IT Operational Excellence

When IT departments are tuned to run their best, they achieve more, spend less and drive success back into the organisations they support.

IT operational excellence is an approach that helps to ensure IT departments run efficiently and deliver great service. Without an operational excellence philosophy, IT departments lack vision and strategy, are slow to adapt and are more likely to be bogged down by trivial issues.

Achieving IT operational excellence isn't about implementing one particular framework. It is a mindset geared towards continuous improvement and performance that incorporates multiple principles designed to align team goals around delivering value to the customer.

IBRS can help organisations achieve IT operational excellence by revealing the most effective ways to leverage resources and identify the most valuable activities and differentiators in a given IT team.

Conclusion: Technologists consistently under-estimate the growth of data volumes. The result is tactical actions aimed at increasing capacity achieved by adding storage on-premise using traditional bulk storage solutions or moving technical workloads, such as back-up or disaster recovery, to Cloud-based Storage-as-a-Service offerings. This reflects a decades-old mantra of “disk is cheap, buy more disk”.

When the lack of predictability of data volume growth is combined with the need to capture then distribute data from new sources as well as control the hidden cost of data movement across networks, these tactical responses fail to deliver transformational value to end users.

To deliver effective and efficient data storage solutions, IT infrastructure architects must collaborate with their information and data management colleagues to identify the demographics of data being managed1; they must then select storage solutions that optimise data capture, storage, distribution and access based on these characteristics, not simply by volume.

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Conclusion: This month has seen an increased focus on security threats posed by managed service providers and associated vendors. ICT service providers are attractive targets because they can provide access to a wide variety of customer networks, or can be used as a starting point for other malicious attacks. Compromised commercial or government data, or products which facilitate vendor service provision, can result in serious breaches and unexpected losses. More in-depth reviews of vendor security protocols, products and response measures to threats are required for customers to obtain the best possible protection against attacks launched through their managed service providers.

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Conclusion: The range of channel and customer engagement tools needs thorough and continuous evaluation. There are two challenges to this objective. Firstly, the initial impediment is to gather data from various sources. The second problem is to apply a coherent and durable methodology to all of it.

The greater complexity of technologies and increased channel support means organisations must have a path to understand how their technologies perform. The most common assessment of return on investment can be applied to all data sets but it lacks sophistication. Developing a use-case will help establish a secure methodology which will make clearer the real value of customer satisfaction.

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IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

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Conclusion: This month, there has been an increase in the launch of digital communities or marketplaces which facilitate partner access to resources, information and collaboration in specialist areas. These types of initiatives can be beneficial to both vendors and customers, providing the capacity to identify disparate services and combine them for specific needs or develop new tailored vendor offerings. Products, service offerings, project delivery, financial models and contract structures can be enhanced by targeting individual needs. In an environment where innovation is critical to remain competitive and relevant, these types of initiatives are valuable. They also allow for a clearer and broader perspective when developing solutions.
This kind of transparency can help to address some of the challenges associated with complex outsourcing agreements which result in technical or contract management difficulties. Allowing this kind of exchange can help drive fresh ideas and new approaches to IT outsourcing, as well as more effective customer and partner engagement.

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Conclusion: Technology decision-makers have a larger and ever-growing set of technologies to choose from. The creative entrepreneurship driving the expansion of products is generally beneficial to end-users because it stimulates change and helps to drive innovation from the major vendors.

For larger organisations, in most cases, the major enterprise offer will be selected for many reasons, incumbency being significant, along with compatibility. For other organisations, examining the new and emerging vendors’ technologies may unlock a better process. However, assessing all the vendors within a category vertical, each with their own range of solutions, features and technical aspects, can result in a lot of information to process. The most effective method is to apply the principal business objective and assess how it aligns with strategic execution.

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Conclusion: Effective risk management, whether it is for a change initiative or for ongoing business operations, will ameliorate harm or at the very least reduce the impact of harm. Leaders must understand risk management, and plan and engage with risks and mitigate the risks as appropriate on an ongoing basis.

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Conclusion: This month, discussions around the difficulties associated with establishing and maintaining managed services agreements have been prominent. Contract or service failures typically cannot be attributed to one issue, but are usually the output of a number of underlying factors. Inherent technological flaws, security attacks, human error, configuration errors, management procedures and delivery delays amongst a wide range of other factors often combine to result in contract failures and disagreements. These types of complexities and variables, which are often unforeseen, require stronger foundations between vendors and customers when establishing agreements.
More simplistic, outcome-based targets, as opposed to a focus on technological solutions, can often provide a beneficial framework for providers and their clients. Establishing and implementing complex agreements from this perspective can help provide the flexibility required to avoid disagreements as well as resolve problems which do arise.

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Conclusion: In the last few years the structure and shape of ICT investment have undergone a series of shifts. The results are varied and complex and they reflect wider changes in the investment and use of ICT products.

It is important for organisations to take note of these transitions and to adapt and utilise methods which can improve the efficiency of their ICT portfolios.

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 IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

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Conclusion: This month has seen increased discussions regarding systems integration service uptake and service range. Outsourcing agreements, partnerships and new vendor offerings indicate a heightened demand for services to consolidate disparate software systems and data sets, allowing for greater efficiencies, high-quality information access and analysis. Both customers and vendors have seen value in integrating multiple subsystems and data sets to function as a whole, and the trend towards systems integration service adoption and expanded offerings is expected to rise.

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Conclusion: This month, a number of high-profile systems outages were reported, again flagging risks associated with operating complex IT environments and business functions which rely on these systems. Seemingly minor incidents, or a combination of disparate problems, can result in serious and costly system failures. These problems are exacerbated when issues impact on a company’s service delivery mechanisms and their own customers. This month, a power surge which triggered a global systems outage at British Airways left 75,000 customers stranded, at an estimated cost of $135M. A failure at Westpac left online users unable to access funds for 24 hours, following a similar week-long online and mobile banking failure in November 2016. The Australian Taxation Office has experienced serious service disruptions as a result of three outages in recent months, related to two separate service providers. A review of two failures by service provider Hewlett Packard Enterprise found a number of issues contributed to ATO system collapses and an inability to respond to them, including monitoring systems used to detect operating errors that were not activated, and access to recovery tools required to resolve problems being stored on the network which failed. These types of incidents highlight the impact of unexpected failures and inadequate response measures as well as the need for both vendors and customers to prepare for such events.

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Conclusion: Vendors use sales incentives, such as bonuses or rewards, as levers to focus the behaviour or outcomes of their sellers or channel partners. Many vendors work on quarterly results for their sellers, and set sales incentives for these periods. Vendors view sales bonuses and incentives as levers that they can put in place to try to drive a specific focus, or specific sales results.

Being aware of the existence of these incentives can help an organisation understand that incentives may be driving the negotiations approach that a vendor may be prepared to take, and on what solutions are being offered.

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Conclusion: There are four broad approaches to consider when procuring Software Asset Management. The approach should be based upon an organisation’s SAM maturity1, and its appetite to grow this maturity2.

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Related Articles:

"Software Asset Management Maturity Part 1: A pragmatic model" IBRS, 2014-05-30 00:00:00

"Software Asset Management Maturity Part 2: A Process for bootstrapping maturity" IBRS, 2014-06-29 00:00:00

"Software Asset Management Maturity Part 3: Aligning Architecture" IBRS, 2014-07-29 11:24:24

Conclusion: Astute CIOs and business managers must consider not only which COTS (Commercial off the Shelf) vendor best meets their needs, but also how to best deploy the solution. This is because many vendors not only offer a mix of on-premises or private Cloud or SaaS (Software as a Service) solution but due to a limited local presence may lack the capability to implement it.

A further complication in the debate is that many COTS solutions are functionally mature which often means the selection decision hinges on their meeting qualitative and non-functional requirements.

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Conclusion: This month, discussions regarding skills gaps and talent shortages in ICT services have been prominent. Difficulties obtaining staff with specialist skills are expected to be apparent throughout 2017, and managed service providers are adopting a more strategic approach to obtaining and retaining qualified staff in key industry areas. The past year has seen a noticeable increase in acquisitions and collaboration between firms to provide services in high demand and maintain market relevance. However, vendors have recognised the need for long-term and strategic solutions to avert, rather than respond to, expected skills gaps. This has resulted in new positions being created dedicated to sourcing and further developing workforce capabilities that are sufficiently flexible to cater to a highly volatile and fluid industry, while providing environments that attract staff. A shift in perceptions of talent acquisition from an expense to a long-term asset investment is also required to ensure vendors can maintain a quality skills base.

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Conclusion: Organisations that by law must issue open tenders for systems solutions know they will be inundated with multiple responses and spend scarce work days assessing them. Staff involved in the process also know that many solutions proposed are not practical and, even if they are, often doubt the vendor has the capacity and capability locally to implement them.

The alternative, if not required to issue an open tender, is to conduct a market scan and qualify vendors with a viable solution and the ability to implement it. Having qualified them, they can send them a tender knowing they can probably meet its requirements. If this approach is adopted, there is the risk a potential vendor might have been overlooked.

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As outlined in “Human Capital Management Solutions: Why your ICT Group needs to get involved with HR right now” (IBRS, 2017) vendors are increasingly offering capabilities right along the spectrum of human capital management (HCM), starting with recruitment, through learning and performance management, to succession planning. This infographic provides a snapshot of vendors key strengths within the HCM. This Infographic is a useful starting point for conversations with HR professionals as to the HCM areas that may be worth considering in the short, mid and longer term, and links this discussion to product selection.

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Conclusion: ICT vendors compete to gain the loyalty of channel partners to take their products to market. Vendors often run channel programs that reward partners for specific behaviours and results, which can give specific partners an upper hand in competitive situations.

When organisations go to market to purchase specific technologies, they often seek out several quotes or proposals in an endeavour to ensure costs are competitive and reasonable.

Whilst pricing should not be the only factor in choosing a supplier, organisations should be aware of the way partner relationships work with vendors and how this may influence pricing and other outcomes.

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Is a return to the high period of IT investment likely? The same conditions of the long IT investment boom are not present today. This infographic reveals the trends over the next 3 years.

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Conclusion: This month has seen a sharp increase in outsourcing agreements and a broader range of services adopted by customers. Due to globalisation and thus access to new markets and overseas resources through collaboration, vendor offerings are becoming more diverse and tailored to individual customers. This allows for the adoption of stronger digital models from diverse markets, not focused on particular technologies but on business processes and changing customer experiences (CX). This pattern is emerging globally, spanning both large and small businesses. Worldwide, there has been an increased emphasis on CX and recognition that a focus on customer needs as well as a capacity to adapt is necessary to maintain customer engagement and remain competitive in the industry.

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Organisations can select a model for a particular need however, it is fundamental that the assumptions and the factors that construct the model are realistic and clearly understood. Furthermore, the models should be comprehended by other departments within an organisation, such as finance. A model that is only applied within, and solely has merit for IT, is generally not an altogether useful tool. The outputs and the inferences drawn from them may not convince other parties if the tool is not compatible with cross-department interpretation.

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IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

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Conclusion: This month, strategic focuses and plans for managed service providers have been prominent. As the current market remains highly flexible and prone to change, vendors must plan ahead while providing customers with tangible business responses to evolving markets. In particular, areas such as security, analytics and digital transformation are set for increased growth this year, as well as associated, offshoot industries that support areas in high demand.

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Conclusion: This month, financial results reporting for the first half of the 2017 financial year have shown steady growth for many IT managed service providers. Vendors that have acquired other companies to enhance or expand service offerings often report positive outcomes, provided those businesses can be successfully integrated with existing operations. Without carefully assessing potential acquisitions and developing a solid transition plan, difficulties can arise because of unsuccessful integration and restructuring efforts. A stringent consolidation plan is required for vendors to incorporate acquisitions and fully exploit specialist products and skills obtained from these investments. It is critical for vendors to assess their own service capacities, capabilities of potential business acquisitions and determine how they can be consolidated to improve service offerings.
In addition, careful planning is required for acquisitions that require business transformation, as well as other potential shifts, such as different target markets or strategic objectives. These efforts can be complex and expensive, but highly beneficial for vendors. There is a need to provide unique, innovative and efficient solutions to customers in a fast-paced and competitive industry, and acquisitions can facilitate this type of market differentiation.

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Conclusion: Successful ICT life cycle service delivery from strategy development to system decommissioning relies on the person assigned the role picking up the work in progress and successfully completing the task before handing it to the next agreed role. It is analogous to the relay runner at an athletics carnival taking the baton from the previous runner and, on completion of the leg, handing it onto the next runner.

Unless the ICT service delivery model is designed well, critical activities might be missed or partially performed by different roles, resulting in duplication of effort, output overlap and, at worst, process failure. To overcome this problem the service delivery model must be thorough, and activities and the level of accountabilities clear so staff know what is required of them by activity.

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Mergers, acquisitions and divestitures are a fact of life that make vendor management an ongoing challenge for today’s tech leaders…

There have been several seismic shifts with IT vendors over the last couple of decades. The merger of HP and Compaq, Lenovo’s acquisition of IBM’s PC and server businesses and, more recently, the Dell EMC deal that has seen the two companies come together – while several businesses, such as Quest Software and Dell SonicWall, have been divested. And, more recently, we’ve seen HP split into HPE and HP Inc. Add the constant acquisitions of small companies and start-ups by the big boys and vendor management becomes a major headache for technology managers.

Peter Hall, an advisor with analyst firm IBRS recently published a research note on vendor management through mergers, acquisitions and divestitures.

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Conclusion: Prominent this month were agreements and discussions that highlight shifts in the ICT outsourcing market, with increasing demand for targeted solutions to support business functions and long-term goals. These types of offerings have become more common, and are no longer niche services. Set solutions, which are sufficiently flexible to be tailored to individual customers, have become the norm. These solutions bundle a wide range of technologies, associated services and specialist staff, while utilising new business models for the provision of end-to-end services. In order to remain competitive, and facilitate the adoption of new solutions such as the Internet of Things (IoT) vendors are bundling offerings which go beyond the performance of business functions or expanding existing functionality.
Catering to specific goals such as increased customer engagement or the need for monitoring and analysis systems to help with business evolution or protocol development are becoming increasingly popular. Vendors have recognised the importance of portfolios which include extensive suites of strategic managed services that are efficient, diverse and easily customised to individual needs.

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Conclusion: Organisations deal with an array of ICT vendors, resellers, integrators or service providers. Prudent organisations will establish formal Supplier Relationship Management procedures to systematically manage the organisations’ interactions with suppliers, with goals of streamlining procedures and maximising effectiveness and value in these dealings.

Not all suppliers are equal in value, and SRM approaches for each should be measured in the effort applied.

A really effective SRM approach should enable an organisation to foster and grow strategic relationships with key suppliers capable of helping the organisation, for example, in driving competitive advantage. This would mean viewing the relationship with key suppliers as an asset and managing it as such. Organisations should also be aware of the risks in having too few strategic relationships which may stifle innovation or value over time.

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Conclusion: Contact centres in Australia have been undergoing many strategic changes embracing digital transformation for well over a decade. So what awaits in 2017? As new technologies mature, it is time to seriously ramp up and explore the emerging trends and then embrace the next generation of technology enablers to better serve business aspirations.

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Conclusion: The options for processing ERP (Enterprise Resource Planning) range from on premises to managed services to public Cloud to SaaS (Software as a Service). The attributes of all the solutions, including the risks, costs and benefits, can appear overwhelming and may persuade risk averse senior management to make an expedient decision and keep the status quo.

IT managers must engage their risk averse peers and force them to think through the issues and make a strategic, rather than an expedient, decision as whatever they decide will have long-term ramifications.

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Conclusion: This month saw a focus on the development of improved controls over vendor activities due to the high number of recent outsourced solutions failures and serious impacts on customers. In particular, establishing internal early threat detection teams for initial development phases and more stringent, ongoing reviews. These types of activities flag a change in the outsourcing environment, with increased customer involvement in contract execution throughout all phases of an agreement and set processes to assist with technical issues that may arise before implementation as well as basic contract management. This type of involvement can help minimise risks associated with the adoption and consumption of new technologies and business models, with a greater emphasis on frameworks to circumvent threats as well as respond to them.

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Conclusion: Mergers, acquisitions and divestitures are regular occurrences amongst ICT vendors. A lot of analysis of these announcements focuses on the potential impact on the future value of the organisations involved, particularly for investors. But each announcement means there will be changes for employees, customers and business partners.

Prudent organisations must be proactive and engaged in considering and debating how announced changes to suppliers could impact them, and assess for themselves the business implications of the potential scenarios that are likely to occur, and the risks or opportunities these present.

As each customer and business partner will have a unique relationship with the parties involved, they should do their own assessment, including seeking independent advice, of the potential ramifications of the announced changes.

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Conclusion: This month saw a focus on customer priorities and greater demand for niche or highly specialised IT services. In particular, there was a shift in IT investment centred on cost savings to ongoing strategic initiatives which facilitate innovation and expansion to maintain competitive advantage. These types of priorities can be advantageous for enterprises hoping to increase operational efficiencies or avoid irrelevancy in changing markets. However, without adequate preparation and thorough assessments of existing and potential environments, large-scale alterations to business operations can be hazardous, negating potential benefits. Risks associated with unforeseen skills deficits, complexities associated with consolidating or replacing environments and business process changes must be considered carefully. An increased uptake of business consultancy services to manage high-level alterations and avert or respond to difficulties indicates an awareness of the necessity to establish solid plans in conjunction with vendors that can be flexible and sensitive to customer needs.

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Conclusion: On 1st October, Microsoft introduced a number of changes to its licensing regime, changed the names of several products, added two new packages under the new Secure Productive Enterprise (SPE) portfolio and introduced new licensing rights1.

The new licensing packages are aimed at taking organisations on a journey off Cap-Ex (persistent) licensing for devices, toward Op-Ex (subscription) licensing for users.

Understanding the new Secure Productive Enterprise licensing packages is essential for organisations embarking on a move to digital workspaces, and those renegotiating Enterprise Agreements (EAs) within the next nine months.

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IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs. 

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IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

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Conclusion:

Prominent this month were reports of outages and system failures which impacted on critical operations for several businesses and government agencies. These types of failures can become costly with the increased reliance on technology and more complex environments that underpin many basic business processes. Outsourcing agreements and protocols can provide frameworks for averting or responding to service interruptions, but cannot cater to all variables that cause unexpected problems which are difficult to resolve. Triggers for serious disruptions this month have included human error, software misconfiguration, failed fire alarms, contravention of standard consultant protocols and ISP failures which had flow-on effects for large companies which rely on networks. It is not always possible to prepare effective responses for the types of disruptions that are not predicted, making it essential for both vendors and customers to conduct more thorough and regular reviews of environments, as well as establish strict protocols for public responses to avoid further damage to vendors or clients depending on outsourced services.

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IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

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Conclusion: The Australian Bureau of Statistics’ annual innovation survey gives financial evidence to the rhetoric on innovation. The data presents strategic directions which could produce wider changes too, such as full casualisation in employment, coupled with technology investment by large businesses and structural underutilisation and deskilling, although more trend data is required to qualify such a view in future.

Senior technology executives ought to take note of this economy-wide picture of investment strategies in order to understand their own initiatives in a wider context. It may help with policy setting, with business cases, and provide a better view of planning evolution over the next two years.

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