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Destination: Cloud first

Will the cloud drive innovation in both the public sector and the digital economy next year?

Cloud first is a leadership stance

Ovum’s view is that a pro-cloud-services policy is a positive step for many governments … even though when taken literally it can seem a bit odd to bias procurement towards one particular sourcing model. The argument that some of the activity under the US government’s Cloud First was perhaps a little inefficient or could have been better planned misses the point that these criticisms can equally be applied to any previous whole-of-government ICT strategy and also that it was strategically necessary to create a more active step change in the ICT reform agenda. Vivek Kundra was exercising Leadership with a capital “L” when he used Cloud First to “kick the hornet’s nest” of government ICT procurement.

Cloud first needs to be a practical journey, not an ideological quest

Ovum’s recommendation to agencies since 2009 has been that the most important way to transition safely into cloud services is to get started – to gain ‘hands-on’ experience. Proverbially, “it takes two to tango”. Vendors need to develop and mature their cloud services capabilities to meet government’s needs … and need projects to do so. Agencies need to unlearn some traditional ICT thinking, learn some new internet-age, more agile, thinking and gain some new skills. Actual experience of implementing and managing cloud services is critical for organisational learning.

From this perspective, it is a mistake for central agencies to focus too much on writing largely theoretical policy guidance and seeking to control agency adoption of cloud services. The bias needs to be towards encouraging adoption in prudent applications and workloads, sharing experiences between early adopters, showcasing successes, solving significant policy obstacles and creating enabling frameworks. Cloud services adoption is all about making trade-offs between different forms of benefits and risks - and these trade-offs require practical experience of outcomes.

Cloud services are actually a paradox for whole-of-government ICT strategy. They are highly centralised, shared services that deliver economies of scale and innovation in a decentralised manner to individual agencies. Agencies can act unilaterally and still achieve the benefits of centralisation without the need for a mandated “forced march” by a strong central agency. Indeed, the paradox is that an over-controlling approach from the centre may be the very thing that discourages agencies from taking advantage of the centralisation benefits of cloud services and slows cloud adoption.

The bottom line is that a cloud first strategy should focus on creating action and organisational learning in agencies – not just documents and cumbersome centralised procurement arrangements.

It is time to kick the ICT procurement Hornet’s nest in your agency

The problem for all national, state and local government jurisdictions in the ANZ region is that the current approach to ICT is becoming increasingly untenable due to a growing mismatch between demand for ICT innovation and the ability of agency ICT departments to supply innovative projects. Ovum’s view is that many agencies are stuck in a game of “snakes and ladders” – unable to make sustainable progress in the maturity and sophistication of their ICT capabilities.

The rate of failure of ICT-enabled business change projects is too high. Too many projects take too long and are too expensive. ICT procurement and risk management processes create increasing layers of bureaucratic checks and balances that obfuscate accountability and increase project timelines and costs. Internal strategies of consolidation, rationalisation and standardisation and shared services have delivered mixed results – in many cases further increasing project timelines, costs and risks and in some cases causing total project failure. Assets are ageing and their replacement is unfunded because depreciated allowances have been raided for other purposes. To make matter worse, fiscal constraints are further compounding the stresses and technology is changing more quickly than the agency ICT departments can keep up with. The challenges appear to be moving beyond the reach of incremental and tactical refinements of ICT procurement and ICT management practices.

In essence the value of cloud first is that it authorises, and even requires, senior agency executives to look beyond the constraints that are driving the snakes and ladders game of ICT management. A cloud first stance authorises them to ask the question “is there a better, more agile, way to use ICT to achieve our policy and service delivery outcomes?” Can we just buy and use services that are already proven to work in the cloud rather than building customised systems and running them ourselves?

This value, however, is only apparent if one first opens one’s eyes to the reality of the unsustainability of the status quo and the fact that we really do need to accelerate the introduction of a fresh approach to ICT in government - as well as in the economy.

Dr Steve Hodgkinson is Research Director IT Asia Pacific for Ovum. He was born in Invercargill, studied at Otago and Oxford Universities and now lives in Melbourne. Cloud first is a leadership stance

Ovum’s view is that a pro-cloud-services policy is a positive step for many governments … even though when taken literally it can seem a bit odd to bias procurement towards one particular sourcing model. The argument that some of the activity under the US government’s Cloud First was perhaps a little inefficient or could have been better planned misses the point that these criticisms can equally be applied to any previous whole-of-government ICT strategy and also that it was strategically necessary to create a more active step change in the ICT reform agenda. Vivek Kundra was exercising Leadership with a capital “L” when he used Cloud First to “kick the hornet’s nest” of government ICT procurement.

Cloud first needs to be a practical journey, not an ideological quest

Ovum’s recommendation to agencies since 2009 has been that the most important way to transition safely into cloud services is to get started – to gain ‘hands-on’ experience. Proverbially, “it takes two to tango”. Vendors need to develop and mature their cloud services capabilities to meet government’s needs … and need projects to do so. Agencies need to unlearn some traditional ICT thinking, learn some new internet-age, more agile, thinking and gain some new skills. Actual experience of implementing and managing cloud services is critical for organisational learning.

From this perspective, it is a mistake for central agencies to focus too much on writing largely theoretical policy guidance and seeking to control agency adoption of cloud services. The bias needs to be towards encouraging adoption in prudent applications and workloads, sharing experiences between early adopters, showcasing successes, solving significant policy obstacles and creating enabling frameworks. Cloud services adoption is all about making trade-offs between different forms of benefits and risks - and these trade-offs require practical experience of outcomes.

Cloud services are actually a paradox for whole-of-government ICT strategy. They are highly centralised, shared services that deliver economies of scale and innovation in a decentralised manner to individual agencies. Agencies can act unilaterally and still achieve the benefits of centralisation without the need for a mandated “forced march” by a strong central agency. Indeed, the paradox is that an over-controlling approach from the centre may be the very thing that discourages agencies from taking advantage of the centralisation benefits of cloud services and slows cloud adoption.

The bottom line is that a cloud first strategy should focus on creating action and organisational learning in agencies – not just documents and cumbersome centralised procurement arrangements.

It is time to kick the ICT procurement Hornet’s nest in your agency

The problem for all national, state and local government jurisdictions in the ANZ region is that the current approach to ICT is becoming increasingly untenable due to a growing mismatch between demand for ICT innovation and the ability of agency ICT departments to supply innovative projects. Ovum’s view is that many agencies are stuck in a game of “snakes and ladders” – unable to make sustainable progress in the maturity and sophistication of their ICT capabilities.

The rate of failure of ICT-enabled business change projects is too high. Too many projects take too long and are too expensive. ICT procurement and risk management processes create increasing layers of bureaucratic checks and balances that obfuscate accountability and increase project timelines and costs. Internal strategies of consolidation, rationalisation and standardisation and shared services have delivered mixed results – in many cases further increasing project timelines, costs and risks and in some cases causing total project failure. Assets are ageing and their replacement is unfunded because depreciated allowances have been raided for other purposes. To make matter worse, fiscal constraints are further compounding the stresses and technology is changing more quickly than the agency ICT departments can keep up with. The challenges appear to be moving beyond the reach of incremental and tactical refinements of ICT procurement and ICT management practices.

In essence the value of cloud first is that it authorises, and even requires, senior agency executives to look beyond the constraints that are driving the snakes and ladders game of ICT management. A cloud first stance authorises them to ask the question “is there a better, more agile, way to use ICT to achieve our policy and service delivery outcomes?” Can we just buy and use services that are already proven to work in the cloud rather than building customised systems and running them ourselves?

This value, however, is only apparent if one first opens one’s eyes to the reality of the unsustainability of the status quo and the fact that we really do need to accelerate the introduction of a fresh approach to ICT in government - as well as in the economy.

Dr Steve Hodgkinson is Research Director IT Asia Pacific for Ovum. He was born in Invercargill, studied at Otago and Oxford Universities and now lives in Melbourne.

Comments

Dr Steve Hodgkinson, Research Director IT Asia/Pac

1

Hmmm ... I think not na#ve. I appreciate that many folks have alternative views on the potential of cloud services but the clear evidence of organisations that are using mature enterprise-grade cloud services for serious work is that they can be better, faster to implement, less costly and less risky (when all this are considered). There are now many case studies which provide proof points ... so I don't think my views are "na#ve". Perhaps the word you were after was "visionary"?

The general proposition, however, that cloud services are appropriate in any organisation and for any application is indeed na#ve - as is the assertion that all vendors that claim to provide cloud services are competent to do so or have well developed and trustworthy services. The normal rules of caveat emptor apply.

I have seen many iterations of ways of providing ICT services in government agencies over two decades and my concern is that (as a general rule) things are getting worse not better ... and the money is running out. Mature enterprise-grade cloud services are simply a form of industrialized shared ICT services that are proven to actually work. When this is combined with executives that are prepared to think and buy services in a more agile manner the result is a better, faster, less costly and less risky way to buy and manage the ICT capabilities necessary to drive increased productivity as well as to enable policy and service delivery innovation.

I'm more inclined to see continued universal faith in the status quo of in-house ICT, internal shared services and traditional hard-wired outsourcing - with all of their vested interests - as na#ve. Each of these ways of sourcing ICT capabilities has its empirically proven failings ... though still has a place in different agencies and for different applications ... there is no "one size fits all" magic bullet. My argument is that cloud services are becoming an increasingly relevant addition to this sourcing portfolio ... as is demonstrated by the experiences of early adopters. As agency budgets tighten the status-quo is becoming increasingly unaffordable.

The one thing that is unique, and new, about mature enterprise-grade cloud services is "cloudy is as cloudy does". They are already operating at scale with many users - so it is possible to fully evaluate them prior to making a purchase commitment and also possible to start with a small commitment and iteratively evolve forward in an agile, responsive and flexible manner.

Surely the na#ve viewpoint is that of the skeptic who is prepared to discount the relevance of cloud services in the government ICT mix without even putting them to the test?

Anonymous

2

does the industry and the Australian public a disservice. A comparison of actual cloud take up in a number of countries suggests that, behind the hype and slick marketing slogans, a similar adoption trajectory is being taken by most.

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