Home > Blogs > VMware Accelerate Advisory Services > Monthly Archives: March 2014

Monthly Archives: March 2014

Why CIOs Need to Make Time for Transformation

As businesses depend more and more on technology to drive innovation, IT is being asked to rethink the way it supports the company. How does the business currently understand the role of your IT organization? According to Gartner analyst Leigh McMullen, CIOs need to reposition IT from a process and technology organization to a service-focused organization that promises agility, responsiveness, and innovation.

The front office, in particular, presents an exciting white space for IT to demonstrate a positive impact on business differentiation and effectiveness. IT leaders can make inroads here by forming strong relationships with the lines of business most responsible for the business’ mission or revenue generation, explains McMullen in this video.

Forward-looking CIOs build a foundation for this transformation with more sophisticated automation and other efficiency measures, freeing up bandwidth for them to build the relationships necessary for a service-focused IT strategy. “If your attention is focused on operating the enterprise and keeping the lights on, you’ll never be able to give these new growth opportunities the focus they require,” McMullen says.

How do you carve out time for long-term strategy and transformation? What steps will you take in 2014 to free up more of your attention to focus on innovation and business drivers?

Navigating Your Approach to an SDDC

By Enrico Boverino

In my last post, I introduced a banking scenario where my customer was focusing far too much on running at status quo and not enough on evolving the business – and by extension, IT — for continued success. Read on for two software-defined data center (SDDC) approaches that will help the CIO and IT set sail toward supporting innovation and meeting business goals.    

Roman philosopher Lucius Annaeus Seneca once said, “If one does not know to which port one is sailing, no wind is favorable.” This quote doesn’t just apply to sailors. It extends to IT organizations and data center strategies as well and underscores just how important it is to set the destination, navigate there, adapt to changing conditions, mitigate risks, and continuously measure improvements to recalculate the ideal route.

Let the software-defined data center (SDDC) be your favorable wind.

 

A typical software-defined data center (SDDC) architecture

A typical software-defined data center (SDDC) architecture

When identifying which SDDC approach should fill your sails, different priorities require setting appropriate strategic approaches to meet the objectives. I usually facilitate the conversation with questions like:

  • Is your priority as IT to RUN the bank and above all cut costs?
  • Is there a strong demand for innovation that can no longer be ignored?
  • Do you require a sign of discontinuity to accelerate collaboration of people and consolidation initiatives?
  • Is agility, now enabled also by new technologies and cloud services, your main priority to support the bank direction?

Two approaches commonly identified by the outcomes of these questions are:

1. SDDC New Platform (Greenfield)

Create a brand new SDDC platform for new and existing services, built on x86 infrastructure. This means implementing a converged virtualized architecture, which includes compute, network, and storage, and automated through predefined policies, operated proactively with analytics to meet SLAs and managed with granular cost allocation by usage to support budget and investment processes.

Applications can be decoupled from the underlying infrastDownload white paper for more information on optimizing the IT operations organization for cloudructure and deployed with greater flexibility by using hybrid cloud resources.

This approach also requires the definition and adoption of new processes that go beyond established best practices, which may not be sufficient to operate a completely new environment. Therefore, an optimized organization[1] will be shaped with fewer dedicated silos and more service-oriented tenants that can support business demands at new speeds and generate differentiation in the services delivered. Implementing cloud infrastructure operations centers of excellence and cloud tenant operations is both a transformative and disruptive process. However, there are a few key factors that can help a company achieve a successful outcome and avoid pitfalls. (Download white paper for more information on optimizing the IT operations organization for cloud.)

Recommended steps for a Greenfield strategy:

  • Address business urgency with pre-integrated frameworks and simplified business models.
  • Introduce innovative technologies that mitigate the risks of pioneering new delivery models.
  • Manage changes that the new platform creates on existing processes and organization.
  • Establish cloud centers of excellence and tenant operations for convergence.
  • Partner with the lines of business (LOB) in co-funding initiatives as driven by business demand.

2. SDDC Build and Replace (Brownfield)

Define a multi-phased approach based on SDDC use cases and management planes (infrastructure, operations, automation, and financials) to develop an actionable roadmap. Within this option, you respect relevant current investments and leverage existing skills to clear current bottlenecks while introducing new SDDC structural elements and functions.

Operations processes will be updated gradually in relation to the SDDC structural elements introduced, which will also deliver efficiencies and quick wins to support the long-term roadmap and goals. Once these are in place, you will continuously improve to reach the complete SDDC model as well as the modernization of all management planes.

Recommended steps for a Brownfield strategy:

  • Address platforms and data complexity with a multi-phased value approach via SDDC use cases and management planes.
  • Build on top of current systems, mitigating the risks of data migration and decommissioning.
  • Establish cloud centers of excellence and tenant operations for convergence (as with Greenfield).
  • Gain LoB commitment by sharing transformation plan to pursue swap of current modules.

After clarifying both SDDC models, I work collaboratively with my customers to start to design an actionable roadmap and business justification to pursue one of the two options (or both at the same time). With a plan in place, this actionable roadmap can help you reach your desired destination and achieve results for both IT and the business.

=====

Enrico Boverino is a senior business solution strategist for VMware Accelerate Advisory Services based in Italy. You can follow him on Twitter @eboverino


[1] VMware white paper: “Organizing for the Cloud.” Kevin Lees, Principal Architect, August 2012.

Taking IT Out of the Shadows

by Barton Kaplan

Wikipedia defines shadow IT as “systems and solutions built and used in organizations without explicit organizational approval…by departments other than the IT department.” It’s been a sore point for central IT organizations for a long time, and judging from the most recent data, it’s only getting worse.

Gartner predicts that by 2015, 35 percent of technology spending will occur outside the central IT organization[1]. In a US$2.7 trillion industry[2], that’s a big number. What’s worse, CIOs consistently underestimate how much the business spends on technology. According to best practices firm CEB, business partners spend almost twice as much on technology as IT estimates[3].

Why is this happening? Recent technology trends compound the prevalence of shadow IT, and putting increased pressure on central IT to keep pace.

  • Business partners have become more tech savvy and are much more willing to take on technology-related activities. From technology evaluation to vendor management, some two-thirds of business executives express a willingness to lead.[4]
  • With the maturation of cloud and XaaS offerings, it’s easier than ever for the business to go around IT to meet its technology needs. And vendors are targeting these business buyers because they typically purchase more and procure faster than IT departments.
  • Across industries, technology is viewed as more critical to enterprise success and competitive differentiation than ever before.
  • As business speeds up and third party providers improve their ease of use, central IT is  perceived as getting even more slow and bureaucratic.

What’s worse, traditional approaches to managing shadow IT simply don’t work anymore. Historically, central IT has reacted to shadow IT in one of three ways:

  1. Police – Attempt to root out and shut down shadow IT. The reality in today’s enterprises, however, is that the vast majority of central IT groups simply don’t have the stature to adopt this approach, or the authority to enforce it. Further, much of this spend is business-sanctioned and viewed as essential.
  2. Ignore – Turning a blind eye to shadow IT isn’t an option either, given the size of the spend and the potential risks to the enterprise of it going completely ungoverned.
  3. Incorporate – Bringing shadow IT into the central IT organization is actively opposed by the business out of fear that it will result in lost agility and innovation. Fifty percent of business technology spending is on innovation, which is three times the size of IT’s innovation budget.[5]

So what should IT do? First and foremost, central IT organizations need to adjust their mindset. The days when shadow IT meant hiding a server under your desk are long gone. Today’s shadow IT has become much more sophisticated and central to the business.

IT organizations need to accept and advise business partners’ experimentation with technology, not resist it. Progressive practitioners who have had success changing their technology relationships with the business are adopting the following three tactics:

  1. Distinguish between healthy and unhealthy shadow IT. At one consumer products company, the IT organization differentiated between “shallow” vs. “deep” IT when determining whether a project should be business or IT-led. This more cooperative approach resulted in a 52 percent increase in IT investments directed at new opportunities.[6]
  2. Change IT’s perspectives on risk. IT’s typical approach to risk is one of mitigation. Less risk is always better. By contrast, business partners look at risk vs. reward tradeoffs. If the reward is great enough, it may be worth the risk. Leading IT organizations are adopting risk management frameworks that capture this more nuanced view of risk.
  3. Improve business perceptions of IT. IT needs to operate at the speed of business and devote more of its budget to innovation. According to VMware data[7], customers who are running IT as a service spend 50 percent of their budgets on innovation vs. an industry average of just 30 percent .

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


[1] 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.
[2] The New York Times. “Hard Times Could Create a Tech Boom.” Quentin Hardy, November 17, 2012.
[3] Corporate Executive Board (CEB) webinar: “Getting to Healthier Shadow IT.” January 9, 2014
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] VMware “VMware IT Evolution: Today and Tomorrow – Insight from the VMware 2013 Journey to IT as a Service Study.” August 2013.

Software-Defined Data Center Adoption in the Banking Industry

By Enrico Boverino

While organizing my notes on my flight home after meeting with the CIO of the IT Shared Services organization for a large global bank, the metaphor “selling ice in the Arctic” came to my mind. Like me, some of you may have been subjected to play it out during a job interview, in order to demonstrate your creativity and persuasive skills.

The main topic of my meeting with the CIO was how a software-defined data center (SDDC) could help his IT organization accelerate its ability to modernize the delivery of services while achieving the 3-year cost-saving objectives set forth in the company plan. However, our meeting was not about me (as amazing salesperson) trying to sell a technology solution to someone who didn’t need it, or to persuade him to go against his best interests. My role was to understand my customer’s business needs and the unique challenges the banking industry presents to his IT organization.

Our discussion centered on how technology, processes, and organizations can be managed to achieve business objectives faster and more efficiently. Today’s banking industry is moving past a few challenging years. And while many banks are still executing for cost savings in back-office optimization or making the necessary investments to adhere to new regulations such as SEPA payments or Bank of Italy Continuity Controls, I do see a strong movement to quickly modernize. In fact, many banks are embracing technology innovations to adopt a digital strategy and to create new services to transform from a transaction-centric to a customer-centric model.

This innovation leads to the development of new personalized services such as digital wallets, new online payment processes, and personal finance applications that can be offered as value-add services to the existing online banking experience. These new services also create requirements for dynamic customer front ends that address mobility and new social behaviors. There are examples of banks developing two unique customer experiences that are demography-based—simpler and limited interface for traditional customers; richer and more dynamic interface to attract Generation Y. And of course, there’s the rising demand for more data storage and richer data analysis—mostly related to customer transaction history, spikes of trades, and social data insight.

In the banking industry, innovation can have different meanings to different IT organizations, based on their resources and constraints. And, there are tradeoffs and negotiations on how to fund “RUN the bank” versus “CHANGE the bank” initiatives that shape corresponding IT strategies, as shown below:

RUN the Bank

  • Front-to-back office modernization
  • Financial transparency of IT services
  • Regulatory compliance and operations continuity
  • Efficient procedures and selective sourcing

CHANGE the Bank

  • Accelerate M&A and geo expansion
  • Share commodity functions across bank communities
  • Enhance customer experience and grow mobility offerings
  • Data consolidation and rich analytics to create new offerings

So how can a software-designed approach enable my customer’s IT organization to deliver on new service requirements and accelerate innovation for his business stakeholders? Today, he manages to distribute budget and resources to support both sides of the bank’s initiatives, but I pointed out that his IT organization remains too anchored to the RUN side, which is slowing the outcomes he could realize from innovation.

In my next blog, I’ll compare an SDDC greenfield approach to a build-and-replace model. While there are different approaches the bank can pursue, creating a new data center platform—an SDDC greenfield strategy—can put the CIO and his IT organization on a fast track toward meeting business objectives.
____

Enrico Boverino is senior business solution strategist for VMware Accelerate Advisory Services based in Italy. You can follow him on Twitter @eboverino.