Before we get into the meat of this post suffice it to say
that as a group of individuals there is absolutely no indication that doctors
or pharmacists are less honest and upright than the average person. In fact, someone who takes on those jobs,
with the tasks, cases and experiences that are involved, and the work and
sacrifice needed to succeed and thrive, is likely, on average, to be more honorable
than most.
Still and all it takes almost no effort to do a search
regarding health care fraud and find many, many cases of doctors and
pharmacists engaged in all manner of unethical, fraudulent and illegal
activities. There are bad apples, what the
Boston DEA’s SAC Ferguson has called “rogue” doctors and pharmacists. When it comes to stopping doctor shopping and
thus much opiate abuse the preferred systems technology, PMPs, put these rogue
providers, these foxes in the henhouse.
We have previously made the case that PMPs are inadequate to the task of preventing opiate abuse.
A key reason is that the only people examining a patient’s history of drug use
in the PMP are doctors and pharmacists. PMPs are populated by having
pharmacists enter into a data base all opiate prescriptions, all Schedule II
and III drugs, that they fill. They
enter data identifying the patient, the doctor who wrote the prescription, the
nature of the prescription (how many units of what drug), and the pharmacist
filling the prescription. Requirements vary but in most states pharmacists have
one week to submit the data after providing the drugs to the patient.
The rules and usage vary by state but doctors and
pharmacists then inquire this data base prior to writing or filling a
prescription for someone with existing, open, conflicting prescriptions or
showing a pattern of over consuming opiates. When the provider is, per usual
honest, the PMP can be effective. But it is known that the minority of doctors writes
the broad majority of illegal prescriptions. PMPs can only work in these cases
if “rogue” doctors and/or “rogue” pharmacists turn themselves in.
This
is a major fault. With PMPs as they are, the largest sources of fraudulent prescriptions
are created and then filled by the one minority that has a vested interest in
the fraud[1]. Until this “loophole” is closed there will be
foxes in the opiate abuse henhouse.
[1]
Fortunately, there are methods to do
the checking for the provider not by the provider
A bit of background to make sure we’re on the same or
similar pages. Especially accelerating in
the past few years, opioid abuse, the over use of prescription pain killers, has become a
major economic and health issue in the US and a major cause of death.
Opiates, which are crucial to alleviating pain for many
patients have been mismanaged and misused to our shared loss.There are many places to get numbers.Here’s
a fairly net summary from The Incidental Economist, Austin Frackt[1].
In the summary Frackt makes two points key to this post:
Most opiate overdose deaths and growth in
them can be traced back to prescriptions: “4 in 5 of people today who
start using heroin began their opioid addiction on prescription opioids.”
Clamping down on the supply of heroin alone will not address the problem.
U.S. clinicians “write more prescriptions
for opiate painkillers each year than there are adults in the United
States.”
A common and concerning trope is that average citizens are
often prescribed opiates in large or refillable dosages after injury.This often leads to dependencies.When the prescriptions run out and/or the
costs get out of hand, the much more available and cheaper street drugs, mostly
heroin, become the outlet for the addict’s need.From here we move to petty crime to support
the addiction and death from misuse and overdose (see chart above).
Much has been and must continue to be done to help people
recover from their addictions. In terms
of preventing them in the first place, besides public awareness, education,
training within the medical, policing and treatment communities, the tool that
is almost universally cited as an aide to prevention is something called a
Prescription Monitoring Program (PMP).
Operating on a state-by-state basis in almost all states
PMPs require pharmacists to record into the system the data/time of fulfilling
a prescription for Schedule II or III drugs (opiates), the name of the patient,
who picked up the prescription, the name of the doctor, and key data about the
prescription itself.
Once the data are in the PMP then doctors have the opportunity
to, increasingly they are required to, look at the PMP data base to see if the
patient has outstanding, repeated or high numbers of opiate prescriptions prior
to writing a new one. Similarly, the
pharmacist can see the same information to help guide if a prescription should
be filled based on patterns implied in the PMP data. In this way PMPs have shown some effect in
reducing “casual” or “unthoughtful” prescription of opiates, but the effect is
minor compared to what should be[2].
Especially given the size and scope of the epidemic, the
nature of the death and destruction that opiate addiction brings with it, Prescription
Monitoring Programs as currently structured are inadequate to the task. PMPs’ significant shortcomings include:
·The Fox is in the PMP Henhouse - When
doctors and/or pharmacists are involved in the fraud the PMP is not a defense.
This is a major failing of relying on PMPs.Although very few doctors participate in scams, if, as the Boston DEA’s
SAC Ferguson says, “there are too many rogue doctors and pharmacists” then we
are not being diligent enough if we ask rogue doctors and pharmacists to check
on themselves
·Prevention Effectiveness Requires Transactional Consistency - PMP data is subject to error in the interpretation by
myriad independent physicians and pharmacists each applying their individual
interpretations and doing it with different levels of diligence each time
·Design Prescription Monitoring for Operability - PMPs oblige
doctors and pharmacists to examine a data base, manually, with each patient,
causing delay, frustration and cost in the office. It’s as if when buying
clothes at a retailer the sales clerk stops the sale to check your credit score
·Closing the In-state PMP Loop - With
PMPs data are only collected for prescriptions filled, not
prescriptions written.The
PMP cannot detect potential diversion prior to dispensing.You can see doctor after doctor for at least
a week before anyone notices
·In Opiate Abuse Prevention, PMP Timelinessis Godliness - PMP dataare
collected monthly, or at best in some states weekly.This is not sufficient to capture diversion,
which can be done intraday with patients getting prescriptions from multiple
doctors and filling them at multiple pharmacies in very short periods of time
·State-by-State Doctor Shopping Prevention Silos - Because they
vary, technically, by state, and because laws governing their data and use are
written without sharing across state lines in mind, PMPs do not operate across
state lines.Multiple prescriptions can
be written in one state and a very short time later, often minutes, filled in a
nearby state with no-one the wiser.
Opiate addiction and its health and related effects is
particularly destructive to people, families and communities.Nationwide groups, towns, counties and states
are trying to stem and turn the tide.PMPs as structured are not adequate to the task.Fortunately, there are methods to do the
checking for the doctor not by the doctor, operate without new office technology
and very little process change for doctors, capture prescription writing and
dispensing, operate in real time, and operate across state lines.
In early 2014 Ian Mitchell, a Programme Director at American Express, submitted a discussion question to the Harvard Business Review group on LinkedIn. Mitchell's question: "What is the single most important quality for a leader to have?" I am unclear what formally passes for "going viral" on LinkedIn but this one question, as of the end of May, has generated over 5,000 comments. I decided to investigate, using the comments in the stream, "what ARE the attributes that people think make up a leader?" If there is a way to download all the comments I don't know it, so I copied and pasted a sample into an Excel sheet. Then, using a series of simple transformation and filtering tricks I removed all of the noise and distraction that comes with a simple "copy and paste" and whittled the file down to only those responses that elicited a "like" inside the discussion. In a truly circumstantial outcome, in this manner I came down to 100 comment types in the sample I chose. To recap, I have a 100 item subset of 5,000 comments within a group of people who are users of LinkedIn and are members of the Harvard Business Review (HBR) group within LinkedIn.
To make my small analysis more approachable I've filtered further. A number of people respond to Ian's request for "the single most important quality" with multiple qualities, e.g. Trust and Humility, or with paragraphs. In these cases I typed the comment with the first type used, not both. Also, in my cut and paste sample the most dominant comments that were liked were those that explained that the answer is situational, unknowable,.. a mystery, There were 1047 likes across my sample comment types. 318 of these are in the comment type I labeled "Situational Mix." I created this chart with those comment types that are not "Situational Mix":
Almost all of the attributes that got more than 10 "likes" are about the leader's character, not the skill set. Trust, Integrity and Humility lead the list. Then the ability to communicate is cited, ending in this list of most-often-liked with the redundant Leadership. The pattern extends in the types I've summarized as 6-10 likes and 1-5 likes. Words like "passion,", "reliability", "compassion" and "virtue" are listed. "Analysis," "negotiation," "synthesis," and similar skills are not cited. Because its the HBR group the respondents, whether CEOs or not, most likely have at least some leadership responsibility, even if in a small group. With fair reason we can expect these people to be leaders or directly interact with them. Yet, in reading, the responses strike me as aspirational. They read more as what people think leaders should do, what people wish their leadership does do, than as analytical of the actual behavior of leaders. My method doesn't approach science so I'll end with observations. First, a simple question on LinkedIn can generate enormous activity. In this case the question is about the attributes of "leadership." Leadership seems to be something people are passionate about. At the same time, leadership is something that people do not appear to be consistent about. Except for the high concentration of people who say "its a mix of things" that describe leadership, there is little consistency in the responses. People care about leadership. They know it when they see it. But they don't have a simple, shared expression of what it is.
No matter what cloud computing sellers say there are practical limitations to moving existing business technology to cloud platforms.Most often when this is discussed the issues of establishing the target platform, testing and configuring, establishing management practices covering change management, service quality, security and access and the like are central to the discussion.
The so-called mythical man-month and the related issue of how to use scarce IT funds is also central.Cloud computing proponents rightly will tell you that cloud operating costs are somewhat lower than comparable in-house costs.Cloud providers are operating at scale and usually pricing on the margin.It’s a big cost advantage… if you don’t examine the switch-over costs.
The switch-over costs are not limited to the dollars or Euros involved in migrating applications to Das Kloud, whether public or private.The act of migration is distractive.It means the halt to the development of any new function, today, while legacy applications are migrated to a lower-cost platform tomorrow.That’s a bad thing.
Smaller companies with smaller applications portfolios may feel this pinch less than medium and large firms do.But for most, the time and opportunity costs of migrating the out-of-sight, out-of-mind legacy is too high for the benefits.It is often best to move those applications as they age to the point of replacement or major re-engineering.
New systems or major bolted on enhancements are a different matter.Provided there is a reasonably current interface available these new functions can be designed, developed and deployed in a cloud environment and linked through the web to the legacy.
New uses of IT, like social media technologies in Marketing 2.0 applications, tend to be cloud-provisioned.Instead of coordinating and helping, old-schoolers often try to block corporate access to Facebook, Twitter, YouTube and the other places where the customers are learning about and discussing your products.
Companies must be involved in those conversations.This drives marketing people to external clouds and creates gratuitous governance issues for IT.IT needs to get on board.“Resistance is futile.”Whether that cloud is Private, Public, or a hybrid, for most of us a cloud, by any other name, is how you Tweet.
It says something about cloud computing when the NY Times, not often an information technology bellwether, not known for surfing on the bleeding edge of technology, publishes on its business pages an article on how mainstream companies are slowly but surely examining and adopting cloud computing. That the NY Times Business Section has noticed cloud computing is a clear indication that The Cloud has risen, in the mind of general management, beyond awareness and interest to the level of general business management discussion and decisions.
Action, one way or another, can’t be too far ahead.What will established companies be looking for?What must cloud computing providers do?
Companies considering cloud computing range from old and established like Eli Lilly to the new and working on establishment like Arista Networks.Larger companies with their multi-layered architectures, their extended labyrinthine networks of legacy applications and data farms and user communities have many obstacles to widespread adoption of cloud services.Many concerns have been expressed including conversion paths, conversion costs, data speed, data failures, responsiveness, privacy, security, recovery, long-term costs and hidden costs.In the days of mainframe-only computing I was asked “do you know the definition of an IBM elephant?”The answer, “it’s a mouse… with features.”
To date start-ups or smaller companies have been buying cloud services either to run all their applications or, just as often, to run some of the services like e-mail or, as in the case with Netflix, the web-presence portion of IT.Greenfields IT is relatively easy.But these companies haven’t got the scale and complexity of IT infrastructure that a Fortune 500 sized company has.
There is a wide array of cloud service providers.Expected names like IBM and Google are in the mix but Amazon, on first blush a surprise, is an industry leader.There are less gigantic players like Rackspace and Terremark.There are “public” cloud providers where the services are only available outside a company’s network.To the purists this is the only cloud that is a cloud.IBM and Acadia, a joint effort by EMC, Intel and Cisco, are offering so-called “private” cloud services where the web-based, on-demand capabilities are privately held or within a privately managed and controlled bubble.
Working on Step 2
Cloud computing providers are now reaching out to major corporations in an effort to provide core computing services to them via the cloud.Their relative success will depend on their ability to discuss, offer and deliver their cloud services less as a “transformational new paradigm in information technology” and more as a solid, tested, and trusted component of effective and efficient business operations.
To the extent that cloud computing significantly penetrates mainstream computing in large businesses providers will have to convince prospects that they understand the needs and motivations of mainstream business.Said in the framework of Everett Rogers’ Diffusion of Innovations, businesses that are innovators that are excited by the next new thing are already using the cloud.So are “early adopters,” companies that through need or culture like to be on the leading edge.For cloud computing to find a major market it must “cross the chasm,” in Geoffrey Moore’s “Crossing the Chasm” terminology, and appeal to the “early majority” of main stream businesses.They buy on different signals and in different ways.
The Early Majority are pragmatists. They care about the company they are buying from, the quality of the product they are buying, the infrastructure of supporting products and system interfaces, and the reliability of the service they are going to get.Pragamatists tend to be 'vertically' oriented, meaning that they communicate more with others like themselves within their own industry than do technology.A standard question:“Where else have you done this for someone just like me?”
There are four fundamental characteristics of visionaries that alienate pragmatists.When planning and executing a marketing strategy, when engaging prospects in sales efforts, cloud computing services should avoid all four.They include:
1.Lack of respect for colleagues' experiences.
2.Taking greater interest in technology than in their industry.
3.Failing to recognize the importance of existing product infrastructure.
4.Overall disruptiveness.
I have worked in multiple very innovative software companies and came to dread the meetings where the founder/chief architect/head visionary is on a sales call and forgets to listen to the prospects.Instead, they frequently listen for a bit and lapse into how all encompassing the vision is and how smart we were to provide it to solve your problems, whatever they are.Implicitly we were also saying how behind the times the prospects were if they didn’t get on board.We would get smiles and encouraging signals of further consideration.The near universal back-channel reaction was that the prospects were plenty smart and plenty experienced too.They have a number of issues and we didn’t take the time to grasp and deal with them.We should come back when we’re prepared.Similarly, cloud providers who are in a race to establish market share may very well win that race through patience and listening.
A difficulty about providing technology is that evaluation discussions frequently become about the technology.It is important to know and measure scalability, be able to show how and if you use the Rete Alogrithm or not (for 50 bonus points, without using the web, what is THAT about?), and have a discussion of file size compression for rich media content.This class of issue has its place, and, since sales to the mainstream involve consensus across the prospects functions, they will be covered.But, these issues describe how value is delivered, not what the value is.In the end the winning providers in mainstream competitions will understand and communicate about in-this-industry net value.By net value I mean the value net of vendor-risk (can they support us, are they strong enough to stay with us, if something goes off the rails can they recover?).
Mainstream corporate IT has a ton of legacy, as well it should.The legacy systems and underlying infrastructures represent the collective, and sometimes forgotten, knowledge and wisdom of thousands of people over many decades.Legacy applications are rarely pretty, in IT terms.Within an enterprise they yield multiple systems architectures, multiple sets of underlying operating and data management software, multiple hardware platforms and configurations.Successful mainstream cloud efforts will work with these realities, align with them, adjust and change them where possible over time.Watch out for the cloud provider that attempts the large-scale, 100% conversion in an accelerated timeframe.It will look good for the business case, certainly look good on their income statement, and almost certainly fail under the pressure and complications.
Vendors of cloud services are in a difficult place.They need to introduce a new way of delivering, consuming and paying for computing to the mainstream market that buys consistency and reliability and distrusts change.The apparent economic advantage of cloud computing, it is generally priced on the margin, is the carrot.The winners will be able to communicate and deliver what the buyers view as risk-adjusted superior value.My personal expectation is that they will but only to the extent they put on their customers’ shoes and walk around in them.
A discussion was started on CIO Zone yesterday that makes my hair hurt.
Titled “CIO’s Are Getting Tougher on Social Media” the main article reported data from a Robert Half survey of IT management regarding the use of Enterprise 2.0 technologies:Twitter, LinkedIn, Facebook, wikis, YouTube et al.The article says that even though Enterprise 2.0 was ubiquitous, its usage growing, fully 38% of CIOs are tightening their restrictions on social media personal or business usage, depending, in the workplace.Only 17% are loosening such restrictions leaving 45% to stand pat where they are.A bit more startling to me, the article states that “in October, Robert Half issued a survey in which 54 percent of more than 1,400 CIOs said their company doesn’t allow employees to visit social networking sites for any reason.”
The author expresses surprise, “after all, we can all remember a time when allowing staffers to use the Internet seemed like a crazy idea from security and productivity standpoints.”I found the inward-looking, functional resistance nature of many of the comments more surprising.Here’s the first one:
... But if it were solely up to me to dictate policy, I would block Facebook/Twitter but encourage use of LinkedIn and professional social networking sites such as CIOZone.
To me, Facebook is nearly exclusively used for personal use and people who are addicted to Facebook tend to squander huge chunks of their time on it. I very much doubt many people at most companies have a compelling business reason to use it on a regular basis. Maybe give access to an HR person for potential background checking-type things, but that's it.
You can’t make some stuff up.The above comment reads as though the writer has never interacted with anyone in sales, marketing or customer service and support.I’m fairly certain that the writer has had such interactions but the position taken denies it.He clearly doesn’t work at Best Buy and has never heard of Blue Shirt Nation.He can’t work inside Booz Allen with Walton Smith.He doesn’t work at Thomas Nelson Publications.
No business can responsibly be interacting with and engaging with its markets, especially customers, prospects and influencers, without Enterprise 2.0 technologies.People research products and buy products through the web.They interact about what works and what doesn't, what is good and what isn't, using social media (see David Meerman Scott’s Four Questions).
Thus, all parts of the organization that interacts with customers, prospects and influencers must use it, any and all of it that the community they deal with uses.This means just about everyone in your organization needs access to Twitter, LinkedIn, Facebook, wikis, etc., etc.... except, maybe, the Luddites in IT.
Read the comment again.The writer is saying that the external social sites that he uses are fine but those that others use aren’t justified.It’s another way to say “I don’t know what other people do.”
Other comments are more sensible.An example, “you can't bury your head in the sand… you can't simply expect this thing called social media to go away. 40% of all professionals now use their profiles to email colleagues - soon email as we know it will be a thing of the past.For the professional side of social networking, reaching out to peers for industry discussions, problem solving and keeping abreast of business news, this site and others make complete sense. Forrester tells us time and time again that learning from peers in forum discussions and via video content is where it's at.”
Ed Zachary!
But the Luddites are there.“I believe that the security of the company must come before convenience” is a common sentiment.The problem is that this is not the choice.It’s security risk versus market participation risk.“Convenience” is not at issue.
Another view, “I still have a hard time justifying the use of Twitter, Facebook, MySpace, etc. in a corporate setting unless someone is doing sanctified marketing or other corporate promotion.”“Sanctified?....”Frankly, this comment reads as though the writer feels inconvenienced by all that “marketing stuff.”He should read the company’s income statement.
Working on Step 2
A viewpoint to get behind is “there is also no doubt that the world has shifted in such a way that personal and business boundaries are blurring, with work spilling into personal time and vice versa… The ubiquitous presence of personal mobile devices capable of posting to social networks places the issue outside of an employer's ability to restrict access.”
This view is consistent with that of Microsoft’s CIO, Tony Scott.Recently interviewed by CIO Zone Scott said that its actually social media “in life” and that they were going to entirely invert their previous position on the consumerization of IT and orient their infrastructure to support the technology their employees bring to the firm rather than force their employees to fit into an IT-generated cookie cutter.
I don’t suggest for a second that security concerns are immaterial.The normal rules of engaging in inappropriate content should be enforced as should professional standards of protection against sites and services that create security and access exposures.That said I agree with Sam Curry of EMC’s RSA group (they do security).Sam will tell you that business is ultimately about Risk v. Reward, that Fear, Uncertainty and Doubt (FUD) are no way to run a business, and that the task is to “ensure the right people have access to the right information over a trusted infrastructure.”“Trusted” is different from “entirely restrictive” and essentially not useful nor helpful.
It is clear, at least to me, that all parts of the organization that interact with customers, prospects and influencers must use Enterprise 2.0 technologies, must use “social media.”It is also clear that what is the best or appropriate tool to use for what business purpose is under rapid change.Your company doesn’t get to choose which ones the community-of-interests you deal with use.That is defined outside your enterprise and you must adapt to that definition, unless, maybe, you’re a technology Luddite inside IT.
This means just about everyone in your organization needs access to Twitter, LinkedIn, Facebook, YouTube, wikis, etc.You already have management authority to keep people working instead of fooling around, whether the technology is there or not, use it.Expect people to get their work done and provide them the tools to do so.Increasingly these are Enterprise 2.0 tools.
There is a lot of talk about what is or is not “cloud computing” and whether such a thing as a “private cloud” does or does not exist. In the end I believe there are many forms of cloud. The question examined in this post is “what impact will a move to cloud computing, in stages, have on IT spending?”
Recently Michael Neubarth wrote another fine article. Its title is “Are Private Clouds Hogwash?” For some reason for a number of people the very idea of a “private cloud” is disturbing and disorienting. Neubarth quotes a number of the literati on the subject. Most say cloud computing must be outside the enterprise or clouds require a scale of computing and mutually-balanced workloads that a single enterprise cannot offer. Maybe, though this argument seems to fly in the face of the origins of many cloud providers (Amazon, Salesforce.com, IBM).
The private cloud naysayers do cite a concern that I share. Some people are simply calling their traditional data centers “private clouds” and declaring victory. But, simply employing virtualization, web-based computing and other technologies doesn’t make a cloud. Neubarth quotes P Laudenslager on his blog, “Calling [the use of modern technologies alone] a private cloud is like drinking alone and calling it a private party." You can’t just put lipstick on a data center. There is a required aspect of cloud computing that is by-the-drink, load balanced, on demand, scalable with the financial, service management and administrative practices needed for businesses to rely on such capabilities.
Still, one might well be confused reading the complaints about the term “private cloud” at all versus seeing where major players are placing their bets. IBM, Acadia (the joint effort of EMC, Intel and Cisco), Google, Amazon, Microsoft and others might disagree. Acadia’s stated purpose is to offer private clouds as evolutionary pathways for IT. Many readers of Rock Icons and IT Thought Leadership feel as Judy Collins did when she wrote:
I've looked at clouds from both sides now
From up and down and still somehow
It's cloud's illusions I recall
I really don't know clouds at all
The research firm Saugatuck Technology has a take on Das Kloud that is fairly centered. In their research alert“Cloud IT: Stages of Simultaneous, Disruptive Growth and Change”they describe cloud computing as “The Cloud. IT as a Service. Platform-as-a-Service. Software-as-a-Service. Hosted services. Managed Business Services. These and many other capabilities and offering types comprise what we have labeled “Cloud IT.”
It’s a deliberately inclusive definition. They go on to say that “all aspects of user IT and business operations are rapidly melding into an inextricably interwoven, and inter-dependent, series of capabilities that are delivered and used as one or more services via one or more networks. [Saugatuck] no longer sees easily-definable boundaries between IT and business; just as [they] will soon see the disappearance of boundaries between traditional (on-premise) and Cloud-based business and IT.”
Saugatuck’s point is that user IT and business operations are rapidly becoming intertwined “into an inextricably interwoven, and inter-dependent, series of capabilities that are delivered and used as one or more services via one or more networks.” It’s a practicalist view, not a purist view. They see that the business/IT boundary is blurring as well as traditional, on-premise and off-premise IT. By extension clouds must reach from outside the business into the business.
Saugatuck also sees the use of Das Kloud evolving in four stages within enterprises. The first is the Point and Supplemental Stage where the majority of Cloud IT exists today for users and providers. In this stage cloud infrastructure offerings and use is “filling in gaps, augmenting existing system and process capabilities.”
The second stage is the Developmental Stage. Cloud computing makes a practically limitless scope of software development resources available to users and vendors alike, and very inexpensively. Software developers no longer have to rely on dedicated internal resources to code, test and refine. Resources are available whenever (and wherever) needed, and can be turned on and off as required.
The Internal Growth Stage is thethird stage and involves significant development, deployment, and use of Cloud IT within user organizations as part of overall IT strategy and operations and includes private and/or internal clouds.
Saugatuck’s vision has a fourth stage, “Hybrid/Interwoven,” wherein customized combinations of traditional, Internal/Private Cloud, and third-party Cloud IT are delivered and used. Saugatuck ties it all together with this model:
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Working on Step 2
If we take Saugatuck’s estimates and stage descriptions as an example what are the implications for IT spending? Recall the basic concepts behind the IT funding model:
Systems built this year must be run and supported over time
Left unchecked, the compounding effect of increased operations and support costs inexorably crowd out further new systems spending
Because businesses cannot tolerate static systems, because system change and new challenges emerge, constant efficiencies are needed in operations and support costs to make budgetary room for new systems development
As described in Holding the Line on IT $pending, many companies are pursuing Saugatuck’s first stage of Supplemental Point cloud solutions in their campaign to hold down operations and support costs. These often include solutions as storage and processing. In the case of SaaS, many customers have deployed focused “point” solutions focused on key business. Saugatuck says these “solutions differ in concept very little from any early-stage, newly-introduced IT, with the possible exception that they are exceptionally low in cost to acquire.” And that is their point, budget reduction in operations to enable development spending.
The second stage deals with cloud computing and systems development. In an example of Platform as a Service (PaaS) multiple providers are coming to market with entire offerings for systems development in the Das Kloud. IBM and Microsoft are both investing heavily in Cloud-based development platforms environments and services for customers and their ISV and development partners. The Cloud also makes a practically limitless scope of software development resources available to users and vendors alike, and very inexpensively. This pattern will reduce the cost of developing systems and thus may ease the demand to reduce unit costs in operations and support, in the short term.
However, as cloud-based development becomes standard all competitors will have the same capabilities and the old pressures will resume. IF, as some claim, cloud-based development is a productivity enhancer for systems development it will bring systems to production faster. This will increase the pressure on support and operations to reduce costs as their workload will increase without resources to handle it. This will push those organizations farther into the cloud-for-cost-operational-reduction camp.
Saugatuck’s third stage, the Internal Growth Stage, is the significant development, deployment, and use of Cloud IT within user organizations, as part of their overall IT strategy and operations.It is a reaction of the success of the first two. If the Stage I, or Initiation Stage uses of Das Kloud reduces operations costs and eases development then everyone will want to be on those bandwagons. This typically results in a rapid increase or “Contagion” in use of computing and, in this case, a rapid increase in cloud-related spending.
Nolan's 4 Stages of EDP (IT) Growth
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I’m not particularly concerned with whether or not there IS such a thing as a “private cloud.” I think the description is apt enough. It describes how many very large organizations today, and smaller ones in the not-too distant future, will use cloud technologies. I’ll leave the nomenclature battle to others.
I do believe there is a driving requirement to reduce IT support, maintenance and operations unit costs day in and day out, week in and week out, year in and year out. The Cloud appears to offer assistance in making reductions without sacrificing delivery and quality. As and if that proves out expect your business to use much more of it in the near term regardless of the name you put on it.
