The EMC IT Transformation: Five Years In The Making

The transformation of IT organizations from a traditional service model to an IT as a Service (ITaaS) provider is a multi-faceted, comprehensive endeavor requiring a universal commitment from the enterprise, and tests the persistence and patience of all of us leading the charge.

In the case of EMC IT’s transformation, it is a story that began nearly five years ago, when we recognized that we would not optimize the beautiful infrastructure we built if we continued to operate with the same antiquated processes and governance we had used in the past. When looking at ourselves objectively, we had to admit that the truth hurt.

• We never had enough capacity to meet requests, and were constantly in the position of having to “manage demand down” to meet the available supply.
• Disconnects between the funding made available for IT services and the consumption of IT services was creating unproductive friction between IT and our clients.
• Increasingly, Business Groups looked to the public cloud because it’s faster and they could avoid the IT bureaucracy, even if it came at an increased cost.
• The increasing speed of EMC’s business was putting huge pressure on us to become faster and more adaptive.
• We found ourselves “sweeping up the mess” too often.

These painful truths and their inevitable consequences provided a compelling case for change, and pointed us in the right direction. Transforming, or re-inventing, ourselves to optimize IT production for informed business consumption became the clear imperative. In short, the target state was running IT more like a commercial business would operate and less like a monopolistic agency; a “cloud operating model” that would take advantage of the powerful infrastructure foundation we’d created and leverage it to its fullest.

To accomplish this, we first had to agree on the critical attributes of this cloud operating model. We came up with the following:

• Standardized services that deliver valuable business capabilities
• Self-provisionable
• Consumption-funded
• Automated deployment
• Transparent pricing and service levels
• Built-in security and GRC
• Services brokered as well as built

When we thought through this transformation and the end-state we wanted to achieve, we realized that there was nothing exotic about our aspirations. We were trying to adopt a model found in many businesses, yet for whatever reason this model is foreign to most IT organizations and was certainly foreign to ours. However, it helped us to think about this transformation as if we were creating a start-up organization within the enterprise.

In our new Cloud Operating Model, we needed to become service-oriented. Up to that point, the IT world revolved around projects and services that were merely the consequences of completing a project. In the new model, the services became paramount and projects were subordinated to being the means by which services were brought to market, enhanced, extended and retired.

Core to our new operating model was the notion that we needed to compete for our business, as opposed to feeling entitled to it merely because we were a captive provider. To be competitive, we needed to have distinctive value when compared to alternatives. If we aren’t competitive, we should broker best-in-class services from external providers rather than penalize our enterprise by forcing them to use us.

The new operating model also demands a different way of looking at our finances. As an entitled cost center, we were able to aggregate our costs and spread them like peanut butter over projects. In the new model, we needed to understand the cost of all our individual services, which meant better granularity on how we tracked costs. Yet, more importantly, we needed to understand our unit costs and what was happening to unit cost as we made investments in services and as consumption patterns changed over time. We then analyzed how those costs were hopefully covered by the money we were recouping through chargeback.

Key enabling technologies involved the systems that produced financial transparency: metering, billing and chargeback, a service catalog that delivers self-service, automated provisioning, and orchestration enabling end-to-end service automation.

The most challenging elements of our transformation were the roles, skills, culture and organizational structure changes that were required to develop and reinforce the new ways of working that were required. Convergence of server, storage and data center networking technologies necessitated new broader cloud infrastructure architecture and operations roles with established career paths. This model created incentives for employees to develop these extremely valuable skills.

The market-driven, service-centric aspects of our target model required us to acquire product management, marketing, branding and consulting skills. The adoption of multi-tenancy and the drive for high consolidation led to many more eggs in far fewer baskets. This required us to rapidly develop a much more professional approach to operations. We created a dedicated 24×7 operations function and enabled it with a more comprehensive and feature-rich monitoring and management toolset.

We encountered many challenges along the way, and the time it’s taken to get where we are today exceeded our initial estimate. We learned that people don’t change in accordance with milestones in project plans and Gantt charts. They adapt and evolve. The compelling case for change and the details of the change and how it affects them must be constantly reinforced. Change is something that people learn and get comfortable with over time. Muscle memory is extraordinarily strong. We all get into habits and patterns that are hard to break. In transforming our IT operating model, we had to establish new patterns, new habits, and new ways of measuring our success. In retrospect, the magnitude of the change we’ve driven over the past few years is enormous and it’s a testament to the talent, commitment and ambition of our teams that we are where we are:

• 86% Consumption funded
• Standardized, self-service semi-automated “aaS” offerings for Infrastructure, Business Analytics, Database, App Hosting, Content Management, Virtual Desktop
• Service Catalog providing one-stop-shop for it services and support
• Converged organization, matrix aligned to service offerings and technology stacks.

We’re measuring the success of our transformation through the success of our services in much the same way a business measures itself and the success of its products:

• How strong is the value proposition?
• How quickly can we fulfill demand?
• How reliably do the products perform?
• Are we able to sustain ourselves financially?

While we still have work to do, improvements to make and kinks to work out. This will always be the case. Transformation is eternal. The need to adapt will be increasingly important as the pace of business continues to accelerate and complexity manages to creep in as scale increases. Transformation is not a simple process. It is a journey that takes patience and a collective effort from all parts of the organization, but the results are worth the trip.

Want to learn more about our IT Transformation? Be sure to read the 2012 EMC Corporation IT Performance Report.

About the Author: Jon Peirce