Simplification: the great lie of the Cloud Era

At the start of 2017, I tasked our Snow Software sellers with introducing a simple question into their conversations with senior business and IT leaders at organizations around the world. The question is short and simple: “Is the cloud making your job simpler or more complicated?”

At the start of 2017, I tasked our Snow Software sellers with introducing a simple question into their conversations with senior business and IT leaders at organizations around the world. The question is short and simple:

“Is the cloud making your job simpler or more complicated?”

I’m fairly sure you can guess that one answer that these business and IT leaders never give: “simpler”. 

For the vast majority, alongside a wry smile, a rolling of the eyes or even holding their heads in their hands, the answer is invariably “more complicated”. For some, there is a more qualified response: “well, it depends, some things are simpler; others are much more complex”. But never just “simpler”.

These responses betray the truth of cloud adoption and the drive for Business Transformation. The technologies that are enabling advances in the ways that organizations operate, gain competitive advantage and achieve target efficiencies are also making life more difficult for both business and IT leaders. 

Why is that?

Because these leaders are conflicted.  They want and need to be at the forefront of Business Transformation. They take personal responsibility for driving their organizations forward and the last thing they want to do is become a roadblock to progress.   But at the same time, these leaders also have financial obligations to the organization – not necessarily to limit costs (although that can often be a key duty) but certainly to ensure that money is being spent responsibly and that there are no black holes in expenditure.

As such, it’s no surprise that a top priority for CIOs in 2017 and beyond is analytics.  In a way, it’s strange that it’s taken IT so long to focus on an area that’s been so important to other parts of the organization for a number of years now.   The Business Intelligence / Analytics market has exploded in recent years as organizations strive to become data-driven by having access to that data in a format that makes sense and supports informed decision-making.

The Cloud and Business Transformation will make it essential that CIOs and their staff have access to the same quality of analytics. 

Why isn’t the cloud making things simpler?

Well, for some it is.  If you’re a developer wanting to test a new piece of code or stand up an application to read customer data in a new way, it’s easier than ever to get the job done. All you need is a credit card and an account with Amazon, Microsoft or Google. 

If you’re the director of a business unit or function and you believe a new SaaS app will make you more effective and help you achieve your targets, why wait for IT to help implement the solution? It’s SaaS, after all. You can go it alone. More than likely, you can get started without breaking your personal financial sign-off limits.

This ease of access also means that it’s easier than ever to create cost that those charged with managing the organization’s finances have zero visibility of. The Chief Finance Officer and other senior executives are seeing increasingly-large bills coming in for a growing number of SaaS and IaaS investments that they simply can’t reconcile. 

The CFO and CIO are in equally tough positions. Both know that they need cloud to move the organization forward. Neither knows if what they are spending is justified or delivering business value. 

Putting the CIO in the hot seat

More than 80% of CIOs report directly to the CEO or the CFO, giving them instant access to decision-making powers, but also making them the go-to person when the cloud bills start to look scary.   A common story from the business and IT leaders that Snow Software experts speak to is that a full 12 months’ worth of cloud budget is often consumed in less than six months, with little or no understanding is to why the money got spent so quickly. 

And things are getting worse. One organization I spoke to recently (and not a huge one at that) is now spending $600,000 a month on cloud services. And the CFO is frustratingly blind as to why the cost is that high. As he explained, he’s expected to approve the invoices, but those same invoices don’t give him any insight into what his organization is doing or achieving with the investment. 

For him and many others, cloud expenditure is reaching breaking point. The status quo can’t continue.

The Disruption Gap we’ve mentioned in previous blogs and article is very real. It is the growing separation between the IT consumption behaviours of the business and the ability to influence and account for this spend by the ‘corporate’ functions.

One of the most effective ways to close the gap is to equip both parties with a common view of IT consumption and spend. Call it analytics. 

The trouble with analytics

Over recent years a number of popular analytics platforms have emerged – Qlik, PowerBI and Tableau to name a few.  All great platforms.  And all suffering from the same fundamental issue.

It’s a well-known issue to anyone involved in IT:  crap in, crap out.

No matter how fancy their presentation capabilities, analytics platforms are almost wholly reliant on external data sources.  Any issues with the raw data mean that the pretty graphs and drill-downs will all be for nothing.  Which kind of defeats the purpose. 

Even when the raw data is right, getting it to feed the analytics platform can be difficult, with hard-to-explain discrepancies creeping in between the data source and the shiny dashboards in the analytics platform. 

Analytics on steroids

But imagine an analytics platform that could really tell you what’s going on across the myriad of IT platforms being managed and consumed by your organization – from mobile to desktop, datacenter to cloud – tracking apps both within and outside the network, regardless of who commissioned them or who’s paying for them. 

Imagine what you, as the CIO or CFO, could do with that information. 

This where, with the right technologies in place, the CIO perhaps has the advantage compared to other senior executive colleagues.  Unlike other parts of the business, the CIO doesn’t need to rely on third-party information sources outside their control. When it comes to gaining visibility of the hardware and software both inside and outside the organization’s corporate network, the CIO can choose a single-platform solution to provide the majority of the data they want to analyze.

Snow = More than SAM

For the last 10 or more years, Snow has been synonymous with Software Asset Management (SAM).  And with good reason. After all, it is perhaps the most capable platform in terms of whole-network Hybrid IT inventory and license management. 

But just as the nature of IT consumption across the organization is changing, so too are the ways in which data and intelligence from the Snow platform is accessed and consumed. 

Already, a number of Snow partners have started using third-party platforms to create an ‘analytics presentation layer’ on top of Snow data, lifting the value of the solution and making complex data easy to digest to the C-suite audience. 

As Gartner says, “By 2020, for 40% of software titles, the fundamental priority of software asset management (SAM) will shift from managing compliance with software publisher terms and conditions to eliminating unnecessary expenditure in “as a service” contracts.”1

Most organizations understand compliance. Most are still working on it (compliance is rarely ever ‘done’). But the pendulum is swinging. As Cloud accounts for a growing portion of the organization’s overall technology spend, so the senior executives in the organization need to diversify their practices to encompass optimize software spend in all its forms.  

And Snow will be there to support senior executives as they adjust. 

To understand this in more detail, read Snow’s guide: The Indispensable Cio

This blog was first featured on ITProPortal on September 19th 2017  

[1] Gartner, Software Asset Management Reaches a Tipping Point: SaaS Cost Management Eclipses License Compliance, Stephen White, Victoria Barber, 06 January 2017