who want this?’). The process

should cover the gamut of incubation from

capture of ideas through to delivery of

execution. Each step should be fair and

unequivocal for all ideas, offer clear and

comprehensible metrics, and allow for lessons

learned feed back into the process itself.

6. The Law of BHAG: BHAGs are “Big Hairy

Audacious Goals”: flags around which

everyone in the organisation can congregate.

BHAGs drive engagement, and they are

binary: you know when you’ve reached it.

Crucially, management can set the goals, but

leave it to the wealth of expertise in the

organisation how to get there.

7. The Law Of Execution: As mentioned under

‘The Law of Resources’, it is important to

examine the dividing line between the

business’ current operational obligations and

the requirements of the innovation agenda.

Both deserve equal value, and the

demarcation must be theoretical, not physical

– otherwise the Law of Culture will be broken.