Consider the Source

The IT Consumerization Challenge – and Opportunity

By John Lytle, Consulting Director, Compass

The “consumerization of IT” – or the Bring Your Own Device (BYOD) trend – has emerged front and center, and a lot of CIOs aren’t very happy.  A recent article in Computerworld calls it a “thorn in the side” of most IT departments, and cites complexity, support, and security concerns.

Like it or not, employees are purchasing iPads, Blackberries, iPhones, and other devices and using them for work-related purposes.  One question CIOs need to ask themselves is, “When do I start caring?” Specifically, what policies should be defined and enforced around who can use what kind of device for what kind of activity – be it messaging or collaborating, accessing corporate networks, etc.?

Another set of considerations revolves around the basic question: “How do I support these devices?” If they haven’t been already, CIOs will be tasked with providing mobile access to company information. If you have character-based legacy applications rather than browser-based applications, it will be a lot more difficult to support mobile devices. Meanwhile, telling the folks in the Boardroom that they can’t access sales figures on their “executive jewelry” devices isn’t a viable option.

The consumerization issue also affects infrastructure: how good is your network’s perimeter security? The influx of mobile devices could impact your entire network strategy. Consider the question in the context of how will you manage “data in motion;” in other words, your companies IP, client data, etc.

While discussions around IT consumerization tend to focus on the various headaches it causes IT, it also provides an opportunity.  I’m having more and more conversations with CIOs who are concerned about building their operational defense plan, about managing their legacy applications and rationalizing their portfolios.  They’re looking for a good understanding of overall staffing and support costs, and how to pull together their shared services and sourcing strategies.  Ultimately, they need to understand what they’re spending and what they’re getting.

In this larger context, the IT consumerization challenge can help you take on these big picture tasks of IT operational strategy.  So, rather than a putting-out-the-fire exercise, the imperative to effectively support mobile devices can become part of your strategic plan to transition the enterprise from where is now to where you know it needs to be.

What do you think? Is IT consumerization keeping you awake at night? How are you dealing with it?

Waiting for the Innovation Fairy

By Max Staines

If you expect something, you should have some way of knowing whether or not you get it.

A sizable portion of IT executives seem to be missing that point.  According to a recent survey cited in CIO magazine, “67 percent of IT leaders say they rely on outsourcers to turn ideas into new and improved processes, but just a third actually measure the impact of innovation delivered by their service providers.”

Sounds like a recipe for disappointment.

The survey, conducted by the United Kingdom’s Warwick Business School and sponsored by offshore outsourcing provider Cognizant, also found that most CIOs would welcome some sort of framework for innovation, and half would be willing to pay more for such a framework.

From Compass’ perspective, a process for measuring innovation has to address some basic questions, including:  

• What’s my current state?
• What’s the potential benefit of the proposed innovation or improvement?
• What’s the investment, risk, and change involved to implement the initiative?
• What are the alternatives to the proposed change?
• What will we need to manage the future state?

A broader consideration is to make a distinction between productivity improvements on the one hand, and true innovation on the other.  Client organizations and service providers will admit they often make unrealistic demands for (and promises of) both. Yet true game-changing innovation requires specific mutual incentives that allow both parties to envision the art of the possible and work towards a transformative future state.

That’s a very different proposition from optimizing the efficiency of the existing environment. 

Bill Huber, a TPI Partner and Director of CPO Services, suggests building a certain number of consulting hours into service provider contracts that are devoted to identifying and exploring truly innovative ideas. Gainsharing incentives can also be effective, as can governance frameworks that include a specific focus on tracking the introduction, acceptance, and lifecycle of innovation initiatives.  (A recent column in Global Services magazine discusses TPI insights into innovation, specifically in the BPO space.)

To put the improvement vs. innovation distinction into perspective, consider the business world of 100-some years ago.  When efficiency-minded organizations were equipping messengers with bicycles to increase productivity, a few saw an opportunity to make a step change with this new telephone thing.

What were the telephone people doing differently?

Middle Market Focus: The Journey from Managed Service to the Public Cloud

by Stanton Jones, Vice President and Chief Information Officer, TPI

It’s clear that many organizations with managed infrastructure service agreements are taking a long, hard look at new vendor-hosted cloud Infrastructure as a Service (IaaS) offerings. Promises of faster, cheaper and more flexible are hard to ignore. In fact, when TPI surveyed its clients about which cloud-related services they were evaluating, four of the top five areas were related to IaaS, including virtualization, storage and computing services.

TPI believes that the mid-market is taking the lead in adopting cloud-based infrastructures; however, we also have found that as companies begin to investigate the available offerings they quickly find themselves overwhelmed with the options, which can include private, private-managed and public cloud IaaS services.

The IaaS space is growing and maturing very quickly and TPI views these services as a spectrum of possible solutions, not a “one size fits all” market. Here’s why:

• Making the leap from a traditional, non-virtualized managed service to a vendor-hosted private cloud is typically most influenced by technology considerations: will my applications work in a fully virtualized environment? For most modern applications, the answer is yes; however, for legacy applications or large, transaction-intensive databases, virtualization may not be the right approach and may need to stay where they are in a managed service.
• The considerations for moving from a vendor-hosted private cloud to a public cloud offering usually coalesce around business risk: am I comfortable having my data reside on the same physical hardware as other customers? For most data, a multi-tenant environment is appropriate, but there are some categories of data that require more scrutiny (e.g., intellectual property, personal data). In addition, it’s important to understand your clients’ requirements with their data. While it may be totally acceptable to have your data in a shared environment, your clients may feel otherwise. These applications may need to stay within a private cloud environment.

The small- to middle-market is currently leading the way in the adoption of public cloud services for collaboration and customer relationship management (CRM). As more mission critical lines of business and back office applications migrate to the cloud, understanding the key checkpoints along the managed service-to-public cloud spectrum will continue to grow in importance as well.

The Managed Service-to-Public Cloud Spectrum

 

 

Based on current trends, TPI believes that many mid-market clients will begin to adopt a “hybrid” approach to the cloud, using services along the spectrum, based on technology fit and appetite for risk. Moving further up the spectrum creates significant opportunities to reduce cost and increase speed, but comes at a price: a more standardized technology stack and increased reliance on shared technology infrastructures.

These services can be sourced from multiple providers to maximize flexibility, or can be purchased from a single provider, in order to leverage buying power. Either way, viewing managed services, private cloud and public cloud as a spectrum of available options will allow you to find the right fit based on your business and technology requirements.

TPI’s seasoned transformational sourcing experts can help your company define the right strategy through our experience, objective advice, industry knowledge and depth in all aspects of information technology and business process services. To learn more about how cloud computing can benefit your organization, or to find out more about TPI’s cloud computing strategy offerings, contact Stanton Jones.

Why Every Company Needs a Cloud Computing Strategy Now

By Kevin Smilie, Partner, TPI Cloud Computing Business Solutions

Only 5 percent of companies have a Cloud Computing strategy while just 20 percent have the resources internally to develop one, according to a survey of more than 140 global IT decision-makers conducted by TPI.

Cloud Computing is widely seen as the next evolution of IT services, yet only a fraction of organizations has have a strategy for dealing with it. Developing a plan to take advantage of this game-changing innovation in 2011 should be at the top of every CIO's agenda.

Here are the TPI Top 5 reasons why organizations need to develop a strategy now to take advantage of Cloud Computing’s disruptive impact on technology:

1. The iPad Effect on Business: The enormous popularity of the iPad has not only been lucrative for Apple, it has also shown the world how the rapid adoption of Cloud Computing by consumers is putting enterprises on the spot. As executives and employees have grown enamored of the iPad and its ability to access services from the Cloud with ease, they are increasingly attempting to use them for work. To avoid the risk and confusion created by individuals going around the IT department with their own ad-hoc implementations, organizations need a plan for supporting Cloud Computing widely.

2. Need for Cost Control: While the “Great Recession” may have subsided, uncertainty about the speed and timing of an economic recovery is keeping the pressure on organizations to reduce costs and limit investments until business demand returns. TPI Research has found that the ability to more tightly manage IT spending is the number one reason clients are interested in Cloud Computing. As budgeting for 2011 begins, organizations should be preparing to leverage this disruptive technology to reduce costs and capital expenditures and align future spending with value.

3. Pricing Confusion: In theory, the Cloud Computing market is pay-as-you-go. But in practice, it can be hard to discern just what you will pay and just what you will get. Pricing and terms vary widely, and there is no standard methodology for service level agreements. The business models for public, private, hosted and hybrid solutions are all different, and figuring out the best deal for your organization will require enterprise-wide planning, research and testing, all of which takes time.

4. Changing Landscape: There has been a flood of new Cloud-based offerings coming on the market recently, while intensification in merger-and-acquisition activity has caused major shifts in the service provider community. Organizations should be thinking of their Cloud Computing strategy as a roadmap that will help them navigate this increasingly cluttered landscape and arrive at the right set of vendors and solutions for their needs.

5. Only the Beginning: Cloud Computing only works as well as an organization manages it. The key to achieving the benefits it promises is with an integrated, centralized IT Service Management (ITSM) system dedicated to demand management, capacity management and service integration. The only path to such a system is through proactive strategic thinking well in advance of implementation. Migrating a service to the Cloud is only just the beginning.

Every company needs a strategy to deal with the rise of Cloud Computing. The TPI Cloud Computing Business Solution Unit advises clients interested in moving IT and business process operations to the Cloud as a way to reduce costs, improve flexibility or create scale to achieve their business objectives.

For more information, contact Kevin Smilie at kevin.smilie@tpi.net or
+1 817 773 4127.

VDI Brings the Benefits of Cloud Computing to the Data Center

by Jim Kane, Director - CIO Services, TPI

The past couple of years have been an exciting time for CIOs needing scalable IT platforms that are cost-effective and support rigorous security standards. In addition to cloud computing, a currently less-publicized technology called “VDI” is gaining momentum and credibility for those who need similar attributes with added benefits. The server-centric VDI model, which borrows from the traditional thin-client model, can be a great alternative for organizations that want to maintain control of their applications and data in-house, uphold stringent control of operational standards and reduce support costs.

VDI means “virtual desktop infrastructure.” Quite simply, it takes the user’s desktop and moves it into the data center. When done right, resources become better utilized, applications are managed efficiently, and data never leaves the friendly confines of the data center.

First generation virtual desktop solutions were designed to serve up a basic virtual desktop running Microsoft Office and client/server or Web apps, and they did a great job at that. In today’s computing environment, many companies are concerned with the sometimes delicate balance of cost versus security. Besides the obvious cost consciousness brought about by the weak economy, another less-common cost consideration is what I’m calling the “experience” value – the relative ease-of-use of a given solution for a typical end-user. We want this value to be high, indicating a highly usable system. Then there’s the security side of the equation.

I believe that the VDI desktop solution can help organizations 1) keep costs down, 2) maximize the “client experience” value; and 3) maintain data security. VDI can help lower costs by reducing management, administrative, and resource overhead, while at the same time increasing the user’s experience and securing data inside the data center.

Desktop virtualization depends on where the virtualization is taking place (i.e., implemented), either at the host (i.e., data center) via one single image being presented to all users (a.k.a. “thin client”), or at the host serving up multiple images to users or the client workstation running multiple images.

VDI is a “younger” technology that we’re seeing implemented by some major vendors in the past two years. HP, IBM, MS, VMware, Citrix, SUN and various boutique service providers have been increasingly getting into this space. Along the spectrum of virtualized desktop implementations, there have been many successful implementations worldwide such as Sparkassen, the savings banks’ financial group in Germany, which has deployed more than 100,000 thin clients using VDI.

VDI is a proven technology and has reached a maturity level that gives buyers with a certain set of requirements many viable choices. But you don’t want to virtualize without a clear understanding of your current and desired states.

Wondering if VDI might be a good fit for your organization? E-mail me, and I’ll send you a checklist of things to think about before a VDI deployment.

Lost in the Cloud

by Thomas Young, Partner & Managing Director, CIO Services - Infrastructure, TPI

 

The security of stored data is often cited as one of the key obstacles to organizations adopting Cloud Computing. To be sure, the risks are high if a company’s customer records are compromised as a result of being in an unsecure Cloud environment. That issue is enough to give even the most maverick CIOs pause as they consider their technology plans in the coming years.

However, if we look to other technologies that use public infrastructure, the solution for storing data in the Cloud may be right in front of us. The telecommunications industry has for years provided secure voice and data by encrypting communications and dividing them into multiple fragmented streams. The packets are sent on independent routes over unsecure public telephone networks and the Internet and then re-aggregated and decrypted in a secure environment. Something like secure à  unsecure à  secure.

All of this happens every time we log onto our brokerage accounts online and we never think twice about it. Why? Because if the packets were intercepted, they would have to be decrypted and re-aggregated for the voice or data stream to make sense. This is possible, but very difficult to do. 

The same protocols can be used to store sensitive data in the Cloud. Data can be encrypted and divided at the bit-fragment level and stored in multiple, independent and diverse storage arrays.  Each encrypted fragment reveals nothing if intercepted and meaningful information is only revealed if significant clusters of data are decrypted and re-aggregated. Theoretically possible, not likely.

In this architecture, aggregators sit between the application layer and the storage layer and act as an intermediary to the computing platforms that need the data, pushing and pulling these fragments. This is how Google search is architected. The data is read from storage, processed, and rewritten to storage, or something like this: secure à  unsecure à  secure.  Just like in the telecommunications example, the unsecure segment is effectively secure because the data is fragmented and encrypted. 

SNIA (www.snia.org) is working on standards to deploy this kind of technology so that data security will no longer be a barrier to cloud computing adoption. And in the future, when the auditors ask if your customer data is secure, you will be able to say, “Yes, it’s lost in the Cloud.”

Two Paths to the Cloud

By Thomas Young, Partner & Managing Director, CIO Services - Infrastructure, TPI

 

 

A recent study from Telecom Trends International estimated that Cloud Computing will generate more than $45.5 billion in revenue by 2015. But what should CIOs be doing about it today?

 

In his book The Big Switch, Nicholas Carr compares IT in the early 21st century to electricity in the early 20th  century, when large manufacturers had to generate and manage their own juice. Up until now, businesses have had to operate and maintain their own IT infrastructure.

 

In time, though, electricity became a utility that could support small and large operations alike. The key was standardizing on 110V-by-60Hz. Today, we see the emergence of a standard IT utility under the banner of Cloud Computing that may lay the framework for a revolution on the scale of electricity 100 years ago. 

 

So what is a CIO to do in 2010?

 

CIOs should assume Cloud Computing will evolve along two paths:

 

1. Proactive Path: They move functions such as e-mail to the Cloud to lower cost and improve functionality

2. Reactive Path: Their internal clients start to move functions such as CRM to the Cloud

 

In the Proactive Path, CIOs are driving the agenda to adopt solutions that leverage Cloud Computing technologies and service delivery platforms, and generally speaking, their business model does not change. In the Reactive Path, CIOs see major changes to their business model. For example, CRM is now being bought as a service from Salesforce.com.

 

Either way, the challenge will be to maintain their cost structure as more and more of the functions they support leave their data centers.  So in 2010, CIOs should plan to convert as much of their fixed costs into variable costs. They should also look to their supply chain to outlay capital and provide service at a cost that allows them to maintain their margins. 

 

As they try to separate the hype from reality, smart CIOs will be looking to create flexible third-party agreements with an eye on the Cloud.

 

To learn more, contact Thomas Young at thomas.young@tpi.net.

Cloud Computing – How to Make Rain NOW

by Kevin Smilie, Partner, CIO Services, TPI

“Clouds, clouds everywhere, but what about the rain?”  We are awash in the “cloud computing” metaphor these days, but no one seems to be focused on why clouds exist in the first place ─  to move water from one place to another. What “rain” do we expect cloud computing to deliver? 

Cloud computing promises to enable agility and flexibility that can translate into competitive advantage. We heard a similar story before with utility computing.  But things are different this time. As we’ve already adopted cloud services into our personal lives with technologies like Apple’s iPhone, our mental map has shifted. CIOs are more willing to accept the evolution of cloud computing in the enterprise because they’ve seen the consumer benefits.

And the consumer push has created an infrastructure for service that is now delivering value to small and medium-sized businesses (SMBs) with software as a service (SaaS) applications such as Salesforce.com and Google Apps. Large companies are beginning to adopt certain of these while piloting other cloud computing services for broader uses such as development and test. What do you need to do now to get ready to put this rain to productive use?

Know how to channel the runoff. Develop a plan for how cloud services fit into your service delivery model and how you can effectively use them. The complexity and integration of your application portfolio will be a major point for consideration. You’ll also need a good knowledge of your local regulatory environment and your organization’s risk profile for moving services and data outside your firewall.

Don’t do a rain dance when there’s not a cloud in the sky. Understand the market and what it can deliver today. How are the services priced, and how does that compare to your current cost?  What are the available service levels and how do you get them to align to your needs? What constraints do your current agreements present, and what can you do to remove them?

Be the rainmaker in your organization. Set the expectations for what cloud will do for your company and when. Partner with your business customers to introduce new services and gain their support.  Be proactive about determining how cloud computing will be incorporated into your IT governance, and get agreement among your corporate leadership.

The weather forecast has everyone’s attention in 2010. We are currently working with clients on strategy sourcing engagements to extract the benefits of cloud computing in ADM, Infrastructure, even Network Services – and we can help your organization do the same. Ask yourself: When the rain is finished, will you be out on the water sailing, or cleaning up from the flood? 

Considerations for Emerging Technologies in Your Sourcing Strategy

by Fred Croxton, Director, TPI

There are a number of commonly accepted models for the adoption of emerging technologies and the most effective manner for the organization to consider, test and deploy them. Generally there is a “trigger event” followed by building expectations, then disappointment and eventually a period of more pragmatic expectations and realizable productivity. Here are the TPI Top 5 considerations for how the technology adoption cycle may impact your sourcing strategy:

1. Rationalize technology adoption with your service provider integration strategy. More enterprises these days are employing smaller, more segmented sourcing transactions (along “tower,” region or business units), and hence managing three, four or more outsourcing relationships versus one large one. While there are clear advantages to such a strategy, there are also inherent governance challenges. Make sure you consider expectations for your sourcing partner(s) for their role in adopting and deploying new technologies and have contractual mechanisms in place to enforce these expectations.

2. Leverage SOA investments to rapidly integrate new services. Although service-oriented architecture (SOA) is one example of technologies featured in most views of emerging technologies, it is well along the “slope of enlightenment” and is already embedded inside many organizations. For those with a reasonably developed SOA strategy in place, you would do well to consider how to leverage this architecture to more quickly plug in selected technologies and how to deploy them in the form of services for a quick return. This is, after all, one of the reasons for embarking on the SOA journey.

3. Take a long-term view toward innovation. Clients frequently have inflated expectations of provider-driven innovation as they enter a new sourcing relationship. After all, “they do this all the time, so they should be the experts.” As a practical matter, innovation is difficult, and service providers may be much more consumed with driving down delivery costs than identifying opportunities for real innovation. Look at your governance mechanisms and how you will manage expectations for your sourcing partners to identify, test and introduce new technologies into your organization. Be realistic, and don’t give away the “family jewels” as far as business-driven opportunities for innovation. Consider an “innovation steering committee” comprised of a cross-section of business/user representatives that emphasizes “influential and visionary” contributors as much or more than seniority.

4. Don’t forget “end of life” strategies. Nearly as important as your adoption strategy of emerging technologies is having a clear strategy on retiring “end of life” technologies. For example, cathode ray tube (CRT) monitors are expected to reach end of life within a year or two. Such an installed base may represent a significant investment in physical retirement and disposal of the asset (especially considering today’s “green” movement) as well as replacement cost. Make sure you have practical alternatives baked into your sourcing strategy for end of life strategies. Schedule timely reviews with suppliers of technology assets and build deployment and retirement plans into your agreements.

5. Consider the impact of “transformational” technologies on your sourcing relationships. Emerging technologies may be viewed as “transformational” or “modestly impactful.” “Transformation” itself could arguably be considered a form of “hype,” but in the best of sourcing relationships it can have a real and measurable impact on resource consumption and spending (e.g., server consolidation). Be sure your sourcing relationships have appropriate safeguards built in to protect against punitive revenue commitments.

TPI’s experts can help you achieve an objective assessment of your strategy for managing technology change. We provide objective, risk-balanced, and forward-oriented strategies for sourcing relationships. Contact Fred Croxton, Director, TPI.