For the modern CIO, establishing trust with business partners in technology is a core responsibility.
At the dawn of the computer era, trust in technology was primarily about assurance that a particular piece of hardware would work for the purposes defined by the software development efforts of an enterprise IT department.
Then, trust expanded to encompass business applications, including large-scale ERP systems built on top of enterprise database. Here, CIOs had to trust that their technology providers would be available to support them in the event of a critical bug or to enable a workaround for an intractable problem.
Next, trust evolved into the realm of IT outsourcing, with offshore teams of IT specialists developing software on behalf of an organization. Going beyond the typical supplier-customer relationship as had been the case with software and hardware sales, CIOs entering into outsourcing relationships had to build trust that their development partners were working in their best interests.
From there, it was an easy conceptual leap to other forms of outsourcing, including various forms of business process outsourcing. To the extent that business process inputs and outcomes could be defined and quantified, firms outsourced various processes to specialist providers, using technology as an enabler. But up until this point, enterprise data typically remained within the realm of the enterprise, and partners specifically contracted to provide a carefully-thought-out menu of services.
Now, we’re entering the cloud era. With the utility vision of cloud computing, you’re able to source processing power, disk storage, network throughput, and other IT resources on an as-needed, pay-as-you-go basis. Software-as-a-service (SaaS) applications on the cloud remove the need for enterprise IT to manage either hardware or software in targeted areas.
Previous sourcing relationships required one-off contracts negotiated between partners to accomplish each specific goal. With cloud computing, you enter into a relationship that defines the delivery of a commodity product provided for all customers on similar terms. The cloud computing provider of a utility service doesn’t have to negotiate one-off contracts with each customer. Also, the provider has the scale advantage of a commodity service, further driving advantageous price levels. They can deliver faster, leading to time-to-market advantages to customers.
In this environment, the question of trust becomes more complicated.
If you are using cloud-based services for backup or disaster recovery, you need to ensure that the cloud provider is ready with a sufficient level of preparedness and resilience to meet your needs.
Considering the value of your data, you also require assurance that sufficient security measures are in place, that your security concerns are adequately addressed and that your auditors and compliance officers have enough information to sign off on the deal.
The providers may assure you that because of their size and specialization as technology providers, they are better equipped than you in terms of managing security. While that may be true, tread carefully before you bet the company on another firm’s assurances.
Think about the early days of purchasing hardware, licensing software, and IT/BPO outsourcing. At each stage, the hardware vendors, software providers and outsourcing firms made expansive promises regarding their capabilities. And yet there were hardware failures, software bugs, outsourcing project failures and so on. There’s no reason to expect that the transition to cloud won’t have its spectacular flameouts and failures, whether caused by unsustainable business models or operational failures.
Cloud computing makes it even more important that you consider the true meaning of trust — of the kind that has to be earned. That’s always more valuable than someone simply saying, “Trust me.”
For more information, see:
Technology for Buying Technology: 5 E-Procurement Selection Tips
Data Breaches Are Expensive — and They Stay That Way
Calculating Cloud ROI Is Harder Than It Looks
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