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 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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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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