Each month, Cross Words invites a business brain or digital doyen to step onto the Smarter Business Ideas soapbox and share the big hot button topic or issue that has them all fired up.
Today, he is a senior consultant at Offis, the Sydney-based cloud management consultancy and partner – along with Telstra – of RightScale, the global leader in
multi-cloud management services.
Cross Words: Welcome David. Could you please step onto our no-expense-spared virtual soapbox and tell us about your hot button topic?
David Cleary: [Businesses should] focus on services and their customers, both internal and external, rather than focusing on products and the way in which they’re delivered.
CW: So, are businesses too focused on the nuts and bolts of the infrastructure and technology behind the product, rather than the customer experience of using it?
DC: Yes. All of the infrastructure that chief information officers (CIOs) previously focused on – networks, storage, all of that sort of thing – are fast becoming commodity items. [Products are conveniently and widely available with little distinctive difference between the various brands]
Back in the mid 1990s, brand name PCs were really expensive but people still bought them. Cheaper brands came in and, all of a sudden, the PC became a commodity item. Then, service became a commodity item and now storage has become a commodity item.
What this means is that [businesses] should no longer be focusing on what brands they’re buying and where they’re putting this [hardware], they should be focusing on the services they have to deliver to their customers.
CW: Are businesses placing unnecessary restrictions on themselves by planning strategies and services that are dependent on the hardware and assets they have available, instead of using the cloud to deliver the ideal service customers want?
DC: Exactly. [Businesses] should be focusing on the actual delivery of the end product to the customer. How that is supported should be pretty much irrelevant.
Be it an internal IT department or an outsourced IT [service], those people take the business problems and requirements and translate them into a solution that best fits those requirements. That might be a deployment in AWS [Amazon Web Services: the largest and most popular public cloud service]. It might be a deployment in Azure [Microsoft’s public cloud service]. It could also be a new set of physical infrastructure. It shouldn’t matter what that is. What should matter is
that they are getting the best possible answer to their business problems and their business requirements.
CW: Public cloud services such as AWS and Azure seem to have given small businesses and start-ups the ability to do what previously would have required the hard-won skills and experience of a CIO in a larger enterprise. Does the cloud mean anyone can become his or her own CIO?
DC: Absolutely. We’re seeing almost a CIO-as-a-service [model], whereby smaller organisations can contract people like myself to determine the strategy for them and help them create their vision.
Everything’s open to them. They have all the advantages. They don’t have to familiarise themselves with five different brands of server to work out which one’s going to be best for them. They don’t have to look at all these different applications and see which ones work best on which platform. They [use a] Software as a Service (SaaS) platform.
Somebody wanting to set up some accounting software, for example, doesn’t have to go out and purchase MYOB or whatever … because there’s now MYOB online and there’s Xero online. There’s even a SAP small business one. So, they have all these options open to them. And the set-up is [as easy as], "Here’s what I’m looking for. Here are my credit card details. Go and set it up for me".
CW: How are established small businesses handling the transition from legacy systems and infrastructure to customer-focused service delivery?
DC: We’re currently working with a few customers saying, "We can’t afford, or we don’t want to, sink all this money into what we’ve been doing traditionally because that’s a huge overhead. We’re looking at ways of reducing that cost. How are we going to do it?"
We’ve been able to work with them to say, "Right, your best solution is this Software as a Service platform from Microsoft or this platform from AWS," or whatever it happens to be.
CW: No-one wants to find out that the way they’ve always done things might now be wrong. Are businesses fearful that redefining how the business works might risk upsetting the apple cart?
DC: It’s not that what they were doing was wrong. I think that’s an important point. What they were doing was right at the time. But the times have shifted along quite rapidly. There are all of these new options that didn’t exist five or 10 years ago.
What that means for [small business] is that where they had these complex environments they had to maintain, they don’t need to do that anymore. That complexity becomes somebody else’s problem. They go to AWS, they go to a consultancy, or they go to an outsourcer to do that. The reality is, when it comes to outsourcing to another person, it’s not as complex as it was.
CW: Where do you think we’ll be in five years? Will businesses still be debating whether to let go of their physical servers and other assets or will the competitiveness of service-focused companies drive them to extinction?
DC: I think the latter, very much so in five years’ time, once people start getting out of that asset-based mindset.
Once some larger companies start moving that way – and we’re certainly seeing companies like Coles and Australia Post doing that sort of thing – some of the smaller companies will then start looking and saying that’s exactly what they need to do or they’re going to be left behind.
CW: What would be your single parting piece of advice?
DC: Focus on your customers, both internally and externally. Let somebody else worry about the rest.
Disclaimer: This article does not necessarily reflect the views of Telstra or its staff.