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: IBM’s launch of its PureSystems line of hardware completes the vendor line-up for Integrated Systems. While this does not dramatically change the market it does further solidify our 2009 prediction that IT infrastructure is transitioning to a new procurement and deployment model. However, due to internal barriers adoption rates are modest and this transition will only happen slowly over the next seven years.

On the next major IT infrastructure refresh, especially storage, IT organisations should review their approach to procuring and delivering infrastructure. This may require challenging the established infrastructure dogma in order to accurately evaluate the benefits of Integrated System.

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Conclusion: One of the challenges faced by senior IT and non IT managers is how to encourage right use of IT resources by their staff? One option, favoured by many organisations, is to charge business units for the cost of IT services and make line management accountable for outcomes and astute use of IT resources. Whilst the option is fine in theory, it comes with a price. The effort needed to collect and allocate IT usage costs is not trivial and often leads management to ask whether it is worthwhile.

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Conclusion: For organisations that use digital content distributors, telecoms suppliers, and social media, the Convergence Review is an important stage in how policy and regulation will evolve. The review sought to update the regulations in the sector which has changed rapidly. Although the review did not focus on digital players, there were elements in the digital arena that indicate where change may lead.

It is probably inevitable that more regulation will enter the digital content and distribution sector. The need to impose controls will be to facilitate market competition and foster new ventures. It will also be used to protect individuals. That means that running an unregulated market is not possible if the goals of increasing local content, commerce and technology innovation are to be achieved. Organisations may have a special interest perspective depending on their role within the content, communications, technology development and social media sectors.

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Conclusion: Einstein said that “everything should be made as simple as possible, but not simpler.” This is true in enterprise architecture and project management. CIOs know that simple solutions have many benefits over complex ones. Highly complex projects have high failure rates, like highly complex architectures. However, many CIOs unwittingly encourage and reward complexity. Complexity must be viewed as a primary focus for reducing cost and risk associated with large projects. CIOs should understand some of the key steps that can lead to reduced complexity in projects and systems.

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Conclusion: Microsoft licensing continues to be a major point of confusion and disruption to many IT groups, and procurement managers. Understanding the principles underlying Microsoft’s licensing will go a long way to optimising procurement during negotiations and avoiding licensing errors.

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This month’s deals were fairly thin but tenders and project announcements were up. More interesting this month was the chatter centred around BYOD, and other new technologies that are resulting in diversified environments and management and security vulnerabilities arising because of a lack of planning and experience with these technologies.These types of environments are expected to result in new outsourcing service offerings for vendors to take control of areas like mobile device management

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The topic of Bring Your Own Device (BYOD) has resurfaced this year. While this is an important trend that needs to be examined by IT organisations, be careful to separate the facts from the hype. Here are the four most common myths that I keep hearing.

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Conclusion: As the market for Board Portals rapidly matures, IT organisations are being asked to assist in selecting and implementing a solution. This is a golden opportunity to raise the IT Organisation’s profile with some of the most influential people in the company.

The CIO must ensure that technical staff do not overcomplicate the project and must find an Executive sponsor who can manage the Board members’ requirements and expectations.

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Conclusion: The speed and disruptive effects of consumerisation in the mobile market surprised many organisations that were looking back, not forward. Even mobile providers have not anticipated rates of change and must invest millions to remain competitive.

Over the next three to four years the mobile market will face stark realities in a fully developed and oversupplied market. Providers will have to manage costs, improve service delivery and raise user revenue. That is not an easy set of objectives to achieve. The effect of raising revenues and cost management on users could be disruptive as users seek to maintain price and service levels they have enjoyed for some time. Organisations may have to manage another round of change when it comes.

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Conclusion: When assessing the options at outsourcing contract renewal time, ensure insourcing is included in the evaluation as, despite the changeover cost and risks, it may be the best strategy to pursue.

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The major interest this month has related to revenue growth for IT service providers. Global and Australian figures are high, and the flow-on effects were clear in the news. Service providers have been announcing new service offerings, strengths in different areas, company expansion both locally and globally, and revenue increases and investment in expanding and improving business operations. Overall it seems there will be some interesting times ahead as business growth impacts on outsourcing industry practices and trends.

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CIOs, architects and managers responsible for IT systems often wonder – how did we end up with this mess? There’s no decent documentation. No-one seems to be responsible for the apparent lack of any rational architecture. A lot of stuff is “due to historical reasons”. Of course this would never have happened under your watch, but now it’s your responsibility to make some sense out of it. If your system represents a substantial investment, it stands to reason that you’ll want to understand why it was designed the way it is before you take any radical action to change it.

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Conclusion: In spite of changes over the last decade the Microsoft Windows Server licensing is still rooted in the physical machine era of the ’90s. However, most organisations run the majority of their x86 workloads in virtual machines. Microsoft’s disconnect with the virtualisation realities of the last five years can result in licensing confusion. Organisations that choose the wrong licensing approach will either greatly over-spend on Microsoft licences or, more likely, not be compliant.

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Deals have increased this month, but more importantly, the deals are more interesting! Increased outsourcing in areas that support consumer-orientated functions (as opposed to just infrastructure or business support deals) is especially clear this month.

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As discussed in this month’s research note “Microsoft Licensing + Virtualisation = Licensing Confusion” Microsoft’s Licensing model is based on a physical machine model that is increasingly out of touch with the IT industry.

In the past, when computers did not have the processing power of today’s hardware and operating systems, and software was bound to the physical machine, binding licensing to the physical machine made absolute sense. When organisations wanted to get more computing power, they would buy more machines: which would see Microsoft getting more revenue. Consumption of software (arguably the value of IT in the eyes of users) was closely correlated to the physical machine.

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Conclusion: In spite of some benefits in security, remote access and speed of deployment, VDI has remained a niche product. This has largely been due to the higher complexity and much greater capital cost compared with a Full Desktop. However, as VDI infrastructure innovations continue to close the gap, the adoption of VDI will increase beyond this small base. Due to the risks and costs of switching from a well understood model to a relative unknown model, the adoption will increase at a moderate rate and there never will be a “year of VDI”.

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Related Articles:

"Is this the year of VDI? (Part 1)" IBRS, 2012-02-29 00:00:00

Deals were light but other news was especially interesting this month. The standout issue seems to be the IT skills shortage (again!), but the discussions about the shortage seem to be expanding into areas such as hiring practices, potential resolutions etc, indicating people are considering the issue carefully, with commentary going down a few levels. There also seemed to be a high level of CIO and CTO appointments this month. The most interesting topic was the Huawei exclusion from NBN bids – lots of debate (and allegations) on that one, everyone seemed to have an opinion!

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Circa 1960: The “Hard theory of platforms”

In the early days of information technology, hardware was THE platform. Companies such as IBM and DEC provided the big iron. Business software was THE application. In those days even software was as hard as stone. The term application platform was unheard of.

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Conclusion: No, and there never will be “the year of VDI”. However, now that the capital cost of VDI is close to that of a Full Desktop the adoption of VDI will begin to increase beyond its current small niche. The large capital cost and complexity of replacing the existing desktop fleet, the perceived risks in using to a new desktop approach, and a general lack of experienced staff will ensure adoption of VDI will proceed slowly.

For the next 5-7 years organisations will continue to use a range of desktop deployment techniques (such as Full Desktop, Laptop, Remote Desktop Services aka Terminal Server) with VDI being just one of many.

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Related Articles:

"Is this the year of VDI? (Part 2)" IBRS, 2012-03-30 00:00:00

Conclusion:Emerging Technologies (such as those relating to Tablets, to Cloud, to Social Media, to Big Data) threaten to complicate and disrupt the work of enterprise architecture. As enterprise architects struggle to understand, simplify and bring governance to heterogeneous technology environments, new and emerging technologies get in the way.

Emerging technologies cannot be ignored. They promise tantalising new benefits and bring a vision of hope to CIOs struggling with increasing costs and stagnant budgets.

Enterprise architects must understand what is possible with new technology and matching that to the specific needs of an organisation whilst reducing technology sprawl.

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Conclusion: With cumulative revenue in excess of $1 billion, and penetration into the majority of ASX50 organisations,Indian based IT service providers are clearly a well-established and credentialed participant in the Australian IT environment. The adoption of these vendors by Australian organisations has continued to accelerate in recent years. An increased challenge for current and prospective customers is to understand the implications of evolving Indian provider capability and investment.

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This month we have seen a lot of commentary on the e-Health records initiative, with industry bodies (medical, privacy and software) becoming quite vocal about expected launch date delays and inability to reach technical objectives, while government bodies responsible for the system refute the claims! More significant this month is the rise in outsourcing contracts and proposed tenders and even better, more interesting contracts – finally!

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Social media is nearly ubiquitous in every market. So far social media ventures have done extremely well commercially, if not in real money, well then, at least in some discounted financial value accounting methodology.

This year the whole game, so to speak, goes up a degree with Facebook more than likely to go public with its IPO in late May according to latest reports. Forecasting what it will mean to the social media industry, to usage and apps development in a market that is already mature and fully saturated, is complex.

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Conclusion: As discussed in “Backup is not Archive!1 all IT organisations should evaluate the deployment of an archival platform to reduce storage costs and improve unstructured data management. Our 2008 survey found archiving in ANZ organisations to be immature and with many risks. A follow-up survey in 2011, and on-going client discussion, shows this situation has improved as evidenced by higher implementation success rates and customer satisfaction scores.

We found the products most commonly used in production were Symantec Enterprise Vault and Commvault Simpana. These products were very well rated by the organisations that used them while EMC on the other hand continues to struggle.

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Conclusion: Most vendors emphasise their strengths and obfuscate to hide their weaknesses when responding to an RFT (Request for Tender) for IT products and services. Detecting their weaknesses by unravelling their obfuscation is often a major task for the evaluation team or panel. Failure to detect weaknesses could lead to the wrong vendor (tenderer) being selected and reflect poorly on the team.

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There have been no IT deals of great interest this month which is to be expected so early in the calendar year. As with any major government IT program, now that the launch of the federal government’s e-health record system is being ramped up, reports and debates on the system including any setbacks and flaws have increased this month and will probably keep doing so until July. Forecasts are levelling off, but there are interesting comments on predictions for the outsourcing landscape by the IAOP and Outsourcing Centre and it will be of further interest to follow developments over the next twelve months.

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Conclusion: The foundation of any BYO device initiative is a robust BYO device policy. The policy must set the boundaries for acceptable use, costs and security. Ensure device security is driven by business stakeholders and is based on pragmatic risk analysis rather than technical concerns from IT staff, or FUD from vendors who are anxious to sell their wares.

Robust policy, strong corporate culture and proper training can be more effective than technology in securing corporate data and controlling costs and risk. Use policy, culture and training to drive compliance, minimising the need for complex and expensive technological controls.

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Related Articles:

"BYO Devices (Part 1): Adoption in ANZ" IBRS, 2011-11-26 00:00:00

Deals during the month have been comparatively unexciting, with a real focus on analysis of major issues in 2011 and forecasts for 2012. What is a little disturbing and confusing about this month’s news items were the Federal Government announcements about areas for planned IT spending cuts, and increases. It is shaving costs on some essential IT (such as equipment upgrade and maintenance) and cutting vendor panels and new projects while it continues to invest huge amounts into spending on IT for students. While this appears to be a good idea in theory the value of diverting this spending may be questionable. The perceived need to get technology into student’s hands, within what is a tight timeframe, could be mostly for government PR. However this rush could lead to an inability to negotiate the best deals in terms of price and reduced leverage to procure quality items.

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I was taken by surprise when the caller, whom I had never met, asked whether I was interested in being considered for an IT management position in a large (unnamed) organisation. Intuition told me to be circumspect and keep asking questions about the role while I gathered my thoughts.

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Conclusion: The idea of Bring-Your-Own (BYO) Laptop has been bandied about for the last seven years, but it is not as common as implied by the press. Few ANZ organisations have BYO Laptops, however some have implemented BYO smartphones and many intend to do so in the next 18 months.

The driver of BYO device in the organisation is not avoidance of the capital costs but rather the need to accommodate users’ expectations of technology, which have been significantly increased by the consumerisation of IT, and largely driven by the iPhone and iPad.

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Related Articles:

"BYO Devices (Part 2): Policy" IBRS, 2011-12-28 00:00:00

While the number of outsourcing transactions has reduced in Q3 this year, the deals this month are more interesting than usual. News largely focused on project rollouts of previous sourcing deals and there seems to be a lot more tender and project announcements.

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Conclusion: Oracle will continue to excel in the Application, Middleware and Database markets, but it also intends to radically transform and simplify IT infrastructure. Oracle’s strategy is to eliminate complexity, create significantly greater business value and reduce infrastructure costs using an Integrated Systems approach. The objective is to enable customers to focus on applications, instead of infrastructure, in the hope they consume more Oracle software.

IT executives should keep abreast of Oracle’s infrastructure innovations, as well as the competitors’, and be prepared to rethink their existing infrastructure approach if an Integrated System can create a significant new opportunity for the business.

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Conclusion: Gainshare models have started to emerge as a way of evolving IT and BPO outsourcing and increasing measureable financial benefits of outsourcing. Gainshare is immature and not without challenges, but can be a proof point of a mature outsourcing philosophy by an organisation.

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News has been very thin this month. Apple product releases, vendor offerings, the dispute with Samsung and the death of Steve Jobs have really dominated the news. IT company CEO and CIO employment was also featured quite heavily. There were a few deals and developments, but of most interest is the establishment of a new Australian outsourcing industry body. Hopefully we will get some significant insight from them in the future.

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Conclusion: The instincts of greed and ambition can sometime blindside the architects of IT Shared Services (ITSS) initiatives. Thinking too grandiosely and without sufficient regard for the consequences of ITSS can doom such ventures from the outset. Conversely, taking more level-headed approaches, tempered by the honest counsel of those that aren’t necessarily management sycophants, can have the opposite effect.

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Conclusion: The discipline of Enterprise Architecture has evolved from the need to articulate and maintain a big picture overview of how an organisation works, covering organisational structure, processes, and systems. Whilst Enterprise Architecture can assist in implementing industry best practices, several-fold improvements in productivity and quality are only possible if the organisation makes a conscious effort to attract and retain top-level subject matter experts, and if it commits to a so-called Domain Engineering / Software Product Line approach to the strategic analysis of market needs and the design of products and services.

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Conclusion: Poor quality and incomplete requirements continue to be a leading cause of IT project failure. While the more widespread use of iterative project management techniques is minimising the impact of bad requirements, it is still not addressing the underlying cause. Accountability for improving the quality of requirements remains elusive. Enterprise architects must take a stronger role in the validation of requirements, and be prepared to intervene when necessary.

Observations: The saying goes that you cannot create a symphony by asking a hundred people to give you ten notes each. This is an apt description of the way requirements may be developed on large IT projects. The result is often a disjointed set of wishful ideas, concepts and assumptive solutions without any intrinsic integrated design or consistent rationale. Given this profoundly flawed starting point, it is not surprising that subsequent project implementation activities that rely on correct and consistent requirements will be inherently challenged.

Challenges in defining requirements: Understanding of the term “requirement” differs among stakeholders. Requirements can be variously perceived as user wish-lists; or detailed product features sets; or complex business process descriptions. The language used to express these requirements is often loose and ambiguous, instead of concise, testable statements of conformance. Requirements often focus on functional behaviour and ignore important non-functional aspects such as performance, security and operational concerns.

Commonly the task of establishing a set of requirements is somewhat blithely described as “requirements gathering” and implies that they already exist ready-formed in perfect shape, and just need to be harvested like simply picking cherries from a tree. Such a perception is a very dangerous attitude – especially among senior executives.

The reality is that high-quality requirements are difficult to create. Unless there is a very clear and concrete understanding of the objectives of the system, and ready access to explicit and accurate supporting information about all relevant dependencies, the process of defining requirements can become a messy and imprecise affair. Common challenges include:

  • conflicting understanding of the underlying business problems between stakeholders

  • limited access to key subject matter experts

  • organisational politics that hinder contribution and create divergent objectives

  • changing circumstances render requirements obsolete

  • time pressures that cause analysis to be incomplete and poorly formed

Dealing with poor quality requirements: Delivery pressures tend to force poor requirements to be accepted unchallenged. In the face of impending (or missed) deadlines, there is acute pressure to have the requirements ‘signed-off’ regardless of the quality. Project governance checkpoints tend to measure when a project milestone has been completed, but not the quality of the actual work products. If requirements are identified as lacking, this advice can be ignored, or dismissed as rework that can occur in later project phases.

The best way to guard against poor quality requirements is to have them validated early and often. Requirements can be quickly tested against some very simple heuristics to gauge the quality and completeness of their definition. Simple tests include:

  • Cohesive – does the requirement address a single, simple business function?

  • Precise – is the requirement completely unambiguous and stated using concise, simple, plain language?

  • Verifiable – can conformance with this requirement be easily proven in the testing phase?

  • Traceable – are all requirements linked back to a clear business need or objective, and are all business needs covered by a comprehensive set of requirements?

The rise of agile delivery techniques has cut the time between requirements definition and requirements testing. This has meant that faulty requirements can be identified faster and at a smaller scale than traditional waterfall techniques. However agile delivery methods are still not pervasively utilised – and very large programs of work found in government and financial sectors still rely heavily on waterfall techniques.

The role of the architect in requirement validation: Requirements elicitation and definition is commonly the domain of the business analyst. Architects tend to be engaged in projects in the earlier conceptual phases to make key decisions about platforms and technologies based on high level business needs. Then, in parallel to the detailed business requirements definition, architects focus on things such as:

  • defining system context and external integration points

  • identifying system components and interactions

  • understanding information structures and flows

  • performance, security and capacity analysis

The risk here is that while the architects are focused on all-things architecture, they remain isolated and disconnected from the detailed requirements definition and validation. But architects are the best placed people to perform requirements validation. They are the experts that should hold the end-to-end system knowledge and enterprise context, coupled with a clear understanding of the business needs and desired benefits to critically and authoritatively validate the quality of requirements.

Despite protestations from architects that requirements validation is unwanted QA of business analyst artefacts, or unnecessary detail, or this is the role of the project manager – architectural validation of detailed requirements must be performed. And project managers must be accountable in ensuring that any deficiencies identified in architectural review are acted upon.

If poor quality requirements are identified by architects, and not addressed by project teams, architects are obligated to escalate the issue for executive attention. Architectural intervention over poor quality requirements is perhaps one of the most important actions that can be taken to improve the chances of project success.

Next steps:

  1. Examine how the quality of requirements is assured on projects within the enterprise.

  2. Check whether architects have appropriate review and oversight of requirement quality, or is this left as a project manager responsibility.

  3. Make architects accountable for requirement validation as a mandated governance checkpoint.

  4. Ensure appropriate escalation path exists for architecture intervention if necessary.

 

Conclusion Leading IT organisations now recognise that selecting and integrating a mix of best-of-breed servers, storage and networks no longer adds value to their organisation. Instead they are purchasing Integrated Systems from a single vendor that eliminates the cost and complexity of integrating these components; lowers the integration and support risks; and reduces the time to deliver a working solution.

To make this paradigm shift most organisations will need to change the kind of relationship they have with their infrastructure vendors from a purely transactional supplier to a long term strategic partner. For many IT, and vendor staff, this will be a difficult and traumatic transition.

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Conclusion: Despite a long history of IT Infrastructure and applications outsourcing in Australia and New Zealand, too many outsourcing contracts fail to maximise client outcomes due to a range of factors that are fundamentally easy to overcome. Improved outcomes start with improved process up front. Organisational failure to identify and leverage appropriate resources, in parallel with hard deadlines that are too tight to clarify the appropriate level of complexity, provide the wrong environment to start to generate value. The organisation must focus limited upfront resources on the fundamental business and technology issues that will generate the most value from the outsourcing relationship, and not waste resources on those factors that have limited long term value or potential downside.

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Contracts continue to be issued in relation to the NBN build. Both Transfield Services and the Syntheo JV have been awarded significant two year contracts. On the other hand it is interesting to note that the value of IT services contracts globally has fallen again in Q2 2011. A fall of 40% in the past year now brings contract value to its lowest level in over eight years.

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