How and why has the role and location of the ISD department changed in a business?

What's the ISD department ?

Sounds like homework. However departmentalizing Information security is a prerequisite for failure, successful IS is a responsibility of all users, managers and IT personnel. Cloud computing if files are hosted off site gives IS another site to secure both physically and from digital attack. Insuring that data saved to off site cloud servers is never transmitted or stored in the clear is the first step. Also insuring that there is no encryption keys on these servers is also a must. Data needs to be encrypted before it is sent then sent over an encrypted connection and stored in an encrypted state.
This is not an answer to you question for that I would suggest re reading your course material. Good luck in your studies.