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Thought Leaders In Cloud Computing: Doug Menefee, CIO of Schumacher Group (Part 4)

Posted on Thursday, Jan 20th 2011

By Sramana Mitra and guest author Shaloo Shalini

SM: Okay, got it. With the kind of integration and expansion or extension strategy you are following, what is the cost of integration? What did the cost of these enhancements turn out to be? Is that a big part of your budget?

DM: No, because we do all the integration internally and the solutions that we have in place are scalable. Therefore, we are not paying for a number of new connectors within the environment. It is all included in the sunk costs at the beginning. Many of our integration services simply involve some amount of development time to achieve that. There aren’t a whole lot of costs associated with it. The biggest challenge is defining the change management and making sure that the departments where these integration points happen are in synchronization at all the times. We need to ensure that each of the departments that are integrated is in sync with what is supposed to happen with the system.

SM: In terms of the process and the organization structure, who is doing this integration for you? Is it your internal IT organization or some other business unit or team?

DM: It is all done by our internal IT. When we bring up a new service, feature, or function that needs to be integrated with our existing systems and setup, we build out a project plan. Let us use our implementation of Host Analytics as an example here. In our model, Host Analytics is used as a budgeting and forecasting solution. For Host Analytics, we began with the signing of a contract. Next, we negotiated terms, service level agreements, compliance and all those other good things. Then they turned the services on. During the next two to four weeks, we said that we were going to bring Host Analytics capability within the organization and start with the configuration. Once the configuration is complete, the next step on the project for us was to do the integration with Workday and bring in data from PeopleSoft for the actual information. In tandem with that we were focused on a big part that I worked on – single sign-on for the organization. Single sign-on was important so that our employees didn’t have to deal with multiple user names and passwords. We built that into the project plan. The first phase involved making the system functional and having it up and running. The second phase was making sure that the data flowed between the systems. The third phase dealt with ensuring that a single sign-on works so that we could turn it on to the masses of the organization. We did our implementation of the Host Analytics, integrated with a daily import of real-time interface data from our Workday environment and we brought batch information into it from PeopleSoft, in addition to the single sign-on feature within our environment in less than eight weeks.

SM: I see. That is pretty impressive! When you look at the cost structure of what you have been able to accomplish through your cloud strategy today compared to where you were, say, five or ten years ago, what do you think is the impact of cloud from a cost structure point of view of your IT organization today?

DM: It is really interesting. We are in a situation where we are a really fast growing company. We grow 15%–20% on an annual basis. When I started with the organization five years ago, we were considered a technically laggard organization. We had a strong telecommunication infrastructure, voice over IP, and a network infrastructure. But we were extremely weak on the application infrastructure front for the entire organization. What we have put in place over the past five years has been primarily new features and functions for organization that have replaced many of the paper-based and manual processes. We have not done much migration from one system to another system for cost savings or moving from an on-premise solution to a cloud-based type of solution.

We are starting to work into that environment now. The reason is that I have never sat down as a CIO of an organization and said that this is my cloud strategy and we have to have 100% of our services on the cloud. My approach is to look at it from the perspective of the business need we need to address. I have never been prejudiced against cloud-based solutions. Now if you looked at me, you would probably say I’m prejudiced against on-premise solutions. Well, the reality today is that nine times out of ten, cloud-based solutions are winning because we can bring a cloud-based solution up so much faster than a non-cloud one. Referencing our most recent Host Analytics use case, we were able to bring up Host Analytics and have our finance team working on the application in less than two weeks. Had we gone an on-premise solution, in two weeks I couldn’t even have provisioned a server inside my environment. The real driving factor in terms of cloud adoption for us is not necessarily the cost. The driving factor is the value we get from being able to deliver solutions in a more expedited fashion for the business users who are going to use it.

This segment is part 4 in the series : Thought Leaders In Cloud Computing: Doug Menefee, CIO of Schumacher Group
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