Many industries have gone through a transition from vertically organized manufacturer to supply chain oriented integrator. Automakers are an obvious example. Last century they owned manufacturing. They made everything from raw to finished goods, assembled the components and delivered vehicles to the showroom for sale. Today, the auto industry is made up of many specialized manufacturers and the automakers are final stage assemblers managing their complex supply chains.
In IT, we see the same transformation. The big IT vendors have shifted from manufacturing to assemblers. The leader in this change is Dell who disrupted the industry when they started as a supply chain master assembler and never became the manufacturer. Everyone soon followed for reasons of economy and agility.
Now this transformation from manufacturer to assembler has come to the data center. The genesis might be traced to the service oriented architecture movement ten years ago. The concept that monolithic applications could be decomposed into smaller, discrete services and re-assembled into more meaningful composite applications aligned to business processes was a move towards assembly and supply chain management.
Fast forward to SaaS, public cloud providers, DevOps, OpenStack, Docker and other emerging models. Driven by virtualization, abstraction, pooling and automation – the software defined data center – the CIO moves from being a manufacturer to a business service assembler and supply chain manager. Few CIOs today are seeking out positions as original manufacturer. Rather they are being swept up in this disruptive momentum and learning to adopt, or at least adapt to this new model. Assembling IT delivered, business services and assuring just in time inventories from the hybrid enterprise of on-prem and off-prem services.
So what does this new assembler / supply chain manager CIO look like? First, the economics shift dramatically from CapEx to OpEx. Budgets have to be reworked with the CFO from purchase, amortization, and maintenance cycles to one of subscription. This includes mastering how to negotiate and manage short and long-term contracts with suppliers.
Who are the suppliers? SaaS providers and public cloud providers are the most obvious. Almost every firm today has multiple applications being delivered in a SaaS / subscription model. With growing momentum, enterprises are going to public cloud providers when refresh cycles are due to get compute, storage and network services. Some services will be delivered by the data center. These services will be software defined and highly automated to meet dynamic demand requirements.
Governance takes on different meanings when managing this new supply chain. How to balance risk management, compliance and costs when you have many suppliers providing services that once were all in house have to be considered and resolved quickly or the next audit will be more painful than normal.
Lastly, what does this new model mean for people resources? Domain expertise gets pushed out to the suppliers. The days of segmented internal resources are replaced with experts in business process, design, architecture, and service level negotiation and management. The people do not disappear, their skills sets and roles change to meet this new supply chain / assembly model. The biggest shift is from focusing on system feature / function to mastering business process management and continual improvement. What we have been motivated by for years, ITSM (IT system management).
The world has changed, and the CIO must change as well. We understand this change brings a “think differently” approach rather than simply “think better”. CMI can help your different be better.
CMI – Your Adaptable Data Center Company