I’ve been speaking to more and more clients lately who are not just saving money with cloud computing — they’re using the principles of the cloud to completely transform how they source, build, and deliver all IT services. Savvy I&O leaders should look beyond the per-hour savings promised by the cloud to the core tenets of cloud computing itself. How do the public clouds do it? Why can’t you?

Well, you can. You can transform your IT operating model from that of widget-provider to a true service-oriented business partner. Forrester writes extensively about how to make the IT to BT (business technology) transition. I recently spoke at length with the IT management team at Commonwealth Bank of Australia (CBA) about their multi-year IT transformation to what they call “everything-as-a-service.” I was put in touch with them by one of their primary suppliers, cloud service management and automation vendor ServiceMesh.

We’ll be publishing a complete case study soon, but I wanted to share some of the basics here because they outline a strategy anyone can achieve, regardless of your current level of cloud maturity. The bank started by establishing six core tenets to be enforced across all I&O services moving forward, whether hosted internally or externally. These guiding principles neatly summarize the core value dimensions of cloud computing itself:

• Pay as you go. Business customers only pay for products and services actually used, on a metered, charge-back basis, under flexible service agreements, as opposed to fixed-term contracts.
• Contestability. Every IT service is offered for bid to multiple vendors (internal or external) to encourage competitive pricing and eliminate lock-in to any one “exclusive” provider.
• On-demand. Requests for IT services should be delivered immediately as requested, supported by real-time processing to cut the time required to begin the fulfillment process.
• Automation. Business customers must be able to request services from a catalog via self-service interfaces. Fulfillment is then executed by governance policies, fully automated approvals, and on-demand provisioning processes.
• Standardization. The IT organization defines and enforces the use of a set of standard services articulated in a comprehensive service catalog, to encourage reuse and cost predictability.
• Workload portability. IT services are designed to be fully portable between infrastructures and vendors, letting the Bank easily move workloads to the most cost-effective location.

CBA learned early on that following these principles meant transforming more than the underlying technology infrastructure. A holistic cloud approach was required — one that included people and processes as well as technology — to ensure ongoing sustainable benefits. Therefore, the team first built the organization and processes required to deliver infrastructure-as-a-service (IaaS), and only when that was in place went to work transforming the existing IT infrastructure to support these new capabilities.

We’re always looking to speak with clients as they make their transition from traditional IT to embedded BT, or business technology. If you have battle scars or best practices you’d like to share with your I&O peers, I’d like to hear from you.