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Monthly Archives: May 2015

What is the Difference Between Being Project-Oriented vs. Service-Oriented?

Reg LoBy Reg Lo

Today, IT is project-oriented. IT uses “projects” as the construct for managing work. These projects frequently begin their lifecycle as an endeavor chartered to implement new applications or complete major enhancement or upgrades to an existing application. Application projects trigger work in the infrastructure/engineering teams, e.g., provision new environments include compute, storage, network and security, with each project having its own discrete set of infrastructure provisioning activities.

Project-Oriented vs. Service Oriented

Project-Oriented vs. Service Oriented

This project-oriented approach results in many challenges:

  • There is a tendency to custom-build each environment for that specific application. The lack of standardization across the infrastructure for each application results in higher operational and support costs.
  • Project teams will over-provision infrastructure because they believe they have “one shot” at provisioning. Contrast this to a cloud computing mindset where capacity is elastic, i.e., you procure just enough capacity for your immediate needs and can easily add more capacity as the application grows.
  • The provisioned infrastructure is tied to the project or application. Virtualization allows IT to free-up unused capacity and utilize it for other purposes, reducing the overall IT cost for the organization. However, the project or application team may feel like they “own” their infrastructure since it was funded by their project or for their application, so they are reluctant to “give up” the unused capacity. They do not have faith in the elasticity of the cloud, i.e., they do not believe that when they need more capacity, they can instantly get it; so they hoard capacity.
  • A project orientation makes an organization susceptible to understating the operations cost in the project business case.
  • It makes it difficult to compare internal costs with public or hybrid cloud alternatives – the latter being service-oriented costs.

When IT adopts a service-oriented mindset, they define, design and implement the service outside the construct of a specific application project. The service has its own lifecycle, separate to the application project lifecycles. Projects consume the standardized pre-packaged service. While the service might have options, IT moves away from each application environment since the solutions are custom-built. IT needs to define their Service Lifecycle, just like they have defined their Project Lifecycle. You can use VMware’s Service Lifecycle, illustrated below, as a starting point.

The Service Life-cycle

The Service-Oriented Mindset

This service-oriented mindset not only needs to be adopted by the infrastructure/operations team, but also by the application teams. In a service-oriented world, application teams no longer “own” the specific infrastructure for their application, e.g., this specific set of virtual machines with a given number of CPUs, RAM, storage, etc. Instead, they consume a service at a given service level, i.e., at a given level of availability, with a given level of performance, etc. With this mindset, IT can provide elastic capacity, (add capacity and repurpose unused capacity) without causing friction with the application teams.

The transformation from a project-orientation to a service-orientation is a critical part of becoming a cloud-enabled strategic service provider to the business.  When IT provides end-to-end services to the business, the way the business and IT engage is simplified, services are provisioned faster and the overall cost of IT is reduced.

Reg Lo is the Director of VMware Accelerate Advisory Services and is based in San Diego, CA.  You can connect with him on LinkedIn.

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