The media was replete in November of reports that Telstra would be replacing and decommissioning approximately 1200 legacy systems. For instance, Mike Sainsbury in the Australian Business Section on 17 November, compared the systems to a ‘bowl of spaghetti’ on the assumption they were entwined and it would take a mammoth job to untangle them.

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In the December publication I referred to an IT Strategic Planning exercise we are currently undertaking. We have engaged the services of a consultant with a proven track record to assist us in putting together a strategy which allows the business to enter the 06/07 financial year with clear and agreed strategic directions, projects, priorities and funding to proceed on a one to three year strategic plan. The plan would be refreshed annually. This is a fairly new departure for the business, although each year we produce an IT Business Plan which attempts to complement the Company Business Plan. As in the past the Company Business Plan has basically simply stated that we will do more of the same at a bigger profit it has been difficult to produce an IT Business Plan which is any more imaginative than to say much we will support this increase albeit at a proportionately higher cost.

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Conclusion: There is an increasing trend for the IT function to become decentralised. Feedback from IBRS clients indicates that more than 60% of organisations have elected to adopt some form of decentralised IT responsibility. Our observation is that this figure is increasing, driven by:

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Conclusion: Without a support strategy for legacy systems and technology, organisations run the risk of getting caught short when a vendor withdraws support or staff maintaining the systems, the problem is compounded when few, if any, staff have the support skills required, which is often the case for legacy application systems.

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Once again some recent high profile failures of IT projects have raised the issue of good project management and its impact on project outcomes. Those organisations that have yet to establish an effective Project Management Office (PMO) should consider the benefits that can accrue in IT projects through the correct application of a PMO.

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Impressive ROI reports based on nebulous benefit predictions often slip through the approval process at big companies. The numbers presented are often so impressive, or so difficult to understand, that no one bothers to question them. Companies launch big software projects such as enterprise resource planning (ERP) and customer relationship management (CRM) - which can easily cost $50 million apiece at a large company - with a completely false sense of whether the project will pay off.

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Conclusion:A prerequisite of a business case is that all the variables are covered; the forecasts of likely outcomes along with the returns on investment and the processes to manage the venture are classified and described. In so doing, risk is averted or minimised, although there may be occasions when a proposed venture is so large a degree of faith in a business forecast is just as influential as the logic or rationale contained in the business case.

As News Corporation emerged became the third largest digital media player in the US in 2005, its approach to managing online strategic investments offer an interesting insight into its strategic direction. For instance the corporation is now committed to digital media to produce a new growth channel as its newspaper businesses suffer decline.

Few mangers will face the scale of what News has done but two useful messages emerge. Firstly, catching up with the early movers is prudent because the risks associated with catching up with them decrease over time. Secondly, management needs to take steps to ensure that a new initiative works across the entire organisation, that is, it produces benefits for most operating divisions. In the case of News, to take a military analogy: they have boosted their right flank and hoped the left can survive – for the time being.

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The changes that are currently being driven through the business are having an interesting affect on how Information Technology is being viewed. As it becomes more and more apparent that the changes required rely in the main on IT to deliver the appropriate infrastructure, it becomes equally apparent that there are insufficient IT resources to do so efficiently within the time frame expected. Furthermore the extent of the changes and the demands on IT are such that a significant additional investment in personnel and software is required.

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A monthly review of all of the sourcing activity, upcoming tenders and news items

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Conclusion: The end of the calendar year is always a time of soul-searching and reflection. What has been nagging you this year that you know can be improved upon next year? Before 2006 begins in earnest, think about some of the aspects of CIO life that could be changed for the better.

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Conclusion: Getting senior management to invest in replacing a system or suite of software that has served the organisation well and persuading them to invest in its replacement is often a tortuous task. To succeed, persistence and a preparedness to engage in organisational politics by convincing managers of the need to change, is needed.

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Conclusion: Since the beginning of the dot.com boom of the late ‘90s, there has been considerable debate over which web server should be used. By 2004 the web server wars were over with two clear victors emerging, IIS from Microsoft and Apache from the Apache Software Foundation. IT Organisations (ITOs) should move beyond debating the technical merits of various product and select an organisation wide technology standard based on existing investment, skills or alignment with strategic platforms. As part of an ongoing strategy to reduce infrastructure complexity (see “Infrastructure Consolidation: Avoiding the vendor squeeze”), ITOs should create a pragmatic plan to migrate to the new standard.

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Conclusion: Multisourcing can provide a number of significant benefits to client organisations however the full potential will only be achieved if the issues of governance and system management tools and processes are satisfactorily resolved prior to multisourcing.

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The growth of utility computing (UC) and utility infrastructure (UI) is both driving and being driven by open source software adoption. Leading utility IT vendors show that open source-based technologies and applications are now being considered or used to fill important product line gaps. At the same time, feedback from our customers indicates that utility infrastructure partially based on open source-based software will deliver more value to the enterprise than would utility infrastructure purely based on proprietary technologies.

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Conclusion: The rising popularity of online business networking platforms, sometimes also referred to as social software, is the first sign that the traditional CRM paradigm that equates to "one CRM system instance for each organisation" has reached the limits of its usefulness. The players that shape a new, complementary CRM paradigm exploit pervasive use of broadband and wireless internet connections. Many of them are dynamic and small organisations, some still operating in start-up mode. Over the next two years the CRM landscape will undergo significant change, and it may be worthwhile to wait for the dust to settle before investing in expensive CRM solutions that may soon be obsolete.

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Conclusion: IT Outsourcing in the SME (Small to Medium Size Enterprise) sector can be an initiative which can bring real benefits to many SME’s. There are, however, a number of considerations that need to be taken into account to ensure that the exercise achieves its objectives and provides a positive outcome for the IT staff.

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As discussed in these pages before this company has been undertaking a significant review of business processes since the large losses that were experienced on both the Hilton Hotel and Spencer Street Railway Station projects some eighteen months ago. While this review is still very much in progress a number of necessary organisational changes have already been identified and are in various stages of implementation.

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Conclusion: With the maturing of Server Virtualisation on industry standard (X86) and RISC/Unix servers, all IT organisations should evaluate its role in optimising IT infrastructure. See IBRS research note “Infrastructure Consolidation: Avoiding the vendor squeeze” October-05).

The recommend strategy is to start by using server virtualisation to enable the consolidation of non-production systems (i.e. dev/test/QA), progressing to consolidating smaller non-mission critical production applications and finally creating a virtual server infrastructure that simplifies and enables load-balancing, high-availability and disaster recovery. A well executed server virtualisation strategy will reduce complexity and increase agility, leading to better alignment of IT infrastructure with the applications requirements and business strategy.

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Conclusion: For CIOs sustaining effective IT Governance in an organisation is hard work, principally because most senior managers are preoccupied with meeting their performance targets and have little time to come to grips with the nuances of IT Governance. Helping these managers understand their role so they become informed participants in governance matters is an ongoing challenge.

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A monthly review of all of the sourcing activity, upcoming tenders and news items

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Conclusion: A website that is underperforming, certainly in terms of the expectations that an organisation may have had for it, could be called loss-making. Not all websites generate revenue in one way or another but many organisations want their sites to demonstrate returns, whether that is in contact with site users, public relations, or just awareness of the site itself.

There are many tools and techniques to measure, and thereby improve the performance of a site: one of these is usability. These techniques will deal with the execution of site structure and content. As valuable as these techniques may be, if a site is loss making it may be that the root cause lies in the initial planning i.e. that the site does not match the strategy or the expectations that were in place when it was developed.

Organisations with underperforming web site must adopt business process re-engineering principles and redesign it and redesign the aims of the site. Return to the strategic plan – if one exists – and reset objectives. Do this planning once the site has been measured and assessed to obtain a thorough overview of the site’s current performance.

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Conclusion: With the increasing sophistication of application software, it seems inconceivable in 2005 for any organisation to have data quality problems. Yet it is a problem that does occur more frequently than many recognise.

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Widely-available, relatively cheap technology is catching up with the long-standing desire of end-users and businesses to use and pay for technology as demand arises, rather than them being forced to buy entire software packages or infrastructure, and then use just a small percentage of the overall capability. At the same time, user business environments have become more nimble, requiring more flexibility in IT delivery and usage, in licencing and payment structures, and in vendor business models. By being aware of new provisioning models, users will be able to gain long-sought improvements in costs and service.

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Just recently, there have been a number of announcements from the heavyweights of the software industry. These events have the potential to make a big impact on the industry and on user plans. Whenever a vendor acquires another company, reorganises or announces a new strategy the effects are sure to be manifested in changed product roadmaps, reduced support or R & D for products, account management changes and many other aspects that could change user plans. By understanding the impact of announcements such as those discussed below, users can avoid costly mistakes when choosing products and services in a constantly evolving market.

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Conclusion: The US State of Massachusetts' policy that by 2007 all Executive Department documents must be stored in Open Document Format (ODF) or PDF is a significant milestone in the ongoing migration from proprietary systems to open standards. The statement is founded in the belief that open standards are the best option for ensuring that official public records are freely and openly available for their full lifecycle. Experience with other open standards (ASCII, TCP/IP, SQL, HTML) demonstrates their central role in interoperability, confirming this belief.

Microsoft will resist ODF in an attempt to maintain control over a critical standard in one of its most profitable product lines. However, like other open standards before it, and for similar reasons, ODF will become the common standard for office documents, though due to the ubiquity of Microsoft formats this may take 6-8 years.

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Conclusion: Manywho have outsourced their Service Desk complain that in doing so they lost touch with the pulse of their organisation. Bringing the Service Desk back in-house allows customer and IT intimacy to be re-established.

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We have been using VOIP for over two years now but to date we have hardly scratched the surface of its capabilities. We have a Cisco Call Manager installed at Leighton House in St Leonards, Sydney which was originally intended to service the needs of our corporate function (about one hundred and twenty people) the Holding Company (about seventy people) and the corporate and NSW offices of our property development company (about a dozen people). The Call Manager is not owned or managed by us. We are tenants in a building owned by the Holding Company who have the responsibility for managing the telephone system. This has proved a significant hurdle as we seek to expand the VOIP network and take advantage of the voice and data convergence capabilities offered.

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Conclusion: The need for systems integration skills in organisations that keep their IT processing in-house and those that use external service providers will continue to grow and increasingly be a differentiator in services offered to clients. Managers who do little to enhance the skills of professionals engaged in systems integration activities will be doing themselves a disservice and run the risk of losing their highly marketable staff.

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Conclusion: The Service Level Agreement (SLA) is a key part of any outsourcing contract. Done well it can play an important role in improving service performance and can also provide the foundation to a successful partnership between the client and the service provider. Done poorly it can sour the relationship and lead to a bureaucratic exercise of SLA monitoring and review.

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A monthly review of all of the sourcing activity, upcoming tenders and news items

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Conclusion: Practical experience shows that software development initiatives usually entail high risks for the customer and the software developer. In anticipation of the risks both parties attempt to mitigate the impact, the customer often insists on a fixed price, and the software developer consequently builds contingency into the fixed price. This simplistic mitigation strategy rarely works. Successful application development requires intensive interaction with end user representatives and stakeholders, and the ability to take into account new insights into user needs, which are gained while the application is being built.

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Conclusion:The mobile phone is entering a new phase in which it appears likely to become another medium, combining material from broadcast and print media. The mobile is not likely to become a pocket cinema - Apple’s iPod video is that – but according to a recent Australian research survey mobile users want more communication choices on their mobiles and to enjoy media content.

Current developments in technology and the growth of mobile content and increasingly mobile media content give organisations a powerful channel option in their communications suite.

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''On-demand''—or ''adaptive,'' ''agile'' or other terms being used by major vendors includes the combination of business models, processes and operations that are enabled by and which require these IT resources. This concept is therefore more of an overall business strategy, including not just the availability of IT resources ''on-demand,'' but the ability to build, change, adapt and manage business operations using and leveraging the ready availability and variable capabilities of utility computing.

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In early September the Audit Bureau of Verification Services released its online advertising market report which showed that revenue had grown by 62.7% year-on-year to $488m. For the last five years the online advertising industry has been promoting its growing revenues as proof that it has “arrived”, and by implication, companies should use online media as an advertising channel.

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Conclusion: SOA is an increasingly common TLA (three letter acronym), and is often thought of as a new technology - and equated with Web Services. This does injustice to Service Oriented Architecture, a new software design concept that emerged from the need to easily integrate web based applications independent of their implementation technology. Hence the adoption of SOA is not about migrating to yet another technology stack, but rather about adopting new software design principles that make life easier in today's world of distributed and heterogeneous systems.

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Conclusion: Infrastructure Consolidation has been a hot topic since the IT downturn in 2001/2. Unfortunately, this topic has been hijacked by IT vendors and used as justification for purchasing their latest high-end technology. To date most consolidation efforts have been technology projects with poorly defined goals that rarely go beyond implementing a specific technology. As a result most consolidation projects fail to deliver lasting benefits.

To ensure long term benefits, IT organisations (ITOs) must view infrastructure as an asset to be optimised for an appropriate mix of Total Cost of Ownership (TCO), agility and robustness as required by the business. The critical success factor is the recognition that complexity is the key driver of these characteristics and that a planning process (not technology) is necessary to reduce and control complexity.

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Conclusion: Every organisation needs to assess its level of maturity in the management of its IT asset at least annually. Because most managers focus on meeting service delivery levels, they can easily overlook the need to manage the life cycle processes for IT assets from acquisition to retirement. By not investing in initiatives to increase their level of maturity in IT assets management, as per the table below, managers could be putting their careers at risk.

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A monthly review of all of the sourcing activity, upcoming tenders and news items

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There has been much publicity of late about the issues surrounding Australia’s ageing population. Concerns which have been reinforced by our esteemed Prime Minister and which have lead him to encourage us to stay in the work force longer. This is a far cry from the days not so long past when anyone over fifty was considered to be over the hill and, if they were unlucky enough to find themselves out of work, the immediate prospects of an early return to full time employment were fairly remote.

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Conclusion: An often heard complaint from organisations, is that despite issuing an RFP, the process selecting an Outsourcing Service Provider took considerably more time than they had expected and consumed considerably more resources than were planned.

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