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: ICT vendors invest in training their Account Managers or Sellers to be “Trusted Advisors”. The training is to improve the seller’s skill to be able to help their clients achieve success both in business and at a professional level. A client organisation’s expectations are that the vendors should at best be “Competent Advisors” in terms of the solutions or products they represent. Few, if any, employees in client organisations are relying on or expecting their success to be based on the strength of a “Trusted Advisor” from a vendor.

Few sellers can ever achieve the highly valued position of being a true “Trusted Advisor”. The way vendors manage and reward their “sellers” generally has nothing to do with the client recognising them as a “Trusted Advisor”.

Sellers from vendors know their primary measures are on their sales results. This is what their management really expects them to be focusing on and achieving.

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Conclusion: This month, the integration of businesses and expanded service offerings has been especially prominent. In particular, the combination of technologies and managed services to provide more variety and highly specialised IT service offerings targeted to customer strategic initiatives. Vendors are reaching beyond service implementation to deliver full, high-value solutions in innovative ways, including partnering with competitors to expand capabilities and improve service quality. This type of flexibility is critical and indicative of an environment where delivery models, innovations and offerings change at a fast pace and underpin high customer demand for new solutions.

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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, online Census solutions failures prompted the government to launch a review into outsourcer IBM’s performance. Debate regarding causes for the outages commenced, and uncertainties again highlight the need for a solid and structured framework to be established in contractual arrangements, as well as protocols for implementing services and responding to difficulties encountered. Frameworks are more critical now as rapidly changing technologies and solutions are in high demand, combined with the new, often complex customer environments vendors must cater to. Problems can be compounded by an under-appreciation of costs, different vendors working together and time overruns. It seems as though a higher number of contract failures are being reported, but it is a natural output of outsourcers delivering hybrid solutions in large, complex and foreign environments with evolving technologies and solutions. These types of factors that can result in problems for both customer and vendor necessitate a solid legal and operational framework for conducting the contract.

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Conclusion: Communications vendors’ product shipping reports show that a disappointingly large number of Australian enterprises continue to re-invest in obsolete telephony solutions. In most organisations, this approach is a major waste of business opportunity and a misdirection of communications responsibilities given that popular and effective alternative unified communications and collaboration (UCC) solutions are so readily available.

UCC has become known as simply ‘collaboration’ and telephony needs to be seen as a supported part of the collaboration environment rather than as a first choice communications technology.

Do not re-invest in obsolete telephony solutions. Strong collaboration solutions abound.

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Conclusion: Discussions regarding new executive appointments, acquisitions and partnerships have been prominent this month with managed service providers adopting a more calculated approach to reformation. In order to meet emerging challenges and demands, vendors must match both operations and offerings to provide solutions which can cater to new customer priorities. These priorities have increasingly dictated vendor investment decisions to build capabilities and portfolios through acquisitions and partnerships with specialist service providers. Heightened demand for industry-specific digital business models has driven much of the investment and transformation; in particular, end-to-end business solutions, digitally unified systems or the provision of new solutions that cannot be obtained using existing customer systems.

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Conclusion: This month, IT Outsourcing (ITO) industry analyses for the Asia Pacific region were released. Whilst figures show a decline in ITO spend in the region, the trend towards Cloud adoption and new service models that result in cost savings has driven this decline, not the demand for external services. As vendors shift to cater to this new market and provide more specialist services, ITO sector growth is expected. These types of changes in the ITO industry have been seen in the past, as service providers adapt to accommodate customer demands and new services and technologies. These market shifts are typically beneficial for customers, vendors and business operations providing a greater range of services, higher quality service delivery and cost savings.

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Conclusion: This month has seen a high level of activity in tender issues, funding allocations and new ICT projects by government agencies seeking to reap the benefits offered by emerging technologies, ongoing innovation and digital transformation. This follows general trends in outsourcing because of the advent of new technologies, contract structures and solutions that can be tied directly to fulfilling business objectives. Whilst the technologies exist, a report issued this month regarding CIO concerns has flagged difficulties still prevalent when attempting to take advantage of innovations, attributed to outdated existing technologies, policy and budgetary constraints. As the ICT outsourcing industry continues to evolve at a fast pace, organisations must adapt their inner workings to suit new technologies and business structures before they can take advantage of benefits, and avoid project failures because contracts and businesses are misaligned.

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Conclusion: This note seeks to analyse two questions: Is a return to the high period of IT investment likely? And what were the conditions surrounding the last one?

The answer to the first question is, currently at least, of a very low probability. The conditions or background that produced the long IT investment boom are not seen today and are not likely to provide the same business environment in the near-term either.

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Conclusion: This month there have been a high number of new senior appointments and workforce expansions in the IT service industry, flagging the need to monitor and change resources which support businesses if required. Whilst strategic planning and initiatives are central to business development, the need for an effective skills base to successfully implement plans in increasingly complex and unique environments, which change quickly, is clear. Both the skills base and the framework to maximise benefits are required. Regular assessments of a company’s human resources, and structures in place to utilise them to achieve business objectives, have also become crucial. Structures need to be sufficiently flexible to accommodate new and targeted skills required to support both business and fluid IT environments.

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Conclusion: Most IT professionals see Cloud as simply a replacement (sometimes even competition) for the tasks they do now – provide CPU cycles, storage and internal communications. Looking at Cloud through such a narrow lens is a big mistake. Cloud is not just a replacement for IT processes – it is a replacement for all business processes that are based on legacy in-house IT capabilities.

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"Why In-House IT is not like Cloud" IBRS, 2016-03-01 05:05:35

Conclusion: This month there has been a focus on supplier governance models based on the service integration and management (SIAM) approach which can improve the effectiveness and efficiency of IT environments. By establishing converged and hybrid technical foundations and utilising multiple suppliers significant benefits can be achieved. However such an approach may be problematic if disparate arrangements and processes for contract execution are employed. The SIAM approach provides a single and end-to-end user experience, despite multiple suppliers’ underlying IT functions. This type of model allows for greater efficiency and cost benefits, as well as faster IT overhauls for companies needing to increase capacity, upgrade, or wishing to access new technologies and solutions. However, the model also requires strong implementation partners for analysis and a strict system definition combined with strong management capabilities, to support a very tightly integrated environment where many components can operate as one entity.

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Conclusion: CIOs continually wrestle with how to replace or modify failing core systems and having to convince management to invest in modernising them. They also know that ignoring a bad situation will probably cost the organisation more to fix the longer they postpone the replacement decision.

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Conclusion: Cloud architectures offer a vast array of possibilities that are not an option for organisations limited to conventional IT solutions. Do not let infrastructure people convince the organisation they can match Cloud capabilities solely using legacy in-house resources

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"Why in-house IT is not like Cloud (Part 2)" IBRS, 2016-04-01 05:08:33

Conclusion: This month, discussions regarding a number of failed public sector outsourcing projects, which resulted in significant cost overruns have been prominent. Weaknesses were identified in a range of areas, from inappropriate vendor engagement processes to insufficient monitoring and response measures to problems that were identified during the course of a contract. It is critical for clients to establish protocols for contract management as well as frameworks to ensure these protocols can be followed.

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Conclusion: The role and responsibilities of procurement and corporate services organisations is increasing relative to those of ICT groups as ICT becomes increasingly bought ‘as-a-service’ rather than installed as capital-intensive internal infrastructure.1

This demand is driving the trend to focus on governance, probity and sourcing management issues in buying decision frameworks.

Neither corporate procurement nor ICT sourcing teams can succeed in isolation: both will sink or swim together. The near-term challenge for most enterprise buying activities will continue to be the ability for both procurement and ICT to keep each other adequately informed and sufficiently knowledgeable in the other’s domain2.

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Conclusion: This month, there has been a particular focus on service-based Cloud offerings. As this market matures, there are increased concerns regarding vulnerabilities that arise when using evolving environments without adopting new enabling tools and processes to support a shift. Approaches, such as retaining legacy applications in a new technological space can cause difficulties in areas such as security, which require more high-level data collection and analysis for success, rather than basic functions offered in legacy systems. With a dramatic increase in vendors offering service-based solutions, it is important for customers to ensure solutions have underlying systems that can support businesses and strategic objectives prior to establishing agreements. It is critical for customers to alter their perspective of service-based Cloud offerings from an alternative hosting platform to an IT toolset that can alter business processes and efficiency, with adequate foundations to achieve business objectives.

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Conclusion: This month, the Queensland government’s action against IBM for the failed Health payroll system was dismissed, with the liability waiver upheld despite assertions the government was misled by IBM regarding its capabilities during the tender. The Australian Federal Police also announced it has cancelled two five-year outsourcing contracts with Eldbit Systems because of project failure. This underscores the need for clarity during the negotiation phases and establishing clear contract terms such as liability waivers and exit clauses to cater to project failures and disagreements, as well as fostering an environment for positive client/supplier relationships even when projects fail.

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Conclusion: While the need to design current and future state technology platforms has not diminished, the role of the solutions architect in designing tactical business systems and advising management which systems implementation approach to pursue is taking centre stage.

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Conclusion: This month, discussions regarding analytics and data-driven innovation have been prominent. As the role of IT changes from providing technology solutions to driving business outcomes and strategy through the use of technology agile services to support business processes and targets are required. Companies have recognised that data handling and having the capacity to absorb, use and deliver data are becoming core competencies. This has prompted the growth of service providers that manage and analyse data, as well as providing associated services such as security and storage.

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Conclusion: This month, Fujitsu and Link Group announced a five year extension to their current ten year managed services agreement, which is founded on a combined on-site, on-shore and offshore delivery model for the provision of a variety of services. This is indicative of an increase in further alignment between IT spending and business strategic priorities utilising complex and evolving delivery models. The agreement highlights the need to provide a wide range of resources which cater to business needs, whilst managing them as one. In order to do this, a cohesive management strategy and the capacity to accommodate increased IT proliferation, new technologies, and associated security risks, must be carefully integrated into outsourcing plans during vendor engagement and contract performance. 

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Conclusion: It has been well established in recent reports that future workplaces will be significantly different from today and the workers of tomorrow will demand to work differently. Technology has enabled organisations to provide greater freedom to their workers with a new, greater understanding of the strength and weaknesses of flexible working. In addition, organisations will gradually casualise their workforce for greater flexibility. Organisations that fully harness the potential of providing highly flexible or flexible and creative workplaces early will be able to attract and retain the best talent for their workforce. Other organisations will be forced to adapt as work roles and practices disappear or change radically.

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Conclusion: To ensure desktop investments are aligned to the organisation’s strategy, and the business benefits are clearly understood, IT organisations should create a Benefit Dependency Network. This is a benefits management tool that explicitly shows the linkages between technology investments and the business benefits, uncovers the business changes necessary to deliver these benefits, and clarifies the role of the business in harvesting those benefits.

Through the processes of building a Benefit Dependency Network, the IT organisation can engage the business in a meaningful discussion about business benefits and about the business changes needed to harvest them. Without a benefits analysis a major desktop investment is less likely to be approved and there are risks generating no value for the business, perpetuating the view that IT is a cost that must be reduced.

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Conclusion: This month there has been an especially visible increase in managed service provider offerings and expansion globally. With the wide range and increased release speed of new technologies in the market, greater emphasis has been placed on adopting new technologies in business to support evolution and cost reduction. Approximately 70% of business leaders involved in company digital business transformation ranked new technology adoption as the top priority in a survey this month, resulting in an increased demand for tailored solutions with effective implementations in complex ICT environments.

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Conclusion: Especially interesting this month was a Trial Services Agreements (TSA) between SkyFii and Wests Ashfield Leagues Club. The agreement spans four weeks, with very specific deliverables and KPIs. In IT outsourcing, where agreements and relationships can become difficult to manage or collapse due to a wide range of unforeseen complexities, TSAs are emerging as a solid review process to measure vendor skills and capacity to service specific customers. These TSAs are also an attractive avenue for vendors to display competencies sought by customers and a precursor to possible long-term relationships. Such arrangements can also provide a greater clarity when setting terms and establishing final agreements as well as clearer and sturdier ongoing vendor/customer relations.

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Conclusion: Sustained investment in IT Infrastructure is critical for the delivery of services to clients and delivering business efficiencies. Without continued investment service quality will deteriorate, operational incidents occur more frequently and the organisation’s network put at risk from unwanted intrusions.

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Pervasive networking is becoming ubiquitous as fixed and mobile communications’ reach, coverage, reliability, latency and speed improve consistently over time. These critical networking characteristics are unlikely to saturate before 2025. The net outcome of all these factors is that telecommunications and enterprise networking will deliver networked applications that create the foundations for transformational corporate agility and productivity.

In this IBRS Master Advisory Presentation (MAP), IBRS outlines the high-level issues, surrounding communications from both business and technology viewpoints. This MAP is designed to guide and stimulate discussions between business and technology groups and point the way for more detailed activity. It also provides links to further reading to support these follow-up activities.

The MAP is provided as a set of presentation slides, and as a script and executive briefing document.

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Conclusion: This month, discussions regarding Big Data and analytics were prominent. With increasing volumes of information possessed by organisations, a clear and solid information management strategy is critical. To meet this rise in demand, new product and service offering levels and uptake in external information management services were high. The development of this service area has been driven by the recognition that this type of data management can provide organisations with insights for action, organise unstructured data more efficiently and will continue to evolve as vendors provide tailored solutions to meet customer needs.

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Conclusion: Microsoft’s new strategy is to make Windows 10 the dominant enterprise desktop O/S by first winning over the consumers with a much improved user experience, then have consumers demand Windows 10 at work, forcing the enterprise to upgrade. This is Microsoft’s best desktop strategy in 10 years and IT executives must prepare a strategy1 for dealing with user demands or risk losing control of the enterprise desktop strategy.

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Conclusion: Today’s Windows centric desktop is based on 20 year old assumptions about devices and applications and is the result of years of sustained innovation. We are now at the point in the desktop innovation cycle where incremental change no longer adds business value and the business is reluctant to fund upgrades. This was clearly demonstrated by the difficulty most IT organisations had funding their Windows XP upgrade.

Forward-thinking CIOs are reassessing the assumptions on which their next end user computing platform will be built and are experimenting with disruptive innovations to build a self-service, web-centric Digital Workspace that will last the next 10-15 years.

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Conclusion: This month has seen a number of large and high value outsourcing agreements. The Manchester United/Epson contract renewal was especially interesting and indicative of increased flexibility when vendors and buyers establish outsourcing agreements. Epson will continue to provide IT infrastructure and obtain advertising rights from Manchester United in a combined sponsorship/managed services agreement, established in 2010. These types of outcome-based, business-focused agreements which provide unique benefits to both parties can result in stronger relationship foundations, transparency, and a greater chance of success during the course of an arrangement and when resolving difficulties that may arise.

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Conclusion: Prominent this month are a wide range of new projects and service offerings in the IT outsourcing industry. This growth has highlighted the necessity for flexible environments and models that can adapt to changing requirements and company demands. Recent announcements by outsourcing vendors CSC and HP to divide their operations indicates increased flexibility is required beyond not only new product models, but also business models and corporate structures. HP was founded in 1939, and CSC in 1959, with current restructures aimed at enhancing efficiency and services provided.

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Conclusion: especially interesting this month was Datacom’s and the Department of Health’s infrastructure and support services agreement. In particular the service provision model which is outcomes-based with a consumption-based pricing model. These types of agreements highlight the demand for arrangements which are more transparent in order to reduce conflict, align interests, and increase contract flexibility to adapt to changes in customer needs or vendor capacities. By establishing stronger and clearer foundations, customers and vendors are more likely to have a sustainable and successful outsourcing agreement.

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Conclusion: organisations have invested considerable resources over the past decade in an effort to improve their procurement capability. ICT investments were often large, complicated, and undertaken over long periods. Companies expressed concerns that they felt vulnerable when dealing with technology vendors, and their relationships often reflected protectionist behaviour. Cloud based services and other consumerisation of ICT procurement places pressure on technology companies to perform, as their customers can theoretically switch quickly and relatively painlessly if they are unhappy with products and/or services. However, organisations will need to be smart buyers to optimise the benefits of the new services on offer, but also be good customers.

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Conclusion: leading Mobile Device Management (MDM) solution providers will persist but face multiple challenges with Microsoft’s Enterprise Mobility Suite, especially its Intune Configuration, rising as a logical challenge to MDM in >50% of Australian enterprises before 2017.

The dominant MDM selection criterion will remain: how well does this mobility solution integrate with Microsoft and others?

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Conclusion: CIOs and the IT management team continually wrestle with prioritising and coordinating planned and unplanned IT operational changes for both new and existing systems. The problem is compounded when senior managers use informal influence with IT staff to change the priorities, thereby jumping the queue and bypassing formal processes. Not only does this create disharmony, it can also cause system failures.

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Conclusion: the key factor in the selection of a CRM vendor should be the duration in which the product will be in service. The time in service period could be up to a seven year horizon and therefore durability is a critical condition in order to make a selection. This recommendation counts equally for vendor abilities as it does for an organisation’s requirements.

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Conclusion: discussions regarding innovation in the ICT industry have been prominent this month, with a focus on investment in new technologies and collaborative arrangements for further development to support managed ICT services. With a dynamic and continuously evolving services landscape, there is a clear need to differentiate offerings, as well as innovate to support new service models, technologies, and changing customer demands. Flexibility is critical if vendors are to provide solutions that support the needs of its customers and the market. By combining knowledge, expertise, access to resources as well as products and services, businesses in disparate industries are providing tailored and alternative solutions to cater to market demands that are emerging at a fast rate.

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Conclusion: failure to maintain a competent ERP support group1 can have an adverse impact on an organisation’s business operations. When the group lacks the resources to keep the software current or to resolve data errors in rejected transactions, clients become disillusioned with the ERP and either work around its requirements or develop alternate systems solutions, e. g. using spreadsheets or departmental computing.

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Conclusion: this month, vendor collaborations for both development and education have been prominent. With increasingly complex IT environments and multiple vendors providing a range of services, it is necessary to understand the flow-on effects of adding new systems to technology infrastructure as well as possess resolutions to difficulties which can have a dramatic impact on business and company IT. Understanding, developing strategies, and establishing response measures for critical issues which can arise in specific environments is a necessity. Collaborative development and educational initiatives help to support these needs. In March, IBRS’ James Turner will be speaking in a webinar dedicated to data loss prevention, with a focus on strategic measures that cater to complex and unique environments. This type of information and awareness is invaluable to professionals, particularly when infrastructure complexities increase with the engagement of multiple providers.

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