Six Questions Government Executives Should Ask About Cloud Computing

Computing clouds are, in essence, online, supersized data centers containing tens of thousands of servers hosting Web applications. Cloud services from raw infrastructure to complete business processes can be purchased through Web interfaces and turned on and off as they are needed.

Characteristics of cloud services include:

• Little or no capital investment
• Variable pricing based on consumption; buyers "pay per use"
• Rapid acquisition and deployment
• Lower ongoing operating costs

Cloud computing lets organizations bypass the expense and lead time of buying, installing, operating, maintaining and upgrading the networks and computers found in data centers. Instead of licensing software, users tap into a service when it’s needed for as long as it’s needed. All that is required is a broadband Internet connection and a mobile device or personal computer with a browser to access and activate the cloud service.

Accenture has identified six key questions government decision makers should ask about the still-new phenomenon of cloud computing.

By focusing on these questions, government executives can narrow their inquiries and start to identify opportunities and risks that will affect their organizations.

The basic cloud technologies are well established and can be duplicated by any organization. That makes it possible for governments to build private clouds—restricted infrastructure that uses cloud computing technologies but is shared only by approved organizations. Private clouds can be used within single governments or possibly be shared by both local and central government departments.

Given the specific challenges that governments face around keeping data and processing in-country and security and data privacy restrictions, private clouds are likely to play a key role in the evolution of cloud computing for government organizations.

When compared to the commercial sector, government leaders face different challenges and will need to scrutinize their cloud decisions through their own distinctive lens. They need to consider the following:

• Serving the Public: Citizens are putting more demands on their governments, not only in regard to how services are provided, but in how efficiently government operations are run.
   
• Politics: It may not be politically acceptable to have government data and processing performed outside the country.
   
• Tough Standards: Given the nature of some government operations, security, data privacy and reliability concerns may impose even tougher restrictions on how much flexibility is feasible when considering access, storage and processing “in the cloud.”
   
• Organizational Issues: Management will need to overcome any cultural barriers or resistance to sharing services and IT across government.
   
• Procurement Processes: Procurement policies—designed to maintain fair competition between suppliers—may reduce flexibility in governments’ ability to use cloud services.

Given the scale and diversity of IT environments across local and central governments, it is our view that private clouds are likely to play a key role in the evolution of cloud computing for governments. Adopting a cloud computing strategy that seamlessly integrates public and private cloud capabilities with legacy IT as part of the overall IT strategy could bring additional significant benefits and greater opportunities for success.

Governments need to consider which applications are suitable to run in the public cloud (e.g., non-sensitive data applications and development and test work), and which require a private cloud solution.

This hybrid approach would meet requirements for in-country processing and data privacy/security as well as lower costs, and improve services and efficiency by:

• Avoiding the fragmentation and dilution of efforts that hinder efficiency, reliability, data privacy and security across governmental departments.
   
• Enabling new integrated customer-centric processes that are gaining importance in governmental services.
   
• Supporting data-intensive processes such as data analytics that are increasingly being used by governments (e.g., to fight crime and discover fraudulent activities).
   
• Sharing departmental peaks in data processing across the cloud to reduce overall capacity requirements and costs.
   
• Standardizing new and current services for multiple groups, saving development and maintenance costs and speeding provision time (e.g., common applications required by local government departments or schools and universities).
   
• Providing a platform that allows very quick development of new applications and services, ideal for short term needs.
   
• Facilitating real time competition among service providers

The three top benefits of cloud computing talked about today are cost, flexibility and speed to market.

Cost
Replace a large up-front capital expense with a low, pay-for-use operating expense; eliminate the cost of servers, software licenses, maintenance fees, data center space, electricity and IT labor.

Flexibility
Summon a cloud quickly, grow it by assigning more servers to a job, then make it shrink or disappear when no longer needed; well-suited for sporadic, seasonal or temporary work; for finishing tasks at lightning speed and processing vast amounts of data; and for software development and testing.

Speed
Create a software service using free or low-cost development tools and quickly make it available to all, potentially making government departments much more agile and responsive; a fast and easy way for organizations to impose a standard set of applications or processes. But these are just today’s benefits.

In the commercial sector, companies that have built massive clouds are already transforming the nature of competition. Governments may use cloud computing to make similar leaps—to transform the nature of cooperation. Possibilities include:

• Greater cross-government sharing
• Easier applications development
• Better data security
• More cost-efficient provision of cloud infrastructure services
• Quicker, easier detection of data errors and fraud

In addition, governments may start promoting clouds as a low-cost way to provide IT services to non-governmental organizations, community organizations or start-up businesses. In Japan, there is a plan to create a nationwide cloud computing infrastructure that could eventually host all Japanese government IT systems.

To make sure an organization maximizes benefits and minimizes risks of migrating from conventional to cloud computing, executives must:

• Ask hard questions and demand data-based analyses regarding cost savings. Don’t assume automatic and substantive cost savings. Do an ROI analysis. Consider conversion and ongoing costs as well as savings.
   
• Establish a clear governance structure. Decide who inside and outside the IT organization should be included in decisions on cloud computing, and what decision-making rights and responsibilities they have.
   
• Keep cloud efforts on track. Make sure cloud computing receives the focused thinking, planning and follow-up it requires. Identify and address both immediate and longer-term business needs and opportunities that lend themselves to cloud computing.
   
• Set the standards for success. Provide the necessary oversight to the IT organization. Make sure goals and deliverables are well understood, and projects are well aligned with business needs. Clarify how the value from cloud computing is to be determined.
   
• Provide the necessary support. Look beyond financial resources and technical talent for activities that will underpin the success of cloud initiatives. For example: a community of practice or a cloud program office to develop cloud skills and share cloud experiences.
   
• Buy cautiously, appraise frequently. Consider whether prospective cloud providers have the potential to be a desirable partner in the future. Evaluate chosen partners on financial stability and their ability to improve functionality and service levels; to integrate data across different technology platforms and cloud services; and to deliver on promises.

Ultimately, the value of cloud computing will be measured in how it changes the fundamentals of providing government services. For example:

• There will be greater cross-governmental sharing, which allows citizens to access everything they need from their government through a common portal (e.g., a change of address made once will update all government departments).
   
• Government departments will develop applications to support their operations using pre-approved, cloud-based platforms or will use pre-configured applications (that come with hardware, networking, security and other services built in).
   
• Data security will be provided at the appropriate levels through a government cloud. Local and central government departments will specify the sensitivity of the data and the cloud will automatically store it according to defined rules (in-country, secure data center locations, strong authentication, etc.).
   
• Cloud infrastructure services will be provided to governments through a competitive, real-time market for services (as with energy).
   
• Government will have the IT power to use data analytic techniques to detect data errors and potential fraud quickly and easily.

Asking the right questions is the place to start:

• What is cloud computing and how does it work?
   
• What benefits can cloud bring to my government organization?
   
• Given the industry-specific challenges, how can government executives come to a timely, focused and productive evaluation of cloud computing?
   
• Can I depend on clouds to save my organization money?
   
• How will clouds affect the way my organization operates in the future?
   
• What about assurance of security and data privacy?