An AEC CIO’s Paradigm Shift to the Cloud
Reflecting on my 19-year career as CIO for a top Architecture, Engineering, and Construction (AEC) firm, it was sometime around 2015 where my mindset shifted to cloud first.
Leading a technology organization in a growing and progressive AEC company, I recognized that numerous things had changed, and would continue to change.
It was going to be impossible for an internal IT organization to keep up without significantly increasing staff. Even increasing internal IT staff, it was questionable if they could scale. I realized that solely relying on adding staff was not the appropriate strategy. For the IT organization to support the business effectively, we needed to leverage trusted technology partners to augment the internal IT team’s knowledge and capabilities. Additionally, we weren’t going to be capable of maintaining the pace of change nor have the agility required by the business without fully embracing a cloud first strategy.
Leveraging cloud services would enable us to scale up and down, be agile, and adapt quickly. This meant we needed to utilize best of breed software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS). This also meant we needed to thoughtfully select trusted technology partners to augment our internal IT staff and capabilities.
No Time For Downtime
For AEC companies and other professional services organizations, ensuring staff can fulfill their client work obligations is paramount. Our engineers and architects depended on always-on access to their design software and computing environments. Everyone required 7x24x365 access to design files and work artifacts. This was true for all our professional services consultants and supporting staff: information technology, GIS, Planners, Environmental Scientists, Construction Management, Construction Inspectors, Surveying and Subsurface Utilities staff, and others.
Although it sounds trivial, one of the most critical business systems in a professional services company is time reporting and customer billing. One of the most critical metrics for a professional service company is utilization (billability). Monitoring utilization in near-real time provides insight into the company’s forecasted revenue and profitability. Improving time reporting was a priority.
Change in the Work Culture
Throughout the past decade, there was also a shift in the definition of work. Work was now something you do, not a place you go. Staff asked for and needed the capability to work from anywhere at any time. Staff would use our offices, but they were often on client sites and more recently working virtually. Additionally, staff needed to do their best to keep a work/life balance.
Having employees come to their brick-and-mortar office to access their computer and systems was no longer sufficient and was actually an impediment. Consequently, the systems and IT infrastructure needed to empower employees to be fully productive anytime, anyplace.
Running Out Of Gas
Also, around 2015, there were increasing signs of growing pains with our business applications. Up to this point in time, our business applications were all on-premises best of breed applications. Finance and Project Accounting had their systems. Human Resource had their systems. Marketing had their systems.
For the most part, these business applications were standalone with no integration. There were periodic data handoffs of specific information such as employee data and client project data, but these were not real time. The temporal differences caused inconsistencies and these differences often consumed valuable resources attempting to investigate and explain why data was out of sync.
Some business applications were “running out of gas” so to speak. An initial remediation was to upgrade some on-prem server hardware with more CPU and memory to attempt to improve performance. This bought us some time but wasn’t the solution. Business stakeholders had begun investigating the current commercially available functional applications that were on the market to make improvements to their respective operations. IT needed to get in front of this.
Transforming Our Business Systems
As CIO, I called a time out! Instead of starting down a road to replace individual business systems, one at a time, I proposed to leadership that we strategically consider transforming our Enterprise Business Systems collectively. Taking this approach, we defined some desired outcomes:
Getting Buy-In From The Leadership Team
Convincing my executive leadership team about a cloud-first strategy took some time. It was through a combination of group and one-on-one conversations, where I would educate, listen to individuals’ questions and concerns, and respond individually. I recommend using the one-on-one approach. Sometime individuals are reluctant to ask questions in a group setting, feeling they may look foolish or ask a dumb question. For many, the “cloud” is a vague and ambiguous term.
Some expressed concern about the security of our data in the cloud. Overcoming leadership’s concern required persistent education and multiple conversations. Some of them were planned presentations. Some interactions were situational, impromptu conversations. I explained to leadership that companies like Microsoft invest billions of dollars annually to secure their environments. Organizations such as Microsoft had 1,000’s of employees focused solely on security compared to the one or two FTEs within our organization.
As the CIO, you need to tailor the message to be relevant to your audience, your situations, and your organization. Key stakeholders in my AEC firm that needed to buy-in included:
CEO/President – Our CEO had reservations regarding shifting our systems and data to cloud services. He had a comfort level with what had worked for us in the past, by operating on-premises systems. We had been successful with this approach, and this operating model has gotten us to where we are today.
Our CEO needed to get comfortable with the notion that the cloud services were secure. And as it is for all CEOs, he needed to understand the how the shift from the traditional Capex investments to an OpEx operating model would impact our bottom line.
CFO – Our CFO personally didn’t like how the technology industry had shifted their business models from an acquisition and maintenance model to subscriptions models. Who knows, maybe he was envious that technology companies figured out how to create a recurring revenue stream! Like all smart CFO’s he understood the value proposition.
AEC companies need to actively manage their overhead rate. An AEC company’s overhead rate is a critical factor in setting billable rates and to remain competitive in the AEC industry. The CFO needed to understand how the shift to OpEx expenses versus the traditional Capex expenditures impacted the company’s overhead rate. Through analysis and modeling of multiple years’ projections, the CFO accepted that the OpEx transition would not have a material adverse impact on our revenue and profitability.
IT Staff – we all realize most people don’t like and resist change. Recognize that IT staff may have some fear, uncertainty, and doubt about moving from on-premises to the cloud. Don’t ignore this. Through discussions and individual conversations, plus a little bit of saying “trust me,” the IT team bought into the transformation.
Line of Business Leadership – In general, the business was most concerned about the reliably having the systems, applications, and technology resources for their staff to do their jobs and complete projects. Some wanted to better understand how the cloud was going to enhance reliability and security. Through group discussions and individual conversations, leadership became comfortable and trusted my recommendations.
Using our guiding principles, we achieved most, but not all of our desired outcomes. We did not find one system that met all the minimal requirements. Yet we were able to:
We enabled the business by deploying:
Each company and its IT organization has its unique challenges. Each evolve differently. But there is much commonality in our challenges. I hope my reflections stimulate some thoughts regarding how your IT organization is supporting your business. Do you align with your business stakeholders to achieve their business goals and desired outcomes? Do you have a Strategic IT Plan to support your company today and to leverage available technologies? Do trusted technology partners assist you in navigating today’s complexities?
If you’re challenged with a lean IT staff and would like to increase your velocity, reach out to our Strategic Advisory Services practice for a discussion at info@eGroup-us.com.