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.

February saw a continued emphasis on security threats and response measures, as well as practical issues that may impact on IT investment. Particularly interesting was a write-down of Tower’s new core IT systems after the sale of some of its business units. This highlights the need for careful planning and extensive consideration of real world issues in an environment where fluid and complex IT and business structures exist. The desire to exploit the benefits of new technologies requires changes to both IT and business foundations which can pose challenges when technologies and business processes need to be integrated. A combination of evolving solutions and limited support can be problematic when business-oriented decisions are made which could have flow-on or unpredictable effects on IT infrastructure and strategies.

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Conclusion: Disaster recovery continues to be an issue for many clients. Approaches based on tape have a low cost benefit but often recovery takes too long to meet the business’ requirements. The popular new approach of replicating data to a secondary data centre enables rapid recovery but at a cost which is prohibitive for some applications or smaller organisations.

An emerging third approach is to use Cloud infrastructure (IaaS) as a warm standby. This is attractive both in terms of cost and recovery time and can also be used as a strategic stepping stone for adopting IaaS.

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Conclusion: Software Asset Management (SAM) is not simply a set of technologies: it is a set of ongoing organisational practices and processes. Prior to embarking on SAM, organisations need to ensure that the foundations for a successful program are in place: identification and education of executive stakeholders, clarifying the scope of the SAM and setting clear and measurable objectives as well as identifying the sources and quality of information required.

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This month has seen a lot of discussion regarding security failures, sparking debate in relation to the adequacy of the solutions and response capabilities for such incidents. Concerns raised because of these failures, emerging technologies and uncertainties regarding security arrangements have forced both vendors and specialist security providers to investigate ways of alleviating customer concerns through integrating solutions and assurances when establishing outsourcing arrangements. While security has always been an issue for customers recent failures are driving more collaborative, open and prospectively sturdier security arrangements for the future.

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Conclusion: It has become common for IT staff to refer to their on-premises virtualised infrastructure as a Cloud. The unchallenged assumption is that their on-premises environment is as good as a Public Cloud (aka IaaS) and provides the same benefits.

IT Executives and Enterprise Architects need to un-collapse these two concepts and recognise that while a virtualised on-premises environment has many benefits it does not have all the benefits of a Public Cloud – i.e., pay-as-you-go, hyper-scale, massive scale-up and scale-down.

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Conclusion: Software Asset Management (SAM) is now a pressing issue for many organisations, due to growing complexities in vendor licensing as a result of the mix of: traditional per device, virtualisation, consumerisation, mobility, cloud services licensing models. SAM is no longer just a tracking service, but an essential part of financial and risk management. However, implementing SAM solutions must accompanied by the alignment of key business units. Processes – both for governance and automation – must be clearly defined between the key business units if SAM is to be of any lasting value.

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Conclusion: Utilising vendor products entails a cost to the user above the licence fee. This cost, which is hidden, is mostly unaccounted except when dealing with a vendor that imposes vexatious conditions. Such conditions may alter usage rights and prolong the negotiation period to conclude contracts. That adds costs to an organisation it should not bear.

Where a vendor has myriad and confusing contractual terms it is a cause for organisations to assess their lock-in with that vendor. In reassessing their connections with vendors, organisations ought to strategically move out of deep lock-in towards more flexible relationships with vendors. For a user organisation to be overly dependent on a limited number of vendors is a potential problem. Reducing dependencies on single or groups of vendors may also deliver more efficient business relationships. It also serves as a signal to vendors that an organisation wants an efficient arrangement.

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Especially noticeable in December was the large number of purchases and collaborative agreements in the IT service provider sector. Vendors aiming to expand their customer base and service offerings, reach and scale as well as exploiting new technologies they have no access to are adopting alternative approaches to business growth and sustainability. This underscores the need for the industry to remain flexible and be aware of industry changes, demands and evolving areas that can benefit their customers

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Conclusion: When faced with the need to upgrade the desktop, rather than viewing this as a refresh or modernisation project (which is an IT centric approach to technology issues) undertake a business centric Application Delivery roadmap that focuses on the end-user’s application experience and the business benefits.

An Application Delivery approach will reduce project risks by highlighting the linkages between the project and the business benefits, prioritising the delivery stages of the project to get value early in the project, and ensuring application delivery methods are aligned to the user’s needs, ensuring a high quality user experience.

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Related Articles:

"The desktop is dead. Long live application delivery! - Part I" IBRS, 2013-10-29 00:00:00

Conclusion: CRM technology is capable of being put to several discrete purposes. The added complexity of the tools is necessary in the more complex digital communications environment. Even though CRM systems are more adaptable and extensible than before, there are still four central questions to CRM activities.

The central business questions that drive the sales and marketing effort are about communications channels and the use of data. Organisations should be clear about how they answer those four questions as that will assist in the way they manage CRM and its associated capabilities.

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Conclusion: CIOs must avoid being swept up by the hype concerning SaaS (Software as a Service) and approach each business case on its merits. While the immediate net benefits may be appealing, it is important to evaluate whether the long-term benefits are sustainable and the risks manageable before entering into a service contract.

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There has been much discussion this month with regard to IT in the Banking and Financial Services sector. Projects and plans to expand internal IT structures have largely been in response to increased and changing customer needs and demands. The high level of activity and discussion regarding IT in this sector illustrates how evolving technologies and customer awareness and desire to access these new technologies can transform internal infrastructures and how IT service providers must respond positively to these demands. IT service providers catering to these new needs need to address issues such as internal support systems, protocols and IT decision-making and make significant increases in IT investment. This is particularly evident as service providers restructure, extend capacities and begin to offer new services in respect of cloud and security.

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Conclusion: The recent enhancements to CRM suites offer deeper and more useful insights into organisational processes. The second and possibly more profound aspect to CRM suites is that they provide the means to evaluate organisational productivity.

Productivity can be seen in ratio terms across the enterprise and therefore the management of assets which can be handled with greater clarity. If organisations chose to use CRM as a productivity management tool, they would need to organise a management team that oversaw such a designated use. It is not a sales or a marketing role but it is a function that finance and those connected with the executive may choose to accept.

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Conclusion: When faced with the need to upgrade the desktop, rather than viewing this as a refresh or modernisation project, which is an IT centric approach to technology issues, undertake a business centric Application Delivery roadmap that focuses on the end-user’s application experience and the business benefits.

An Application Delivery approach will reduce project risks by highlighting the linkages between the project and the business benefits, prioritising the delivery stages of the project to get value early in the project, and ensuring application delivery methods are aligned to the user’s needs, ensuring a high quality user experience.

Read more ...

Related Articles:

"The desktop is dead. Long live application delivery! - Part II" IBRS, 2013-11-30 00:00:00

Conclusion: Difficulty in defining performance criteria for an enterprise architecture team typically points to a lack of clearly articulated business priorities, or to a lack of a meaningful baseline against which performance can be assessed. An enterprise architecture team needs to be given clear objectives that relate to the performance of the business, without being prescriptive in terms of the target IT system landscape.

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Conclusion: Software Asset Management (SAM) is a widely overlooked and misunderstood practice. Over the last five years IBRS has seen a marked rise in organisations finding themselves out of compliance due to immature SAM practices, and this is resulting in licensing exposure ranging from hundreds of thousands, to millions of dollars. This rise is partly due to the more aggressive stance of software vendors, namely Microsoft, Adobe and Autodesk. However, it is mainly due to a lack of awareness among IT professionals of the financial risks of not having SAM, and the potential benefits of getting SAM right. IT executives should determine the benefits SAM brings to their organisation, and articulate these to senior business executives.

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This month there has been a lot of discussion regarding the importance of innovation, in the approach to both technology and business strategies. While this has been flagged previously it is even clearer when examining the IT industry activity this month, in particular company buy-outs, new product and service offerings, investments in development and company growth. Collaboration between companies in the provision of specialised service offerings and in discussions about new standards and protocols for evolving technologies and solutions were also noticeable. These activities are both driven by, and drive, the need to innovate in the current climate, the need to address user concerns in the uptake of new solutions and a desire to maximise the benefits of using new solutions.

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Conclusion: With IT infrastructure having gone through major changes in the last five years, due to virtualisation and cloud technologies, organisations should challenge their assumptions about storage, and evolve their strategy prior to the next major storage acquisition.

Rather than assume the current networked storage centric strategy is the right approach, and simply needs a minor update, organisations should look at how their IT infrastructure has changed in the five years, then evaluate alternative approaches such as Integrated Systems or networked storage free Unified Systems.

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Conclusion: Customer Relationship Management (CRM) is undergoing major changes. The addition of features, analytics, and high quality data measurement gives users more options than ever to explore how their various customers interact with their organisation.

The substantial enhancements in CRM technologies should encourage organisations to lift their own skills in order to use the power of these tools. To use the CRM tools effectively it may be necessary for people within each department to coordinate their work across different areas of the organisation.

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Conclusion: Today, nearly all organisations are delivering digital services to customers and suppliers. Quality of service expectations of external stakeholders create significant challenges for organisations that were used to treating IT and software needs as internal topics that are at least one level removed from customers and suppliers. Digital services have evolved into the key mechanism for embedding an organisation into the external value chain. Articulating a clear conceptual picture of the external value chain in precise terms without using any IT jargon is a prerequisite for innovation and successful business transformation, having an IT strategy is no longer good enough.

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September has seen a noticeable rise in the number and value of outsourcing deals, particularly in the provision of communications and network infrastructure. Other IT news was centred mainly around the change in government. Pre-election, there was much discussion on the Coalition’s proposed strategies and plans, and after the election, predictions regarding the impact of the change on the ICT industry. Commentary and opinion was largely positive and focused on increased confidence and business-centric policies which are expected to drive evolution and growth in the ICT industry.

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Synopsis: In the previous millennium some CIOs claimed they could reduce their IT costs by not producing printed reports for business managers and only recommencing them if the manager complained. If they said nothing the application software and documentation were put on the back burner in case they were needed and after a decent period given a ‘quiet burial’.

In this millennium the approach above will not work as business professionals and managers can access their data and prepare management reports online when needed. This begs the question, how can CIOs reduce their costs in 2013 while managing risks?

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Conclusion: Vendor performance evaluation is a critical component of successful contract execution and has been an area of difficulty for the ICT industry. Deciding what to evaluate, when and how often to evaluate, how to collect the data necessary to undertake the evaluation and fulfilling the responsibilities of a customer requires commitment, planning and active participation. However, CIOs will be rewarded with improved supplier relationships and more successful contract engagements.

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Conclusion: Microsoft’s licensing for its end user products (Windows, Office) attempts to straddle the old desktop-bound paradigm and the new user-centric paradigm brought to the fore by mobility, cloud services and consumerisation of end points. This has resulted in a fragmented and complex set of intertwined usage rights that can confound even the most astute procurement specialist. The only workable approach is to prepare long-term scenarios that deal with specific end-user situations and have Microsoft develop and confirm the licensing requirement in writing prior to deployment: plan for more dynamic application deployment, but externalise the effort, time, costs and risk of the licensing decision back to Microsoft.

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Conclusion: Withouthonest and informed feedback from clients on the effectiveness of the services delivered, IT management must rely on their intuition to devise ways to enhance services and measure the department’s performance.

The ideal way to obtain the insights needed to enhance IT services and measure performance is to conduct an IT Service Effectiveness, or Customer Satisfaction Survey, on a regular basis and act on the findings. Actions might include, for instance, justifying an increase in the IT Expense budget or acquiring extra computing resources to improve online systems performance.

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Conclusion: Application portfolio rationalisation offers the promise of reduced ICT maintenance costs while improving data quality, process support and usability for end users, and increasing organisation effectiveness and efficiency.

An effective approach to application portfolio rationalisation involves five steps: 1. understand your business architecture; 2. understand your applications portfolio; 3. develop principles for rationalisation; 4. assess opportunities for rationalisation; and 5. rationalise.

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The majority of IT outsourcing contracts this month include the provision of cloud-based services, and issues relating to cloud adoption. A large number of service providers and consultancies have announced the acquisition of specialist divisions, partnerships and collaborative agreements for the sharing of information and expertise for companies outsourcing IT. A number of training initiatives, workshops, and information sharing arrangements between vendors, industry service providers, and governments have taken place.This benefits both vendors and customers when outsourcing in an environment where a large degree of flexibility and constant development is required to accommodate new technologies and solutions. By expanding existing capacities or strengthening service offerings companies are providing a greater range and higher quality specialist services for a changing market.

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There’s a long history of fad terms and acronyms in the information technology field – EDP, VM, CRM, EDI, iPad, iPod, tablet, BPO, ad infinitum, and of course the latest – Cloud.

The advent of all things Cloud introduced new terms such IaaS, PaaS, SaaS to classify layers of technology such as infrastructure, platforms and software that could take advantage of the Cloud – ‘Everything as a Service’.

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Conclusion: Reports on the findings from CIO surveysconsistently highlight management’s imperative to transform stored business data into wisdom. What the survey reports do not make clear though is how wisdom, or the Eureka moment, can be recognised. Also missing from the reports is an explanation of how skilled IT and business professionals can achieve the transformation, so management can act on the wisdom.

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July has seen a noticeable rise in the number and range of outsourcing deals. An interesting development is the move to smaller service providers who are being engaged to provide targeted and specialised services. This flags a trend in the outsourcing industry which has been evolving for some time, as the desire to realise the benefits of new technologies across diverse commercial environments is necessitating specialist support skills and increased company flexibility from prospective vendors.

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Conclusion: Enterprise architecture tools and processes have traditionally missed the mark in providing timely and relevant support for executive decision making. A fresh approach is required that focusses on just enough information to support defensible, evidence-based planning. Enterprise architecture functions must provide value in short, focussed iterations.

Enterprise architecture provides an evidence-based approach that demonstrates clear traceability for investment planning decisions. Astute executives will understand how enterprise architecture can be used as a powerful approach for developing an ICT investment plan that is robust and defensible.

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While discussions around company and service offering expansions have been common in the past few months the real consideration of the implications of these developments was prominent this month, In particular the demand for new and highly specialised service offerings in response to increased business complexities, new technologies and solutions and problems emerging because of these issues. For instance, the demand for consultants to copy company data, manage data retention and review and reduce stored data has risen dramatically as the accumulation of large amounts of data is becoming problematic for organisations. Enhanced technologies and solutions or different problems necessitate services to support them which in turn results in new tools and outsourcing services providing stability to growth markets, and the development of new ones.

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Conclusion: CIOs and technology leaders will often have relationships with many suppliers and vendors. This can be transactional in nature and limited to an exchange of goods or services for payment. A strategic partnership is a longer and deeper relationship and has many of the same characteristics of a good marriage and many benefits. However, organisations often focus on having a good process and underestimate the real imperative of good relationships which is harder to achieve but is the clear differentiation between a transactional relationship and a strategic partnership.

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Conclusion: Most organisations that use enterprise resource planning (ERP) software have a need to integrate the ERP system with other enterprise software. It is common for ERP systems to be integrated with customer relationship management software (CRM) and with all the bespoke applications that operate at the core of the business. Some organisations strive to simplify the system integration challenge with a single silver-bullet system integration technology, but this approach only works in the simplest scenarios, when the number of system interfaces is small. Instead, aiming for maintainable integration code leads to better results.

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Conclusion: Enterprise architecture should be viewed by CIOs as a fundamental toolset to provide sound, defensible, evidence-based decision making. CIOs who ignore or misunderstand enterprise architecture forego a powerful management device.

CIOs should understand and make use of the enterprise architecture techniques at their disposal; they must also recognise approaches to enterprise architecture that will not work. CIOs should set expectations with their enterprise architects for quick delivery of highly relevant outputs: days not years.

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Conclusion: Much discussion on NBN attempts to demonstrate its value in the future. Instead of trying to prove what NBN can deliver in thirty years it is wiser to assess what organisations can do with the network.

This may seem obvious. All that’s required is to plug into NBN and let the network make it happen. If NBN is really such a significant change in technology, organisations will find they have to discover how they operate and how to fix themselves in order to use the NBN to their advantage.

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This month, there has been a lot of discussion regarding security and ICT systems. These discussions have ranged between risks, new product offerings, need for greater awareness, specialist security company expansions and security responses. This has been interesting in relation to outsourcing as the discussions have adopted a more holistic approach, with security not being seen as an individual component of IT operations, but rather one which should be integrated with other areas. For instance, aging technologies or system protocols which can potentially cause major security problems, are not seen as distinct with both the problem and response measures intertwined. The types of specialist skills necessary to address security issues caused by existing technologies and practices as well as evolving markets and technologies will inevitably result in a growth in products and service provision in this area.

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Conclusion: Many organisations in Australia rely on SAP software for enterprise resource planning (ERP) software. To get the best results out of their data, a significant number of organisations have implemented a data warehouse alongside operational systems, and are combining SAP software with best-of-breed technologies for customer relationship management and system integration. Whilst SAP software continues to provide important functionality, it pays to understand to what extent standardisation of ERP functionality makes economic sense, and from what point onwards standardisation reduces the organisation’s ability to deliver unique and valuable services. Standardisation is desirable only if it leads to a system landscape that is simpler and sufficiently resilient.

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Conclusion: Most organisations run a large percentage of their workloads on VMware’s hypervisor, yet they are reluctant to virtualise their production Oracle Databases. The three common reasons given are: lack of support, poor performance and increased licence costs. The first is Oracle FUD, the second is a lack of understanding and testing, and the third needs to be examined on a case-by-case basis, but can result in a reduction in cost.

For many organisations moving some, or all, of production Oracle databases to an existing Intel/VMware platform is a low risk, high value strategy that should be examined.

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Conclusion: IT managers and purchasing officers need to be aware of recent changes in Microsoft’s licensing and evolving interpretations of licensing terms, or face surprises during true up and licensing negotiations that Microsoft will use to its advantage.

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