Last week I participated in the MIT Sloan CIO Symposium. The CIO Symposium is an annual one-day conference on the MIT campus, now in its sixth year, “where CIOs and other senior business executives from around the world gather to explore how leading-edge academic research and innovative technologies can help address the challenges faced in today’s changing economy.” The theme of this year's Symposium was Sustaining CIO Leadership in a Changing Economy.
The MIT Symposium consisted mostly of interactive panel discussions, including broad audience participation. Two key themes kept recurring throughout all the panels and discussions. One was cloud computing, the other was the evolving role of the CIO.
As is typically the case, panelists used somewhat different definitions of cloud computing, as they each talked about clouds from his/her own point of view. This is what you would expect if you agree with the view that cloud computing refers not to any one product or service, but to an emerging model of computing beyond the centralized and client-server models of past decades.
Pretty much everyone agreed that cloud computing should not be used for mission critical applications, or applications involving sensitive information. Based on discussions across several panels, I could discern a common point of view emerging about the applicability of cloud computing.
A lot of the benefits of cloud computing, such as virtualization, shared infrastructures, highly disciplined systems management, flexible deployment and scalability are of value to just about all data centers and service providers, whether you run them as a private clouds providing services to only members of the company, or as public clouds open to everyone. There is also general agreement that you should make cloud deployment decisions on a case-by-case basis, especially decisions as to which applications should be run on private versus public clouds. Public cloud deployments make the most sense for highly commoditized, standardized, mass customized applications.
There was also a broad consensus that infrastructure savings and flexible scaling where key adoption drivers for cloud computing. One panelist remarked that “The benefits of cloud computing start and end with the dollars you can save. But it can also help getting your best people away from working in areas that can be outsourced to the cloud. This way you can allow your best people to focus on an area that drives differentiation for your company.”
Another observed that "We're seeing more and more user cases where they’re starting new projects and they find a lack of predictability of how much capacity they’re going to need. That gets expensive very quickly… the advantage of cloud computing is that you can turn over the keys and forget all the issues with scaling."
In the end, the best way for companies to decide how and where to use cloud computing is to experiment and examine how well it fits in with their business models and overall strategy.
I moderated a panel on The Virtual Organization. We all agreed that the classic hierarchic organizations of the industrial age do not scale well for the fast changing, integrated global environment in which business is now conducted. You need the kind of distributed, collaborative approach that virtual organizations are all about.
Good virtual organizations are designed to help bring together different groups from within and outside the organization, so they can better work and share ideas with each other. The rise of virtual organizations in the last decade has been enabled by advanced Internet technologies, multi-channel communications capabilities and social networking, Web 2.0 oriented platforms.
Our panel had a number of very interesting discussions. It is quite likely that the net generation, that is, those that are growing up digital might not be able to understand why we are having a panel on virtual organizations at all. Aren’t all organizations part physical and part digital? We wondered if young people would view our panel as a way to bring to the attention of an older generation of business executives and academics what the younger generation is already doing.
Teams operate most effectively with the right balance of personal and virtual contact, but we don’t know yet what that right balance might be. We are beginning to learn what works best for different kinds of projects and organizations. The more structured and concrete a problem, the easier it is to partition the work among physically distributed groups, who will interact mostly through virtual channels. However, when addressing ill defined, unstructured problems, groups whose members know each other personally, will likely be able to better collaborate and come up with innovative, new ideas.
Advanced technologies and innovations, such as those emerging around virtual worlds, can significantly improve the effectiveness of distributed organizations. When distant team members share a common virtual space, such as a virtual office or lab, they can not only better communicate but also become more aware of each other’s presence even when not communicating. Such distance awareness and presence might help create more cohesive and focused virtual work environments. There is clearly a lot to learn about virtual organizations.
What about the changing role of the CIO? If large parts of IT are becoming commoditized and available from cloud service providers, do you still need a CIO to manage an organization’s IT infrastructure? How will the role of the CIO evolve in the future?
The consensus at the MIT CIO Symposium was that the role of the CIO will change significantly over the coming decades. The very name CIO might even change to better reflect the evolving responsibilities of the function.
CIOs will continue to have the lead responsibility for acquiring and managing their organization’s IT infrastructure, but that feels like the most straightforward part of their jobs. As IT is now permeating every nook and cranny in business, the economy and society in general, you need executives with the technology, systems and engineering knowledge of CIOs to help architect and manage the major IT-based functions in the organization, not just the classic IT infrastructure.
IT is critical to business processes, so we likely need something like a Chief Process Optimization and Transformation Officer. Technology is indispensable to the very organization of the company, in particular to the way employees communicate and work with each other, as well as with suppliers, partners and clients around the globe. Do we need a Chief Organization Officer?
Even the classic IT infrastructure role of CIOs is not what it used to be. Someone has to decide which services and processes to run inside the enterprise and which to procure from service providers. Regardless of whether the service is done internally or acquired externally, the whole business has to be integrated and managed. As enterprises have been learning when something goes wrong, managing a globally integrated enterprise where components come from suppliers all over the world is very hard work. Specific tasks can be distributed and outsourced, but overall responsibility and accountability for the final offerings to clients remain the responsibility of the company's senior management, including the CIO.
Perhaps the CIO position will evolve to a kind of super-CIO advising all parts of the business with IT-based decisions, as well as managing the overall IT infrastructure that supports the company’s processes, organization and business strategy. Regardless of what we call this emerging position, it will require executives with considerable technical, engineering and project management skills, who are able to oversee such complex IT-based systems and organizations.
In other words, it will require those talents that today we associated with being a good Chief Information Officer. The name might change, but the position is alive and well and more important than ever.