Consumerization Archives - Page 2 Of 2

Wipro and HCL Deals Signal the Arrival of a Life Sciences Infrastructure Surge | Sherpas in Blue Shirts

June 4, 2014

On 19 May, Wipro signed a US$400 million+, multi-year strategic alliance deal with Japan’s largest pharmaceutical firm, Takeda Pharmaceutical. Wipro will provide infrastructure management services across Takeda’s global operations, thereby creating a unified platform across the company. Less than a week earlier, HCL announced a landmark infrastructure deal with pharmaceutical major Novartis. Per the terms of the deal, HCL will provide remote infrastructure management services for Novartis across its entire data center landscape, covering more than 70 countries across six continents.

The Life Sciences Infrastructure Bandwagon

These deals are indicative of a sharp inflection point for IT infrastructure services in the life sciences industry. Until now, service providers have been largely focused on delivering application outsourcing services such as ADM, testing, ERP, and package implementation. Demand for infrastructure services was largely linear and predictable. However, the winds of change sweeping the overall healthcare landscape have brought about strong momentum to infrastructure uptake.

These winds include regulatory reform, consumerization, market consolidation, and the emergence of next-generation digital avenues. The volume, variety, and velocity of incoming data are fundamentally impacting how life sciences organizations view their infrastructure needs. Exponential growth in data, coupled with evolving engagement and drug development models, has resulted in a significant need for analytics. Dimensions such as real-time reporting, proliferation of mobile devices, and automation are providing additional impetus.

The Opportunity At Hand

Among the various sub-segments of life sciences IT outsourcing, we see infrastructure poised to assume the lion’s share of growth in the coming years. While applications and SI/consulting are likely to grow at a healthy rate, the infrastructure opportunity in life sciences could triple in value over 2014-2020. This is likely to be fueled by increasing traction in cloud delivery and storage models, data warehousing efforts, consolidation of information systems, and the move to obtain a unified view of customer data to enable actionable business outcomes.

Life sciences has traditionally been a mature IT market. Across medical device manufacturers, pharmaceutical firms, biotech companies, life science firms spend more on IT than typical buyers. Life science companies have innovative R&D efforts at the core of their operating model. Given the rise in personalized medicines, there will be a surge in data storage/processing requirements and, consequently, infrastructure needs. These themes impact life sciences IT infrastructure requirements to give rise to various technology imperatives across the ecosystem.

Buyers in the life sciences space need to evaluate their infrastructure services roadmap on a business impact versus investment paradigm. They need to establish meaningful relationships with strategic partners in order to enable the true synergistic benefits of a comprehensive and relevant infrastructure services roadmap.

At the same time, services providers need to expand their infrastructure footprint to partner with enterprises in this transformative journey. They need to adopt a holistic mix of traditional tenets (co-location models, data warehousing, BI, hosting, and network services) along with next-generation services such as multi-tenancy solutions, cloud delivery and storage, and BYOD.

What are you experiencing in infrastructure services? Our readers are eager to hear!

The Curveball Impact on IT Spend Decisions | Gaining Altitude in the Cloud

July 12, 2013

There is an interesting new twist these days on how organizations initiate, fund, and make IT spend decisions. It’s sparked by two major trends: Nicholas Carr’s 2003 Harvard Business Review article claiming that “IT doesn’t matter” and the consumerization of IT. As a result, some organizations no longer view their CIOs as responsible for generating business value through IT decisions.

Instead, increasingly the CIO’s mandate today is to take tactical steps to reduce the cost of IT. Make it run anytime, anywhere, available when and where needed. Make sure it’s compliant and highly reliable — and cheap. The cost of IT on the balance sheet or the operating statement has been creeping up past one percent to two or three and sometimes six percent of total corporate revenues. Now the mandate is to take that down by several points, and even below one percent.

More automation, increased use of private clouds and increased role of labor arbitrage combine to lower the cost. Simplification and standardization also play a prominent role in achieving cost objectives. The mass commoditized world is overwhelming the bespoke world or customized environment, and the focus is on eliminating variations and getting to one kind of server, one kind of data center, one kind of virtualization and operating system. In addition, processes are more ITIL-based, which leads to a cheaper, more reliable, more flexible environment. And it makes it easier to interact with third-party providers.

The power of the purse

This CIO mandate is growing in importance and increasingly is more prominent in CIOs’ agendas. But it comes at the expense of their desire to drive innovation and value into the business. With the consumerization of IT, the business stakeholders are taking over decisions about IT functionality and benefits, as well as how to use IT to drive value in the organization.

They grew up with technology and don’t feel they need to collaborate and partner with IT, certainly not up front. They feel very self-confident and build their own vision of how things could change.

And IT funding has shifted to the business stakeholders along with envisioning and initiating technology decisions that drive innovation and business value. The CIO’s budget is constrained or cut, whereas the business stakeholders’ budgets are now flush; they have the power of the purse.

Traditionally, organizations (through CFOs and CIOs) controlled the introduction and allocation of technology by constraining or managing costs; the point of control was through CAPEX. But in the new world with business stakeholders driving decisions, capital isn’t needed. Business users can leverage ready-made tools that are available in the cloud and through SaaS that don’t require CAPEX and also don’t need as much, or any, IT team participation to launch — making experimentation easy.

Two completely opposite markets

These shifts in influence on delivering value and control over funding create two markets within organizations, and they behave very differently from each other. Their contrasting behaviors and mindsets pose fundamental issues and create a lot of confusion for the enterprise and for the IT vendors and service providers trying to sell into the organization.

This dramatic change from the traditional ways of governing technology and IT spend are like a curveball in baseball. Depending on the grip and hand movement, a pitcher can throw a baseball with a spin so that it swerves downward and deviates to the right or left, surprising the batter and making it difficult to hit the ball. Similarly, the two differing IT markets in today’s organizations throw a curveball at senior leadership and sales/marketing teams, necessitating developing new approaches, concepts and communication about IT initiation, allocation and spend.

For example, a central IT team used to manage through traditional IT governance “gates” such as capital allocations and compliance, which facilitated the ability to look across the organization. But a world where everyone does what’s best in their own eyes poses challenges to managing IT.

There is an upside. To the business stakeholders’ credit, it is more effective to stand up a technology, see how to use it, and then understand how to change it, rather than building an elaborate requirements document up front. It facilitates understanding the nuances, consequences and organizational challenges in a much deeper, more realistic way than can happen by developing a requirements document that is, at best, an abstract vehicle.

It also plays into the idea of agile development but also goes beyond that concept by stringing together fully formed components that already exist in the marketplace. Business stakeholders can see how the components relate and see how to benefit from them; and they can easily add to them or discard them quickly. So it turns the risks of a big planning exercise into a much more measured incremental march that facilitates fully understanding the technology before fully rolling it out.

On the downside, in a world where everyone makes decisions on what is best for their own needs, it can be challenging to scale it across an entire organization at a later point. Potentially it also can create complications for the CIO’s mandated agenda to create a low-cost, highly resilient, highly compliant factory.

It isn’t that the CIO market or the business stakeholder market is right and the other market is wrong. They’re just very different. Borrowing from the claim in the days of the Roman Empire, we’re not here to bury Caesar or to praise him; it’s just a fact that Caesar was very different from Augustus.

So, we must accommodate this new phenomenon of the two markets and celebrate the benefits this brings in terms of a deeper understanding of how to use technology and achieve faster speed to impact. It will necessitate building tools and new management structures that support the inevitability of the new divergent structure. And it will necessitate a new approach and communication strategy for selling IT. In our next blog post, we’ll provide some strategies and tips for how to succeed in hitting a home run despite facing a curveball.

Photo credit: Jason Alley

Why Next Gen CIOs Are Actively Promoting “Shadow IT” | Gaining Altitude in the Cloud

October 9, 2012

The conventional thinking about business-led adoption of cloud services in the enterprise goes something like this:

Frustrated by a non-responsive IT organization, business users become attracted to the innovation, speed, and flexibility offered by cloud vendors and solutions
Fearing loss of control, corporate IT puts the brakes on deployments and projects of which they become aware
Undaunted, business users “swipe the credit card and go” to the cloud anyway, around and outside of normal IT procurement processes
CIOs and IT executives are shocked to learn that cloud adoption is going on behind their backs

And while many enterprise IT departments frequently spew the terms “rogue IT,” “shadow IT,” and “end-running IT” at this phenomenon, progressive CIOs are actually encouraging this behavior as a way to gain leverage and scale with a limited IT budget.

CIOs have a finite set of time and resources to accomplish what is asked of their IT organizations. Many enterprises facing significant cost pressures and budget constraints must focus almost exclusively on supporting, maintaining, and enhancing core, mission critical systems. Think trading platforms for capital markets firms, or claims processing for insurance companies. IT can support only so many new projects requested by the business, and every CIO needs to draw the line somewhere on the project list.

For projects that fall below corporate IT’s project cut line, the cloud is a win-win proposition. Business stakeholders can go ahead and acquire from a third party the capabilities they are seeking. IT ends up with a happier internal customer. And the organization overall can effectively attain greater scale from its IT budget and headcount by pushing the business to cloud providers.

As one CIO recently commented to us, “I actually want our business users to go to the cloud. I want them to ask cloud vendors the right questions, and, of course, I want to make sure they’re not doing anything that touches our mission critical apps. But other than that, I’m happy for them to go out to get what they need.” Of course, one of the keys here is the right questions, such as those focused on critical topics including security, data ownership, integration, availability, disaster recovery/business continuity, etc.

There’s no doubt that many CIOs are surprised internal developers are using Amazon Web Services (AWS), or that marketing is building its own custom apps on salesforce.com. The more unanticipated but understandable fact is that many of them are actually relieved to have this extra weight lifted off their heavily-burdened shoulders.

Video: Lauren Cooney Explains Why Your Dev Team Just Became the CIO at Cloud Connect Chicago | Gaining Altitude in the Cloud

September 24, 2012

Lauren Cooney, Senior Director, Software Market & Developer Strategy at Cisco, explains the new cloud computing world order. The consumerization of IT is changing the CIO’s perspectives, and user experience is ascending as a top priority. Lauren talks about empowering the developers and create a better product and better user experience.

Follow Lauren on Twitter @lcooney.

Lauren was a speaker in the New World Order: Your Dev Team Just Became the CIO session — part of the Organizational Readiness track at Cloud Connect Chicago, which Everest Group’s Scott Bils chaired. For more Organizational Readiness resources, visit www.everestgrp.com/ccevent.

The Consumerization of IT may be a Bigger Problem for Business than IT | Gaining Altitude in the Cloud

September 28, 2011

King Cnut (Cnut the Great) of England, Denmark, Norway, and parts of Sweden once famously instructed the tide to refrain from rising, only to hours later find its disdain for his royal decree. Today’s CIOs find themselves faced with similar limits on their power and influence as Androids, iPhones, and iPads flood the workplace. The power of the purse cannot control these new and disruptive technologies as they are funded directly by employees. Corporate policies and other traditional control mechanisms are also being eroded or washed away in the rapid adoption of these easy to install and attach devices. Even more worrying is the ocean of ready-to-use, high-power business applications that are only one click away from installation. As enterprises find themselves waist-deep in this new reality, they are forced to accommodate these new technologies, user expectations, and business certainties.

Without belittling the significant technological and security questions this new reality poses, it is the challenge to the way enterprises do business that may have the most far-reaching implications. One of the key challenges these technologies and capabilities present is the effect they have at the interaction points between parties. Employees expect to have instant access to HR support systems and be able to conduct their interactions through mobile-enabled self-service applications. Customers have instant price look-up and competitive information at the point of purchase. Patients have their medical records on their iPhones and expect healthcare providers to be able to utilize this information yet conform with the right to privacy. Payment systems are only a Bluetooth click or barcode swipe away. The point is this: even small changes to how parties interact can create significant and sometimes surprising impacts on a firm’s structure, controls and completive models, sales channels, and governance. When these changes are imposed by the broad scale adoption of new technologies – as is the case with mobility – the question is not how to control or gate them but rather what to do now that they are here.

To further explore the extent of this impact, let’s use a major healthcare institution as an example. Healthcare is covered by strict laws that regulate how key information and data is captured, shared, and utilized. This web of regulation has contributed to the slow adoption of new information technologies across the healthcare industry, and resulted in most healthcare institutions adopting closed networks with tight controls on new devices and applications. The existing structures and polices are under attack. Patients arrive with instant access to their own data, stored on their own devices or resident in a host of cloud-based vehicles, with the reasonable expectation that clinicians utilize this information to avoid duplicate tests and take advantage of patient history. At the same time, clinicians face uncertainty on efficacy of the data, yet encounter far more educated and interactive patients. Patients are able to receive second opinions from a variety of qualified and unqualified sources in real time. When combined with changes in how clinicians (who are often independent of the provider networks) expect to interact with healthcare institutions and further complicated by payment systems that are shifting to real-time mobile-enabled devices – it is easy to see that mobility will and is changing the way medicine is and will be practiced across the entire supply chain. The organizational and business model implications look to be huge and all because nearly everyone today has the power of the Internet in their pockets.

Live from Bangalore – the NASSCOM IMS Summit, September 21 | Gaining Altitude in the Cloud

September 21, 2011

CIOs, service providers, analysts, and the business media rubbed shoulders on the power-packed first day of the NASSCOM Infrastructure Management Summit (IMS) in Bangalore. This year’s conference has the twin themes of Enterprise Mobility and Cloud Computing, with one day dedicated to each, which seems to lead to a more focused set of discussions than a super broad-based event that leaves you struggling to absorb all of what you just heard.

After the welcome address and keynote speech from Som Mittal, President of NASSCOM, and Pradeep Kar, Chairman of the NASSCOM RIM Forum, we settled in for a series of insightful presentations and panel discussions with global technology leaders.

BMC CEO Robert E. Beauchamp spoke about how the parallel paradigms of cloud, consumerization, and communication (yes, I am in alliteration mode today) require CIOs to think of a unified approach to service management. Of particular interest were Beauchamp’s insights on how different service providers are trying to interpret the cloud differently in an attempt to a) disintermediate the competition; b) avoid being disintermediated; or c) both a and b.

IBM’s interpretation of the cloud: The cloud is all the bundled hardware, software, and middleware we have always sold to you, but now you can buy the whole stack yourself instead of us having to sell it to you.

Google’s counter: Who cares about the hardware anyway? We will buy the boxes from Taiwan – cheaper and better. It’s about what you do with it, and that’s where we come in…again.

VMWare chips in: You already own the hardware – and we will tell you how best to make use of it.

Beauchamp sees more than one way of “belling the cloud cat,” and CIOs need to figure out which direction to take based on their legacy environments, security requirements, and cost imperatives. (“Belling the cloud cat” is my take-off on a fable titled Belling the Cat. It means attempting, or agreeing to perform, an impossibly difficult task.)

As for service providers, he also foresees successful survivors and spectacular failures as the cloud conundrum disrupts traditional business models.

Mark Egan, VMWare CIO spoke about how consumerization and cloud computing are nullifying the efficacy of traditional IT management tools. According to Egan, IT needs to move from a “we’ll place an agent on the device” mode to a “heuristics” mode of analyzing data in order to prevent every CIO’s security nightmare from coming true in a consumerized enterprise.

Next up, Brian Pereira, Editor, InformationWeek, and Chandra Gnanasambandam, Partner, McKinsey, inspired us with real stories about how mobility is transforming the lives of unbanked villagers, saving billions of dollars worth of healthcare expenditure, and improving and optimizing the enterprise supply chain.

Here’s a gem of an insight: Do you know what most urban workers in the Philippines, Vietnam, or India do if they need to transfer money to parents living in rural areas? They buy a train ticket. Then they call Mum and Dad, share the ticket number, and ask them to go to the local railway station, cancel the ticket and collect the refund (minus a small cancellation fee). Wow – that’s what I call consumer-led innovation!

To summarize today’s sessions:

While many discussions highlighted the correctness of what Everest Group analysts are already predicting, it was invaluable to get validation on what we suspected, complete with more live examples.
Cloud and enterprise mobility are here to stay. With the momentum behind them – unlike other hyped up technologies – these are being demanded by the consumer, not dumped on them. And that is always going to mean something.
Service providers and CIOs need to evolve. In themselves, cloud and mobility do not represent a threat. But it’s a lot of change. And the threat lies in how CIOs, and their service providers, gauge the pace of the change, and react to it.

That’s it for now. Tomorrow, I share a panel with CSC and Microland to discuss “Trigger points – Driving traditional datacenter to private cloud.” Right now I’m heading off the gym in an attempt to burn all the calories I’ve put on during the day, thanks to the excellent food. Stay tuned!

The Consumerization of IT and Business Processes: Why the Shift to End-to-End Processing Puts Power in the Hands of the User | Gaining Altitude in the Cloud

September 14, 2011

Service Delivery Automation (SDA) encompasses cognitive computing as well as RPA (robotic process automation). Software providers that provide SDA come to market with an enterprise licensing structure that basically requires the customer to license a number of agents for a specific length of time. But in using this licensing model, service providers unintentionally constrain adoption and open the door for competitors’ differentiation. Along with the average Joe becoming increasingly accustomed to downloading an app to a smart phone in seconds and receiving immediate gratification utilizing powerful, easy to use technology comes uncomfortable questions for corporate IT. “Why can’t you do this? If it only cost me $5 to get this from Apple, why does it cost me millions to get a much worse product months, if not years, later from you?”

Behind this new sense of entitlement is the growing reality that these new apps offer dramatically increased levels of automation, allowing for activities that were previously the providence of experts but are now self-service, giving the user far greater control. Even more profound is the complete reorientation of perspective as technology is developed and deployed from the consumers’ ease-of-use rallying cry, increasingly far away from delivery organizations’ focus on efficiency and corporate control.

These same secular forces that are creating a profound change in IT are also beginning to drive change in shared services organizations and how they address business processes. Think end-to-end processing for talent management and learning in HR, and purchase-to-pay and record-to-report to name in F&A. As with their IT counterparts, these processes are increasingly being automated and shifting toward a self-service delivery structure. This not only reduces costs but also places increased power in the hands of the user community.

Now those internal groups that deliver IT and business processes are facing a harsh reality. They are no longer dominated by stovepipe delivery organizations designed to capture the efficiency of specialization, centralization and labor arbitrage. Rather they are quickly turning into flatter organizations that are delivery-oriented around a user’s view of the process, with emphasis on the transparency of information flow, and process designs that prioritize ease of use over traditional corporate command and control.

As these changes rework the business process landscape, they portend coming shifts in how third parties will be utilized. It is likely we’ll see a reversal in the current trend that allows for increased provider control of processes, with firms increasingly choosing to design solutions that place control within the firm and wherever possible in the user community, thereby also reversing the current provider push for outcome-based pricing. And increased levels of automation may diminish the amount of labor arbitrage which is utilized.

All of this is best summed up by a client who recently told me, “I am no longer looking for a delivery vendor that provides high quality silent running. I am now looking for a transformational partner that will help me implement my new vision and then play a supporting role.”

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Tag: consumerization

Wipro and HCL Deals Signal the Arrival of a Life Sciences Infrastructure Surge | Sherpas in Blue Shirts

The Consumerization of IT and Business Processes: Why the Shift to End-to-End Processing Puts Power in the Hands of the User | Gaining Altitude in the Cloud

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