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: Data centres which are less energy efficient will ultimately be more expensive to host in; because customers will end up paying for a data centre's excessive power consumption. CIOs should insist on knowing the Power Usage Efficiency (PUE) score of their data centre service provider, as this score will have a direct impact on pricing. Some data centres are very shy about their PUE, so any PUE claim should be independently verified.

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Lots of deals this month! But the deals are definitely interesting, not your standard outsourcing deals. My interpretation of the types of services being taken up shows a trend towards obtaining highly focused and specialised services when outsourcing, with vendors providing the combination between base products and services and implementing them for defined and set business functions (not just business or IT areas)

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The right starting point for Enterprise Architecture (EA) is a clear picture of your organisation’s strategic objectives and desired operational model. If this picture is well formed, an EA can effectively mould the necessary structure and behaviour of business and IT assets over time to maximise business performance. For organisations just beginning the process of developing an EA, it is better to start by concisely and simply documenting an EA vision, rather than attempting to create a detailed EA strategy with complex, formalised frameworks.

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Conclusion: CIOs who do not know the level of alignment of their IT strategy and performance with business objectives are potentially flying blind. They could, for instance be advising management to allocate scarce resources to the wrong problems or hiring the wrong people and not know it.

Because alignment is based on perception, CIOs may also be missing the signals from business managers that they are not doing well. Restoring alignment, based on measuring it and taking corrective action when out of alignment, must be a priority of today’s CIOs.

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Conclusion: With the release of View 4.5 VMware has failed to move beyond the limitations of a centralised, virtualised desktop (aka VDI) to a robustly managed Dynamic Desktop that supports Full, Virtual and Published Desktops. VMware claims to have eliminated the capital cost barriers to VDI adoption and has introduced a management framework concept called the Modular Desktop that in the long run will enable VMware to expand out of its desktop niche.

VMware will continue to be challenged by Citrix which has much greater experience in the desktop market and has delivered a Dynamic Desktop for over 12 months. Microsoft also has the capability to deliver a Dynamic Desktop, but has yet to articulate it in a robust or compelling way.

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This month’s deals have been pretty standard, but there have been lots of tender and project announcements and news is out of control! Lots of great outsourcing forecasts, research results and a little bit of gossip made for a great news month.

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There have been a few interesting outsourcing deals this month, though project plans and public sector tenders have been more pronounced. There has also been a lot of discussion re plans for e-health, everyone seems to be jumping on the bandwagon!

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Archimate is a vendor-neutral, pragmatic and simple visual language for Enterprise Architecture that can help define and communicate architectural solutions to diverse stakeholders. However the lack of support for transition roadmaps and program management integration means its use should be limited to tactical situations until the planned harmonisation with TOGAF is complete.

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Conclusion: The increasing cost of energy is not being widely considered in IT departments, but ignoring this trend is a mistake. Not only is the electricity getting more expensive, but data centres are using more of it. CIOs must take immediate action to improve energy efficiency in the data centre and reduce total energy consumption, or they could face a doubling of electricity costs within five years.

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This month has been the most active I’ve ever seen with announcements in shared service panels, or plans to establish one by government agencies, so all that news doesn’t seem to have impacted much at all. There have also been a lot of roll-outs, project completion and project plan announcements this month. Overall it’s been a pretty positive month for outsourcing.

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Conclusion: The last 15 years was the era of the controller-based storage array. As organisations built ever large storage networks the storage array grew in both capacity and functionality. These devices are now extremely powerful, but for many organisations they are overly complex and the unit cost of storage is very high compared to low end storage.

As the controller-based storage array reaches its plateau of maturity it is ripe for displacement by a disruptive innovation. While no clear product has yet emerged there are four interesting candidates that should be examined to see how storage technology will evolve over the next five years.

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Conclusion: At IBRS, we often find that the performance of IT Managers is weighed too heavily on short-term criteria. In such environments when outsourcing is being considered, the pressure to minimise current costs and to be seen to take quick, decisive action can result in on-going problems and higher than anticipated costs. There are, however a number of strategies that organisations can adopt which will lead to significantly better outsourcing outcomes.

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This month has been very surreal in terms of IT industry news. The ICT industry in general is starting to look like a TV drama series, with law suits (public and private), regulatory investigations, compliance investigations, law enforcement investigations, complaints against IT companies, suspicions of regulatory breaches, you name it! Lawyers have been very busy this month. Seems like tight economic conditions, increased awareness of weaknesses in both company and public protocols when it comes to ICT has made institutions more aggressive (and defensive) when breaches or suspected breaches (of anything) occur, giving these types of things a much higher profile in IT news.

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‘Superb’ may be a silly name for a car, however the Skoda Superb sits at the top of the Skoda range. It’s the aspirational model, competing with many luxury brands, albeit at a lower price-point.

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Conclusion:Client hypervisors have been available from start-up vendors for over a year, but this technology has largely gone unnoticed. The release this month of Citrix XenClient Express will quickly change this and raise the client hypervisor into mainstream awareness.

The client hypervisor is a very interesting technology and much hype will be generated over it, however its business value is limited. Nonetheless the client hypervisor will be quickly adopted by PC vendors looking for the “next big thing” and it will become common in new desktops/laptops over the next three years. IT organisations should look at the client hypervisor to understand how it can be used to lower desktop TCO or to create new business capabilities in the desktop.

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What’s most significant this month is the rate of activity! Lots of deals, lots of tenders and positive forecasts for the IT industry. Telstra got a lot of contracts this month, and contracts for cloud services seem to be on the rise.

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Conclusion: Organisations that have fleets of Windows XP desktops will soon find themselves squeezed to either embark on a rushed migration to Windows 7 or pushed into purchasing additional licensing from Microsoft. IT Professionals managing the transition to a new Managed Operating Environment (MOE) must factor in Microsoft’s convoluted licensing options or run the risk of encountering higher than expected costs.

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Conclusion: With core Fibre Channel over Ethernet (FCoE) and Converged Enhanced Ethernet standards now ratified, and with major networking vendors having rolled out FCoE products, IT executives should prepare themselves for an onslaught of converged FC and IP networking product marketing.

While FCoE will be the dominant storage protocol in the long-run, IT organisations must brush aside vendor’s future/function technobabble and understand the benefits of a converged network in the context of their environment. Only then can the organisation define an adoption strategy that guides how and when storage networking is migrated to FCoE.

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Conclusion:Organisations that practice smart sourcing know what they can achieve with their resources and what must be sourced externally. They also know how to act on that knowledge to deliver timely and cost effective services to their clients.

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Conclusion: The phase of the outsourcing lifecycle that involves the selection of the service provider is where the buying organisation has the opportunity to make a decision that can make or break the outsourcing initiative. A considered approach that includes an analysis of both the buying organisation requirements and potential service providers' capabilities is the most likely way to achieve a successful outsourcing outcome.

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this months’ news, discussions about expected shortages and concerns comes from a combination of economic recovery and stronger performances from outsourcing companies, recruitment companies announcing a rise in job ads, and increased demand for highly specialised IT services, like software testing, and low resources levels. Those things, and IT resource shortage discussions are always a great fallback topic for news providers when there’s not much else to talk about!

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Conclusion: Organisations that still have Windows XP as their Standard Operating Environments (SOE), and those that have plans to stay with XP for near term, need to tread carefully with regards to Microsoft’s licensing. While remaining compliant with Microsoft’s licensing will not necessarily incur significant costs, falling out of compliance will be costly. Organisations without Software Assurance and those without an active Microsoft Volume Licensing Agreement at risk with regards to falling out of compliance, especially if purchasing desktops with Windows 7 pre-installed.

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Conclusion:When it comes to evaluating software products to address a particular business need, the first activity after determining a list of candidate products often consists of sourcing product selection criteria from independent subject matter experts. But qualified product selection is only possible if extensive information about the specific organisational context is taken into consideration, otherwise boilerplate product selection criteria only have the effect of a security blanket.

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There have been a lot of little deals in outsourcing, the SMB market is active, and getting some attention (like the government IT advocate for SMBs), and in terms of news, lots of talk about security services and outsourcing them, as well as business continuity and disaster recovery solutions.

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John Maynard Keynes is back in business. A version of his theories helped save the world’s economy last year. The English economist’s robust statement is the headline above, and it’s getting a lot of wear right now. It serves as a reminder of how being flexible is the basis of making the right decision.

As everyone breathes a sigh of Keynesian relief, there is also a spotlight on Japan as the former Asian economic powerhouse may illustrate the future for most of the developed world, technologically and economically.

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Conclusion: Moving from today’s Layered Component model to an Integrated Systems model of IT infrastructure will bring many benefits such as lower operational costs and a more agile infrastructure. However there will be many challenges in undertaking this change, and at the top of the list is the IT infrastructure inertia created by people’s resistance to change and the scale of the investment in the existing technologies.

Rather than focus on the technology IT executives need to work on the people issues, (resistance to change, competency traps, fear of the unknown) and the capital investment issues, that are typical in any major program of change.

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Conclusion: One of the key activities in Contract Management is the governance and performance management process that is used to ensure that suppliers meet their contracted deliverables.1 Despite the importance of this process to the achievement of the goals surrounding the contract, in many situations contract managers report that the performance targets and related governance processes have not worked, and in some cases, actually hindered contract performance.

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It’s been a fairly hefty month in terms of IT outsourcing: lots of great deals and news! There have been a lot of announcements about planned government IT projects, and spending allocations – all potential future tenders.

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Conclusion: CIOs must keep all levels of management aware of the impact of extending the organisation’s reach and range1 of services. Whilst there are obvious benefits from the extension, business managers must understand that it brings with it increased application and IT infrastructure complexity2 and extra support costs. It also makes the organisation’s network vulnerable to intrusion.

Astute CIOs know that having alerted management of the impact of extending reach and range, and to keep their job, they need to present their strategy for its support while minimising the risks. Without strategies, as set out below, they put their jobs at risk.

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Conclusion:Despite the importance of the contract in the procurement process some IT organisations continue to delegate full responsibility for contract preparation to their legal group or to external legal advisors. This can result in an overly legalistic document which may also fail to adequately address the non legal requirements that a buying organisation also needs in the contract.

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It’s January, so as usual there has been a lot of attention on reviews of activity in 2009, and 2010 forecasts. An upturn in outsourcing spending is predicted, and the forecast seems solid – large deals and lots of government tenders are early indicators. Mostly, upturn predictions are founded in new technologies the business sector is looking to adopt, eg. Cloud computing. Let’s hope for a good 2010 IT year!

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Particularly during the tough economic times, we find that the performance of CIOs can often be weighed too heavily on short-term criteria at the expense of strategic long term goals. In such environments when outsourcing is being considered, the pressure to minimise current costs and to be seen to take quick, decisive action can lead to significant longer-term problems.

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Conclusion: Storage vendors promoted storage deduplication a technology that can increase storage efficiency and reduce storage capital costs. However, since some storage deduplication products have a high capital cost, to ensure that an investment is recouped IT organisations must first understand where it should be used and why. IT organisations must then decide whether storage deduplication is a tactical band-aid, and limit its use to a specific case, if it is a strategic platform that must be invested in and built out across the enterprise or if it should be avoided entirely.

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Conclusion: Many organisations have found that as the level of risk increases in their contracts, the potential benefits that can be achieved from enhanced contract management also increases. A process that involves risk identification and the quantification of the probability of these risks occurring can help guide organisations in determining the approach that they should take to the management of their contracts.

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Conclusion: In a continually evolving business world, organisations with immediate access to quality data can fast-track decision making and gain a competitive edge or be recognised as a leading agency. Critical in sustaining this edge will be the performance of the CIO (Chief Information Officer) in securing and supplying data on demand and ensuring its meaning is understood by business professionals and managers.

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A monthly review of all of the sourcing activity, upcoming tenders and news items. Not much to say about the news this month except that it’s thin! (as to be expected, with the holidays), though there were lots of tenders early in the month.

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In the current climate of cost reduction, implementation of a managed print service can reduce costs while providing efficiencies and business benefits to both printer vendors and to their clients. Cost savings and a reduction in the environmental impact of printing can be realised by user organisations while printer vendors can profit through changing their business model from strictly hardware and consumables supply to one that is more service orientated.

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Conclusion: When designing a service-oriented architecture it is essential to provide a mechanism for connecting services from different sources. Enterprise Service Bus (ESB) technologies add value when the systems involved don’t make use of shared data formats and communication protocols.

The market now includes a number of mature open source ESB technologies. Selecting the most appropriate option involves looking beyond the technologies and understanding the factors that influence the quality of a service oriented architecture.

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Conclusion: HP’s acquisition of 3COM, Oracle’s acquisition of Sun Microsystems and Cisco’s move into blade servers are all clear signs that IT infrastructure is at the beginning of another major structural change. These events herald a transition from today’s Layered Components model, where best-of-breed components are purchased from a number of specialist vendors and then integrated by the IT organisation, to an Integrated Systems model where complete systems are purchased from a single vendor, avoiding the need for the IT organisation to act as a Systems Integrator.

IT organisations should look at adopting the Integrated Systems model when the costs and risks of acting as a System Integrator outweigh the benefits of competition at the component level (commoditisation and innovation).

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Conclusion: Contract management is the longest activity in the procurement lifecycle. As an example, this activity may run for well over five years with an outsourcing contract. The potential for this activity to have a major impact on contract outcomes means that buying organisations must ensure that they apply an optimum mix of resources and executive overview to this activity.

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