1006RA The Problem with Pilots in a Cloud-speed Era

What is Happening?  Saugatuck’s review of user enterprise pilot programs, trials, and proofs-of-concept in such emergent, leading-edge IT as Cloud IT, mobility, social business IT, and big data/analytics indicates that too many enterprises are moving forward with inadequate evaluation and assessment. In sum, enterprise leaders are signing off on trials and proofs-of-concept without having realistic ideas and insights into how and where these investments will affect IT and business operations and costs within and beyond the scope of the initial programs.

Our direct work with even the most forward-thinking enterprises supports this; we see too few enterprise IT and business leaders acquiring and deploying emergent, disruptive IT based on realistic expectations and quantified/qualified assessment and evaluation of their impact.

Such actions result in the following negative effects:

• Lack of adequate data to evaluate the operational and financial impact of these initiatives and develop realistic use cases;
• Lack of context for developing realistic analysis of the initiatives’ cost/benefit and risk/reward;
• Inadequate investment in associated and necessary IT and operations management, resulting in inadequate ROI, and unnecessarily high TCO; and
• Loss of jobs for those responsible for the impacts and effects of these initiatives – not necessarily the same as those who were responsible for the initiatives themselves.

Why is it Happening?  The foundational cause for such problems lies in the differences between traditional IT and Cloud-based IT and related services.  Historically, IT pilot programs and proofs-of-concept required business and use cases that included assessment and evaluation of costs, operational and organizational impacts, and other controlling factors. Such projects tended to be closely monitored and mined for data that would be used to prove or disprove the business and use cases and spur or stop advancement of the project or program..

And because the funds for such projects and programs came via centralized IT and/or business sources, they could be bounded and relatively easily controlled, meaning that likely effects on the enterprise could be gauged or estimated in a limited environment.  

The ubiquity and affordability of today’s leading-edge IT – Cloud, Mobile, Social, and Big Data Analytics – removes many if not most of these historical controlling factors.

The relative affordability, speed, and boundary-free nature of most Cloud initiatives mean that pilots, proofs of concept, and trials tend to be initiated, funded, and executed, without centralized control and too often without any sort of formalized guidance or assessment. Because of the ease of acquisition and distribution, they also too often become integrated into the enterprise at large, without adequate, realistic evaluation or other formal governance.

“Cloud speed” also plays an important role. Not since the heyday of the dot-com era have we seen such rushes to embrace and deploy technologies and services without adequate assessment. Floods of offerings in Cloud, mobility, social IT and big data/analytics have combined with unmitigated hype, initially-affordable offerings, and accelerated development cycles to produce change and opportunity at unprecedented speed, resulting in mass confusion among IT and business leaders and users along with a high willingness to try just about anything.

To be fair, the effects of Cloud, mobility, social IT and big data/analytics are only now being experienced by relatively few enterprises, and few IT and business leaders are experienced enough to know what to do, what to look for, and how to manage such situations. As we have often noted to our research clients, the core nature of Cloud-based IT and business services enables and encourages non-traditional approaches that require new ways of managing IT and business (706SSR, Lead, Follow, and Get Out of the Way: A Working Model for Cloud IT through 2014, 25Feb2010). 

To counter such problems, Saugatuck suggests a simple, two-step approach as follows:

1. 1.Take a step back. Speed for the sake of speed has become a de facto influence in Cloud pilot projects and proofs ofCloud-based initiatives will still deliver relatively quick response and value, and probably more than expected, when adequate time is used and artificial deadlines based on exaggerated Cloud-speed expectations are minimized.
2. 2.Evaluate and assess likely impacts. We recommend beginning by looking at the enterprise business and IT impacts of leading-edge IT in terms of how they improve (or enable improvements in) Effectiveness, Efficiency, and Opportunity. Our working model framework can be seen in Figure 1. We’re positioning this as a building block, a sort of “Project Management 101” device that helps to put the first pieces of realism back into these types of initiatives.Figure 1 presents the framework as a matrix that can be adapted to specific enterprise situations.

The below is presented only as a framework; future Strategic Perspectives will guide Saugatuck CRS clients into and through its workings, and clients with inquiry privileges will be able to work one-on-one with our senior staff to refine the model to their own situations. 

Figure 1: Saugatuck Leading-Edge IT Assessment Matrix

Source: Saugatuck Technology Inc.

Market Impact  In summary, too many enterprises are moving forward with pilots, trials, and proofs-of-concept of leading-edge IT without adequate insight as to how those projects will. . . .CLICK HERE TO READ THE FULL RESEARCH ALERT