From the Authors

We live in a chaotic world of increasing and ceaseless change and uncertainty. And it is only going to get worse.

While it’s true that times like these create unprecedented disruption and dislocation, they also create the potential for new power and new fortunes. The question, therefore, is: How do we prepare our organizations to not only survive, but to also take advantage of the opportunities that rapid change inevitably brings?

The cloud computing revolution

The advent of cloud computing presents an opportunity for organizations to revolutionize the way they build information systems and, in so doing, transform their businesses.

For the very first time, everyone who has access to the Internet also has the ability to harness unlimited computing power — much like they can tap into the electrical grid by plugging in an appliance.

Cloud computing offers much more than just lower operational costs and fewer technical resources. The cloud removes the boundaries imposed by an organization’s IT function. All of a sudden, IT is no longer the sole means of delivery (through the enterprise data center) and no longer the sole means of production (through the company’s programmers). Now anyone can develop and deploy software solutions at will.

For IT, this is a scary thought because IT is all about control. IT is a perfect reflection of how we view our organizations — as well-oiled machines — where ever more knowledge, more efficiency and more hierarchical command and control will produce better results. This paradigm of the organization as a machine is everywhere we look: We need to “jump-start,” “shift gears” and get back “in sync.” We “re-engineer” and want it all to run “like clockwork.”

The way we build our information systems reflects this mechanistic view. As a result, we pretend we can predict what will happen in the course of each day and what the best course of action might be for any circumstance that may occur. So systems are built to follow the instructions given to them and to only work in the specific conditions programmed for by the engineers. Changes in the environment wreak havoc on them because these systems have no capacity to adapt.

Cloud computing gives us a more appropriate approach. And, happily, it comes at a time when we can no longer simply lay out detailed plans and expect a guaranteed outcome.

A new paradigm: Complex adaptive systems theory

Instead of machines, organizations these days are more likely being viewed as living, growing and ever-changing whole beings — what scientists call a complex adaptive system (CAS).

In this world, our role changes from architects of a system we can control and manage to gardeners in a living, ever-shifting ecosystem. In this ecosystem, each individual in the organization becomes an active agent in building solutions for his or her own everyday challenges. Since they are closest to the problem or opportunity, they are better able to respond quickly and effectively.

It is difficult for organizations to give up control in this way, but it’s the only way to survive in a world that is increasingly uncertain and complex. Complex adaptive systems are characterized by a high degree of adaptive capacity, giving them resilience in the face of change — exactly what is needed by organizations today.

If an organization fails to give up control consciously and methodically, it will not only fail to leverage the considerable benefits that offers, but it will also have to contend with the anarchy that ensues as employees “do their own thing” to adequately respond to their evolving environment.

To succeed with this approach, you need to understand how and why CAS works. You then need to put the necessary pieces in place to ensure its success in your organization. In this way, you can transform your business into a player capable of surviving — and thriving.

Self-service in the cloud

As CAS theory tells us, the speed and efficiency demanded of a resilient and responsive organization occurs only when employees find different ways to make continuous small adjustments that increase profits and decrease costs every day, every week, every month. The only way to do this is to give them the tools and support they need to serve themselves.

Self service does not mean turning business people into programmers. What it does mean is giving the right set of tools and support to the person closest to the problem, so that person can build powerful software solutions on his own. The goal is to get these knowledge workers to put together “good enough” software solutions to solve specific problems - quickly - so we can significantly reduce or even eliminate the time and coordination needed from IT. In this way, it becomes possible to address areas that were previously unaffordable or of low priority to the IT department.

The target audience for a self-service approach is an educated professional (e.g., accountant, HR personnel) with modest computer literacy and interest that mostly includes the Web and Microsoft Office. They have basic computer experience, like using a wizard to generate something new; interacting with spreadsheets, documents and forms; and using drag and drop to rearrange items on the screen.

The types of applications being addressed will not replace core business applications. They address a different need — applications that are built for just a handful of users, applications that are used for only a few weeks or months, or applications that address a small piece of functionality. Called situational applications, they are a new software niche, where communities get form-fit, good-enough tools for the very particular needs of the community that uses them.

Situational applications are a potent combination of tools, mindset and methodology. They provide a formidable force that helps your organization meet today’s business challenges quickly and cost-effectively. They reduce — or even eliminate in some cases — the need to use professional software developers (a valuable resource best used for enterprise-wide solutions) and the need to purchase an ill-fitting software package or to kludge a suboptimal, inefficient and incomplete solution using tools like Excel and email.

These solutions on demand will help businesses slash expenses and reduce cycle times by more effectively supporting how people work, address challenges and make business decisions. They will allow the business to be more innovative and competitive by supporting new processes more effectively, increasing overall productivity and facilitating new ways for sharing information.

The advent of cloud computing facilitates solutions on demand. And, cloud computing opens up the possibility for businesses for the first time to build and deploy powerful systems that don’t depend on the resources of the IT department.

Bear with me for a minute, for a little history is in order to understand where we stand in the evolution of technology today. Once upon a time, computer programmers wired boards on tabulating machines to process decks of punch cards produced by a transistorized computer that, in turn, had to be instructed in machine-like languages. The good programmers were not necessarily abstract thinkers, but they were very mechanically inclined.

From punched cards, it was on to magnetic tapes and disk drives and newfangled procedural programming languages like COBOL and FORTRAN. Still the programmers were machine-oriented thinkers and geeks who walked around the electronic data processing (EDP) center carrying their status symbols: mag tapes.

Then, when telecommunications became more sophisticated and companies began acquiring computerized PBXs, the EDP department became the information technology (IT) department, and eventually EDP managers became IT directors. Then, oops, along came object-oriented programming (OOP) systems and a step-change in abstraction. Programming was no longer procedural. It became a request-respond world, where one, let’s say a C++ or Java object, requested and got a response from another without knowing how the other object did its thing internally.

Objects were much like actors on a stage, each with its own role and capabilities, and it was the objects’ interactions that made up a given computer program. At about the same time, the emergence of relational databases brought about ERP systems, where during a painful period of business reengineering, departmental silos were torn down by integrating the data and processes once held exclusively inside each silo. This was a great step forward in streamlining businesses, and the role of the chief information officer (CIO) was established. At this point, data centers were staffed by systems analysts, database administrators, database programmers, data administrators and technical systems administrators. Quite an expensive command-and-control army had grown up to support and control central IT, where a company’s systems-of-record were housed.

Meanwhile, enter stage left, the PC and VisiCalc.

Oh my. Now business departments could do their own numerical computing using spreadsheets independent of central IT involvement. It’s amazing that to this day a large part of what companies keep track of is contained in Excel spreadsheets scattered across a given firm. Then Microsoft unleashed another trend with Visual Basic, opening up computer programming to many outside the walls of central IT.

Rather than guard their centralized fortresses, smart CIOs and their IT staffs reached out to all this distributed processing to develop eventerprise architectures that could bring some coherence to it all. But then the Internet and then the Web and then on to the great step-change, Web 2.0. Internet 1.0 was basically a delivery mechanism for read-only brochureware until Amazon showed the world that see-buy-get transactions could be processed on the Net. Initially it was the retail industries that got Amazon’d and had to change their operations to do business transactions on the Internet. Now most industries conduct business on the Internet.

Then, enter stage right, the read-write Internet, Web 2.0, where just about anybody can go beyond consuming information to producing it as well. Programmer? Who needs one? You just access preprogrammed services to create a website, join Facebook, tweet on Twitter, update a Wiki, create a blog or mash up your custom Google apps. Just about anyone can do it, just as they could with a spreadsheet — no central IT department needed.

Web 2.0 represents the consumerization of IT, and you might think that’s the end of this three-minute history of technology. No, all that was yesterday. Now the real action has just begun with the read-write-execute Internet. It’s called the cloud. If you take all of the amazing advances in computing over the past 50 years, as described above, the cloud represents the knee in an exponential growth curve, making cloud computing the new baseline for business and human collaboration models we have yet to conceive of and the new Bill Gates and Jeff Bezos we have yet to hear of. Goodbye General Motors, hello BYD Auto, the auto maker that Warren Buffett just invested $232 million in.

In the past, information technology was about productivity; now it’s about collaboration, a shared information base and collective intelligence — the wisdom of crowds, social networks and cloudsourcing of unimaginable computing power, all in the hands of everyday people.

Remember that mechanically inclined board wirer described just three paragraphs ago? Or that EDP manager, or that IT director or that CIO? Move over, for it’s now time for the chief cloud officer (CCO). The role of the CCO is to provide leadership in a brave new world where the level of abstraction of not just programming but also technology infrastructures are abstracted as services — Everything as a Service (EaaS).

Although tech-savvy, the CCO is all business, probably coming out of the ranks of operations or an extremely business-savvy CIO. It will indeed be informed leadership, not command-and-control management of computing and information resources that will shape the future of companies and countries in the current era of global economic crisis and unexpected change. Agility is no longer an option, a nice to have. It’s the entry price. Lead, follow or get out of the way. There is much to learn and cultural barriers to overcome, but the company of the future will not be the company of today. The future is here now, as we shift from information technology (IT) to business technology (BT), from systems-of-record to systems of boundless collaboration backed by endless computational resources available to all.