CEOs should take charge of cloud deployment: IBM Malaysia head
By A. Asohan August 26, 2014
- CMOs leading the cloud charge in Malaysia’s enterprise space
- CFOs find it hard to make connection between IT spend and business case
CLOUD adoption in Malaysia may be behind more mature markets in Asia Pacific such as Australia and Singapore, but the market is poised to take off, being driven primarily by chief marketing officers (CMOs) when it comes to the enterprise space, according to the head of IBM Malaysia.
“Enterprises, by virtue of their size and the fact that they have many different departments and lines of business (LOBs), are seeing the CMO at the forefront [of cloud deployment] in Malaysia,” says IBM Malaysia managing director Paul Moung.
“We are ourselves were surprised at how much they are spending for marketing using the cloud. We were astounded,” he tells Digital News Asia (DNA) at a recent interview, declining to give figures.
Moung says that a prominent IBM customer in Malaysia has spent “millions of US dollars” for its marketing campaigns. This cost includes money spent by the agencies the customer has engaged, which are also using the cloud.
“Why? Because they are in a hurry and they can’t wait, and all the tools are already out there on the cloud,” he says.
“The setup time is very short – it’s a matter of days now – so it’s very compelling. And it’s opex (operating expenditure), not heavy capex (capital expenditure),” he adds, referring to the cloud model of paying for IT resources one uses, rather than having to invest in hardware and software to bring new capabilities into play.
But that’s an issue, says Moung, because he believes that when it comes to cloud deployment in an enterprise, it’s the chief executive officer (CEO) who should ultimately take charge.
“Let me qualify that. For companies that have a CTO (chief technology officer) and a CIO (chief information officer), they’re relying on the CTO to help drive [cloud adoption].
“Where you have a CTO who is an actual boardroom-level IT executive, then you can expect the CTO to drive this.
“But I would still say it should be the CEO ultimately because when it comes to enabling new business models, and when it comes to difficult questions such as compliance and regulation – and even questions such as ROI (return on investment) – how then do you rationalise all this?
“This [rationalisation] has to come from the CEO, or at least the CFO (chief financial officer),” says Moung, who prior to taking on the IBM Malaysia role, was the vice president for Cloud and Smarter Planet, Growth Markets.
Fundamental flaw, cloud conundrum
This becomes an issue as cloud computing can fundamentally change the way an enterprise operates, and certainly how it harnesses technology to do so.
“Life was easy when all you had to do was look at business cases and approve the capital requested as the typical three-year capital expenditure,” says Moung. “You approve it, and ask, ‘Okay, when’s the payback?’
“Now, honestly speaking, that approach is fundamentally flawed. It was okay when the markets were not moving so fast, when you had 12 months to do a requirement study, and six months to do an RFP (request for proposal), and three months to select, and then you start.
“If it takes you 18 months to start working on delivering on requirements you had 18 months ago, and the market has moved on, what are you going to do?” he says.
Moung says that in his discussions with CFOs in Malaysia, they have admitted that they don’t really have an answer to this.
“They are more comfortable with the capital expenditure model,” he says.
One reason is that CFOs have no way of measuring such fluid expenditure to determine if a cloud project is justified in terms of spending.
“In a capital-based world, the CFO can hold the executive accountable for the business case. In the cloud model, he [the executive] is just spending. And spending and spending.
“When you wanted to do things a different way [in the old days], and you asked the IT guys for the IT resources, and you could make a connection. Right now, you cannot. That’s a conundrum,” says Moung.
Is he saying that CFOs are having trouble measuring the success of any cloud project? That there are no proper metrics?
“I would say that in the enterprise space, I have not seen any clarity on how they’re going to measure success.
“It’s a lot easier if you’re an SMB (small and medium business). How do you quantify the business value of speed? If something can be done in days not months, you start earning revenue faster. The decision-maker is the probably the proprietor, and he can say, ‘Look, I can figure it out.’
“That’s the main difference, the old paradigm versus the new paradigm,” he says, which is why the CEO has to ultimately take charge.
Does he find CEOs in Malaysia taking on this role?
“No. I think we have work to do in really articulating what it is all about at the CEO level. We’re starting with the CMO and CFO, and the CIO should be a partner in all of this,” Moung acknowledges.
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