by Anthony Orr
Date Published - Last Updated February 25, 2016


All businesses have the same expectations: run more effectively, grow, and innovate. To meet these expectations, organizations have to regularly adjust their strategic focus based on market demands, emerging technologies, and organizational capabilities. In 2013, Gartner identified the top five CIO strategic focuses as delivering business solutions, improving management and governance, improving IT organization and workforce, reducing the cost of IT, and consolidating IT operations and resources. In the ITIL 2011 Service Strategy publication, organizational objectives are segmented into categories: industry, strategic, financial, and operational. One relatively new technology that has the potential to help businesses achieve all of these objectives—that is, increasing an organization’s market share, improving customer satisfaction, improving ROI/ROA, and increasing productivity—is cloud computing.

The rising popularity of cloud computing has forced some serious conversations between IT and the business. How can cloud technologies help the business meet its expectations and achieve its objectives? IT has always been challenged with supporting new business solutions—new capabilities and offerings—while maintaining the continuity and functionality of current deliverables. But businesses always want new capabilities, new offerings, and new functionalities (promising greater agility and better performance, of course) at the lowest possible cost. Cloud computing promises to meet many of these expectations, and businesses expect IT to take action.

IT is itself a strategic asset, one for which change is a matter of course. IT is constantly changing to keep up with the business’s needs and demands, and capabilities that aren’t conducive to rapid change are risks. This is why IT relies on industry-standard methodologies and best practices: to promote and facilitate agility. The more agile IT can be, the better it will be at adapting to the business’s changing needs. Enabling best practices is one of the chief benefits of cloud computing, especially for out-of-the-box cloud solutions that are best-practice certified.

Cloud computing gives IT the ability to manage traditional IT in an object-oriented fashion. Whether each object is managed internally or brokered between internal and external service providers, being able to manage and govern individual objects (such as applications) improves the performance of IT service delivery and support. If an IT organization has found that there’s a gap in its ability to improve performance in a particular management area, it should consider improving that capability through cloud computing.

Modeling the Cloud

Cloud computing has three core models of service delivery: SaaS (Software as a Service), PaaS (Platform as a Service), and IaaS (Infrastructure as a Service). In a traditional IT environment, these can be viewed as an application utilized by the organization’s customers or end users (SaaS); the platform that supports the application (PaaS), managed by the developers; and the infrastructure (IaaS), managed by platform administrators. These components can be brokered or implemented/deployed internally (private cloud), externally (public cloud), internal and external (hybrid cloud), or by a community of like service providers, such as multiple government entities (community cloud). In addition to the three core models, other services, such as SMaaS (Service Management as a Service), can be delivered as cloud solutions (XaaS).

The National Institute of Standards and Technology’s definition of cloud computing states that clouds have five essential characteristics: on-demand self-service, broad network access, rapid elasticity, measureable service, and resource pooling. These characteristics, and other qualities and capabilities, help organizations achieve value by addressing specific use cases, like variable workloads, which can help with demand management, capital and operational cost management, and overall customer satisfaction. They also improve the agility of software development and testing and ensure that disaster recovery, training, and workforce development are more efficiently managed and can be done with more agility. These are just a few examples of areas where organizations are realizing value with cloud computing.

The Cloud and the Service Management Value Chain

Although the cloud can help businesses achieve their strategic objectives, cloud computing needs to be a part of the way the organization practices service management. The combined power of cloud technologies and ITSM best practices, like ITIL, can help organizations achieve their business outcomes and gain a competitive advantage over organizations that aren’t in the cloud. To leverage this power—that is, to manage and deliver services effectively, efficiently, and economically—organizations must have a complete understanding of each service’s value chain (or value network). The value chain is composed of people/partners, process, and technology working in unison as a high-performing team. Cloud computing is an enabling technology, and as such it improves the performance of processes in the value chain and the performance of the value chain overall.

However, when using cloud solutions to improve specific links (i.e., components) in the value chain, care must be taken to understand the constraints on those services. Improving a particular component may not improve the overall service, especially if bottlenecks or kinks in other parts of the chain restrict the flow of the interactions between the organization’s functions and processes. Cloud computing has the ability to create value for the business, its customers, and its stakeholders, but this value can only be realized after the cloud solution has been implemented and is operational—that is, when business activities are actually being carried out by/through the cloud solution. Hopefully, these business activities are improving the overall economic value (TCO, ROI, etc.) of the service, helping the business run better, grow faster, and be more innovative.

Cloud First

Organizations that have successfully implemented cloud solutions may decide to change their overall strategy for managing services. Increased cost savings and improvements in customer satisfaction, customer service, and portfolio, financial, and demand management may prompt organizations to adopt “cloud first” strategies. To implement such a strategy, organizations can take either an evolutionary or a transformational approach. The evolutionary approach involves maturing the current IT environment (application, platform, infrastructure, etc.); the transformational approach involves overhauling the traditional IT environment and replacing it with a cloud solution (SaaS, PaaS, or IaaS). The evolutionary approach builds on the existing value chain and its supporting components, including processes, while the transformational approach completely changes the value chain. There are more challenges associated with the latter approach, especially when it comes to gaining support staff buy-in, but organizations that want to move quickly with their cloud adoptions usually opt for total transformation.

An ITIL-compliant cloud-based SaaS solution can be used to support all ITIL processes, from operational processes like incident management and request fulfillment to transitional processes like change and knowledge management. To avoid complications, these solutions must be properly integrated, as the manual integrations or customizations that can result from implementing multiple cloud solutions can have a negative impact on the performance of the service.

As an example, the cloud can help automate the request fulfillment process. A self-service portal can be used to manage requests and changes to the cloud environment. This portal can be provisioned (SaaS, PaaS, IaaS) automatically using established private, public, or hybrid cloud blueprints, and it can be governed, blueprinted, or architected based on the projected consumption of the service offering. Traditionally, these activities may have been the responsibility of multiple IT resources (functions, roles, people, infrastructures, etc.), requiring complex collaboration and coordination. Cloud technology, however, can automate provisioning across the full stack, increasing delivery performance and therefore increasing business performance.

When using and selecting cloud solutions, it’s important to avoid the following: 

  • Bad clouds that are only IT technologies and don’t meet the needs of the business 
  • “Rube Goldberg clouds” that are made up of a hodgepodge of components that require too much customization and don’t support the service value chain 
  • Scrawny clouds that don’t work on demand and can’t support the business’s workload demands 
  • Selfish clouds that support only their own infrastructure, not a heterogonous business environment

Cloud computing isn’t a panacea, but it can help businesses deliver on the promise of ITIL and other service management frameworks, including, but not limited to, reducing costs, increasing performance, and improving customer satisfaction. The key to success is making the cloud an enabler of ITSM, not its replacement. Just as the right technology can enable process efficiency, the right cloud technology can improve the overall practice of service management and give businesses a competitive advantage in the markets they serve. In becoming more agile and efficient, IT organizations can become true profit centers. Cloud computing can help businesses achieve this goal.


Anthony Orr is currently a director in the Office of the CTO at BMC Software. He is one of the authors of the ITIL 2011 publications and a senior examiner for APMG, responsible for the ITIL v3 certification exams. He has more than thirty years of IT experience, much of it focused on ITSM and ITOM.

Tag(s): cloud computing, business alignment


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