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: Financial models provide insights and support better understanding. Using the right model depends on a thorough knowledge of its output and what it means. A powerful and valid model must have currency outside IT.

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Conclusion: Determining the optimum licensing mix involves not only an understanding of Software Assurance, but also consultation with the organisation’s business strategy groups, as well as a firm understanding of potential structural changes, such as mergers, de-mergers, acquisitions, and growth strategies. Getting the wrong mix can result in overspend, or worse, an inability to adopt business strategies such as mobility, activity based working, or bring-your-own-device.

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Related Articles:

"Understanding and Optimising Microsoft Software Assurance: Part 1 – The Basics" IBRS, 2014-10-01 20:28:23

Conclusion: While the concept of bundling and outsourcing of IT services is simple, its pricing regime based on dedicated devices available and not client applications processed, frustrates efforts to make IT costs transparent to business managers.

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Conclusion: HP’s split into two companies is more important as a sign of the dramatic changes in the IT infrastructure market than the impact it will have on HP customers. When combined with IBM’s exit from the PC and x86 markets and Dell going private, poor financial results from leaders such as IBM and SAP, it is clear we are in the midst of a major industry transition that is being driven by the forces of Social, Mobile, Analytics, Cloud and Consumerisation (SMACC).

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Software Asset Management tools vendors have been spreading the FUD (fear, uncertainty, doubt) as thick and as fast as they can. It’s not that they’re wrong in their claims of the risks. It’s just that mitigating these risks is not a matter of technology. SAM is a matter of process. It’s a matter of maturity. And here lies a problem with how software asset management is currently being positioned in Australia.

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New service contract agreements have been prominent the past month, particularly with the Department of Defence. The Department of Defence has traditionally engaged in high volume, high value, complex projects and does invest a lot in IT to support its critical functions.

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Conclusion: There are several established models which have been used to evaluate technology investments. Some models are applied to assess the value of technology in use within an organisation.

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 these outputs may not convince other parties if the tool is not compatible to cross-department interpretation.

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Conclusion: VMware’s EVO hyper-converged infrastructure is the tipping point for the move away from SAN based architectures. Over the next 3-5 years VMware EVO will commoditise and simplify compute/storage infrastructures in the same fashion VMware commoditised and simplified servers.

This will disrupt traditional systems vendors (e.g., HP, IBM) and new systems vendors (e.g., Cisco, VCE) and challenge the growth and long term viability of upstart hyper-converged vendors (e.g., Nutanix and SimpliVity). However, the real challenge to EVO will be IaaS, especially VMware Air.

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Conclusion: In most vendor-client relationships power shifts from the client to the vendor as soon as the deal is signed. As the SMACC (Social, Mobile, Analytics, Cloud and Consumerisation) ecosystem evolves, strategies are emerging that enable power to remain with the client for the duration of the vendor-client relationship. However, this shift in power will only happen if the client actively works to eliminate vendor lock-in strategies.

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Conclusion: Microsoft’s Software Assurance should not be viewed as a monolithic software maintenance and ‘upgrade path’ for existing solutions. Instead, it should be viewed as a collection of additional licences that extend product usage rights, and grant features for enterprise scale deployments. Knowing which Software Assurance licences to procure, and which to reject, can result in significant savings.

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Related Articles:

"Understanding and Optimising Software Assurance: Part 2" IBRS, 2014-10-31 17:57:54

Once upon a time there was a programmer who developed software, working for a software vendor, and there was a CEO, a CIO, and a sales executive who all worked for a manufacturing business. It was a happy time, where everyone knew who developed software, who bought software, who implemented software, and who used software. In this long-gone era businesses delivered physical goods and professional services, and software was a helpful tool to standardise business processes and automate tedious repetitive tasks. Those were the days where hardware was solid, software was easy to deal with (certainly not harder than dealing with a teenager) and humans were the masters of the universe.

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This month there has been a significant increase in senior appointments, restructures, collaboration and purchases in the ICT industry. In particular, service providers are acquiring or partnering with technology vendors to integrate specialised and high quality products with their services. This highlights the demand in the market for access to new and developing technologies and associated services to take advantage of them. In order to stay competitive, service providers have been forced to move beyond basic service provision and include technologies as part of their service offerings.

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Conclusion: The IBRS technology investment model only assesses costs. It shows costs in net present value terms and can also compare those costs with a typical total cost of ownership calculation. It does not measure so-called benefits or other intangible features of a product. Its principal aim is to reveal what an investment will cost over its duration and to do that as thoroughly as all the data available will allow. In addition the model can be customised and work with different data sets.

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Conclusion: Unless the IT and HR management work together to implement information systems to enable them to hire, develop and record the skills of IT professionals, the organisation will probably not have the right people to meet the looming challenges of the digital age.

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Conclusion: In government organisations the potential for standardisation and process automation via the use of enterprise resource planning software is largely limited to internal administration. In terms of digital service development government organisations can optimise their IT budgets by understanding themselves as knowledge-transformation organisations rather than as consumers of off-the-shelf technology.

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Discussions regarding unknowns that arise from multi-layered, hybrid and increasingly complex ICT environments have been prevalent this month. There is a recognition that, because of these variables, traditional tools and delivery models are often insufficient to ensure ICT environments function efficiently. Reviews indicate that difficulties can arise because of failures in the implementation of management and operational protocols as well as the critical tools needed to bind the many facets of an ICT environment together, to ensure operational effectiveness which all users can access and understand. For instance, user authentication systems that now require careful consideration and planning are often not feasible as they can require very specific expertise for just one small aspect of a large environment. IBRS Analyst James Turner will be discussing this particular issue in relation to authentication solutions, as well as potential response measures in a webinar to be held on July 31st.

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Conclusion: There is no single perfect financial analytical method. There are some models which are in common use but their longevity is due to their lack of rigour, or that they can be used for any occasion.

The best way to avoid the obvious gaps is to combine techniques, not in one model, but for comparison purposes. By bringing together parts of the stronger methodologies users can obtain better insights. How this type of optimised composite model will work is shown in the next paper.

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Conclusion: The architecture for a Software Asset Management solution must take into account an organisation’s structure, ability to digest and utilise the information that such solutions provide, using existing tools and processes. Furthermore, the architecture should not be considered a final end-state, but rather an evolving set of technologies and processes which will incrementally deliver benefits over time.

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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 4: Approaches for selecting a solution" IBRS, 2017-07-03 23:42:13

Conclusion: The operational model and associated processes of larger organisations in many sectors of the economy are encoded in software. Enterprise software from SAP plays a dominant role in many industries and significantly influences the terminologies and workflows used within organisations, in particular in those domains where SAP offers out-of-the-box solutions. The resulting level of standardisation has tangible advantages, but also represents an upper limit to the level of operational efficiency that is achievable. Organisations that rely on SAP are well advised to get independent advice to determine the optimal level of lock-in to SAP.

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Conclusion: IT Infrastructure has undergone a major transformation in the last five years yet many organisations cling to their old practices and are unsure how to proceed. As Jeff Smith, former CIO of Suncorp recently said, most organisations are not limited by skills, people or money, but by what they think is possible!

To harvest the benefits of these changes IT executives must be willing to stand up and challenge the assumptions that underpin the status quo and as necessary push staff out of their comfort zones.

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Conclusion: Organisations looking to adopt Software Asset Management (SAM) tools for the first time often discover that they lack the structure and maturity to realise the full benefits of these tools. Addressing the deep cultural issues that are at the heart SAM maturity may not be rushed, leapfrogged or outsourced. Instead, a steady process of organisational development is needed. 

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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 3: Aligning Architecture" IBRS, 2014-07-29 11:24:24

"Software Asset Management maturity Part 4: Approaches for selecting a solution" IBRS, 2017-07-03 23:42:13

Conclusion: Unlike other parts of business, IT has wrestled with a few financial analysis methodologies. Although those commonly employed work reasonably well, and have currency, it is clear to IT professionals that they are not as good as they might be. That is to say, that despite the application of a financial analysis to technology investments there is still vagueness and uncertainty about the quality of the analysis.

Eliminating all doubts over the merits of financial analysis is not entirely possible, of course, but it is feasible to apply better techniques as to how financial analysis is conducted.  

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Conclusion: Remediating major systems is not a job for the faint-hearted or over-confident IT managers. Poor governance decisions and excessive optimism can easily lead to project failures (and ruin careers). Conversely smart decisions combined with sound project leadership can increase the probability of success and enhance careers.

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This month’s outsourcing deals were especially interesting, showing that the range of services available to outsource and the ways customers are using them has broadened and borders for providers are being eliminated. Vendors are becoming more specialised, as the trend to target outsourced services at particular business functions or objectives, to satisfy customer needs, has emerged. This has resulted in vendors adopting more flexible products, services and delivery models to accommodate a wider range of customers and their varied requirements. This is becoming clearer with potential customers, such as the Department of Health specifically stating it wishes to explore different service models, technologies, IT practices and market capabilities when searching for a new service provider.

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Conclusion: Most Software Asset Management (SAM) Maturity models are theoretical and do not provide an organisation with a pragmatic way to consider SAM in the context of their organisational objectives. IBRS proposes an alternative that provides organisations with a basis to plan gradual, incremental improvements in both technology and, more importantly, organisational culture.

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Related Articles:

"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

"Software Asset Management maturity Part 4: Approaches for selecting a solution" IBRS, 2017-07-03 23:42:13

Conclusion: While many IT organisations believe that using public IaaS (e.g. AWS, Microsoft Azure, Google) to host business applications is a cost-effective strategy, they still require to manage the hosted environment themselves or select an external service provider to manage it for them. Towards this, it is critical to understand the current service management maturity level prior to choosing an in-house or outsourced solution. This note provides a self-assessment service management maturity model to create a solid foundation for selecting sourcing options. IBRS recommend that IT organisations with maturity level 3 or higher retain the service management function in-house, whereas, IT organisations below maturity level 3 should outsource the service management function.

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Conclusion: An organisation planning a CRM upgrade, or deployment of a new CRM, has a wide selection of viable methodologies to choose from. Across the various methodologies there are a common set of principles which make application of a suitable methodology relatively straightforward.

Interpreting and using the most relevant components from a methodology will be important, otherwise there is a risk of being overwhelmed with too much information.

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Particularly prominent this month was the high level of new senior appointments and employee rationalisation in the IT industry. This highlights the critical nature of taking into account practical, business issues as well as technological developments to maintain efficiency, competitiveness and targeted service provision for a company’s internal ICT customers, as well as for service providers catering to external clients.

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Conclusion: There are many benefits in off-the-shelf applications, whether they be onsite or SaaS,  available to organisations in terms of cost reductions, increased productivity, improving market share or customer satisfaction. For organisations that have traditionally followed a custom build approach, there are some key areas that need focus and executive management commitment to ensure the promised value is achieved.

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Conclusion: Enterprise software vendors and enterprise software users are increasingly investing in in functionality that is accessible from mobile devices, and many organisations face the challenge of making key legacy applications accessible on mobile devices. Comprehensive and reliable APIs are the key for the creation of architectures that enable a seamless user experience across a range of mobile devices, and across a backend mix of state of the art Cloud services and legacy systems.

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Conclusion: A major reason CRM projects stumble, or fail outright, is a poorly argued strategy and business case.

A thorough strategy and business case will provide all stakeholders with a clear rationale of what is being planned, and the related business issues that will be managed better as a result. Additionally, the reason for the investment will be understood and the potential costs and benefits articulated.

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Conclusion: Whilst senior management recognise continued investment in IT is critical for business success there is increasing evidence of dissatisfaction with IT management’s performance. It is critical IT managers identify reasons for the dissatisfaction and take remedial action. If not, credible survey data indicates they will be replaced.

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April has been an incredibly strong month for outsourcing engagements. Most interesting is the variety of deals in size and nature as well as the vendor and customer size. It is clear that the momentum in outsourcing is steady accelerating as new technologies are accepted and the skills required to support them evolve and become more readily available. A proliferation of smaller and specialist service providers, new service models, efficiencies and affordable technologies have also resulted in increasing the availability of outsourcing to small-to-medium enterprises wishing to take advantage of new developments.

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Conclusion: As storage vendors increasingly include active-active storage in their proposals, IT Executives must move beyond a naïve understanding of what it is, to a deeper understanding of the scenarios under which it can deliver a benefit, the risks it mitigates, and where is fits within the overall redundancy and availability architecture.

Since active-active storage typically comes at a significant additional cost it is important that a cost/risk/benefit analysis be undertaken to avoid paying an unnecessary premium that becomes a burden on the business. This cost/risk/benefit analysis can only be done in the context of the organisation’s specific application portfolio.

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Conclusion: Organisations that need to run legacy applications under Windows XP will no longer have access to economically sustainable options. In short, there is no way to maintain an XP environment without Software Assurance, and thus there is no practical way for an organisation to continue to run legacy applications without investing in Software Assurance or Enterprise Agreements for the desktop. Organisations should factor in the significant licensing costs when considering the business case for continued support of ‘XP only’ to legacy applications.

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Conclusion: 80% of traditional outsourcing contracts established in Australia during the last 25 years were renewed with the same service provider. However, with the emergence of public Cloud, IT organisations should examine the feasibility and cost-effectiveness of migrating to public Cloud prior to renewing the existing outsourcing contracts.

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Security continued to be a major concern during March, with particular focus on new privacy regulations (Privacy Amendment Act) that came into effect on March 12th. A lot of interest was generated because of the extensive measures and associated fines for breaching the new Australian Privacy Principles (APPs). The APPs focuses on protection of sensitive information and integrates information security policies which are already in place. Of most interest were the significant changes, the fact that many companies were not sufficiently prepared and the high fines for breaching the APPs. It displays an increased concern and focus on establishing security solutions and a requirement to engage external providers to assist with response measures as well as illustrating the need for strong government regulations to prevent misuse, loss or inappropriate access to sensitive data, facilitate breach detection and to establish responses for security breaches.

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Conclusion: Australian organisations in both public and private sectors enthusiastically identify and implement best practices from around the world. After considerable time and effort has been allocated to implementing these processes and tools the results are all too often less than satisfactory. There are many best practices, frameworks and tools to assist in the optimisation of IT but there are two key problem areas that if overcome, can make a significant difference in the benefits that organisations will derive from best practice implementation.

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Conclusion: Due to recent advances in IT infrastructure, the capital cost of VDI is now comparable to that of a Full Desktop, making it suitable for a wider range of use cases. However, there remain significant project risks due to the large upfront infrastructure costs and the very high technical risks associated with building the VDI infrastructure. IT organisations need to understand these costs and risks and then formally develop mitigation strategies to control these.

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Conclusion: Debate over Microsoft’s mixed record of successes and slow innovation during the last decade has incited conjecture as to its long term durability. As many highly successful vendors have disappeared very quickly, the same inference for Microsoft is a reasonable one.

While Microsoft has been ‘disrupted’ in the sense that it has not adjusted smoothly to new conditions, its demise is not imminent. The corporation has to fix several parts of its business, which will not be easy, but it’s financially sound and growing. Microsoft customers need not fret over its longevity. However, they ought to examine how much they depend on Microsoft or other flexible options over the next five years.

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