As the chief scientist of Accenture, Dr. Kishore Swaminathan defines Accenture's Technology Vision and helps set Accenture's technology and research agenda. BusinessCloud9 sat down to hear his views on The Cloud, social networking and the workplace of tomorrow.
“There is a whole ecology that makes up the paradigm shift for the data centre in The Cloud,” argues Swaminathan. “It's not just about letting go of your hardware and software. It's about enabling me to get outside of my firewall and integrate my processes with my partners, scaling horizontally or vertically. No time soon are you going to get rid of your own data centres entirely. Companies will have a mixed ecology. In 2009, almost all of IT is inside the corporate firewall, but already there are companies looking to source from firms like EMC for back up and for seasonal peaks. By 2015 or thereabouts we'll see things like CRM and ERP going outside the firewall.”
But there are tangible benefits from shifting towards The Cloud. “You're turning a lot of fixed cost into variable costs,” notes Swaminathan. “It's risk free. If you want to enter a new market, you don't have to build a data centre or build a local capacity there. So enter the Czech Republic, you can source a lot of capacity from elsewhere. If business doesn't go well. then you can quickly get out without a lot of capital being sunk. Or if it does well you can ramp up. You're basically passing on the risk of failure or success, passing on the variable demand risks to some provider.
“Another important benefit is to do with your partners. When you have your hardware and software inside the company, then when you want to create a project team with employees from two separate companies it is a non-trivial task. Now there are products in the marketplace which allow you to do inter-enterprise collaboration, content management and social networking. The whole thing is hosted. No-one knows where it is run. You step outside your organisation in order to collaborate.”
There needs to be some discussion before embarking on a move to The Cloud. “There are companies like Citigroup who moved 35,000 seats from Siebel to Salesforce.com. Before they did it, they formed a panel to evaluate the issue of security,” said Swaminathan. “If I run Siebel inside my firewall. then I am responsible for the security of Siebel. If I run Salesforce.com, then I pass on the security risks to Salesforce.com. Now, you can see that as a benefit or as a problem. The biggest concern that a CIO has is security. Talking about security is more about perception than about any impartial evidence. There is no reason to assume that even a Fortune 500 CIO can manage security better than Amazon or Google.”
Opportunity or threat?
But some CIOs still seem to perceive Cloud Computing as a threat rather than an opportunity. “There are a lot of CIOs who have an emotional attachment to their data centres,” concedes Swaminathan. “But there are also a lot of them who recognise that much of what they do is not a value-add for the business. They see Cloud Computing as an opportunity to get rid of their non-value add roles. General Electric is moving something like 25,000 people from Office to Zoho. This saves for them in two ways. It gets them out of having to manage all that stuff on their desktop. Secondly it helps them with security as documents are not all kept on laptops.”
But there's a need to rethink how technologies work . “There is such a cacophany of end user technology,” suggests Swaminathan, “You have stuff like Twitter, wikis, social networking and so on. Most organisations just don't know how to use this. Most organisations don't know how to use email! How do people collaborate on proposals? They send emails with large attachments. You end up with huge documents and as a result emails have become a huge overload. We need to find other ways to collaborate. That means looking at the way processes work. When should you use Twitter among designers? If you do, when do you use negotiated sign-offs. The interesting thing is that these are not technology issues, but social ones. Once companies learn to optimise their human processes then we will have a different kind of IT. Over the past ten years, we've been optimising applications like CRM, HR and supply chain management. But most value comes when people do things.”
Part of this change will come with the emergence of the new generation of workers. “In today's IT department, you have engineers. Tomorrow we'll have sociologists and designers. The teenage kid in the bedroom today will be the employee of tomorrow. College seniors today will choose to work with the companies with coolest technologies. Among the interesting findings of our research into the millennial generation is that they actually prefer technology-mediated communications rather than face to face because then they can multi-task. Another difference is that they have a very different notion of privacy, one that is much more relaxed than the previous generation. That's going to be a problem for some companies once they enter the workforce.
“Imagine a world of work in which there are no projects, no plans, no deadlines, no status reports, no-one is accountable for anything and nothing is ever completely finished – but somehow stuff happens! Successful companies will be ones that can be like that. The most creative people are often those with the most freedom. If you have lot of discipline, then do you necessarily have more productivity? Can you achieve productivity when you have almost indiscipline? Open source community development shows us that this is possible, as does Wikipedia.”