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Striving for operational efficiency

Enterprise IT has undergone changes in the past decade that can promote innovation, bringing down the cost and time it takes to test new concepts.  Emerging cloud services help enterprises access new markets and develop go-to-market strategies that their predecessors could only dream of.

And yet we find CIOs presently under so much pressure that they are struggling to remain innovative.  The problem arises in part because technology has become more accessible.  There are actually too many people involved in the strategic IT decision-making process.  Functional heads are now just as likely as CIOs to make the case for technology investments to support their business strategies.

So, as IT has become the domain of the many, the CIO has become a facilitator.  The question is: how can the CIO add value to the enterprise he supports?

The valuable CIO

One way would be to help his organization plot a way through the maze of “game-changing” technologies that have been unleashed with the characteristic hype of the IT industry.

As large Internet enterprises have opened their scalable IT platforms for external users, cloud services such as Amazon’s Web Services and Google’s App Engine have become tremendously popular. The most successful cloud services attract a vivid community of start-up companies and independent software developers who shape an ecosystem of innovation around a set of core services.  This is the innovation that efficient networked services should promote – and the innovation that CIOs at larger enterprises should facilitate.

Motivating CIO innovation

The success of these services can be explained by two major motives:

a)    On-demand access to large-scale resource pools, and

b)    the never-ending quest toward organizational efficiency.

While a) unlocks new opportunities for small businesses, b) is a particularly intriguing value proposition for larger enterprises that already own huge datacenters.

Cloud services add a new dimension to datacenter virtualization which is beyond server consolidation. Traditionally, datacenter decision makers use virtualization technology as a cost-saving tool to multiplex isolated applications across smaller numbers of physical servers. However, downsizing physical infrastructure bears an inherent cost of the increasing risk that unexpected workload spikes cannot be satisfied any more. Amazon’s CTO Werner Vogels points into a different direction: the real value of virtualization is rather the enhancement of application deployment and management capabilities.

It’s here that CIOs can add real value to their organization in the quest for efficiency: the CIO must not become a facilitator, but remain an innovative force within the enterprise.


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