Transition to the cloud Get answers to common public sector questions
Table of contents What are the 2 considerations that preserve the benefits of moving to a cloud platform? How do cloud 2 services affect roles and relationships? How does 4 this transition affect applications? How do these 7 changes affect IT delivery and operations risk? How can a service 9 broker facilitate transition to effective hybrid delivery? What role can 10 brokerage play? Conclusion 12 Users demand access to familiar, high- quality and easy-to-use tools that help them do their jobs. Global governments are looking to cloud computing to control expenses and improve services. Adding cloud services to enterprise information technology (IT) offerings is a major change in buying and using IT. As with any major change, the challenge is to ensure you attain the desired results without getting lost in the fog of cloud computing hype. What are the considerations that preserve the benefits of moving to a cloud platform? Several key considerations during a transition can help your organization ensure the benefits of moving to a cloud computing platform: Effect on IT roles Cloud computing represents a fundamental shift in the relationships among IT providers, IT users, and the implementers of programs that support organizational mission. Infrastructure and applications Effective use of cloud resources can actually improve the availability and reliability of IT services when used in combination with traditional IT or as a distributed replacement for physical resources. They also allow you to rethink how applications are designed and deployed, and how enterprises interact with consumers. Planning for such change can significantly improve outcomes. Risk management Moving to cloud computing is not a binary yes or no proposition. The new solution must act in concert with existing infrastructure and may take various forms (private, public, virtual private). This hybrid environment can be complex and requires a tailored approach to managing enterprise risk. Let s look at each of these areas. How do cloud services affect roles and relationships? The biggest shift the transition to cloud brings is in the relationship between the IT user and IT provider. Under traditional, centrally managed models, user choice often has been limited to what the enterprise can provide. Today, users have access to high-quality, low-cost commercial services on demand. They also have access to these services from a wide variety of enterprise or personal devices. This variety makes it difficult for an organization to control IT sprawl due to the many commercial devices, applications, and services available to users. Users also have nearly universal access to high-speed network connectivity. This effectively frees them from reliance on the enterprise network and its controls. In comparison, traditional enterprise-provided IT services are often viewed as cumbersome, slow to change, and not responsive to a rapidly changing business or mission. 2
Users demand access to familiar, high-quality, and easy-to-use tools that help them do their jobs. If the enterprise IT department doesn t provide these tools, users will find the best tool for the job on their own and use it. This change leaves the enterprise open to issues in data protection, compatibility, and licensing. Enterprises must adapt to the new reality of consumer-driven IT. Does the CIO s role change? The chief information officer s (CIO) role is affected in the transition to cloud. It changes from a direct provider of IT services to a broker of IT services. This new role as an enterprise service broker enables the CIO to: Negotiate favorable terms and conditions. The balance between in-sourcing and cloud-sourcing through a service catalog must support the organization s mission and its business needs making the CIO a key partner to other decision-makers Certify and approve policy-compliant solutions Manage enterprise risk Negotiate service contracts and service level agreements (SLAs) across a hybrid environment Cloud computing now affords the CIO much more flexibility in managing this multisource environment. The balance between in-sourcing and cloud-sourcing through a service catalog must support the organization s mission and its business needs making the CIO a key partner to other decision makers. For example, critical core IT systems must meet regulatory and business requirements, regardless of sourcing. The management challenge for the CIO is to remain responsive and agile, all the while managing risk. Joint coordination is essential Effective cloud adoption also relies on the joint coordination across functions to address not only technological concerns but also others, such as financial and operational concerns. For instance, an organization s chief financial officer (CFO) counts on a predictable budget to meet the organization s financial duties. So it is critical for your CIO and the CFO to work closely together. If uncontrolled, a cloud services pay-for-use model could lead to wide swings in the cost of IT services based on surges in demand. During the transition from IT provider to IT broker, it is important for CIOs to forge a close working relationship with the organization s other decision makers. This will help ensure these hybrid, blended services continue to cost-effectively meet the mission requirements of the organization. 3
How does this transition affect applications? Most enterprises see cloud computing as complementary technology to the traditional in-house or outsourced data center. Not all applications are candidates for the cloud; only a subset will transform and move to the cloud. Those that do move may rely on different instantiations of cloud from public to virtual to community to private or a hybrid combination. When building these hybrid delivery environments, a key success factor is knowing which applications to move to which cloud architecture, when to move them, and how. It s important to review the overall enterprise application needs and determine which can benefit most from being transitioned. Consider these factors when mapping applications to the cloud. Scale up and scale out When moving applications to the cloud, is the goal to take an application as it is and rehost it on a shared cloud-based infrastructure? Or is it to redevelop the application so it can take advantage of the new characteristics that cloud offers? Traditionally, large applications were built on a dedicated, vertically scaled utility infrastructure. Often, these applications can only be scaled by running them on larger, more capable hardware. This is a vertical scale-up model of computing one where processors, memory, network, or storage capacity can be added to the infrastructure. The ability to scale up hardware on demand is one benefit of moving to cloud computing. In this case, the organization doesn t have to worry about purchasing or configuring the additional hardware. In contrast, many types of transactional applications are built on a horizontally scaled or scale-out infrastructure that does not keep track of any posttransaction data (also referred to as stateless ). These types of applications scale by adding instances of that function as demand increases. These horizontally scaled computing grids are well suited to data analysis and search functions. Think of an example of looking for a lost coin in a field. The grid model is like breaking the field into a grid with a single person tasked to search each grid cell. High availability for many users and recovery from system failures can be the advantage offered by such massive, flexible replication of stateless components in an expansive cloud-based grid model. When demand decreases, the application can then scale down as well, resulting in costs more closely tied to demand. Migration to the cloud supports both scaling up and scaling out; however, scaling out generally requires a redesign of legacy applications. Migration to the cloud supports both scaling up and scaling out; however, scaling out generally requires a redesign of legacy applications. Cost reduction could be achieved in a shared utility environment. But gains would be smaller unless applications are significantly rebuilt to take full advantage of horizontally scaled grid designs. The key to this choice is in balancing the cost of transformation with the potential benefits gained from exposing the business processes of a legacy application to run in a cloud model. 4
Service levels and security In-house or outsourced data centers could be characterized as having high levels of customization, high security levels, and high SLAs. Public cloud offerings today typically have low customization levels, low to moderate security, and lower or no SLAs. Unsurprisingly, the price of these services reflects these trade-offs. So it s important to understand the real business needs for security and SLAs for an application when deciding where it should reside. Individualized SLAs and customization are difficult, costly, and not offered in all cloud models. Customized or high security levels increase the cloud solution s cost and complexity, and are often achieved only through private cloud deployments. Core and context Core services are the key applications or business processes that contribute to an organization s value generation. Because core services generate increased business and mission value, their security and SLAs should reflect their importance. Many other IT solutions simply fulfill functions the organization must perform for financial, legal, or other reasons. They do not generate direct business value for an organization they provide what is called context services. These may be important or critical to business operations, but they don t have the same relationship to value generation that core systems have. These context systems often represent commodity business function delivery, such as email. So organizations should seek the most cost-efficient way to deliver these services. When rethinking how applications are designed and deployed and how enterprises interact with consumers, it is important to identify whether the applications are core or context. 5
Systems of record and systems of engagement Systems of record are those monolithic traditional legacy applications and databases on which organizations have built their business processes over the last several decades. Systems of engagement are designed to overlay and complement organizations deep investments in systems of record by providing access, usability, and cross-enterprise collaboration such as business to government, government to citizen, and government to government. Each of these engagement models has unique inherent characteristics. So it s critical to understand in which type of system changes will be applied to effectively manage their effect on the overall architecture and on the overall cost. You should consider up front the full application s lifecycle when assessing the cost, complexity, and effect associated with its transition to the cloud. The concept of systems of engagement becomes much more relevant when you consider the effect of mobility on the enterprise. As the applications move to the cloud, the users have grown used to an application model that is task-based, graphically intuitive, and designed for consumption and interaction on mobile devices. The concept of appification of the enterprise or deconstructing the large and often complex systems of record into task-based intuitive applications creates an overlay of engagement over enterprise processes. These systems of engagement can overlay existing legacy systems with a set of applications that can be designed for horizontal scalability without the investment necessary to completely replace the systems of record. Applications lifecycle and point-in-time production applications It is tempting to concentrate solely on the production version of an application; however, it is also important to consider the environments necessary to support the testing and migrating of subsequent versions. So you should consider up front the full applications lifecycle when assessing the cost, complexity, and effect associated with its transition to the cloud. Point-in-time production application is a significant advantage and use case for cloud services. For example, application lifecycle management tools used in a development or testing environment don t need to be purchased or installed for each project. Instead, virtual machines and applications can be rapidly deployed, as needed, and projects can share licenses and code libraries. This approach also facilitates promoting the application from development, to test, to quality assurance, and even to production environment. 6
You should consider up front the full application s lifecycle when assessing the cost, complexity, and effect associated with its transition to the cloud. How do these changes affect IT delivery and operations risk? The CIO s management challenge is to be responsive and agile while managing risk. A cloud services pay-for-use model could lead to wide swings in the cost of IT services based on surges in demand. Although this can represent significant savings, it could also quickly spiral out of control and become a significant risk if not managed effectively. This underscores the need for close partnership between the CIO and CFO. Incorporating cloud computing into an enterprise is not necessarily an all-ornothing proposition. There is ongoing value in traditional IT approaches for many mission-critical core systems. This leads to a hybrid IT environment made up of a mix of traditional and cloud-based solutions. In such an environment, some systems continue to use traditional technology. Some are migrated to shared internal services (private cloud). Others are moved to shared commercial IT services (public cloud). This blending of solutions should be designed based on the cost, risk, and value of the various IT environment components. As the enterprise service broker, a CIO can place workload in the most appropriate location for managing his or her organization s risk profile, based on business rules and cost considerations. For example: Placing workload with multiple providers simultaneously can provide continuity of operations (COOP) in case of an outage by one provider. Dynamically allocating workload avoids supplier lock-in. Dividing work between public and internally facing systems can lead to an improvement in an enterprise s security posture. Understanding whether an application represents core value to an organization can guide in-sourcing versus cloud-sourcing decisions. Move noncore applications to a cloud services model, and focus investment and key resources on the core systems. Figure 1. Well-orchestrated plan for transition to cloud and enterprise service management Accepting cloud-hosted services, such as virtual machines, also means accepting and using automation in the deployment of new servers, hosts, and applications. Traditional customer IT and security departments need to make significant changes to accreditation, monitoring, and operations to accept automatically deployed servers at any time of the day, 365 days a year. The concept of performing manual security assessments of new systems before they are brought online is replaced by preapproving type accreditations for virtual machines, operating system, and application templates and platforms. 7
A hybrid approach to designing and deploying systems enables the CIO to better support the enterprise. In this approach, the CIO negotiates with suppliers and manages results through SLAs and business rules. In turn, the costs of providing services can be tracked and reconciled more accurately, and the CIO can better manage system performance and security. 8
How can a service broker facilitate transition to effective hybrid delivery? Cloud computing promises to cut costs and improve efficiency and effectiveness, but it requires planning. In fact, enterprises that bolt into the market unprepared and unaware of the potential effect on their organization s mission may find they drive cost and affect in the wrong direction. Cloud computing also involves new procurement and management challenges. So the transition to cloud and enterprise service management is a significant organizational change that must be managed like one. This new hybrid delivery model changes the fundamental roles and relationships that affect your ability to deliver the mission. Change with such dramatic implications must have strong leadership support that drives planning based on organizational affect. It must focus on key resources and collaboration across the entire enterprise and its partners while managing risk. As with other major changes, a well-orchestrated plan should guide this transition. Here are the key elements for such a plan: mobilizing and sustaining change leadership; planning and shaping the change; building and maintaining business ownership; and preparing and supporting business implementation. Clearly articulating, quantifying, and managing the organization s targeted mission results are at the heart of successful enterprise transition. You need to adopt SLAs that support your desired results. The focus on outcomes is critical whether these SLAs are internal or made with an external provider. External SLAs can be difficult to align to the mission, as there is often little or no flexibility in the SLAs offered. The challenge is to use the most costeffective technology source for the need, and align the available SLAs to the mission need, mitigating risk where necessary. That is where the enterprise s service broker comes in as the enterprise champion for cost-effective, risk-managed, business-focused technology. 9
Service brokerage can offer an organizational focal point to orchestrate enterprise-wide service, negotiate for best rates, and ensure financial and business objectives are met. What role can brokerage play? As adoption grows, so does the need for consumption assistance. The upside is that technology can make the transition easier by implementing business rules, collecting enterprise data, managing access to services, and managing costs all accomplished transparently to users. Service brokerage can offer an organizational focal point to orchestrate enterprisewide service, negotiate for best rates, and ensure financial and business objectives are met. In addition, service brokering can offer the benefits of multiple, hybrid sources, such as: Defining mission-aligned rules of engagement through automated business rules and policies Providing timely linkage with financial systems Capturing, analyzing, and using business information to shape the market The CIO, CFO, and business unit leaders all have roles to play in achieving the business and mission results that can be delivered through effective brokering and strategic sourcing of services to the enterprise. Using data to leverage government buying power by anticipating and delivering demand volumes Avoiding vendor lock-in and encouraging interoperability Providing cost savings to the cloud consumer Enabling near real-time provisioning of cloud services to allow for automation and rapid elasticity Simply offering better pricing and transparency among multiple providers, however, may do little to deliver greater overall cost effectiveness. Cost and mission effectiveness are gained through the ability to source across traditional legacy environments and cloud-based sources. A cloud broker can facilitate and govern the real-time provisioning, back-office management, risk-profile management, standards enforcement, and cost considerations across a complex, hybrid environment. A service broker can facilitate the dynamic selection and management of technology services that best serve mission needs. The value of such a broker to the enterprise depends on its scope. Providing a central point of management for an enterprise set of systems, providers, and consumers can assert governance, ensure accountability, and deliver desired organizational results. The CIO, CFO, and business unit leaders all have roles to play in achieving the business and mission results that can be delivered through effective brokering and strategic sourcing of services. The integration and delivery of brokered services can be managed in-house or outsourced to a third-party provider. A key point is that governance must always be established and managed within your organization. 10
Figure 2. Creating value with a centrally managed cloud broker Notional maturity model The ultimate scope of broker services should mature to brokerage among multiple internal and external technology sources (hybrid) to cost-effectively enforce government standards, leverage government market influence, encourage innovation, and enable appropriate competition. An effective cloud broker approach requires central negotiation and management of results through SLAs and business rules and governance. The IT leadership is ultimately responsible for all aspects of how the enterprise IT system performs. It must hold the highest level of accountability to the mission for governance and policy direction-setting responsibility. The ultimate scope of broker services should mature to brokerage among multiple internal and external technology sources (hybrid) to cost-effectively enforce government standards, leverage government market influence, encourage innovation, and enable appropriate competition. 11
Conclusion Advances in technology have significantly facilitated business rules and transparency. But we should not be lulled into a false sense of ease regarding the level of change this represents and the active management required. For an internal IT organization, the move from direct provider to broker can be highly disruptive to staff and processes. It also fundamentally changes the relationship between your organization and IT. This change, however, if properly and aggressively managed, can provide government greater business agility along with valuable cost savings and efficiencies. Experience tells us these considerations and practices will go a long way toward creating concrete benefits while helping your organization avoid getting lost in the fog. About DXC DXC Technology (NYSE: DXC) is the world s leading independent, end-to-end IT services company, helping clients harness the power of innovation to thrive on change. Created by the merger of CSC and the Enterprise Services business of Hewlett Packard Enterprise, DXC Technology serves nearly 6,000 private and public sector clients across 70 countries. The company s technology independence, global talent and extensive partner alliance combine to deliver powerful next-generation IT services and solutions. DXC Technology is recognized among the best corporate citizens globally. For more information, visit www.dxc.technology. www.dxc.technology 2017 DXC Technology Company. All rights reserved. DXC_4AA4-6365ENW. March 2017