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: 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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Conclusion: when approaching significant software licensing decisions, consider re-evaluating the organisation’s licensing service provider (LSP) to bring contestability to value-added services and costs not directly related to the software licences. Determining appropriate selection criteria for an LSP is based partly on an organisation’s software asset management maturity, and investments in software asset management capabilities, and a range of vendor management issues.

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Conclusion: the time is right to review whether ERP (Enterprise Resource Planning) solutions implemented over 10 years ago are still meeting their original objectives, and if not, assess the options. Failure to review and seriously consider the options when the business value of the ERP is marginal, is unsustainable.

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Conclusion: when considering Cloud based email (Microsoft or Google) organisations should critically re-evaluate the need for third party Email Archive add-ons. Since Cloud-based email has virtually unlimited mailbox capacity the archive/storage management features of third party Email Archive add-ons many not be needed.

For many organisations the native compliance and eDiscovery features in Cloud based email are satisfactory and will rapidly mature and improve over time. Organisations that are very large, highly regulated, or at risk of litigation should evaluate the benefit of the more comprehensive, and more polished, third party Email Archive add-ons, whether that be Cloud or On-premises.

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Conclusion: This month has seen an increase in executive appointments in ICT companies, as well as 2015 industry forecasts. Most interesting is an expected rise in outsourcing contract renegotiation to $100B, driven in part by a preference for multi-sourced contracts, as it becomes easier to respond to vendor management and governance issues, as well as obtain more stable contractual models. These improvements are expected to reduce difficulties and complexities associated with establishing and maintaining a number of agreements at once while retaining cost benefits multi-sourcing can provide.

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Discussions regarding emerging trends in 2014 and forecasts for 2015 were prominent this month.  The need for improved security solutions and cloud offerings have been identified as critical issues that emerged in 2014, with 2015 forecasts focused on increased third-party vendor engagements and expansion of product offerings, delivery models and contractual structures.  With large financial investments in outsourcing and the greater demand for business outcome-based contracts it is expected vendors will be altering current approaches to service provision.  

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Conclusion: The digitisation of service delivery in the finance, insurance, and government sectors means that all organisations in these sectors are now in the business of developing, maintaining, and operating software products for millions of users, with profound implications for organisational structures1, business architectures2, and the approach3 to service development and operation. Whilst internal business support functions can usually be addressed via off-the-shelf software, with very few exceptions, the functionality of customer facing services can’t be sourced off-the-shelf.

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Conclusion: Big Data and the promise of unlocking greater revenues and better productivity is perceived as the next technology wave. No barrier exists for any business of any size accessing Big Data solutions.

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Conclusion: Adobe’s ‘Cloud’ licensing model, coupled with aggressive auditing tactics, is causing discomfort for organisations in Australia. In the past, organisations used Adobe’s persistent licensing to deploy Adobe’s products in a largely ad hoc fashion. Now these organisations are being scrutinised by Adobe, and finding themselves out of compliance. Reducing the organisation’s Adobe exposure should be considered a priority.

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Conclusion: When architecting a payroll environment it is best to align to employment types not to departments. The payrolls are simpler to establish and run, cost less, and are in a form that can be outsourced to specialist payroll BPaaS providers.

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Organisations migrating to the Cloud and embracing flexible user-based computing have been tied up in knots with Microsoft’s archaic licensing models. On the end user computing side of things, a quick review of my notes on the nuances of Virtual Desktop Access (VDA) licensing and Remote Desktop Services (RDS) licensing are enough to give most people a brain aneurism.

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This month, the Lufthansa/IBM infrastructure outsourcing agreement, valued at $1.25B was particularly significant. These “big bang” outsourcing agreements have pared back the past few years because of difficulties associated with long-term contracts, such as vendor lock-in and expense, especially when project objectives are not met and client/vendor disagreements arise. 

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Conclusion: IT managers who discourage staff from using consumer oriented technologies could be doing themselves a disservice. Whilst there are risks of data leakage or cost blowouts from over-usage of external computing resources, the unexpected benefits such as identifying new patterns of buying behaviour or using data analysis to identify welfare fraud, far outweigh management’s concerns.

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Conclusion: Before embarking on a virtual desktop project examine the major factors in delivering a virtual desktop rather than immediately focusing on a technical evaluation of Citrix vs. VMware. This should include use cases, service model (i. e., Cloud, Managed Service Provider or Build, Own, Run) and infrastructure model (i. e., Desktop-as-a-service, Engineered System, Do It Yourself).

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October has been a great month for ICT outsourcing contracts, with a wide range of agreement types, vendors and buyers representing different industries.  Particularly interesting is the high number of smaller providers establishing a real presence in the market.

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