A Modern Service Management View On Why Office 365 Is So Important

There are so many great reasons for Enterprises to adopt Office 365.  All of the normal benefit-statements are relevant.  Office 365 is Secure.  Office 365 allows users to be more productive.  Office 365 is an Evergeen-service that is always current.  Office 365 enables users from anywhere on any device.  Office 365 allows IT to focus on the business rather than on delivering utility IT Services like Email.  All of those reasons are extremely valid. 

 In this post, however, I want to take a look at the value of Office 365 from a Modern Service Management viewpoint.  When looked at through the Modern Service Management lens, Office 365 can and should be a conduit to enabling the business for Digital Transformation in all areas, not just in productivity.  To set the stage, let me first take a step back to opine on different views of the cloud held by different IT organizations.

 No matter the type of team (Basketball, Cricket, Information Technology), every team takes on the personality of its leader.  IT is no exception.  IT organizations take on the personality of their leaders who are the CIOs.  In my experience, there are two types of CIOs: former IT Operations leaders and former Business (or development) leaders.  Operations CIOs, in my experience, view the cloud as an extension of their datacenters with the potential to increase scale and reduce costs.  Business and Development CIOs view the cloud as an enabler of business value through feature sets and agility that would be prohibitive in-house.  Obviously, both views are valid.  The best view is to have a combination of the two views: Cloud is an enabler of transformative initiatives and the Cloud is an extension of the customer datacenter allowing all sorts of benefits.  Let’s take a step back even further to define Digital Transformation through the Modern Service Management lens.

 Digital Transformation means different things to different people.  When asked, I define Digital Transformation  in the following way:  businesses are under increasing pressure to compete and to achieve higher profits.  There are two ways to accomplish higher profits: make more money and decrease costs.  In order to go after higher revenues and decreased costs, businesses are innovating.  In today’s world, most innovations involve [Technology] Services.  And if every competitor is innovating, speed is a key factor in winning.  There are six statements of truth that I like to walk through:

1. Computing power is infinite and inexpensive…big compute is no longer reserved to universities; Azure makes virtually infinite power available to all
2. Storage is infinite and inexpensive...we no longer need big in-house storage arrays to archive our data thanks to Azure
3. Physical devices are powerful and inexpensive…when was the last time you met someone not carrying a smartphone?  IoT devices are very inexpensive.
4. Networks are prevalent and inexpensive…we can use high-speed internet access on airplanes
5. Cloud enables new scenarios for everyone…several years ago, Machine Learning power was accessible by only a few, but now, garage developers can access the power of the Microsoft Cortana Intelligence Suite
6. DevOps makes it all go faster…DevOps, when done right, allows for innovation at the speed of business…gone are the days of waiting months for procurement of hardware, and gone are the days of waiting for code to “burn in” before moving it to production

 Given the six bullets above, there are amazing opportunities for businesses.  The downside for businesses is that the same six bullets are available to everyone.  That means that the bullets are true for every business’ competitors too.  Cost of entry to create transformational digital services is extremely low.  In some respects, that means that the ultimate winners in every industry will be those who a) have the best ideas, b) are the best at execution, and c) are the best at integrating the transformational services with their existing services.  All of that probably sounds great, but the billion-dollar-point for every enterprise is that “we have an entire IT Portfolio to manage and that Portfolio (and our business’ reliance on the applications therein) does not go way just because of a couple of new IT Services”.  Let’s dig into the IT Portfolio a little bit.

 Most enterprises have between 500 and 5000 named applications in their IT Portfolio.  Every one of those applications needs a story for modernization in the cloud and DevOps world.  If my Portfolio had 1200 applications, and if I modernize one application per month, it will take me 100 years to complete the modernization exercise.  Clearly, a 100-year modernization project is not feasible given the speed requirements in most enterprises.  New ideas are required to make this topic more manageable.  To that end, it is important to look at the IT Portfolio as “classes” of applications.  There are four key classes:

1. Software as a Service.  Most readers will understand what SaaS represents.  Just like with Exchange Online, the Service is delivered by the provider.  IT’s role is to integrate the SaaS Services with the rest of the IT Portfolio--data connectivity, auditability, monitoring, etc.  IT’s role should also be to drive measurable business benefit in partnership with the business.  In a purist mindset, however, the “normal IT functions” that IT will need to perform for these Services will approach zero over time.  For example, many Office 365 customers are small businesses with no IT staff; they successfully consume Office 365 without a formal IT layer.  Clearly, enterprises are different than small businesses, but the assumption should be that over time, IT’s role in SaaS will be in integration and in value-realization, not in day-to-day operations.
2. Critical Business Applications.  These are the N applications that are most important to the business.  These are the applications that are easy to identify thanks to the investment that the business is making on them.  Normally, one can point to the engineering team for each application—either a dedicated development team or a dedicated team aimed at a commercial-off-the-shelf product. These are the applications that the Board of Directors know by name.  In most enterprises, there are about 30 of these critical applications.  As an aside, surely, there may be some overlap with “1”; for example, Email may be consumed as a SaaS product and thus will fit into both “1” and “2”, but that is beside the point.  These critical applications are where Digital Transformation happens.  These critical applications are where DevOps becomes a reality.  These critical applications may or may not be built or supported in-house; in fact, the business may drive in their own direction with 3^rd party suppliers in some cases, and that should be ok.  As with SaaS, the manual effort required by human beings over time will approach zero thanks to automation and DevOps.  For these critical applications, IT’s role is to enable integration with the rest of the IT Portfolio.  IT does not necessarily need to own the application(s) or the Service(s) to integrate them.   
3. Generic Infrastructure.  If there are 500 applications in the Portfolio and 30 of them are “critical”, what about the other 470 applications?  Surely, they are not all the same with respect to business value, so looking at all of the applications in the same way is not advised.  But with 470 non-critical applications, it is likely not feasible to look at each application individually.  We need to simplify.  There should, in the very least, be a gold/silver/bronze categorization, or perhaps a slightly more complex structure.  Regardless of the classification scheme used, the underlying infrastructure will eventually be modernized using the public or private cloud.  IT will need to drive that modernization, but more importantly, it will need to ensure that the 470 applications and the underpinning infrastructure integrate with the rest of the IT Portfolio.   NOTE that one can expect passionate arguments stating that “Application XYZ” is actually mission critical, and there are two questions to ask in that case: i) if application xyz is mission critical, where is the investment?  And ii) will it change the points that I am making here if application xyz lands in “2” or “3”?  (likely not, so it is not worth the argument) 
4. Traditional Infrastructure.  Over time, presumably all applications and underlying infrastructure will fit into categories 1, 2, and 3.  If there are applications or if there is infrastructure that does not need to be modernized in the long term, one should question whether or not those applications or infrastructure are of importance to the business.  Inevitably though, for now given the fact that the entire Portfolio will not modernize overnight, it is business-as-usual for these applications and for this infrastructure.  IT will need to continue to run and to maintain these systems.  The key for IT will be to integrate these legacy solutions with the rest of the ever-modernizing IT Portfolio. 

So what are the opportunities for IT? 

For “1”, IT needs to;

• operate the services as long as there is still operating to be done,
•  IT needs to drive measurable business value from the Services within the business groups, and
• IT needs to integrate the Services with the rest of the IT Portfolio. 

 For “2”, IT needs to

• deliver the services when called upon to do so, and
•  IT needs to integrate the Services with the rest of the IT Portfolio. 

 For “3”, IT needs to

• categorize the applications and infrastructure,
• IT needs to modernize the applications and infrastructure by classes,
• IT needs to operate the modernized applications and infrastructure using the same principles from DevOps as in “2”, and
• IT needs to integrate the applications with the rest of the IT Portfolio.

 And for “4”, IT needs to

• question why the applications still exist if they are not important enough to modernize,
• IT needs to keep the Services running until they are modernized or deprecated, and
• IT needs to integrate the Services with the rest of the IT Portfolio. 

 As an aside, the operations aspects of “3” and “4” are increasingly easy to outsource.  The repeating theme, however, for every application in the Portfolio is that “IT needs to integrate that application with the rest of the Portfolio.”  That integration is broad-reaching from Operations to Security to Compliance to Auditability to Business-to-Business Standards, etc.  IT has a tremendous responsibility to facilitate the integration in a seamless and rapid manner.  Remember that when we discussed Digital Transformation above, we said that those who win will a) have the best ideas, b) are the best at executing and c) are the best at integrating the transformational services with their existing services.  Bullet “c” is where IT has the opportunity and it is where IT has the responsibility to deliver.  Unfortunately, most IT organizations are focused either on extending their datacenter with the cloud (maybe to meet decreasing IT budget targets, to close a datacenter, to displace an outsource vendor, etc), or they are focused on transforming their business with digital services.  They should do both, and they should be focused on becoming the best-of-the-best with seamless, effortless, rapid Portfolio integration.  In fact, every cycle not spent on “enabling the business thru digital transformation within classes 1, 2, and 3” and “enabling immediate, seamless portfolio integration” is a risk to the business because one must assume that the competition is actually focused on those key objectives.

 Now that we have covered all of that background on how different IT organizations think about cloud, on digital transformation, and on IT Portfolio categorizations and associated opportunities for IT, let us come back to the topic of Office 365.  Let us look at Office 365 workloads in light of the two priorities that we have defined for every enterprise IT organization:

 A)      Enable the business through digital transformation initiatives.   Have you ever thought of the fact that measurable productivity improvements are transformational?  The whole idea with Digital Transformation that we discussed above is to “use technology to make more profit by increasing revenue and/or by reducing costs”.  Productivity improvements enable initiatives that drive more revenue, and productivity improvements directly reduce costs by reducing human overhead and by reducing human idle time.  The problem has always been measuring and proving the value of productivity improvements.  But, thankfully, Office 365 has been designed with measurability in mind (see the usage reporting capabilities of the Office 365 service).  There are canned reports, a Graph API, and a PowerBI pack that are all intended to enable IT Pros to measure real impacts on the business.  For example, “which departments are using Skype for Business in which ways”?  And that data can be joined with business data to answer questions like “as Skype for Business usage goes up, does cost-of-travel-per-employee-per-month go down”?  Or perhaps the business may want to overlay project management metadata with the Office 365 use data to answer questions like “are the most successful construction project teams in our construction company leveraging Microsoft Teams more successfully than the less successful construction project teams”?  The ability to objectively answer business-productivity questions like these is unheard of, yet Office 365 was built with this sort of Digital Transformation in mind.  Office 365 provides a fantastic opportunity for IT to learn-by-doing insofar as driving a Digital Transformation program while planning to show objective measurements of success from the outset.  Office 365 also sets IT up with an opportunity to drive end-user behavior which tightens the bond (in a measurable way) between the business groups and the IT team. 

 B)      Enable immediate and seamless Portfolio integration.  Office 365 was built with this integration in mind.  In fact, the Service Management integration aspects of Office 365 are key differentiators for the service.  This end-to-end integration includes topics like compliance (enter the Office 365 Trust Center), auditability (enter the features for audit integration), monitoring and NOC integration (enter the monitoring and major incident integration features), Evergreen Management (enter all of the features for Change Integration), and many more.  While it is not trivial to integrate any service into the overall portfolio, it is infinitely easier to integrate a service that was designed with integration features built in.  Office 365 gives the IT organization the opportunity to “get the integration right” with a service that was designed from the ground up with integration in mind.  Microsoft has published a wealth of content to help customers integrate more easily (including this blog series that I am authoring).  Microsoft has created an entire Worldwide Consulting organization that is focused on helping customers shorten their learning curve with the integration.  My sincere hope is that customers will look at Office 365 as a way to learn what is required for immediate, seamless integration so that they can play that forward to the rest of their ever-evolving portfolio. 

 Given all of that background, in my opinion, Office 365 is strategic to IT and to the business in the two most important ways (A and B above).  Unfortunately though, most discussions are simply around features and technology. 

 I am thankful for the opportunity to publish the Modern Service Management view on the strategic importance of Office 365.  Let me know your thoughts on Twitter at @carrollm_itsm.  As usual, I do not need to be “right” or “wrong” with these posts; my goal is not about achieving planetary agreement.  My goal is to spark ideas so that everyone can decide for themselves.  There is value in critical thinking, and the stakes are too high for enterprises in today’s world.  We all need to be thinking about these critical opportunities.  Happy Thinking!  And by the way, this IT Portfolio integration discussion will quickly evolve into a Business Portfolio/Business Service integration discussion.  I certainly hope that enterprise IT gets it right so that enterprise IT can be the ones guiding (from experience) on the Business Portfolio side of things when the time is right.