The Business of IT

How am I doing? That depends who is asking

How good are you at your favorite activity? Wait—don’t answer yet, because you’re probably wrong. Your perception of how good you are is influenced by how good you actually are. This is explained by the Dunning-Kruger effect, which is cognitive psychology’s name for the disparity between self-perception and reality. Here is what it looks like:

The Dunning-Kruger Effect demonstrates that the less you know the more you think you know.
The Dunning-Kruger Effect demonstrates that the less you know the more you think you know.

Low performers think they are high performers. High performers think they are high performers. Only medium performers think they are worse than they actually are. Consequently, if I were to walk into a room of people and ask for volunteers to help me solve a problem in an esoteric field of study, such as partial differential equations, I would likely be better helped by asking a person who did not volunteer!

This quirky reality underscores the need for objective assessment, and it is true for individuals as well as organizations. To avoid the pitfall of the Dunning-Kruger effect in your assessments, seek help from an outsider who is, by definition, not self-assessing your software organization’s performance. Until recently there were no objective statistics available for software organization performance, but now the industry benchmarks and scientific evidence-based models are available—I know, I have been using them with clients. Companies ignore these objective data at their own peril.

Contact me for hep evaluating your organization’s performance.

The Business of IT

The ROI of cloud computing

I am often asked by CEOs and CIOs to explain the ROI of cloud computing. My answer goes something like this.

How well do you see? The main consideration in evaluating the ROI of cloud computing is your eyesight. What is the scope of your vision? What do you believe about the future? Ask yourself, as we create the ideal future for our customers, what kinds of changes will my organization need to accommodate? Think about how these changes will impact your use of computing – and indeed your entire operation. Consider the four major dimensions that change will include: technological, economic, organizational, and risk.

Cloud computing is a way of incorporating changes in technological, economic, organizational, and risk considerations into your use of computing. The value of cloud computing, when properly deployed, is in being able to support the changing technological, economic, organizational, and risk landscapes while keeping rock-steady focus on your business’s raison d’être: delivering great products and services to your customers. If you can see that future clearly, and appreciate the changes your organization will need to accommodate along the way, then you can make effective cost and value (ROI) decisions about cloud computing. You’ve got to see change in order to experience the sea change.

Do you need help painting your vision of the future and appreciating the changes necessary to get there? Contact me.

The Business of IT

The four pillars of cloud computing success

Succeeding with cloud computing requires incorporating your organization's unique economic, cultural, risk, and technological considerations.
Succeeding with cloud computing requires incorporating your organization’s unique economic, cultural, risk, and technological considerations.

Success with cloud computing means adopting more than just technology change. It requires addressing the elements that make your organization unique: how you work, the risks you’re prepared to take, and the market in which you sell. Even a tailor with all the right supplies – several yards of fabric, a sewing machine, and an iron – needs to craft a garment that looks good, is of high quality, and is done in an efficient manner. Here are the key ways to incorporate your organization’s economic, cultural, and risk factors into your adoption of cloud computing and accelerate your success.


The three crucial economic aspects to incorporate into your use of cloud computing are:

  1. Understand the business impact of the services that will run in the cloud. Only by understanding the business impact of each service will you be able to properly prioritize regular and emergency work on those services.
  2. Increase capacity with demand. Demand will change over time, so success with cloud requires that your services adjust their use of compute power accordingly. Measuring the demand is the first step toward this goal.
  3. Decrease capacity as demand wanes. Don’t keep around inventory that just sits gathering dust – get it off your balance sheet. Note that decreasing capacity with demand can seldom be done effectively with a self-hosted or private cloud.


The following three aspects of your organization’s culture must be incorporated into your adoption of cloud computing:

  1. Act strategically. No business goal ever achieved itself – it requires concerted effort by people collaborating toward a shared goal. Give people the context they need to understand the shared goal.
  2. Support change. Cloud computing enables organizations to adjust their use of computing as requirements change. Encourage your organization to adjust and adapt to change.
  3. Make it easy to access all your organization’s data. When change comes along, the data will need to be juggled in new ways.


Three critical aspects of incorporating your organization’s changing risk profile into cloud computing adoption:

  1. Hire and partner with only the most trustworthy. As risks materialize, your business will rely on these trusted people to maintain normal operation.
  2. Regularly assess all assets and access points for risk. Look especially diligently into automating work processes so they utilize “blessed” configurations.
  3. Create a single source of truth for authentication and authorization. Whereas other data in your business need not be immediately consistent, authorization and authentication should be, in order to avoid the split-brain, he said she said phenomenon.


While we’re at it, here are the three most impotent technical aspects to get right in your cloud adoption efforts:

  1. Treat all processes as elements in a single value stream: service delivery. With all component activities in the delivery process focused on this result, collaboration and integration between disparate teams is vastly improved.
  2. Utilize small, standardized, compassable elements. Standardization and simplicity is the key to operating at scale.
  3. Build systems that expect failure and act reasonably despite it. When change comes and failure happens, your systems will be able to cope reasonably.

Succeeding at cloud computing means looking beyond the technology and incorporating your organization’s economic, cultural, and risk factors.

Contact us if you need help.

How I learned to stop worrying and love the cloud from Shlomo Swidler
The Business of IT

Not workloads – impact.

Before you ask yourself “what can and can’t I do in the cloud,” stop to consider the larger picture. How will your customers know that you have adopted cloud computing? What resulting radical improvement will delight your customers? These questions help you focus on the impact you want to achieve with your initiative. The answers help you understand the facets that you’ll need to address – technology, skills, procedures, and behaviors – in order to achieve and measure that impact. Then you’ll be ready to talk nuts and bolts about vendors, tools, and cloud-appropriate workloads.

For example, my client, CIO of a media company, was enthusiastic about using cloud computing and wanted to get right down to details: what should he move into the cloud, how long would it take, who could help, and so on. After walking through the questions mentioned above we made several important discoveries:

  • External customers wanted a streamlined billing process.
  • Internal customers wanted to eliminate boring, error-prone manual work.
  • Neither group of customers cared what technology was used.
  • He didn’t know the effects of the current billing process on satisfaction, retention, and revenue.

It was clear that the project was more properly regarded as a customer retention initiative, not as a technology adoption effort. As a result, the CIO immediately knew what he had to do: measure the effects of billing on customer satisfaction, retention, and revenue; and he needed to recast the cloud computing adoption program as a program to substantially improve customer satisfaction. These guidelines provided the business context within which his staff was able to make intelligent, focused decisions about implementation details.

Next time you find yourself asking about what workloads to move to the cloud, think about the only thing that matters: what will delight customers?

The Business of IT

Cloud adoption flu season

This coming year tens of thousands of medium and large companies will conduct initiatives to adopt cloud computing – and most of these will fail. The cause of these project failures will be unrealistic expectations. The inoculation is a hefty dose of reality. Get your vaccine here.

No one questions the fact that IT is undergoing a revolution and cloud is at its center. You need only glance at the article titles in any business and tech publication to see this. Cloud is a critical element in achieving unprecedented agility and supply-chain optimization.

However, will cloud alone get you these purported benefits? No, it won’t. Nor will any single vendor’s solution. Nor will the time and resource investment required to get there be small, as I’ve discussed previously. Shame on the vendors, analysts, and pundits who claim so or set this expectation in meetings with their prospective customers.

Reality. The flu vaccine for cloud-high cloud project expectations.

Let’s set some proper expectations. Real change requires serious investment, time, resources, and oversight. The larger the ship, the more difficult it is to adjust course. Here’s what to expect a successful cloud adoption program to look like:

  • It will be a multi-year effort.
  • It will require investing a significant percentage of your current IT budget just to properly plan. And significantly more than that to execute.
  • It will require adopting new technology and changing the way your people work.
  • It will demand the participation of your customers – internal and external.
  • It will demand executive-level leadership, involvement, support, and prioritization.
  • It will fail if you think otherwise.

The cloud adoption flu season is upon us. The best way to protect yourself is to understand the reality of cloud adoption initiatives – that’s the vaccine.

The Business of IT

You don’t need a cloud strategy

It may sound strange, but your organization does not need a strategy for cloud computing. You no more need a strategy for cloud computing than you need a strategy for toothbrushing: as long as your teeth are healthy, who cares if you brush from top to bottom or from left to right, or what brand of toothpaste you use!

So it is with cloud computing: your organization has a business strategy (if not, give me a call). Does that strategy include developing enhanced agility, improved time to market, and increased innovation? If so, then take a deeper look at cloud computing, and build a concrete plan to use cloud computing to fulfill your business strategy.

You don’t need a cloud strategy. You need a business strategy, and a concrete plan to achieve it. If cloud supports that business strategy – then go for it.

The Business of IT

Wanted: Change. Generous Reward.

Simon Wardley recently satirized the typical response of corporate IT departments to technology change as follows:  Ignore, ignore, ignore, “no”, “no”, “I said ‘no,’ dammit”, “Oh no”, “Oh, f**k”. It reminds me of the classic Toys-R-Us TV commercial from the 1980s featuring children singing about not wanting to grow up. Resistance to change is not unique to children or to IT departments – it is a feature of every organization. How can you help your organization avoid being stuck, and instead drive change before it’s unnecessarily painful to “grow up”? The key is urgency. Growing up is a good metaphor for organizational change: both are normal, both feature resistance, and in both the stakes increase over time. Immature people, like immature organizations, do not reliably achieve their goals. And the longer that inertia dominates, the further behind they remain. Failure to adapt – getting stuck – can be fatal, as it was for the Eastman Kodak Company. In personal as in organizational growth the pressure to change – the urgency – is fostered by discomfort. To increase urgency you need to cause people to feel discomfort with the current state of affairs. John P. Kotter’s seminal work Leading Change offers several kinds of tactics to increase urgency:

  • Show that the present isn’t working: Allow a crisis to happen, publicize poor results, force encounters with unhappy customers, publicize lost opportunities.
  • Change the metrics: Create performance targets that are high enough and/or broad enough they can’t be reached with business-as-usual.

These tactics to increase urgency all work by fostering discomfort with the present. A client found himself spending inordinate lengths of time evaluating opportunities and procrastinating a decision on which ones to pursue. When I showed him how his lengthy decision process was limiting the number and quality of opportunities that presented themselves, he realized that he could grow his business significantly by streamlining this process. He saw the urgency of addressing the issue, we worked together to fix it, and his business has grown threefold since.

Creating a sense of urgency is the first step in a successful change program. Kotter describes further steps to a successful change effort, but urgency underlies them all.

In short:

Ouch! Now, change.

The Business of IT

How I helped by refusing work

A very good repeat client introduced me to his own customer, CEO of a fast-growing company, with the words “you should talk to Shlomo – he does wonders.” When I get an enthusiastic referral like that – which happens often, as most of my business is via referrals – I move fast to see how I can help.

The CEO and I met and began to explore important areas of his business that I typically help with: usage of cloud resources, leveraging the data collected, streamlining processes and team dynamics. The discussion was progressing quickly – in fact, too easily, too rapidly – toward defining a potential project. I sensed something was wrong. He couldn’t describe why he wanted these things to get done; all he could say was, “this is the next issue we need to tackle.”

“Tell me what your rate is for doing these things and we’ll get moving immediately,” he finally said. In the past I would have jumped at the offer – what could be easier than business that practically lands itself in my lap after only thirty minutes of discussion? But, thankfully, I’m constantly learning from the past. My motto is “make new mistakes,” and I had learned the perils of undertaking work without comprehending the motivation behind it – without understanding the “why.”

“Joe,” I said, “I’m not going to work with you on any of that.” He stared at me in wide-eyed shock for a moment. Had I not known he was an elite long-distance runner, in top cardiovascular shape, I would have feared the worst. I continued: “You’re too close to the business to see what’s really going on and what areas need the most urgent attention. That’s why it’s hard for you to explain why these items are important. With your permission, I’ll lead you through a brief series of questions to help us both ascertain the areas of true priority for your organization. Then we’ll be able to jointly determine the best way to work together to achieve those priorities.”

And so we did. We began with these three questions:

  • How much of your own time is spent resolving day-to-day issues versus establishing and communicating direction and priorities?
  • If your business volume were to triple tomorrow, what about your organization would break?
  • If you were to ask your engineers, your support staff, your accounting staff, etc., what their biggest headache was, what would they answer, and would you be surprised by their answers – and why?

These questions helped Joe step out of his day-to-day role and think about the business from the outside, as a doctor would observe a patient. From this vantage point we observed the symptoms that the patient exhibited – the areas in which the organization was not healthy. There were many. We both agreed on the diagnosis: the underlying problem was the organization’s inability to take on new customers because its accounting functions could not handle the additional work. Then we discussed the course of treatment. Joe suggested introducing an automated billing system.

An automated billing system would certainly have alleviated the problems, but I sensed that there was still something more fundamental to explore. I asked Joe, “how can your billing system be directly beneficial to your customers? Why should they care?” Joe thought for a moment, and then he said excitedly, “you’re so right! We need to integrate billing into the customer interface!” Joe’s product is all about simplifying the use of multiple aggregated services, and therefore simplified billing is part of his product’s key value proposition. He realized that he was missing a core element of his product, one that would also enable the company to grow profitably.

We had come a long way from “help me implement these next few things we need done,” and were now discussing how to help his company achieve its strategic objective: to grow profitably. The tasks we had been discussing originally would not have contributed to this goal significantly, and Joe acknowledged that those immediate issues of reducing cloud usage costs and leveraging collected data were illusorily urgent. And he thanked me for pushing back on his request to tackle those issues.

Joe and I are currently discussing various options for helping him build his critical billing capability. He would not have realized the real priority, the true “why” he needs to address, if I had said “yes” to his initial proposals. And my involvement in helping him achieve strategic objectives is much more valuable, and much easier to demonstrate, than extensive work on non-strategic tasks. I prefer the former, and so does Joe, and all my other clients as well.