INTERVIEW
Cloud computing is often sold as a way for companies to cut their tech bill by only paying for the IT they use.
Veteran IT chief Ian Cohen has other ideas - telling silicon.com that any company looking at moving to cloud computing purely as a way of saving money should "forget it".
JLT CIO Ian Cohen says any company looking at cloud purely as a way of saving money should "forget it"Photo: Jardine Lloyd Thompson
Cohen is speaking from experience. As group CIO of Jardine Lloyd Thompson (JLT) he is helping the global risk management and insurance broker to make greater use of cloud-based services, such as Salesforce.com's CRM platform.
When businesses shift to cloud services, the oft-talked-about savings won't last, Cohen said, as any reduction in cost or overheads is quickly swallowed up by fresh demand for IT services.
"If you go into cloud thinking you will save money, forget it. What invariably happens is that you create more efficiency and headroom. However, demand that previously could not be met can now be enacted and thus your activities simply increase to fill the available resources - be that time, people or infrastructure," he told silicon.com at Salesforce's recent Cloudforce conference in London.
"People will be using your systems to do more. That's the killer sell as to why people should be looking at cloud: the ability to flex your enterprise into a more extensible model at light speed."
Cohen cautioned that shifting operations to the cloud is not straightforward for any business - there will always be resistance and challenges, particularly for a heavily regulated business such as JLT.
"It's early days. We are working around some of the issues with some of the naysayers and a lot of it is around security and audit, all the usual cloud stuff," Cohen said. "A lot of concerns are still around data location, traceability and auditability. It's still a challenge if an auditor comes in and simply asks, 'Where is the data? Let me see it'.
"We are a regulated business so we have to be more prudent than some other organisations but that doesn't mean we can ignore cloud technologies and the opportunities they offer."
One of JLT's largest cloud computing projects involves the integration of Salesforce.com's cloud-based CRM system with a contact centre operation. Contact centre systems will record information on each interaction that JLT has with its clients, irrespective of the channel they use, and this information will help JLT staff to determine what went right and wrong with each interaction.
"By capturing information about each interaction in a consistent fashion, JLT staff can better understand the complete client relationship - even those interactions that did not result in successful new or incremental business - and understand why," Cohen said.
"In the past you were limited to...
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1. karen challinor
cloud computing, along with offshoring, outsourcing and all the other magic, quick fix, flavour of the month solutions to make the balance sheet look good in the short term only do so indirectly.
their main aim is to reduce the operational costs, primarily by getting the head count and capital equipment count down while keeping the operational systems, and in the honeymoon period this is what happens
the costs do indeed come down, mainly thanks to suppliers offering ridiculous deals they cannot make a profit on in order to try and win the customer and make a profit from them later
this makes the balance sheet look good and the senior management all get bonuses
now to everyone else except management this is a game of find the lady, as long as the cards never stop moving you never know that the dealer palmed the queen and is now a mile down the road and accelerating taking your bet with them.
it goes like this
while ( we need to make the balance sheet look good to the shareholders ) {
implement <insert flavour of the month solution here> and kick the can down the road a short distance
wait until we reach the can again
}
while this may work a few times, it fails to take into account that eventually the supply of solutions will run out
at that point the company head count has been reduced in all areas except management, there is little or no equipment to run the company in house, the skill resource needed to dig the company out of the hole it finds itself in when there are no more quick fix solutions has withered and died and the company is now so lean and mean that it cannot afford the major capital investment needed to rebuild what it has destroyed
so when the midden hits the windmill the company can't respond and goes to the wall leaving the shareholders, and the few remaining company employees in the lurch
however by this time most of the senior management team will have salted away years worth of bonuses for improving efficiency and staying in the black at the cost of everything that made the company work as a company and retired on large pensions, so it won't be their problem
so no, cloud computing won't save money, but that isn't the intent of any of these measures