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: 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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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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