Pat Pilcher: Cloudy with a chance of IT

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Opinion

As The New Zealand Oracle User Group Conference kicks off, I got the chance to catch up with Doug Hughes, Oracle's Vice President Applications Development Asia Pacific to take a closer look at how recent developments such as the cloud, social networks and the rise of the tablet is working out for NZ business.

PP: You've talked about tension between the business and their IT department when it comes to implementing things like the cloud, what does that look like?

DH: Large transformation programs became the raison d'etre for the IT department over time. Some of these programs over promised and under delivered the outcome the business was looking for. The business became disenchanted. They knew that they might not see the changes that they needed, so they sought alternative solutions.

This is where cloud came in - they could get targeted solutions quickly to solve specific problems - and it was OPEX, not CAPEX, so didn't need IT sign off. But this was at the cost of complying with IT standards for the corporation, and resulted in siloed solutions - which is what drove companies to enterprise solutions in the first place.

PP: So what is driving this tension on each side?

DH: Businesses are buying specific solutions to solve their problems via a cloud model - a sales solution product here, a recruiting product there. These are very good at solving specific issues within that specific line of business: it solves that line of business's local pain.

But it is not integrated to other solutions; now it is on a proprietary standard; and it creates holes in the corporation's business analytics solutions by having data gaps. IT looks and shakes its head. Add to this, the key tenets for business that are around scalability, reliability, security, and for some key industry sectors, data sovereignty.

PP: Why should (or shouldn't ) a business look seriously at a cloud deployment?

DH: cloud brings some real tangible benefits - time to deploy, OPEX vs CAPEX, infrastructure costs, flexibility of licensing. But as always, this comes with concerns - flexibility of solution, integration to existing systems, customising and configuring for specific items.

We see many small to medium companies starting with cloud because of these low costs to start, but in rapidly growing areas like India, as the companies grow, they want to bring some systems in-house.

PP: What's the next step for cloud infrastructure for businesses?

DH: We are seeing some of these changes already appearing with Oracle's announcements around Platform as a Service and Infrastructure as a Service.

Think of some of those great ideas that spring up in corporations. Up until now, some of these would not have seen light of day because of the high costs to play. These sorts of initiatives can now be handled through cloud based solutions that are used for the period of the prototyping, and could then be used as a transition area - an easy and tangible need for lost cost computing.

PP: For Kiwi businesses who tend to be small by world standards, what would you describe as the pros and cons of going into the cloud vs not adopting a cloud approach?

DH: Cloud provides many positives - but you need to get into the mantra of standardisation. For a small to medium business, this should be music to their ears. They will get the advantages of world leading practices from some of the best corporations globally, distilled into a common process for their organisation, and deployed without the high initial set up costs.

They can rely on their IT cloud partner to do what they do best - maintain systems and operate for them, while not needing to invest in a large IT department to do this internally.

However, the cost of customising systems to meet specific needs and requirements is costly and you have to question the benefit. Changing Financial systems - for example. A Kiwi company's way of paying bills, receiving funds, and reporting to management and boards is unlikely to be demonstrably different to that of the largest corporations in the world - taking into account adjustments for specific NZ regulatory requirements.

The other thing to look at is the need for enterprise systems. Understand what can be run in isolation, but ensure those systems that need to be interoperable, are - regardless of deployment model. You don't want to buy a so called quick and cheap solution to find that you have now become an IT integrator as a result of this.

PP: The IT world is very much a moving feast, how is it changing for businesses?

DH: consider how you do business as a consumer, and relate that to how your organisation should present itself and respond.

We research online, we chat with friends directly and electronically, we go to websites for pricing and reviews - all before we have any actual interaction with the end organisation. Then when we call, we have the website open as we speak and quote information to the agent.

The sale has so many facets, and if all of your organisation's systems are not in sync - and those of your chosen distribution agents - because you will be judged right up to the item arriving at the person's doorstep - in one quick tweet your business could be irreparably harmed. This is why I emphasise the consideration around integrated systems. Customer Experience is primary for growth.

PP: Are NZ IT shops unique? If so, how?

DH: I see NZ as a country where economic highs and lows impact dramatically and budgets are tight. This generates a level of innovation not seen in other countries.

The ability to do more with less, and this is apparent in the IT sphere. It is not surprising then that many of the CIOs, and even the CEOs of larger corporations in Australia and other parts of the world that I have interacted with have a Kiwi accent.

This drive to squeeze the most out of the IT budget to deliver results is very highly regarded by any organisation.

PP: So Is the pace of change speeding up or slowing? Why

DH: I would have to say it is speeding up. Think of just 10 years ago, a world without social media that we now take as ubiquitous and are now part of our lexicon.

Many IT changes before were constrained to the enterprise. They impacted the public consumer, but not in such a pervasive way. What we have seen with smartphones, tablets, social media, is a change in consumer behaviour that is tangible and demonstrable at a global level. This is driving massive change and disruption.

PP: So what will you be talking about at NZOUG (NZ Oracle User Group) Event?

DH: I am very fortunate to be on a Cloud Panel at NZOUG and I am also presenting a session on Oracle's new Fusion Applications - cloud ready, open standard, enterprise wide, next generation applications and looking at the differing ways to adopt these successfully in this changing time for IT with reduced disruption to the business.