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Managing Your Brand: Marketing for Today’s IT

Most IT departments lack expertise in how to market their capabilities and communicate value. Now, more than ever before, IT organizations have to contend with outside service providers that are typically more experienced in marketing their services and must accept that managing customer perception is essential to staying competitive. Marketing your IT services and capabilities is not just building out your IT implementation campaign; it’s changing the internal culture of your IT organization to think and act like a hungry service provider.

In this short video by Alex Salicrup—“Managing Your Brand: Marketing for Today’s IT”—you will learn about the key areas to consider as you build your marketing and communication strategy.

 

Alex Salicrup Video Marketing for Today's IT

 

 

The Benefits of Linking IT Spend to Business Returns

Harris_SeanBy Sean Harris

For just a moment, consider the following fictitious organization, Widget Warehouse.

Widget Warehouse is making a gross margin of 15 percent and is able to spend five percent of its revenues on IT (you can replace these numbers with your own). The company would like to improve the financial performance of its business and is considering three IT programs to do that, as well as the likely impact on the CIO, CFO and CEO/shareholders.

 

  1. Leveraging IT agility to raise revenue by five percent without cutting IT spend – Assuming business costs rise—but that IT costs do not—this will generate an additional 0.23 percent of revenue, boosting gross margin to 15.23 percent. If both business and IT costs do not rise, it will boost gross margin to 20 percent. Most importantly, this would show a dynamic growing business rather than a static one, as seen in the following two scenarios.
  2. Leveraging improvements in IT agility, reliability and security to cut business costs by five percent (and not cutting IT spend) – This will deliver a four percent improvement in gross margin.
  3. Cutting IT spending by 20 percent – This will improve gross margin by one percent.

Now, consider the reactions of the Widget Warehouse CIO, CFO and CEO/shareholders to the three scenarios.

  • Scenario 1 – The CEO and shareholders will be most interested in this one, seeing not only improved margin, but also a growing business. This will generate the most interest from the CFO as well, and the CIO is now recognized as a contributor to the growth.
  • Scenario 2 – This will still be of strong interest to the CFO, but of lesser interest to the CEO and shareholders. The CIO will still be seen in a very positive light, but not necessarily a contributor to growing the business.
  • Scenario 3 It is still likely to be of some interest to the CFO, but of limited interest to the CEO and shareholders. It will more than likely generate a whole heap of pain for the CIO, since a chunk of the cost cutting will involve people and inevitably damage morale (and productivity) in the IT department.

The most appealing scenario to all parties is a combination of scenarios one and two, which can be achieved in parallel.

So, having agreed that Widget Warehouse wants to focus on the first two scenarios, they now face a critical question: “How do we approach it?”

Shifting the Focus of IT Projects

It is widely accepted that the use of cloud computing—public, private and/or hybrid—and the delivery of IT-as-a-Service (ITaaS) should provide benefits on three axes:

  • Efficiency Cost containment and reduction
  • Reliability – Reduced outage and improved availability
  • Agility – The ability to respond quicker to the needs of the business, customers and market

Using the software-defined datacenter to deliver the enterprise cloud adds a fourth axis, which is security.

Most IT organizations I speak to are always ready to discuss business cases or return on investment (ROI) based on the efficiency axis, and indeed ITaaS has much to offer in that space, but for the purpose of this discussion I will focus on the impact of agility, reliability and security, and how these can be linked to business benefits.

  • Reliability – Most organizations can easily measure the loss of business during an unplanned outage. The key here is to ensure you measure your availability in terms of business availability, and not IT services availability. For example, an IT group that is supporting five IT services—one of which is experiencing outages—might consider themselves to be 80 percent available. However, if that one service happens to be authentication and authorization, then it is likely all business services are not available, so IT services are actually 100 percent unavailable. It is therefore vital as a first step to comprehensively map business services to IT services and systems.

The most major impact of service outages on the business is reputation and brand equity. Much has been published on the cost to the Royal Bank of Scotland from their 2012 outage. They’ve admitted that due to decades of IT neglect their systems crashed, leaving millions of customers unable to withdraw cash or pay for goods. What is the risk to your business if during an outage your customers try an alternative…and never return?

Another consideration is not unplanned downtime, but rather overall availability. Most IT departments do not consider planned downtime as having an impact on the business or on IT service reliability, but is it possible that by reducing planned downtime you could increase revenues? For example, you could extend trading hours or re-use infrastructure for new services.

  • Security –In addition to the loss of business during a security breach, consider the permanent reputation damage resulting from public disclosure. The 2014 security breaches at SONY will cost the company $35 million in IT repairs in addition to the more intangible, but arguably more serious, harm to their brand’s reputation.
  • Agility – While examining reliability and security as the crucial axis, it can seem as though you are focusing on the negative impacts IT can have on the business, whereas the agility axis looks squarely at delivering positive impact and business value. To generate the metrics in this space requires a new form of communication between IT and the business: the conversation must shift away from pure cost pressures on IT.
    • By delivering agility, what is the impact IT can have on improving business efficiency (scenario 2)?
    • By delivering agile IT, what is the impact on revenues that can result from shorter time-to-market? What is the long-term impact on market share by being first to market? The first player in a market will often maintain a market leadership position, and be an established premier brand long after others enter the market.

Hopefully with this brief discussion I have whet your appetite for refocusing some of your IT transformation effort on not just driving greater efficiency in IT, but in using IT to be able to drive greater efficiency in the business, or even drive the business. This in turn will change the role of IT from being seen as a cost to the business (as it is in most organizations) to being an enabler and vital part of a successful business.

VMware Accelerate Advisory Services can help IT organizations like yours build a roadmap to transform IT into a business enabler and assist in building the business case for change – based not just on the cost of IT, but on the true value IT can contribute to the business.


Sean Harris is a Business Solutions Strategist in EMEA based out of the United Kingdom

Establishing Cost Transparency and Changing Your Relationship with the Customer

Today’s IT organizations need a clear picture of what each service costs to facilitate strategic conversations with their customer, the business. This is the only way to continue innovating while operating within budget and competing with the growing prevalence of shadow IT.

To explore some of the most common use cases addressed by IT Financial Management (ITFM), join two of VMware’s most experienced ITFM consultants for this on-demand webinar as they discuss the business issues, solutions, challenges and benefits of a service costing system.

In this webinar, Michael Fiterman, Senior Consultant for vRealize Business, and Brendan O’Connor, Senior Technical Consultant for vRealize Business, will walk you through:

  • Cost transparency:
    • What is real cost transparency?
    • How can it be achieved, and what are the immediate benefits?
  • Customer intimacy:
    • How can we change the conversation with IT consumers?
    • How will it change our business?

IT Transformation in the Insurance and Financial Services Industries

Gowrish_MallyaBy Gowrish Mallya

Insurance and Financial Services companies are undergoing rapid transformation due to the advent of technological innovations. By 2018, nearly one-third of the insurance industries’ business is expected to be generated digitally. In order to be digitally competent, insurance companies need to1:

  • Reduce barriers to customer interaction
  • Use new business models

VMware’s Accelerate Benchmarking Database provides interesting insights into the current state of IT readiness of insurance and financial services companies – and their target state goals. Let’s take a closer look at the two requirements for digital competence.

1.      Reduce Barriers to Customer Interaction

In a perfect environment, all of the Tier-1 applications would be written in lightweight, highly-portable application frameworks, and be capable of harnessing cloud-connectivity and scalability. Virtualizing Tier-1 applications decouples the software stack from the hardware, thereby easing operations like planned maintenance; as a result there is tighter alignment between IT and business needs. IT would then be able to develop applications to keep up with market needs and serve their end customers better.

VMware’s Accelerate Benchmark Database shows that in Insurance and Financial Services industries, currently only 14 percent of the companies have 75 percent or more of their Tier-1 applications virtualized; the industry-wide company average is around 25 percent.

The data also shows that only 34 percent of the companies have executive or line-of-business support for cloud as a strategy. IT can contribute significantly to reduce computing cost, but without management support, cloud efforts will be difficult and challenged, as the true benefit potential cannot be effectively communicated to business units and end users.

By 2018, insurers anticipate nearly one-fifth (19.7 percent) of their business will be generated through Internet-connected PCs, up from 12.7 percent in 2013. Another 10.9 percent is expected to come via mobile channels, up from a mere 1.5 percent in 2013.2 Application virtualization is key to help businesses cater to such exponential growth that will come from the  Internet and mobile devices, as it will help reduce time to market for new features or products across all customer segments.

2.      Use New Business Models

For organizations in this industry, making quick, informed decisions and acting swiftly defines mediocrity from success. Being able to deploy infrastructure at the earliest point in time helps organizations achieve their goals in the shortest time possible. To achieve higher levels of cost performance, agility, scalability and compute, virtualization must be nearly ubiquitous.

Monitoring of the deployed infrastructure is vital for an organization that enables it to run in an optimal state by:

  • Keeping a check on capacity and provisioning issues by giving out an early warning
  • Providing transparency and control over cost, services and quality
  • Benchmarking the IT systems performance

VMware’s Accelerate Benchmark Database shows that 92 percent of the companies are at least 40 percent compute virtualized. Also, 50 percent of the companies do not have storage virtualized, and 56 percent are not network virtualized. Virtualizing storage and network infrastructure can reduce day-to-day operational tasks and costs associated with important—but non-strategic—processes.

The data also shows that 78 percent of the companies have either no ability to meter IT usage, or they do it manually. Also shown is that 86 percent of the companies intend to partially or fully automate IT service metering. With metering of IT service usage completely automated, there is predictive capability to understand when usage will trigger an elastic event within the environment, thereby aiding in achieving a flexible and scalable IT infrastructure.

The insurance sector is witnessing new business models from new entrants. German company Friendsurance has implemented the concept of online peer-to-peer insurance. Friendsurance uses social media to link friends together to buy collective non-life policies from established insurers. A small amount of cash is set aside to cover small claims, and if the pool is untouched at year-end, it is shared among the group.3 In order to be agile, the companies need to focus mainly on infrastructure virtualization and analytics.

 

1 PWC white paper, “Insurance 2020: The digital prize – Taking customer connection to a new level
2 Capgemini: World Insurance Report 2014[JP1]
3 EY Global Insurance Digital Survey 2013


Gowrish Mallya brings around 8 years of experience in value engineering and benchmarking. He works closely with account teams and strategists across AMER & EMEA to address VMware customer’s IT challenges and demonstrate our solution value. Gowrish is currently a Value Engineering consultant within Field Sales Services team in India

Transforming Your End-User Technology Environment

Desktop and application teams need to evolve to support the increasing rise of mobility, bring your own device (BYOD) initiatives, and the influx of new devices and services. The lines of business that IT supports require greater flexibility and agility in their environment to capitalize on market opportunities. These goals cannot be adequately met using the same tools and processes created more than a decade ago.

Join Chris Janoch, Practice Lead for VMware Accelerate™ Advisory Services, as he shares why the modernization of operational processes and methodologies must accompany new technology initiatives when designing and implementing end-user service environments. Chris will share four key strategies to help your organization overcome the major challenges that come along with transforming your operational processes while continuing to support your business. Click on the video link below to learn more:

 

EUC Video Transforming Your End-User Technology Environment

 

How Does Change Management Change with ITaaS?

LinkGregBy Gregory M. Link

As Dorothy said, “…I don’t think we’re in Kansas anymore.” The same can be said of the changing landscape in IT departments within enterprises. IT-as-a-Service, or ITaaS, is where IT focuses on the outcomes the business needs, and functions much like a business itself, following the service provider model. IT Service Management (ITSM) tools and processes are put into place to deliver IT services with an emphasis on customer benefits. This is a prime example of the evolution taking place in corporate IT organizations around the world.

As organizations move toward an ITSM model to deliver ITaaS, they are transforming the way they work by extensively leveraging technologies such as infrastructure virtualization and the cloud, and working to break down many of the traditional IT silos of the past. Along the way, IT service management processes—such as change management—evolve as well.

Traditional models of change management called for a Request for Change (RFC) to initiate change in a given environment, each one being reviewed, evaluated, authorized and coordinated individually— typically with significant employee involvement. If an organization needed a new server for application development, they submitted an RFC and plodded through the one-size-fits-all process.

But the ITSM tactics and tools used in an ITaaS approach allow many of these types of needs to become software-defined and treated safely as service requests fulfilled via self-provisioning. Some rigor will need to take place via a standard RFC to ensure the desired controls are embedded, but this happens on the front end where policies and standards are built, to ensure safety with the new level of efficiency ITaaS brings. Once properly vetted, this type of service request becomes an orderable item in the service catalog, and fulfillment is delegated to the Request Fulfillment process.

Not only can authorized customers order servers, but they can specify the running parameters of the server for the virtual environment. Once the options are specified in the service request, it only takes the click of a mouse and the server is soon provisioned and ready for use. The era of waiting days or weeks for equipment to be ordered, configured and tested before going into service is over. Governance surrounding this new capability needs to be well thought through in consideration of security and costs.

Essentially, tactics traditionally used for business end-user requests only can be replicated inside IT, allowing IT teams like Application Development to leverage self-provisioning, thereby increasing the speed of delivering overall outcomes to the business.

Of course, new technology solutions won’t allow all changes to be delegated to self-provisioning, even when we end up in the Land of OZ. For example, if a physical server needs to be added to the environment, an RFC will still need to be generated and run through the traditional change management process.

The capabilities that enable an ITaaS approach will continue to evolve as organizations embrace this relatively new way of doing business. Using the key ITaaS-relevant technologies will allow IT to move their processes, like change management, into the future, as well as automating everything that can responsibly be automated and freeing our human resources to add the real value the business needs and expects—innovating and helping to improve the bottom line.


Gregory Link brings over 18 years of experience in IT Service Management. He has worked in both the Service Desk  and ITIL implementation areas for large IT organizations. Gregory is currently a Transformation Consultant at VMware, Inc. and is a Certified Private Pilot with an Instrument rating.

Collaboration Between AppDev & Infrastructure for ITaaS

Mark SternerBy Mark Sterner

Traditionally, IT organizations operated in a siloed environment. AppDev teams were tasked with meeting the needs of the business and Infrastructure teams provided the environment to support AppDev. These two organizations had little interaction and even less collaboration. Even worse, the infrastructure provisioning process was viewed as a roadblock to getting the business with what they needed when they needed it.

In today’s IT world two factors have turned this scenario upside down. The first is the trend toward virtualization and automation, which enable the infrastructure team to provide the supporting environments at the speed of business. The second is the desire of companies to adopt an ITaaS (IT as a Service) approach in which IT focuses on the outcomes the business needs and functions much like a business itself.  Evolving to an ITaaS approach requires a great deal of collaboration between all levels of the IT organization, including effective and structured collaboration between AppDev and Infrastructure.

One of the most powerful results of an ITaaS approach is the provision of cost effective, nimble solutions at the speed of business. To achieve this it is important for all IT teams to clearly define and understand the services they provide, particularly the end-to-end services delivered to the business itself.  Historically, defining end-to-end services has often fallen to the AppDev team who took an application-centric approach to the process. This led to a disconnect between AppDev and Infrastructure.  Ideally, this process is a collaborative effort between the two teams to clearly define the services, taking all aspects into consideration, including not only the applications, but also the infrastructure, the service level agreements for elements such as availability and performance and the relative importance of each service to the business operations.

While the process of defining IT services provides the basics of ITaaS, it is only the first step in truly transforming an IT organization. In order to deliver IT as a service, IT must provide the business with metrics that illustrate the benefits provided, particularly the financial value through increased productivity at a lower cost. To meet that goal the AppDev and Infrastructure teams need to collaborate on many different levels to realize these efficiencies.  Streamlining and effectively managing the allocation and deployment process is the first step to lowering the cost of IT.

Typically, AppDev teams of the past chose their solution to the business need with little thought to maximizing the efficiencies of the supporting infrastructure. Additionally, the Infrastructure team provided the environment with little understanding of the application architecture.  Leveraging the efficiencies of a virtualized environment can certainly provide a more agile environment, but only through a collaborative effort can IT truly provide the most effective solution.  AppDev and Infrastructure need to consider all aspects of delivering the solution. This includes availability, security, performance and scalability and reporting requirements. They must also understand and agree upon the application’s importance to the business. This will determine the disaster recovery strategy and define the support levels provided by both teams. Once all these factors are determined and defined, only then can the IT teams develop the most effective solution by aligning the application architecture with the most efficient infrastructure.  This effort will help to lay the groundwork for standardizing the integrated AppDev and Infrastructure processes and delivering measurable metrics that illustrate the success of the transformation to ITaaS.  Additionally, the standardization work can be leveraged to help implement Platform as a Service (PaaS), bringing even greater efficiencies to a virtualized environment.

Collaboration across the entire IT organization is not a new and trendy concept. Several models have emerged as best practice pathways to building and maintaining agile IT teams.  DevOps, for example, addresses the need for IT to provide rapid deployment of systems by breaking down the traditional barriers between IT teams. The “Dev” in DevOps does not simply refer to the AppDev teams, but includes all IT resources such as network engineers, sys admins, security teams and DBA’s. They are all part of the development lifecycle and have a role in the development of the most effective solutions to meet the needs of the business.  Through DevOps, IT organizations become a valued service provider and not a bottleneck to providing business solutions.

ITaaS requires organizations to rethink how they provide solutions to the business. Collaboration between AppDev and Infrastructure is central to successfully transforming to ITaaS. Traditional silos need to be broken down, blurring the lines between internal IT teams.  This may require an internal reorganizational effort to facilitate a more collaborative environment, but even without changes to organizational structure, working together towards a common, outcome-focused objective, is the key.  While managing this entire endeavor may seem a bit overwhelming, changes in the market, competition and technology are requiring most IT organizations to re-evaluate how they can keep up with the demands of today’s business environment.


Mark Sterner brings over 14 years of experience in IT Service Management. He has worked in both the process development and ITIL implementation areas for large IT organizations. Mark is currently a Transformation Consultant at VMware, Inc.

Two Steps to Put IT at the Heart of the Business: How Senior IT Professionals Can Get the Business to Fall in Love with IT

Ed HoppittBy Ed Hoppitt

As Valentine’s Day approaches, I thought it appropriate to pose the question: “How do you move IT from being seen as a mere service provider, to being at the heart of key business decisions and initiatives in 2015?” Put in the parlance of romance, “How do you get the business to fall in love with IT?”

In the last few years, technology innovations and emerging business models have enabled competition in surprising new ways—and from surprising new sources. Now supermarkets are becoming retail banks, and Uber has a higher market value than Hertz and Avis combined. When technology enables a competitor to rise from nowhere in no time at all, it’s up to you, as a senior IT professional, to take charge of shaping the business transformation to empower your colleagues—and earn a place in the heart of the business.

But how do you make that happen? The road to IT romance starts with the following steps.

Step 1: Work on Your Image and Approach

If you’re going to woo the business, you’ll want to put your best foot forward. It’s not enough to transform your organisation; you need to be sure the business notices your new positive changes, and experiences the benefits of your efforts.

First, realise that perception of your organisation is everything, and being seen as a roadblock to innovation and agility will not get you that first date. Winning hearts and minds requires focussing on strategy over technology to contribute a fresh approach to achieving goals rather than the “same old same old.”

A large part of this entails transforming how you source and procure IT services. Most IT organisations are still focussed around complex hierarchical structures that simply aren’t agile enough to support a rapidly changing business environment. Hanging on to old delivery models—like old love letters—will only hold you in the past.

Here, the CIO’s leadership is critical in changing the organisation’s image from “gatekeeper” to “orchestrator.” You will need to champion a collaborative, hybrid sourcing model that allows you to draw on internal innovation—or leverage the dynamic new commercial ecosystem—based on the best solution to the challenge at hand.

Step 2: Contribute Something Meaningful to the Relationship

Having worked so hard to get a seat at the table, you’ll want to be sure you have something to offer once you get there. The following are three areas where you can add value to the business in 2015.

  • Hybrid: 2015 is going to be the year hybrid really takes off, becoming wholly integrated with enterprise IT. It will become key to be able to run a true Bi-Modal IT function, where “and” rather than “or” becomes the norm. No longer will a one-size-fits-all approach work, and the ability to be both a trailblazer of innovation for your business, as well as a safe pair of hands is critical going forward.
  • Internet Of Things (IoT): Internet Of Things (IoT): 2015 looks like the year IoT will become all pervasive. For example, British Gas has announced an IoT project called Hive, which allows customers to control their heating from a smartphone. When a commodity utility business unleashes software (a move driven by IT) as a differentiator, other markets (and competitors in the same market) will quickly follow. It is through taking the initiative and spotting that opportunity to use emerging technologies and then drive that change in your business and market that will bring success in this space. If, as CIO, you see an opportunity and seize it, the rest of the business can’t help but recognize IT as an orchestrator – not a gatekeeper.
  • Security: No company is going to accept a ‘Sony’ moment in 2015, and no IT executive is going to survive one. For too long, security management has lagged behind developments elsewhere in IT. Security needs to be at the heart of business, and that means it needs to be associated with workloads and data, not with the expensive proprietary hardware running complex software that doesn’t understand the constructs of the business.

This Valentine’s Day, do your best to help the business fall in love with you. They may not realise it yet, but you’re about to become the key to their future happiness—and survival. It’s time to get their attention and make some magic happen. Good luck!


Ed Hoppitt is a VMware EMEA Advisory Services & CTO Ambassador

Configuration Management and ITaaS

kai_holthausBy Kai Holthaus

IT as a Service (ITaaS), in which IT focuses on the outcomes the business needs and functions much like a business itself, holds the promise to dramatically change the way customers and users experience and consume IT services. Making extensive yet appropriate use of virtualization and cloud solutions, it will make ordering IT services and consuming services much easier and less painful. What does this paradigm shift mean on the back-end? How does IT need to change its ways to deliver ITaaS? This blog post looks at a couple of aspects related to Configuration Management, i.e. the process of tracking, controlling and managing configuration items used by an IT department to deliver services to the business.

Two things come to mind with regards to Configuration Management in an ITaaS world. First, it will be very common to supply services made up of a mix of in-house and outsourced IT services. Configuration Management policies and processes will have to be re-examined to ensure the right level of control is exercised over both the in-house and the outsourced services to ensure quality services are being delivered. This aspect of how Configuration Management would work in an ITaaS world will have to be the subject of a later blog post, as I would like to focus on the second aspect.

This second aspect to consider is the automating of updates to the Configuration Management System (CMS) as changes in the environment are increasingly automated. The CMS is the collection of tools and databases that an IT organization uses to collect, store, manage, update, analyze and present its configuration information.  Most organizations today rely on a form of discovery to detect what the IT environment looks like. Some organizations allow discovery to update the CMS when discrepancies are found, and report what was updated to the responsible roles within the organization. However, this form of automated updates is still an after-the-fact update, resulting in a CMS that does not reflect the actual IT environment for some period of time, depending on how often discovery is run.

Instead, the CMS should be updated as part of the automated workflows that are being implemented to perform the changes themselves.  For instance, if an automation engine automatically provisions a new virtual machine, or changes the layout of the software-defined network, the same automation engine should also update the CMS records at the same time. This way, the CMS remains an accurate reflection of the IT environment, even as the rate of change increases.  Note that it would be important to maintain a history of these changes – just as with ‘manual’ updates of the CMS, the tool must also keep track of historical records and versioning information for snapshot baseline and audit purposes.

As an example, let us consider an application that is being delivered over the web. In a “traditional” environment, this application would utilize multiple web servers, typically behind a load balancer, to deliver the user interface to the users. The capacity for these web servers would have to be sized to meet even spikes in utilization. In contrast, in a virtualized environment, the environment could be configured to monitor usage levels continuously. Once the usage levels exceed a pre-defined threshold, additional web servers could be provisioned in the public cloud and be made available to serve the additional needs. Once usage levels drop below a defined threshold, the additional servers in the public cloud could be decommissioned automatically.

In an ITaaS world, this process of automatically provisioning and de-provisioning resources to serve additional demand would also automatically enter the new servers as new CIs into a CMS (and change their status following decommissioning), ensuring that at any time the CMS would provide an accurate view into the environment. Should incidents occur in this environment of in-house servers and servers hosted in the public cloud, support personnel are equipped to make the right decisions based on the current and dynamically changing situation.

In summary, the process of Configuration Management will have to adapt to a new way of doing things in an ITaaS world. Automation of operational tasks should include updating the CMS in this world to ensure the CMS remains an accurate reflection of the live environment, therefore providing valuable information to IT support personnel when making decisions.


Kai Holthaus is a Transformation Consultant with the Accelerate Advisory Services team and is based in Portland, Oregon.

5 Reference Architecture “Resolutions” for 2015

Barton KaplanBy Bart Kaplan

Corporate IT departments find themselves in a paradoxical position entering 2015. On one hand, the outlook for IT budgets hasn’t been brighter in a long time. According to advisory firm CEB, IT spend is expected to rise 3.3 percent this year, the most since before The Great Recession.[1]

On the other hand, the expectations of IT organizations have never been greater. Some three-quarters of company initiatives depend on technology to one degree or another. If central IT can’t meet demands for greater speed, agility, and cost-effectiveness, business partners will procure their own solutions, spurred on in part by the falling prices and increasing maturity of cloud and Everything-as-a-Service (XaaS) offerings from third-party vendors. According to Gartner, 35 percent of technology spending is expected to occur outside the central IT organization this year,[2] led by Finance, Human Resources and Marketing departments.

The challenge faced by IT is that in addition to myriad new business projects, they must also attend to legacy technology systems and environments. These uninteresting yet critical “keep the lights on” activities suck up close to 60 percent of IT budgets.[3] That number is coming down, but not fast enough to accommodate for all the technology requests from various parts of the business.

One way IT can square this circle is by making better use of reference architectures (RAs), some of the most scalable and cost-effective tools in the IT toolbox. Among developers, however, RAs don’t have the most stellar reputation. Commonly heard complaints are that they are difficult to understand, hard to adopt, and often out of date.

What exactly are reference architectures? They are much more than pretty pictures. It’s easier to think of RAs as a kind of ecosystem of resources rather than any one thing (see figure below). Their ultimate purpose is to help solution delivery teams make better design and technology choices. At a time of exploding “shadow IT” and changing IT paradigms, the need for effective RAs is more important than ever.

Figure: Reference Architecture Toolkit

reference architecture toolkit
Source: CEB - Enterprise Architecture Leadership Council


If done right, RAs can deliver substantial benefits to both IT and the business. One large financial services organization I worked with saw infrastructure standardization increase from 30 percent to 70 percent, and delivery times decrease by 75 percent, over a two-year period. By some estimates, RAs can reduce IT budgets anywhere from two percent to upwards of 15 percent.

The most mature practitioners take the following five steps to ensure their RAs are successful.

  1. Manage reference architectures across their entire lifecycle. Most of the focus typically falls on the build phase. But the ongoing maintenance of RAs, and eventual decommissioning, are critical to their usefulness, especially in fast-changing areas like mobility and cloud.
  2. Evaluate reference architectures as a portfolio. Many RAs are developed in a reactive, one-off fashion. In order to make the best use of limited resources and maximize benefits, reference architectures should be viewed holistically, using formal criteria to evaluate and prioritize them. Those criteria should be revisited over time, as capabilities grow and business needs evolve.
  3. View reference architectures as brands. To achieve greater RA adoption, it’s essential to consider reference architectures from the customer’s perspective. They should be easy to find, understand, and use―which in most cases they are not. By putting a consumer lens on RAs and viewing them more as individual brands, some of the most common adoption barriers can be avoided.
  4. Include implementation advice. RAs are most frequently owned by enterprise architecture (EA) groups, whose focus tends to be on higher order elements such as principles, standards and patterns. But without decision guides, prototypes and reusable source code―all of which make these higher order resources easier to implement―the chance that RAs get instantiated in actual solutions is low.
  5. Federate RA ownership. One of the reasons why EA groups fail to develop prototypes and provide source code is that their resources are limited. But responsibility for RAs need not―nor should not―reside in EA groups alone. Rather, ownership should be distributed out to subject matter experts across the organization. This will increase buy in, and substantially expand the capacity of the organization to build and maintain a full RA ecosystem.

[2] Gartner, Inc. “Predicts 2014: Application Development.” Brian Prentice, David Mitchell Smith, Andy Kyte, Nathan Wilson, Gordon Van Huizen, and Van L. Baker, November 19, 2013.

[3] Ibid, Footnote #1


Bart Kaplan is a business solution strategist with VMware Accelerate Advisory Services and is based in Maryland.