CIO Archives - Page 4 Of 9

CIOs Need to Reconceive the Process Design for IT Support Services | Sherpas in Blue Shirts

March 31, 2016

I’ve been observing the end-user computing environment and believe it’s time for a complete rethink on how IT groups support their end users. What I usually find is that the support interactions are a lot like support interactions with cable companies – and most cable company customers feel that’s an infuriating experience.

Cable companies design their interactions with customers to be most efficient for the cable company. They seek to optimize or lower the cost of talking to their customers. They design the process to make the most efficient use of their installation and maintenance fees. They think about how best to maximize the revenue per customer and upsell.

That’s great for the cable company but infuriating for the customer.

Whiteboard vs Keyboard Services | Sherpas in Blue Shirts

November 20, 2015

I recently went to dinner with a CIO who talked about having two major service providers in his company’s portfolio – an Indian provider and Accenture. He told me he uses both providers aggressively. We were talking about the fact that both providers have similar rate cards, large numbers of offshore workers, and they both come to him with an unending set of transformational ideas. I asked him how he chooses between the two.

Here’s his methodology:

When the business problem requires a whiteboard – in other words, he wants the provider to lead change in his organization (and typically that’s a transformational situation) – he uses Accenture.
When the business problem requires a keyboard – or people to execute against a plan he has already developed and he will closely manage – he uses the Indian service provider.

He added that he’s not sure it’s possible for either provider to become the other. He explained that when he asks Accenture to operate from a keyboard mentality, they fight him for the steering wheel. They want to lead and want to drive the transformation. Alternatively, when he asks the Indian provider to lead, they defer to his management team and do as they’re told.

So he says he came to accept that both behaviors are effective. He needs each at different times, so he should not ask one to be the other. Both are valuable assets.

Services clients should keep this CIO’s perspective in mind. There are whiteboard opportunities and there are keyboard opportunities. If you ask providers to be something they’re not, you’ll get a frustrated response. Choose carefully.

Sell Digital Services, Not Apps Rationalization | Sherpas in Blue Shirts

April 1, 2015

After coming back from Nasscom and discussing the inflection change coming to the services industry, I’ve observed a lot of service providers preparing for the shift – especially the apps providers. But I see them making a mistake: putting too much emphasis on apps rationalization and rearchitecting.

It’s not that apps rationalization and rearchitecting isn’t happening. But providers are justifying it as a necessary step for digital readiness, advising clients that they need to do this if they are looking into a digital agenda. I know of a few situations where it was necessary, but I believe those instances will be the exception rather than the rule.

Here’s the issue: If you go to market and emphasize apps rationalization and rearchitecting, you’ll likely end up in – at best – an interesting conversation without sufficient sales coming out of it, for the following reasons.

First, for the most part, you don’t have to rearchitect the client’s legacy systems to run a digital agenda, at least not with where the digital agenda currently is. You have to interface the apps, too. So you end up making unsubstantiated, incredible claims.
Second, in a world where business stakeholders have greater influence, they don’t want to spend their money and time on rearchitecting old functionality; they want new functionality. They are impatient to get to the benefits of changing their customer experience, and they are far less willing to listen to proposals that involve enduring long timeframes. They expect that their digital revolution will happen quickly, but rearchitecture is a long, three- to five-year journey.
Third, rearchitecting doesn’t fit in with the CIO’s agenda; CIOs are trying to rebuild their relevance to their business. It also doesn’t play to the business stakeholders’ agenda.

It’s just not what organizations are buying right now, and it will confuse and slow down your sales process. So my advice is to be very careful about pushing apps rationalization and rearchitecting linked to a digital agenda. I’m not saying that customers won’t ask for it, but it’s likely that they’re really asking for just a connection into digital.

A better story might be:“Let’s drive your digital agenda and connect that back to the apps.”

I think a lot of providers are not resonating with their clients and not getting the kind of growth because they are confusing clients on this issue of apps rationalization and rearchitecting. This may change. But this is my belief about where the market is right now. We’ll keep our eye on it.

Old Wine in Old Wineskins | Sherpas in Blue Shirts

March 23, 2015

A famous teaching of Jesus explains that it’s a mistake to pour new wine into old wineskins because it will burst the skins and both the wine and the wineskins will be ruined. New wine belongs in new wineskins. I think we’re seeing this principle playing out in technology – where the consequences are profound.

New wine expands and grows fast; so it requires a supple, pliant container to allow for that expansion. Old wine is stable and mature; it does better in a stable, consistent environment.

For the most part, now that the cloud experiment is over, we see that new technologies and functionalities have many of the properties of new wine. They are effervescent, change continually, move quickly and often rely on heavy iteration. They constantly expand and change. They are best suited for new architectures such as cloud infrastructure and SaaS services. New technologies also have new requirements; thus, they require new structures, new and more flexible governance vehicles to allow them to capture their full value.

Legacy applications, the systems of records in which enterprises have invested hundreds of millions of dollars, are mature and were designed for their traditional environments, which tightly govern change. They are in data centers that have the requisite management support and requisite talent pools.

The services industry is starting to recognize the profound truth of the new and old wineskins: At this point in time, legacy applications are best left in their old, original containers where they can continue to operate in a mature fashion. Old applications or systems of record need to remain in their existing frameworks or architectures. They should be changed only slowly. Furthermore, new functionalities and technologies need to go into new wineskins, or architectures, that allow for and encourage agility and other attributes that support evolving change.

Photo credit: Flickr

Better Together | Sherpas in Blue Shirts

March 5, 2015

At Everest Group we’ve noticed a growing trend in our client base. As I’ve blogged before, business stakeholders have become increasingly independent and make independent decisions. Mostly they have adopted point solutions, standing up functionalities and making decisions to use SaaS products and developing their own skunk works, agile teams to develop fast functionality. The implications for the services industry are interesting.

We’re now seeing that, as these point solutions embed themselves, they flourish and become more ubiquitous. They then need to stretch and integrate into legacy systems as well as affect multiple stakeholder groups.

At the same time, we see the CIOs upping their game. They no longer resist these new technologies and are willing to embrace them.

Here’s the growing trend: increasingly organizations make decisions in a collaborative group with business stakeholders and CIO groups working together to initiate, plan and execute these activities.

Using a skiing analogy, as point solutions grow beyond the capability of business stakeholders to appropriately manage, they get in over their skis, which opens the door for partnering with IT. We see IT eager to take advantage of this opening and forging effective partnerships going forward.

This is an encouraging trend, but it presents a more complicated selling picture for service providers. They can be easily confused as to buyers’ decision-making rights, which necessitates reaching out to each stakeholder to make sure they leave no one out. That’s the downside – increased selling costs and complexity.

But there’s also an upside: as these collaborative partnering opportunities grow, we observe they are well worth a provider’s sales effort.

Photo credit: Flickr

The Innovation Dance Floor is Getting Crowded | Sherpas in Blue Shirts

January 26, 2015

The innovation dance floor is getting awfully crowded with a lot of eager participants. CIOs want to re-establish their traditional role of custodian of technology driving innovation. CMOs wants to be at the forefront of using innovation to change the customer experience and outreach. Data scientists are using the new analytics tools and want to participate in innovation strategy. And as I blogged recently, an IBM study found even chief purchasing officers are making a bid to join the innovation party. Unfortunately, they’re all joining the product managers, who are historically in a slow dance; so not only is the dance floor getting more crowded, but there are also a lot of different beats that they’re dancing to.

Each of these positions has its own point of view, its own agenda, and sees innovation differently. On the plus side, this provides for a rich mix of opportunity. But on the downside, few innovative ideas have come out of committees.

The IBM study indicates that CPOs are attempting to become more strategic and influential and they believe they are more critical to the enterprise. So by necessity, they have to better align with the corporate strategy and therefore want to participate in developing strategy.

I think it opens up even bigger questions:

In what areas will they seek to set strategy?
Do CPOs have the right background and perspective to do this?

Particularly in the area of services, which are an important ingredient to a change strategy and require deep understanding of the business and how to shape or manipulate the components to create a differentiated position as an advantage, CPOs may struggle as the champions of change.

Enterprises need to protect the innovation strategy

My view is that CPOs are not the right people to influence innovation. Their idea of innovation is do it at half the price rather than doing something different. A data scientist, for example, can get at a certain kind of innovation because they bring a fresh, different capability to the table. I don’t see purchasing bringing something fresh and different.

So this poses some very significant questions to the enterprise:

How do you allow for innovation?
Who do you want driving it?
How do you protect innovation from amateurs who may not be helpful?

Problems for service providers

With purchasing and other departments trying to crowd onto the innovation dance floor, service providers wanting to bring new innovative ideas or capabilities will have to navigate a gauntlet of powerful stakeholder groups. It certainly makes for an intriguing tango.

Photo credit: Piotr Pazola

As-a-Service Implications for IT | Sherpas in Blue Shirts

January 16, 2015

One of the great struggles in today’s enterprises is the ongoing shift of influence from the CIO community into other stakeholder groups. I’ve blogged about this before. An important aspect of this influence shift is the fact that IT has increasingly become unaligned with business goals. But the pendulum is now swinging back. The mechanism the pendulum is using is the as-a-service offer set.

During the recession, companies focused on cost reduction and operational excellence, and IT increasingly lost touch with the business. Purchasing departments focused relentlessly on driving up unit costs and countless operational process improvement vehicles to further lean out organizations. As a result, IT organizations became more efficient — but also less aligned with business needs.

Business users reacted by demanding greater focus on business outcomes and began taking things into their own hands and purchasing as-a-service offerings.

The as-a-service path is a reorganization

One of the benefits of the as-a-service model is that it creates a seamless linkage between business functionality and delivery. And it cuts through layered IT organizations, reorganizing according to business functionality.

The benefits that an organization extracts once it goes down this path is tight alignment by business functionality — close to functionality on demand — and far more flexibility. It enables focusing on the business impact of technology. Businesses can move more quickly and flexibly to adopt the functionality and also scale their consumption to usage.

The implications for IT are enormous in that it requires a rethinking of the classic IT functional organization, which has been in place for the last 15 years. It requires a reconceptualization of the following aspects:

How IT is organized
How assets, services and software are procured
How IT is measured and managed

The benefits of the functionality and scaled consumption to usage are extremely powerful and can only continue to reshape how IT is delivered. But the reconceptualization of IT is far from trivial. It is not just a new pose for IT. The as-a-service model fundamentally reshapes the IT philosophy on how it’s organized, procured, measured and managed.

The Cloud Experiment is Over, but are Buyers Waiting for Godot? | Sherpas in Blue Shirts

January 8, 2015

The cloud experiment is over and the debate in enterprises about its benefits and risks is settled. We know it works, it’s more flexible and cheaper, and it makes it easier for IT to align with business needs. So should buyers put their applications into a cloud environment?

My advice: Don’t rearchitect your legacy applications that were designed and implemented in a legacy environment and port them over to the cloud. Organization of all sizes have been waiting for providers’ porting solutions. Unfortunately, that’s sort of like the Samuel Beckett tragicomedy play, “Waiting for Godot,” in which two characters wait days for Godot even though they don’t know where or when he might arrive. Buyers wait, thinking cloud porting solutions will arrive in the market, but it just doesn’t happen. That’s because porting is really expensive and really risky.

I’ve blogged in the past about CSS Corp Cloud Services and Redwood Software platforms for easily migrating legacy apps to the cloud. But as we get further into the cloud story, it looks like replatforming offerings will be far rarer than we anticipated. I’m not saying they won’t exist; I’m just saying they won’t be the dominant model.

As the smoke clears from cloud experimenting and pilots, the best-practice dominant model for moving into the cloud is shaping up as follows:

Look for opportunities to make incremental improvements to your legacy environment. Rework legacy by increasing the level of virtualization and automation in your data center.
When you develop new applications, architect them for the cloud environment.

This strategy of adding virtualization and automation may get your legacy environment into a private cloud, but it doesn’t get you into the agile low-cost public cloud environment. However, it allows you to improve the efficiency and resiliency of the existing legacy environment without the huge cost and risk of rearchitecting.

The strategy also helps CIO organizations regain some of the influence and credibility they’ve lost with business units as they’ve addressed new functionalities enabling where the business is moving. It enables the organization to be more agile, better aligned and do so with lower cost, which significantly relieves the tension of having to get a huge amount of funding for a set of high-risk legacy projects.

The fact is for many legacy applications the best you can do is make incremental progress. You can move them out of dedicated hardware into virtualized hardware. And other than some potential cost savings, there is little to no business benefit from taking on the risk of reengineering them for a public infrastructure or shared environment.

We saw this same best-practice model happen with distributed computing; new applications went into distributed computing and eventually we reached a tipping point where we needed to move legacy apps. I anticipate the new functionalities, new work will similarly drive the shift from legacy to cloud.

Going forward until the tipping point occurs, put all your efforts into standing up your organization’s new environment to take full advantage of the business alignment, flexibility and cost that the cloud family offers and just make incremental changes to your legacy environment. If you wait for a huge re-platforming surge of cloud porting solutions, I believe you’ll be waiting for Godot.

Implications of the Enterprise Strategic Intent Shift toward Cloud | Sherpas in Blue Shirts

October 29, 2014

Since the beginning of 2014 Everest Group has seen a real shift in large enterprise CIO organizations in their strategic intent toward cloud services. What are the implications on the traditional infrastructure outsourcing market from this strategic intent?

Timing

First, we expect that this shift will not happen overnight. As organizations work on their cloud plans, it’s clear that this is a three-to-five-year journey for migrating some or all their environment into this next-generation environment.

Runoff of work from legacy environments

Second, we expect the runoff on traditional outsourced contracts to accelerate. The runoff has been running at about 5-10 percent a year. We expect this will pick up to something close to 50 percent of the workloads to shift over to the cloud in the next three years with 30 percent of that shift happening in the next two years.

So this is a dramatic runoff of work from legacy environments into the next-generation models. This will put significant pressure on the incumbent service providers in that space.

Who will be the likely winners?

The third implication is the likely winners from this strategic shift. We think that at least for the next two years the Indian players or those with a remote infrastructure management (RIM) model will enjoy substantial benefits. Often a move to cloud or next-generation technologies can be facilitated by a move to a RIM model. So we see RIM continuing its torrid growth.

We also believe the providers with enterprise-quality cloud offerings will be players. One that particularly comes to mind is IBM’s SoftLayer, which we think is well positioned for the shift. It has its own runoff and can grab share from asset-heavy or other legacy providers as runoff occurs there.

We expect to see Microsoft and its Azure platform play an increasingly prominent role in cloud services. It will be interesting to see if AWS, Google, and Microsoft can make the shift from serving rogue IT and business users to enterprise IT. At this time we certainly believe IBM can. And it looks like Microsoft is making deliberate efforts to transition its model. It remains to be seen if AWS and Google are willing to shift their models to better accommodate enterprise IT.

Photo credit: Photo Dean

Sea Change in Large Enterprises’ Cloud Strategic Intent | Sherpas in Blue Shirts

September 8, 2014

For five years we at Everest Group have tracked the cloud space in global services. Until this year, there was a lot of talk about cloud, but much true cloud adoption was driven in business units with large enterprises. CIOs basically sat out the game and watched the cloud’s performance. But since the beginning of 2014 we’ve seen a real shift in large enterprise CIO organizations, which signals a significant change for the services industry.

Until recently CIOs in large enterprises were reluctant to put cloud initiatives in place because they felt it was premature. They struggled with compliance and security questions. And they worked to make sure their organization understands and embrace cloud and as-a-service technologies. Their posture is moving from cautiously watching to actively planning and driving, and some have large initiatives underway. Their plans with regard to cloud have moved from the radical fringe to mainstream strategic intent to embrace and drive.

Large enterprise tech budgets are still controlled by the CIO organization because they are best able to drive technology initiatives to scale and to execute initiatives across functions.

This is a very important development and will cause significant changes in the technology and services industry. This undoubtedly will start to drive a significant shift in spend from the traditional structures into the cloud and as-a-service models. As that occurs, we believe it will pick up momentum and pull the rest of the industry through.

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