¶ … Behave the Way IT Does?" by Bill Fleming Cloud Computing and the New Economics of Business by Michael Hugos

"Why Does IT Behave the Way IT Does?" by Bill Fleming

Chapter 2 of Bill Fleming's book "Why Does IT Behave the Way IT Does?" deals with the cost effectiveness of the enterprise IT systems and the value of IT to companies. he also discusses the change in perceptions towards IT departments and IT as a part of the business where companies treat them as a separate entity or an independent vendor where the IT department has to sell itself and its products to the rest of the company.

The author critically examines the emergence of IT in business since the 1970s and traces the course of development of IT series in business till the present time including the tremendous impact and popularity of the advent and popularity of the world wide web. The author rightly notes that the CIO and IT organizations expend significant time, effort and money in the designing and the implementation of strong and proactive programs for effective capacity building, service, financial and the alignment practices.

Fleming rightly claims that the IT departments and section in modern business require convincing the business users for providing business objectives and requests for IT investments. On its own, the IT services within a company develop service, cost, and capacity contracts based on the business objectives and a set of broader internal management objectives. The success and the value of IT or an investment in IT by a company is measured according to alignment metrics up and down along the value axis. However, the author claims that even after this the business partners of IT find that the results are not always satisfying for everyone.

Drawing a comparison between the roles of IT in the Glass House era of business and the present time, Fleming distinguishes between the role then and now. He notes that in the past while IT was primarily concerned with activities like accounting and the online financial transactions, in modern business IT has assumed or is expected to take on a more value based where they are expected to align their objectives with broader and enterprise-wide applications and provide a strategic intent. Referring to an article by McKinsey titled "Innovations in IT Management," the author lays emphasis on the articulation of strategic themes by IT. Business today expects IT to deliver value based on the core assets of hardware, the software, and processes, and the value in use or the optimization of returns on investments in IT.

He elaborates how business views optimizing investment value and notes that a value of the IT organization as well as its resources using a series of metrics that helps in the determination of the economic value derived from the IT investment to the business. Business looks to find out the delivery of IT towards business in terms of the cost-to-revenue ratio, the strategic value, and the competitive edge gained from the investments in IT. This...

Fleming points out to a number of examples, tools and models that are used to determine the value of IT for business sin the modern era.
It is this conjecture that Fleming goes on to say that since IT is valued as a part of business where returns on the investments made assume criticality and business expecting gaining of competitive edge and a strategic value as well from IT, that IT has to sell itself or provide enough evidence to the business to warrant any form of significant investments. Agreeing with McKinsey on this issue, Fleming writes that an IT department and its resources, if deeply integrated into the business process, is able to enhance its value and business is ten unable to cut costs and hence make significant investments.

PART 2: Chapter 3: Cloud Computing and the New Economics of Business by Michael Hugos

The second chapter under consideration by Michael Hugos takes a close look at the transformational role of cloud computing in business. The author describes the ways that cloud computing can be helpful for business and how business can gain advantages from it. He critically describes the cost and the risk advantages of cloud computing and how business can save money and the considerations that one must take into account while deciding between in-house IT department set up and use of third-party cloud computing services.

The chapter also gives a glimpse of how cloud computing services can help companies to nimbly ramp up revenue and make a positive impact on the business operations and the cost. The section also talks about the advantages for business leaders to let go of the worries about technology and instead concentrate focus on their business. The section lists some of the most obvious potential benefits as well as the risks of cloud models. Hugos, in this chapter of the book, describes the spread of cloud computing technology as a "creative destruction" process that was made popular by the economist Joseph Schumpeter. The author quoted Schumpeter to describe the impact of cloud computing on traditional IT systems and set up in Business claiming that it has brought in a new technology and a new process of doing things and has replaced the previously dominant IT set ups.

While being critical in some places about the risks involving the use of cloud computing technology, Hugo talks about how the technology has seen investments in parallel to the investment by business in traditional in-house computing technologies. Being critical of how some business reacts to cloud computing, Hughes rightly notes that the transition from the use of traditional technologies to this new technology would be "quicker for some and slower for others" and would be dependent on individual circumstances. But in the end the change will happen, says Hugo. His conclusion is based on facts and figures and real life examples, dotted throughout the chapter, that emphasizes the advantages to business enabled by cloud computing.

He notes…