Radical Shift 3: Externalised Service Delivery
The hyped emergence (and apparent rapid adoption) of Cloud Computing, Software as a Service (SaaS) and other 4-letter acronyms will drive further outsourcing of IT services. This is supported by the increased availability of industry-standard business processes that will allow better governance of outsourced services. The adoption of the Cloud will lead to externalisation of assets with more flexibility and unit based costing.
The management of outsourced providers becomes a more important competency of the IT organisation. Again, this may lead to integration with other functions that are focused on partner management (e.g. Supply).
The adoption of Cloud Computing in the Natural Resources industry is still in its early stages. Obvious concerns around security and provision of services to remote locations have prevented widespread adoption. This is however expected to change over the next few years. The challenge in this industry will more around the remoteness of operations, available bandwidth and continuity of service. There is a need for high resilience, but with current single points of failure in the network provision (either in the exchange, the line or core switches) this is difficult and expensive to offer. Specifically in Australia where different telco providers share infrastructure in remote areas, supplier differentiation for secondary infrastructure doesn’t necessarily resolve this.
As a result, there will be a mix of Cloud Computing and owned infrastructure which will require different skills for the IT organisation.
Radical Shift 4: Greater Business Partner Responsibility
The increasing importance of information (technology) for operations and high level of (private or individual) experience with technology lead to the wish for greater ownership of IT by the business. The development of new technology for virtualisation of desktops and applications offers users more flexibility and leads to increased demand. Easier procurement of IT services through Infrastructure as a Service (IaaS) and SaaS provides a way around the perceived bureaucracy and slowness of the IT function. All this gives business leaders more independence of IT as they can access benefits of large scale of infrastructure (via Cloud) and access to expertise (tech savvy staff) themselves.
The traditional IT organisation sees this as a risk as it feels it is loosing control. The paper rightly points out that greater business responsibility should entail more business led requirements identification, more business ownership of business process design and some flexibility for business to procure directly. This does not and should not entail a free for all with a return to proliferation and decentralisation.
The obvious challenge for the business as a whole is to control and manage this in a disciplined manner. Within Asset-Intensive industries, there is already the challenge to manage the dividing line between IT and OT (Operational Technology) and this may only add to the complexity. Close engagement and an open mind for adaptation and collaboration from both sides is critical in ensuring that this is managed well.
Frits de Vroet
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