Conclusion: Utilising vendor products entails a cost to the user above the licence fee. This cost, which is hidden, is mostly unaccounted except when dealing with a vendor that imposes vexatious conditions. Such conditions may alter usage rights and prolong the negotiation period to conclude contracts. That adds costs to an organisation it should not bear.

Where a vendor has myriad and confusing contractual terms it is a cause for organisations to assess their lock-in with that vendor. In reassessing their connections with vendors, organisations ought to strategically move out of deep lock-in towards more flexible relationships with vendors. For a user organisation to be overly dependent on a limited number of vendors is a potential problem. Reducing dependencies on single or groups of vendors may also deliver more efficient business relationships. It also serves as a signal to vendors that an organisation wants an efficient arrangement.

Conclusion: CIOs must avoid being swept up by the hype concerning SaaS (Software as a Service) and approach each business case on its merits. While the immediate net benefits may be appealing, it is important to evaluate whether the long-term benefits are sustainable and the risks manageable before entering into a service contract.

Synopsis: In the previous millennium some CIOs claimed they could reduce their IT costs by not producing printed reports for business managers and only recommencing them if the manager complained. If they said nothing the application software and documentation were put on the back burner in case they were needed and after a decent period given a ‘quiet burial’.

In this millennium the approach above will not work as business professionals and managers can access their data and prepare management reports online when needed. This begs the question, how can CIOs reduce their costs in 2013 while managing risks?

Conclusion: Enterprise architecture tools and processes have traditionally missed the mark in providing timely and relevant support for executive decision making. A fresh approach is required that focusses on just enough information to support defensible, evidence-based planning. Enterprise architecture functions must provide value in short, focussed iterations.

Enterprise architecture provides an evidence-based approach that demonstrates clear traceability for investment planning decisions. Astute executives will understand how enterprise architecture can be used as a powerful approach for developing an ICT investment plan that is robust and defensible.

Conclusion: Enterprise architecture should be viewed by CIOs as a fundamental toolset to provide sound, defensible, evidence-based decision making. CIOs who ignore or misunderstand enterprise architecture forego a powerful management device.

CIOs should understand and make use of the enterprise architecture techniques at their disposal; they must also recognise approaches to enterprise architecture that will not work. CIOs should set expectations with their enterprise architects for quick delivery of highly relevant outputs: days not years.

Conclusion: Much discussion on NBN attempts to demonstrate its value in the future. Instead of trying to prove what NBN can deliver in thirty years it is wiser to assess what organisations can do with the network.

This may seem obvious. All that’s required is to plug into NBN and let the network make it happen. If NBN is really such a significant change in technology, organisations will find they have to discover how they operate and how to fix themselves in order to use the NBN to their advantage.

Conclusion: Clients will see fewer IT services providers responding to requests for work in 2013 as many have been forced to reduce staff to stay profitable. To attract respondents and get competitive pricing, clients must convince both struggling and viable providers they have a greater than 30% chance of success and no-one has the ‘inside running’ to win the business.

Conclusion: Organisations, large and small, have invested time and money over the past 5-10 years in improving ICT project success. Skilled project managers, governance groups, increased executive awareness and improved processes have all combined to improve the probability of a successful project. However, recognising when to cut the losses of a failing project is still a problem for many organisations. Either they never terminate a failing project or they delay in making the decision to terminate it. Either way the consequences can be devastating.

Conclusion: Selecting a corporate mobile device standard can be risky. Mobile devices are far more personal than PCs, and users’ preferences are heavily influenced by their existing consumer experience and personal choices.

Imposing an IT driven device standard increases the risk of the CIO being forced into defending the decision against disgruntled end-users, some of whom may have considerable influence. To avoid this follow the four golden rules of mobility and ensure mobile device selection has business buy-in.

Conclusion: Strange things happen in the labour market when there is economic uncertainty. IT staff turnover drops and IT contractors quickly accept offers made by recruitment agencies. The prolonged downturn, which started with the Global Financial Crisis in 2008, will continue to make permanent employment attractive to contractors. As the tide has turned employers need to seize the moment and make offers to contractors whose knowledge and wherewithal they want to keep.

Conclusion: Software as a Service (SaaS) is gaining mainstream acceptance as a viable sourcing strategy for enterprise applications in both the public and private sector. IDC predicts that by 2015 24% of all new business software purchases will be of service-enabled software with SaaS delivery being 13.1% of worldwide software spending1. SaaS is being considered by many organisations as a means of achieving faster delivery times, cost reductions and access to innovative capability. In addition, organisations can exploit the SaaS model during the acquisition phase to reduce risk, improve business change management and test activities if they are prepared to move away from more traditional approaches and deal with organisation cultural issues. This paper focuses on the early stages of the acquisition process prior to contract finalisation.

Conclusion: Whilst SaaS (Software as a Service) using Cloud computing has helped commoditise IT, it is not always the ideal replacement for in-house application development. Instead the axiom ‘look before you leap’ applies, and SaaS assessed on a case-by-case basis (including not only potential benefits but also the hidden costs, such as contract breakage should the SaaS solution be unable to meet changing business requirements).

Conclusion: Organisations which reach outside to acquire application systems solutions need to manage their risks well and be commercially astute while selecting the right vendor. To select the right vendor the tender document needs to be complete, reviewed thoroughly to avoid mistakes and based on an awareness of what the market will offer. Premature release could lead to the wrong vendor being selected.

Conclusion: It is tempting for the Executive when the IT Department’s processes are failing or systems are not being implemented on time to direct the CIO to engage an external provider. Whilst the need to act might be urgent CIOs must avoid making hasty decisions which could lead to the types of mistakes, set out below, occurring.

Conclusion: Based on their exposure to consumer technology (iPhone/iPad) Business Executives and Managers are demanding mobile solutions for their knowledge workers and field service staff. Rather than rush to a solution for one group’s needs (which may create a siloed solution and a barrier to further projects) define an enterprise mobility strategy that enables current and future mobility project to be quickly and effectively built.

A mobility strategy can be built in less than three months and must start with use cases. This leads to device selection, which must focus on user experience rather than the IT organisation’s concerns.

Conclusion: One of the functions of a board1 is to minimise business risks to the shareholders. As signing a major contract with a managed services provider involves significant risks such as the failure to deliver critical IT services, boards need to be convinced the risks2 are known and can be minimised by vigilant management.

Conclusion: Many organisations approach Unified Communications as a singular initiative: a generic solution that will solve myriad business issues. One key tenet behind this thinking is that the unified communications will "unify" all aspects of communications, from voice and text chat to presence and video. In practice, however unified communications is best deployed to meet specific business cases, and does not actually need to be deeply integrated in order to achieve the benefits sought in many real business cases put forward. In summary, some of the best implementations of unified communications have not been unified at all.

Conclusion: The success of a security professional is not measured by whether their recommendations are adopted, but whether the technical risks faced by the organisation have been identified and communicated in terms of business impact to decision makers. This enables the business to make informed decisions. Consequently, security professionals must make it their highest priority to be in communication with the business, because one of the most impactful technical risks is a communications gap between the security team and the business. IT security professionals must take on learning the language of their business, because it isn’t the business’s responsibility to learn to speak IT security.

Conclusion: For the last 20 years an organisation’s applications and data have been largely accessed from a Windows desktop. While the Windows desktop will remain an important access platform, IT organisations will be expected to also enable access via mobile device and to support Software as a Service (SaaS) applications.

The first step is to shift paradigms from “delivering a standardised desktop” to “enabling access from a range of devices and form factors using multiple delivery methods”. The second step is to choose between a best-of-breed or integrated platform strategy for the management platform.

Conclusion: CIOs need to decide if they will invest in the practice of enterprise architecture and if so, how to approach it. Many CIOs choose to invest in enterprise architecture for the wrong reasons: because other organisations are doing it or because a consultant says it is “best practice”. Instead CIOs should consider which enterprise architecture functions would provide specific benefits, given the functions that are already provided in the organisation.

Conclusion: Australian enterprises seem to be slow in adopting social media and related enterprise collaboration tools. Survey evidence indicates that corporate Australia is not as interested in the social and collaborative technologies as counterparts in other regions.

Taking a steady and progressive strategy implementation of social and collaboration is probably an advantage. Being an early adopter with such technology may be an opportunity for some enterprises but not for a mid-sized or larger organisation. However, waiting too long, or crafting an even better strategy may mean wasting opportunities.

Conclusion: When assessing the options at outsourcing contract renewal time, ensure insourcing is included in the evaluation as, despite the changeover cost and risks, it may be the best strategy to pursue.

Circa 1960: The “Hard theory of platforms”

In the early days of information technology, hardware was THE platform. Companies such as IBM and DEC provided the big iron. Business software was THE application. In those days even software was as hard as stone. The term application platform was unheard of.

Conclusion:Emerging Technologies (such as those relating to Tablets, to Cloud, to Social Media, to Big Data) threaten to complicate and disrupt the work of enterprise architecture. As enterprise architects struggle to understand, simplify and bring governance to heterogeneous technology environments, new and emerging technologies get in the way.

Emerging technologies cannot be ignored. They promise tantalising new benefits and bring a vision of hope to CIOs struggling with increasing costs and stagnant budgets.

Enterprise architects must understand what is possible with new technology and matching that to the specific needs of an organisation whilst reducing technology sprawl.

Conclusion: Most vendors emphasise their strengths and obfuscate to hide their weaknesses when responding to an RFT (Request for Tender) for IT products and services. Detecting their weaknesses by unravelling their obfuscation is often a major task for the evaluation team or panel. Failure to detect weaknesses could lead to the wrong vendor (tenderer) being selected and reflect poorly on the team.

Conclusion: The foundation of any BYO device initiative is a robust BYO device policy. The policy must set the boundaries for acceptable use, costs and security. Ensure device security is driven by business stakeholders and is based on pragmatic risk analysis rather than technical concerns from IT staff, or FUD from vendors who are anxious to sell their wares.

Robust policy, strong corporate culture and proper training can be more effective than technology in securing corporate data and controlling costs and risk. Use policy, culture and training to drive compliance, minimising the need for complex and expensive technological controls.

Related Articles:

"BYO Devices (Part 1): Adoption in ANZ" IBRS, 2011-11-26 00:00:00

I was taken by surprise when the caller, whom I had never met, asked whether I was interested in being considered for an IT management position in a large (unnamed) organisation. Intuition told me to be circumspect and keep asking questions about the role while I gathered my thoughts.

Conclusion: IT executives are increasingly being pressured to adopt Windows 64-bit operating systems as a foundation for the next generation of desktop environment. Vendors – and in many cases IT engineers – are touting a range of technical benefits of Windows 64-bit operating systems over 32-bit operating systems. However, these technical benefits do not equate to business benefits.

Unfortunately, market movements and vendor strategies will force enterprises to adopt Windows 64-bit desktops sometime in the next two desktop refresh cycles. As such, the move to a Windows 64-bit environment should be viewed as conceding to market pressures and adopted only within the context of moving to a new Dynamic Desktop architecture, which is where the real business benefits are to be found.

Conclusion: The idea of Bring-Your-Own (BYO) Laptop has been bandied about for the last seven years, but it is not as common as implied by the press. Few ANZ organisations have BYO Laptops, however some have implemented BYO smartphones and many intend to do so in the next 18 months.

The driver of BYO device in the organisation is not avoidance of the capital costs but rather the need to accommodate users’ expectations of technology, which have been significantly increased by the consumerisation of IT, and largely driven by the iPhone and iPad.

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"BYO Devices (Part 2): Policy" IBRS, 2011-12-28 00:00:00

Conclusion Leading IT organisations now recognise that selecting and integrating a mix of best-of-breed servers, storage and networks no longer adds value to their organisation. Instead they are purchasing Integrated Systems from a single vendor that eliminates the cost and complexity of integrating these components; lowers the integration and support risks; and reduces the time to deliver a working solution.

To make this paradigm shift most organisations will need to change the kind of relationship they have with their infrastructure vendors from a purely transactional supplier to a long term strategic partner. For many IT, and vendor staff, this will be a difficult and traumatic transition.

Conclusion: For outsourced IT or business processes, innovation that is measurable and practical must be managed and aligned with your outsourcing provider. The further up the business value chain you engage in offshoring and outsourcing, the more critical this development and integration of innovation becomes. Unfortunately in practice this has proven more difficult. As a result, innovation in outsourcing contracts has been lacking. This lack of success has led to questions around the actual potential for outsourcing to provide innovation. of the actual capability for outsourcing and innovation.

Conclusion: One of the hidden costs of IT occurs when an organisation is paying more for a vendor’s services than the value provided. This cost will not be evident nor eliminated unless management regularly reviews and measures each major vendor’s performance and takes corrective action when needed. Failure to review and measure could be career limiting for CIOs.

Conclusion: When reviewing options to reduce IT costs, ensure the application systems deployment strategy is included in the list of tasks in case the current strategy is costing more than expected and the benefits are proving elusive. Unfortunately the review is often overlooked because the perceived ‘cost of switching’ to other solutions and the business risks are viewed as too high and the task seen as a distraction from day to day business operations. CIOs must disabuse management of these views.

The CIO walks into the boardroom. He proudly tells the board that he‘s hired “Global System Integration Leader” to be the prime SI for the organisation’s upgraded ERP system. The board fires him on the spot. When he asks for an explanation for his firing, the board tells him that it’s the third time that he’s hired the “Global System Integration Leader” for a major system integration engagement and the first two times failed to achieve objectives. He wouldn’t get a third chance. As he made his way to the lift well he was heard to exclaim in a loud high pitched voice; “But you don’t understand, they get it right once in every three times – they’re due”.

Conclusion: In many organisations there is a major disconnect between user expectations relating to software quality attributes (reliability of applications, intuitive user interfaces, correctness of data, fast recovery from service disruption, and so on.) and expectations relating to the costs of providing applications that meet those attributes.The desire to reduce IT costs easily leads to a situation where quality is compromised to a degree that is unacceptable to users. There are three possible solutions:

  1.  Invest heavily in quality assurance measures,
  2.  Focus on the most important software features at the expense of less important ones, or
  3. Tap into available tacit domain knowledge to simplify the organisation, its processes, and its systems.

Conclusion: Relationship Managers are most effective when they can act as trusted advisors to business managers in how to best use existing IT services while helping them enhance offerings to gain comparative or competitive advantages.

Conclusion: Despite its position as the second largest IT services provider in Australia, and the largest in New Zealand, Hewlett Packard (HP) does not have a consistent or mature end to end IT and business service delivery capability across its services lines in Australia and New Zealand (ANZ).

Future customer confidence in the IT Outsourcing business of HP is reliant in part upon the completion of announced investment in data centres in both countries. It is the opinion of HP’s customers and prospects that its application, industry and Business Process Outsourcing (BPO) based services requires a similar investment and focus to the IT outsourcing business.

Conclusion: RFTs (Requests for Tender) increasingly contain NFRs (Non Functional Requirements) describing the desired attributes of the systems solution or services being sought. Attributes sought vary from those directly related to products and services such as scalability and high availability to strategic management capabilities.

NFRs are needed to help differentiate tenderers due to the commoditisation of products and services. Astute tenderers know they have to submit a compelling value proposition complemented by initiatives to convince clients they can deliver what is required. Clients likewise need to define fine achievable NFRS, be discerning assessors of responses, and be able to hold the tenderers accountable.

Conclusion: Organisations that receive competitive and insightful responses to their RFTs for products and services know they do not come their way by accident, but due to sound planning and conscientious execution of the bid process.

Conversely, organisations that rush the bid process and give potential suppliers little warning of the RFT’s availability and insufficient time to respond are likely to find fewer than expected responses, or even an empty tender box, on the closing day.

Conclusion: Running a robust, cost efficient data centre requires a scale of operations and capital expenditure that is beyond most ANZ organisations. Organisations that host equipment in their own facilities have a higher business risk. Business management is unlikely to be aware of these risks, and has not signed off on them, leaving the IT organisation exposed.

Business management should ask for a business impact assessment to expose these risks to an appropriate decision making level. Management can either sign-off on these risks or request a mitigation plan. For many organisations, moving to a commercial Tier-2/3 data centre reduces risk without substantially changing the total cost. SMEs should consider migrating to a cloud environment (IaaS and/or SaaS) and get out of the business of owning and running their own IT infrastructure.

Successful IT architecture is largely about choosing the optimum systems and technologies that enable organisations to achieve their strategic objectives. The right way to choose between architecture options is through an open, timely, visible process that incorporates key stakeholder input, is based on credible evidence and is measured against alignment with organisational needs and priorities. Poor architecture decision making leads to confusion, waste and delay.

Conclusion: When probity and management accountability are rigorously applied in the IT procurement process, a message is sent to all stakeholders, including vendors, that fair and equitable buying decisions will be made.

Conversely, when probity is absent or lip service only is paid to it, stakeholders may be wary of investing scarce resources to market their services and potentially decide to ‘no bid’ when a tender is issued. The corollary is the client may not get visibility to the best solutions the market has to offer.

Conclusion: For many organisations the question of thin vs. full is highly polarised and usually framed as a mutually exclusive choice where the “winner takes all”. Recent advances in desktop deployment methods enable this question to be constructively reframed as a benefit analysis focused on who, what and where. This approach ensures the appropriate device is used in each scenario, enhancing desktop agility and improving the user’s desktop experience. 

Conclusion: In most organisations the Help Desk is the single point of contact for business and IT professionals regarding desktop support. When management skimps on the number of IT professional needed and their training, users typically wait too long to get through to the Help Desk or become frustrated and abandon the call, with adverse business consequences.

Conversely, when too many Help Desk staff are assigned, boredom quickly ensues. Ensuring the Help Desk has the right number of IT professionals with the right skills is a balancing act for management. Unless management has sound performance metrics to measure service effectiveness, achieving the balance is hard.

Conclusion: Due to the cyclical nature of outsourcing contracts, a large number of large enterprises and government agencies in Australia have engaged in a renewal process for outsourcing contracts in the past 24 months. It is clear from the new contract terms that the balance of power in the relationship has shifted from vendor to organisation. The window currently exists for a deal structure that ensures you maximise business objectives and outcomes and your provider achieves measurable service levels and process delivery.

Conclusion: As Windows 7 celebrates its first birthday many organisations are contemplating a desktop upgrade. Most desktops were designed more than seven years ago and there are many new technologies and approaches that need to be considered.

For most staff the desktop is a personal experience, making the upgrade a high-profile project. Treating this as just a technical refresh risks creating a technically successful solution that is considered an expensive failure by the business, or of marginal value. To avoid a career-limiting move, approach the desktop upgrade as a business project that has strong links to key business drivers, and structure the implementation to ensure it quickly delivers tangible business benefits.

Conclusion: Engagement by Australian organisations with Indian based service providers (IBSP) has accelerated in recent years. Indian providers have invested significantly to increase the breadth and depth of engagement with their Australian clients.

Conclusion:When assessing potential service providers, rate highly those whose solution clearly meets requirements and who have capable IT professionals ready to implement it. To reflect the rating assign a higher evaluation weighting to providers meeting both tests and a lower weighting for attractive pricing, previous experience and availability of proprietary methodologies.

Conclusion: CIOs who do not know the level of alignment of their IT strategy and performance with business objectives are potentially flying blind. They could, for instance be advising management to allocate scarce resources to the wrong problems or hiring the wrong people and not know it.

Because alignment is based on perception, CIOs may also be missing the signals from business managers that they are not doing well. Restoring alignment, based on measuring it and taking corrective action when out of alignment, must be a priority of today’s CIOs.

Conclusion: The increasing cost of energy is not being widely considered in IT departments, but ignoring this trend is a mistake. Not only is the electricity getting more expensive, but data centres are using more of it. CIOs must take immediate action to improve energy efficiency in the data centre and reduce total energy consumption, or they could face a doubling of electricity costs within five years.

Conclusion: Recent Standish Group research1 has shown that project failure rates for IT-based projects have risen since from 19% in 2006 to 24% in 2009. Running projects successfully has become more challenging in recent times as the lingering effects of the GFC tempt project participants to cut corners. Strengthening methodology observance and project governance arrangements may result in some improvements in success rates. However, IBRS believes that greater benefit can be achieved by transcending such mechanistic approaches. We advise a holistic re-examination of candidate projects using our 6C2 approach, then re-configuring those projects where necessary to improve their chances of success.

Conclusion: Failed projects are newsworthy again. The most recent report from the Standish Group, which has studied over 70,000 IT-based projects since 1985, indicates that project failure levels reached new heights during the GFC. Prima facie, this is counterintuitive. Additional controls (such as closer scrutiny and reduced tolerance levels on spending) and cautionary approaches have typified executive responses to the GFC. However, cost-cutting to meet agreed targets and attempting to hasten project delivery in an already resource-lean environment will have contributed to this result.

Conclusion:Value chain analysis is one of the fastest ways to understand the essence of a business or an organisation, provided appropriate techniques are used in the analysis. The only concepts needed for recording value chains are roles, systems, artefacts, the links between these concepts, and a distinction between artefacts that are exchanged with other organisations and artefacts that are only relevant within the organisation. One of the biggest pitfalls in value chain analysis is to lose track of the big picture, and to get lost in the details - which can easily be avoided by following a small set of best practices to avoid work that does not add value.

Conclusion: At IBRS, we often find that the performance of IT Managers is weighed too heavily on short-term criteria. In such environments when outsourcing is being considered, the pressure to minimise current costs and to be seen to take quick, decisive action can result in on-going problems and higher than anticipated costs. There are, however a number of strategies that organisations can adopt which will lead to significantly better outsourcing outcomes.

Conclusion:Organisations that practice smart sourcing know what they can achieve with their resources and what must be sourced externally. They also know how to act on that knowledge to deliver timely and cost effective services to their clients.

Conclusion: The phase of the outsourcing lifecycle that involves the selection of the service provider is where the buying organisation has the opportunity to make a decision that can make or break the outsourcing initiative. A considered approach that includes an analysis of both the buying organisation requirements and potential service providers' capabilities is the most likely way to achieve a successful outsourcing outcome.

Conclusion:When it comes to evaluating software products to address a particular business need, the first activity after determining a list of candidate products often consists of sourcing product selection criteria from independent subject matter experts. But qualified product selection is only possible if extensive information about the specific organisational context is taken into consideration, otherwise boilerplate product selection criteria only have the effect of a security blanket.

Conclusion: CIOs must keep all levels of management aware of the impact of extending the organisation’s reach and range1 of services. Whilst there are obvious benefits from the extension, business managers must understand that it brings with it increased application and IT infrastructure complexity2 and extra support costs. It also makes the organisation’s network vulnerable to intrusion.

Astute CIOs know that having alerted management of the impact of extending reach and range, and to keep their job, they need to present their strategy for its support while minimising the risks. Without strategies, as set out below, they put their jobs at risk.

Conclusion:Despite the importance of the contract in the procurement process some IT organisations continue to delegate full responsibility for contract preparation to their legal group or to external legal advisors. This can result in an overly legalistic document which may also fail to adequately address the non legal requirements that a buying organisation also needs in the contract.

Particularly during the tough economic times, we find that the performance of CIOs can often be weighed too heavily on short-term criteria at the expense of strategic long term goals. In such environments when outsourcing is being considered, the pressure to minimise current costs and to be seen to take quick, decisive action can lead to significant longer-term problems.

Conclusion: Many organisations have found that as the level of risk increases in their contracts, the potential benefits that can be achieved from enhanced contract management also increases. A process that involves risk identification and the quantification of the probability of these risks occurring can help guide organisations in determining the approach that they should take to the management of their contracts.

Conclusion: In a continually evolving business world, organisations with immediate access to quality data can fast-track decision making and gain a competitive edge or be recognised as a leading agency. Critical in sustaining this edge will be the performance of the CIO (Chief Information Officer) in securing and supplying data on demand and ensuring its meaning is understood by business professionals and managers.

Conclusion: Organisations that may be at risk of a discovery action should have strategies to minimise the impact of eDiscovery requests. They should have agreed processes in place and have implemented a comprehensive information and records management system that will enable rapid responses and minimise cost when responding to such requests. Poor electronic information management, particularly in the areas of email and collaboration tools are certain to create eDiscovery problems and expenses.

Conclusion: Contract management is the longest activity in the procurement lifecycle. As an example, this activity may run for well over five years with an outsourcing contract. The potential for this activity to have a major impact on contract outcomes means that buying organisations must ensure that they apply an optimum mix of resources and executive overview to this activity.

Conclusion: Clients need suppliers who will keep their promises and deliver quality products and services at the agreed price. Suppliers, for their part, need a long-term and profitable business relationship with their clients. To succeed, both must strike the best possible deal and sustain the relationship so their needs are met.

Conclusion: Outsourcing IT can involve significant ongoing expenditure for buying organisations. A systematic approach to this activity with the right level of senior management involvement is the best way to achieve your outsourcing goals.

Conclusion: All organisations are involved, at one time or another, in procurement. This is either through the sourcing of goods and services, or the supply of their products and/or services to buying organisations. Despite the importance of procurement many managers in IT do not fully understand the process and as a result do not take advantage of the opportunities that a well- planned procurement project can deliver.

Conclusion: Any successful software testing regime uses a judicious mix of manual and automated testing. Manual testing is best in those areas that need spontaneity and creativity. Automated testing lends itself to explicit and repetitive testing and to scenario, performance, load and stress testing. While not all tests can be automated, given good tools there is no reason why much testing and test data generation and test management cannot be automated.

Conclusion:The transitioning of work being outsourced from client to service provider is the highest risk part of any outsourcing deal. If problems arise in the transition there can be serious consequences to the client organisation's business activities, especially in situations where the availability of IT systems is critical to business operations.

Despite this many clients organisations take a "hands off" approach to the transition, as in their view it is a service provider responsibility. The client executive must not abdicate responsibility and instead must take an active role in overseeing the transition.

Conclusion:Departmental computing in most organisations today is pervasive, commonplace and almost impossible to control. Because it is used widely and for multiple purposes line managers, who fail to supervise its use, are allowing an unsustainable situation to continue.

Attempts to bring departmental computing under control and minimise the risks, while a worthy objective, will fail unless senior management is committed to fixing the problem and forcing line to act. Failure will not only compound the risks, it will increase the hidden (or below the surface) costs of departmental computing.

Conclusion: Many organisations overcomplicate their desktop RFPs with technical jargon while underplaying some of the key operational and commercial considerations associated with their desktop procurement process. The end result can be a contract that while providing a desktop that meets the organisations technical needs, falls down in commercial areas such as competitive pricing over the contract life.

Conclusion: As the number of specialist IT services providers (software, operations and applications) increase each year and organisations choose to engage multiple (technology platform) service providers, organisations must implement tighter systems integration processes. If processes remain unchanged organisations the number of operational problems will increase and unless staff skills are updated it will take longer to resolve these problems.

Conclusion: Organisations that allocate insufficient effort to planning for their desktop RFPs run the risk of achieving a sub-optimal outcome from their RFP. Less than competitive pricing over the contract life and a mismatch in buyer and vendor expectations are just two examples of the negative outcomes that can result from inadequate planning.

Conclusion: Most decisions to outsource IT projects or functions offshore are based around the potential to make significant cost savings. There are however a number of other considerations that should be addressed before any final decision is made. If your organisation takes a measured approach to the activity, uses outside experts where necessary, and develops rigorous plans to address issues identified in the planning and successive stages of the project, then there is a high probability that your offshore outsourcing initiative will be successful.

Conclusion: Management generally has a tendency to engage IT management consultants when an ill-defined problem exists and a solution seems intractable. Ideally consultants are expected to act as fog busters, demystifying the situation and proposing innovative solutions that ‘blow the client away’.

In reality consultants can only meet the client’s expectations if ‘all the cards’ are laid on the table and they participate in the demystifying activity. In contrast, little participation yields little reward for the client.

Conclusion: Faced with a direction to identify and report on areas where IT costs can be reduced or contained, CIOs must respond by developing a comprehensive cost management program that considers all service delivery options and regards no area as sacred. To maintain credibility with stakeholders and get their buy-in the CIO must convince them every expense line will be investigated and ways to reduce it examined, without compromising essential services.

Conclusion: As discussed in “Backup is not Archive!1 all IT organisations should evaluate deployment of an archival platform. However, based on numerous client conversations and a recent survey, it is clear there are significant project risks in implementing archiving. One-quarter of archiving projects take more than two years to implement and nearly half of IT managers state that they would not recommend the archiving product they had selected!

Conclusion: Success in negotiating an outsourcing agreement requires a well thought-through negotiating strategy supported by an appropriately structured negotiation process. To achieve this the buying organisation must develop an understanding of the negotiating style likely to be adopted by the service provider, as well as any other characteristics that are likely to influence their approach to the negotiations.

Conclusion: A carefully thought through negotiating strategy building on the concepts needed for a Win – Win result will provide the basis for a successful outcome to your outsourcing agreement negotiations. It will also provide for the opportunity to think through what will need to be done if a successful outcome cannot be negotiated.

Conclusion: In order to maximise the likelihood of a successful outsourcing initiative, your negotiations to finalise the outsourcing agreement should be based on processes that will lead to a Win – Win outcome. To be successful in such negotiations the buying organisation needs to understand a number of key concepts which can be used to establish the criteria needed for the development of the negotiation strategy.

Conclusion: Deployment of a virtualised Microsoft desktop environment requires careful consideration of how virtualisation impacts an organisation’s Microsoft’s licensing costs. Even though Microsoft has introduced new licensing packages to address desktop virtualisation, it is not uncommon for organisations to significantly underestimate the licensing costs involved.

To avoid confusion, and potentially embarrassing licensing cost surprises, when evaluating a virtual desktop strategy IT organisations must keep firmly in mind Microsoft’s edge-centric (device) licensing model. Think in terms of licences and grants and not in terms of software.

Related Articles:

"Has Microsoft's desktop licensing got you on edge? Part I: The structure" IBRS, 2008-11-30 00:00:00

Conclusion: When outsourcing deals are not working, buying organisations often look at contractual remedies as a way of resolving their problems. This can have unintended consequences, such as a breakdown in the buyer/ service provider relationship or added costs due to contract termination.

Conclusion: Strong vendor management is essential in the successful delivery of critical IT-centric services. Before developing a business relationship or entering into a contract for goods or services it is essential that you have a complete understanding of any proposed supplier. A key part in any formal purchase of goods and services is a detailed understanding of the vendor, its ability to supply and support you, and the processes and resources it will use.

Conclusion: Whilst management might devise complex rating and weighting systems to rank proposals from managed services providers proposals, what matters in the long run is determining who can ‘walk the talk’ and manage the IT infrastructure successfully. Making this determination is not easy.

To make the right decision evaluators have to focus initially on ‘what will be delivered’, followed by assessing ‘how it will be delivered and by whom’, and lastly at what cost.

Conclusion: Reducing the environmental footprint of the Desktop has become an important topic for many organisations. Organisations that have undertaken a Green Desktop initiative report excellent returns from low risk operational and behavioural changes that avoid the massive capital projects associated with radical changes to the desktop deployment model such as Thin Desktops.

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"Greening Your Desktop Part I: Gather the Facts!" IBRS, 2008-09-28 00:00:00

Conclusion: When IT related services are supplied by an external provider successful delivery hinges on the performance of the contract manager. Identifying the right person for the role of contract manager and helping the assigned manager acquire the skills needed is critical for delivery of quality services.

Conclusion: When working on intranet and extranet initiatives – especially those involving collaborative applications – IT managers should appreciate that there will always be a significant gap between the views and priorities of IT and those of business unit managers. IT management will often be looking at infrastructure and governance issues, while line-of-business will be thinking in terms of unstructured, Internet-like applications. Overcoming the gap requires careful structuring of the intranet initiative’s planning and execution teams.

Conclusion: Organisations considering outsourcing are increasingly focusing on the ability of service providers to implement effective relationship management in their outsourcing arrangements. A systematic approach to the evaluation of service provider relationship management capabilities is more likely to lead to the selection of a service provider who will be able to work with the buying organisation to help it achieve its outsourcing goals.

Your organisation is planning to outsource some of its IT functions. You have a competent purchasing group, a long standing arrangement with a firm of legal advisors and an experienced IT management team ready to go. So your expectation is that you should be able to handle the selection and transition to a service provider without resorting to external advisors.

Conclusion: ‘May you live in interesting times’ is reputedly a Chinese curse. It is also a phrase that will resonate with CIOs, who in 2008 are challenged by their organisations to concurrently act as:

  • One of the drivers of corporate innovation,

  • A generator of cost-savings; whilst

  • Contributing to the corporate green agenda.

Conclusion: There is a clear trend towards specialisation amongst software vendors, not limited to vertical markets, but also in terms of a concentration on specific areas in the technology landscape. As a result, many software products are becoming more focused and robust, and the opportunities for implementing modular enterprise architectures are increasing.

This article is the second in a series of three on technologies and techniques that are leading to fundamental changes in the architectures used to construct software applications and software intensive devices.

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Conclusion: Despite the increasing trend to multi sourcing of IT services there are still occasions where sole sourcing is more appropriate for an organisation. Often this can involve direct negotiations with a single service provider without the use of a competitive bid. In such situations the buying organisation needs to develop an engagement strategy that ensures there is sufficient executive management involvement and competitive tension in the negotiations such that its sole sourcing objectives are achieved. 

Conclusion: In most organisations Windows based desktops are ubiquitous and the hardware and software has largely become a commodity. However, in spite of this the desktop Total Cost of Ownership (TCO) still varies wildly across organisations.

The major source of variation in TCO is the relative maturity of an organisation’s desktop management processes. CIOs seeking to lower their desktop TCO should first look closely at their desktop management processes before evaluating new desktop deployment models, i.e., Virtual Desktops, Thin Desktops.

Conclusion: Many non finance matters have to be considered before entering a leasing arrangement for IT assets. IT and Finance managers must weigh up the merits of each situation and decide whether it is advantageous to buy the asset and maintain control of it, or lease it and free up the cash for business growth. Having a blanket policy to always buy or lease makes little business sense.


Conclusion: Re-negotiation is often the preferred option when restructuring of an outsourcing agreement is being considered. If well managed, the benefits of such an exercise can be positive for both the client organisation and the service provider. However, considerable preparatory planning needs to be done and suitably experienced client resources must be assigned to the exercise if the client organisation is to achieve its objectives.

Conclusion: It is well known that the cost to rectify a defect increases significantly the later the stage in the systems development life cycle it is discovered. At the same time it is well known that software requirements can only be reliably uncovered when an iterative process of validating software under construction is used. Taking full advantage of iterative requirements validation while minimising the costs associated with late defect discovery requires a 360 degree perspective on requirements and testing that goes beyond the scope of individual projects, as well as a realistic perspective regarding the (in)ability to foresee future requirements.

Conclusion: There are two ways to implement SharePoint: as an enabler of departmental point solutions, or as a set infrastructure components for collaborative knowledge management. Organisations looking to implement SharePoint for collaborative knowledge management must possess skills well beyond those needed for departmental solution implementations. It is highly improbable that any one person – or even a single development team - will possess all the skills required to implement SharePoint for collaborative knowledge management. Organisations should consider the establishment of a cross-departmental group dedicated to SharePoint deployment, integration, maintenance and training throughout the organisation.

Conclusion: Organisations, especially in the public sector, are increasingly sensitive to the possible, potentially visible and embarrassing, failure of large IT projects. It is now customary to include independent quality assurance (IQA) of the project management for such projects as an added insurance to prevent failure. Lesser projects may not be able to justify such IQA and the PMO may be too involved with the projects to be able to give an objective view.

Conclusion:Rather than developing their own systems, many Australasian organisations are adopting commercial off-the-shelf software (COTS) to implement or enhance their business applications. So strong are the perceived COTS benefits that US government agencies (including Defence agencies), in line with the Clinger-Cohen Act of 1996, are now mandating COTS to take advantage of the significant procurement, implementation, and maintenance cost savings they offer.

While a COTS approach can bring many benefits, it can also bring many problems. Organisations considering using COTS as a way of improving their IT support of business operations must consider carefully the costs, benefits and risks.

Conclusion: When outsourcing arrangements fail it is tempting to blame the service provider for the failure. Reasons put forward include overselling by the service provider’s sales group, inadequate service provider resources allocated to the client or problems with service provider management. In our experience, an analysis of the situation often finds the reasons for the failure are rarely one-sided.