Moving to the cloud corporation: New job profiles for the innovative organisation
Private and public sector organisations are transforming the ways they procure and manage their IT function through the adoption of cloud computing and, as a result, are changing the job profiles of the IT workers of the future.
Cloud computing is best understood as a service–based perspective on the provision of computing that exploits technical innovations such as virtualisation and high–performance networks. From systems like Dropbox and Google Apps, to software services like Salesforce.com, cloud computing is transforming the way the IT function is accomplished. All too often, the current IT function is seen as the “business prevention unit” of an organisation. Nevertheless, most enterprises still look to technology including cloud computing as a means of driving business innovation to achieve sustainable competitive advantage.
IT management changes with the adoption of cloud computing. In many organisations, IT budgets are revised yearly and the high fixed costs are charged to different business units based on metrics such as the number of servers used. One of the biggest benefits of cloud computing is the adoption of a “pay–per–use” charging model. Leveraging this model demands the implementation of service–based metering and billing. This in turn requires IT finance personnel to be able to price services correctly and charge them to the business in an accurate and timely manner. Acquiring these skills can be a significant issue in IT management, since a service director and integrator needs a different skill set from a traditional service provider. To fulfill the role of service director and integrator effectively, IT organisations will need to focus less than before on task–based technical abilities. Instead, IT organisations will require resources competent in areas like business process integration, vendor management and communication (see Figure 1). This logic applies equally to the modern IT-enabled HR function. It too will need to attract and retain distinctive talent and skills to provide these new capabilities.
Figure 1: Cloud skills for the emerging back office function taken from Willcocks et al. (2014)
Some of the new skills required for the cloud corporation relate to the (technological) integration of cloud services to existing (internal) systems, both strategically (business systems thinkers) and operationally (architecture planners and designers, technical fixers). Figure 1 highlights the different mix of skills that organisations using cloud computing will be expecting to hire for their various functions such as IT, procurement, accounting and finance, and HR in the coming years.
The obvious example to take here is the IT function, though Figure 1 can be applied as a model for all back office functions, including HR. An example of an important job profile that is currently under-represented in traditional IT roles relates to the contractual aspects of cloud computing. Cloud computing typically operates on a pay–as–you–go model with short contract cycles (weeks or months rather than years) and as a result, issues like “service level agreements” and “contract exit provisions” become increasingly strategic issues for organisations using cloud services. Unfortunately, too few IT departments currently have skilled staff able to manage these issues effectively and this missing capability limits the effectiveness of cloud take up.
Many of these contract related issues also arise in the context of IT outsourcing and organisations that have successful outsourcing operations have hired and retained staff with appropriate contracting capabilities. Indeed, there is considerable evidence that organisations with highly developed, often collaborative, contracting capabilities perform better than those that pay less attention to the contractual aspects of their outsourcing relationships.
The required capabilities relating to contracting in outsourcing are similar in the context of cloud computing but also have some important differences. In particular, our research has highlighted the need for four job profiles that currently are rarely found in organisations looking to move to the cloud: the informed buyer, the contract facilitator, the contract monitor and the vendor developer.
- The informed buyer must regularly analyse and benchmark the external market for IT and cloud services. They must lead the tendering, contracting and service management processes. Informed buying also requires an intimate knowledge of suppliers, their strategies, financial strength and their capabilities and inabilities in different sectors, services and regions.
- The contract facilitator is crucial for lubricating the relationship between supplier(s) and the business users, not least by ensuring that problems and conflicts are seen to be resolved fairly and promptly. As such it is an action–orientated capability. When outsourcing the need for this role is rarely spotted straight away. Instead, the capability tends to grow in response to on–going issues for which it emerges as an adequate response.
- Contract monitoring involves making inputs into the development and maintenance of a robust contract as the basis for a sound governance framework. The role also involves holding suppliers to account against both existing service contracts and the developing performance standards of the market. Not all potential issues and expectations can be identified at the onset of a relationship and the contract will be subject to differing interpretations as issues arise. Moreover at present there is no standard contract, only standard headings, as each cloud arrangement has its own set of issues and dynamics coupled with the relative immaturity of contracting in the current cloud environment although bodies like the EU are seeking to develop ‘safe and fair’ contract terms.
- The vendor developer is concerned with leveraging the long term potential for suppliers to add value, creating the ‘win–win’ situations in which the supplier increases its revenues by providing services that increase business benefits. Not properly managing the vendor can lead to sub–optimal outcomes, such as loss of technology and process knowledge, lack of innovation, over–spending and poor quality.
For the HR function, all these roles represent key retained capabilities. Although cloud computing might be understood as having a strong technological component, the effective use of cloud computing by enterprises will require the recruitment and retention of staff with a mix of technical, interpersonal and business skills. One thing is for sure. These skills sets are not to be found in the traditional IT function. Organisations are going to have to work hard to educate their people, bring in new staff, but also identify existing staff who potentially match the profiles, if the potential of cloud computing and using external service providers is going to be realised over the next five years.