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Establish Your IT Business Management Office (ITBMO) To Run IT Like a Business

Khalid HakimBy Khalid Hakim

We hear a lot about (and maybe have interacted with) Project Management Offices (PMOs), and possibly about Service Management Offices (SMOs), but IT Business Management Office (ITBMO) sounds like a new buzz word in today’s modern IT business taxonomy. PMOs typically focus on the management and governance of IT projects, while SMOs are responsible for the governance and management of IT services and the processes to ensure effective service delivery. ITBMOs, however, go beyond this to the next IT business maturity level to address business and finance partnership with IT to help IT organizations transform into services-based, business-oriented, and value-focused organizations.

ITBMOHave you ever asked yourself of how you can make your CFO happy? How you can support your corporate financial goals and aspects of a balanced scorecard? How you respond to “IT is always expensive” perception? Have you thought of challenges related to quantifying value your consumers get of IT services? Are you challenged to view IT costs by services you deliver? Or even budgeting and forecasting by IT services? Can you tell on the spot what your unit cost of a service is? What about demand driven IT? Do you feel that you are always over capacity with low utilization of services? What about leveraging marketing power to promote your IT services? How you can commoditize and brand your IT services? And many other questions and thoughts that keep CIOs awake at night.

(I can hear you thinking)

We have been hearing about “transformation” and “running IT like a business” quite frequently nowadays. As a matter of fact, these are becoming overused terms without real meaning of what they actually imply. Imagine that you are the CEO of a new wood furniture manufacturing business. Obviously, the main functions that you could initially think about are Product Management (who turns logs into useful products), Sales and Marketing (who promotes and sells to consumers), and Finance (who manages the financial aspect of the organization). The question is: why can’t we apply the same discipline to IT organizations? Similar to Product Management, IT organizations deliver services, and therefore we have Service Management and Service Owners/Managers. We are only missing two things here to run IT like a Business: a strong service-based financial operating model and the Services Sales/Marketing sense to help promote and consume IT services in the best valuable manner to consumers.

This is what the ITBMO brings to the table: a stronger partnership between IT, Business, and Finance to accelerate transforming your organization into a business-oriented, service-based, and value-focused one. Initially, you can think of the ITBMO as a virtual group or committee that has champions from various IT/Business functions. This virtual team paints the IT business vision and defines its mission on how to run IT like a business to deliver more value to business in the most economical way.

IT Business Management Office (ITBMO)

Figure : IT Business Management Office (ITBMO)

As shown in figure 1, the ITBMO supports 6 functions/towers to ensure stronger partnership throughout the IT service and project management lifecycle. These are:

  • Service Management Office (SMO): the entity (or any similar) within an organization responsible for the delivery and management of IT services. This includes the pure ITSM process management and ownership and delivery along with the ongoing management of IT services.
  • Project Management Office (PMO): the entity responsible for project management and governance
  • IT Finance: the function that takes care of the financial aspect of IT, which could be part of IT or Finance. This typically includes IT budgeting, accounting, pricing and cost optimization.
  • Services Sales & Marketing: a new (or maybe existing) function that will be improved and strengthened as part of the ITBMO establishment.
  • Business/IT Alignment: any existing functionality (such as Customer Relationship Managers or Account Managers) that ensures ongoing alignment between IT and Business.
  • Governance, Risk, and Compliance (GRC): the function (or multiple functions) responsible for organizational change, developing IT policy and governance strategy, IT risk evaluation and mitigation and compliance.

A champion from each function (could be multiple champions based on the organization scale and size) contributes to the core operations of the ITBMO to achieve the value-focused vision. The ITBMO runs in consultative and supporting mode, but depending on the IT organization’s authority, decision making process and power, and delegation factors, the ITBMO could be an authoritative entity within the organization.

Standing Up an ITBMO

Figure 2: Standing Up an ITBMO

Figure 2 shows the six steps required to standup a successful ITBMO within your organization:

  1. Develop Vision/Mission: thinking of why you need an ITBMO in the first place is your first step. What is the challenge you are trying to overcome or opportunity you want to introduce? Thinking collectively in a short/long term vision and drafting a mission statement of what this ITBMO actually does are your foundational steps towards a value-focused organization.
  2. Build and Position the Organizational Structure: figure out what roles are needed and who needs to be onboard and whether this is a virtual team of representatives or dedicated and how it fits the organizational structure and reporting lines
  3. Develop Process Interactions: fully understand your existing processes interactions within the functions that will be supported by the ITBMO, and figure out where you want the ITBMO to help, support, and interject to accelerate value realization
  4. Develop RACI Chart: translate your discovered process interactions and help areas expected into a roles and responsibilities chart (i.e. RACI). This will expose the areas of improvement and will help build a short and long term improvement roadmap across all supported functions to achieve the desired vision.
  5. Establish Value Measures and KPIs: quantifying IT value is one of the challenging tasks IT management confronts. This step defines a very high level value measurement framework or methodology along with the success factors and measures that a CIO or CFO can judge the success of ITBMO thru. VMware vRealize Business is the technology that will be used as a platform to define those value measures and KPIs and help making informed decisions.
  6. Build ITBMO Ongoing Operations: build your ITBMO ongoing operations guide by identifying which RACI responsibilities will be performed

So, you might now be thinking about the value an ITBMO can bring into your organization and how you could best leverage such a powerful business unity:

  • Establish business horizon within your IT and implement a model to help run IT like a business
  • Ensure tighter partnership between IT, business, and finance. This partnership is key to IT success like any other business.
  • Enable your organization explore more improvement opportunities and build a maturity improvement roadmap to run IT like a business
  • Help accelerate your transformation journey not just to a trusted service provider, but to a strategic business partner
  • Create new virtual business roles within your organization and help accelerate this transformation journey
  • Help your IT organization make better and strategic use of VMware vRealize Business to drive the cost optimization and value realization strategy and goals
  • Empower your IT to deliver on the desired quality, at the right cost by creating tighter alignment and accountability between IT, Business, and Finance
  • Elevate and strategize your IT conversations with service consumers, stakeholders, and executives to support IT and business transformation journeys

And if you’re heading to VMworld, don’t miss this session (OPT 5075) on Tuesday 9/1 at 5:30pm!

6 Steps to Establish Your IT Business Management Office (ITBMO) with VMware vRealize Business

VMworld 2015While many smart IT organizations have started their transformation journey to service-oriented and consumer-centric providers, there are still some key gaps that need to be addressed to ensure the effectiveness and efficiency of this transformation and therefore to yield the expected value. These gaps are related to the IT financial operating model and how modernized it is to cope with technology & cloud evolution along with the business speed. The IT Business Management Office (ITBMO) is revolutionizing the way IT leaders demonstrate business value to the enterprise. The ITBMO could be a virtual committee to ensure stronger partnership between IT, Business and Finance together to drive an organization towards faster value realization and maturation. Khalid Hakim, global IT operations, financial and business management architect, and Jason Nienaber, IT Business Management Director at VMware will shed light on this new business practice using VMware vRealize Business to move your IT organization to the next level in maturity and position it as a strategic partner to your business consumers and line of businesses.

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Khalid Hakim is an operations architect with the VMware Operations Transformation global practice. You can follow him on Twitter @KhalidHakim47.

Found in Translation: IT as Interpreter

By David Smith

David SmithThere is a plethora of articles written about the need to transition and transform IT from a technology focused organization into a business driven organization; from running the business to innovating the business; from control to empowerment; from reactionary to proactive, and so on. But, how do we make sure transformation actually happens and ensure that it sticks?

Why we fail
To be clear, IT is an enabling function of the business … not vice versa. With the advent of pervasive internet technologies, cloud computing and public SaaS offerings, lines of business’ now have more choices than ever, either putting pressures on their IT department or purchasing these services directly. That means, as IT, we need to be the best choice for the things we want to control. The number one reason that transformative initiatives fail is lack of user acceptance, meaning somewhere along the way IT misses understanding, setting, or managing expectations (or all three).

More modern organizations work together across silos in IT — but they don’t break the barriers into business. The business works horizontally by nature, and it doesn’t think in bits and bytes. Business users think about getting work done. Knowing this, IT’s answer to “I need email,” can’t be, “We’ll give you some servers with Exchange and small inbox quotas.” It should be, “For how many users, in which locations, from where will you access, will you need to leverage other systems as part of your workflow, etc.” IT then translates these into architectural components and technical solutions.

A tool for success
Use cases (a list of steps defining the interaction of the user with the system to achieve a goal) are a powerful tool to help bridge the gap between business expectations and IT delivery. With a use case, you objectify the discussion and allow the business to clearly articulate what they need, which allows IT to clearly articulate the resulting requirements. IT leverages these use cases to also identify common needs and create reusable platform components. Which in turn helps break down custom-built environments (silos), decreases cost by maximizing IT investments across many lines of business and helps standardize integration points across the architecture. There are several tools and frameworks that help guide the creation of these use cases, but it all starts with a conversation.

Use Case ElementsTake, for example, a company that had embarked on a transformational IT initiative. The pressure from the business to reduce time to provision devices and applications was so great that they decided to begin with end user computing. They needed to get desktops to devices and applications to users, but they had segmented users into 35 or 40 different profiles and device types. Then they swung the pendulum over to other side to offering only three device-based options for desktops, from fully managed to BYOD. Their challenges remained. The missing piece was how to take these three desktops that was an IT centric view to a use-case driven view. What they really needed was alignment with business on five or six use-case driven segments including roles, responsibilities and workflows.

Defining this happy medium allowed the company to tie the user to the HR system. So now when a user joins the organization, the provisioning process is automated. If an employee changes jobs, the process originates in HR as well, with all the IT steps that were formerly manual becoming fully automated. In this case there was a very clear definition of where to put automation. This set the ground for a continual improvement process between IT and business. Instead of meeting once a year, they now meet monthly and with help of the use cases, they align on where to prioritize IT efforts and investments.

What next?
Every organization must find a balance in how deeply and in how much detail they want to take use cases. Try not to go overboard and paralyze your process through analysis. Start with a business function in a line of business to understand your organization’s appetite for change. Any amount of progress toward meeting the needs of the business will facilitate real transformation.


David Smith is a business solutions architect with VMware Accelerate Advisory Services with 17+ years of experience consulting, advising and directing business and IT transformation initiatives for major global organizations. David applies his contemporary business and technical expertise to collaboratively develop, design and implement actionable roadmaps that help customers realize their SDDC and ITaaS strategies. 

Transforming Your Business with End-User Computing

By Daryl Bishop

Daryl Bishop-cropIn my last blog, I talked about the need for a common definition around what constitutes transformation within the IT organisation. In this follow-up post, I’ll discuss the VMware approach to an end-user computing (EUC) transformation.

First a recap, for an initiative to be truly transformational it must satisfy the criteria of change across the elements of people, process, and technology. Additionally, it should be aligned to business objectives and have clear benefits.

If we look at the typical EUC environment today, it’s transitioning from a rigid environment based on a desktop or laptop running a Windows operating system to one that is application and data-centric rather than device-bound. This has some profound transformational impacts for business and IT.

Today’s End-User Computing Environment
Let’s first take a closer look at the EUC environment found in most organisations today.

BISHOP-EUCAs shown in the diagram above, staff have historically used either a laptop or desktop as a primary device. This device, running Windows as the operating system, is locked down at the configuration layer with applications installed natively. This stack forms your traditional and very common standard operating environment (SOE) model. Coupled with the SOE, the EUC ecosystem included printers, isolated (not integrated) mobility devices, and finally an identity management authentication and authorisation component.

This model served us well, providing control, standardisation, and management of risk. However, the rise of the consumerization of technology, a modern IT-literate workforce, ubiquitous access to applications, the decreased usage of the Windows operating system, and the always-connected Internet means this model is, at best, inflexible and, at worst, irrevocably broken.

The Transformed End-User Computing Environment
So what does a transformed EUC environment look like? In the diagram below, the focus has been abstracted from the devices to the application and data access layer.

BISHOP-EUC2

Let’s look at each layer in a bit more detail to better understand the benefits of removing the focus on devices and elevating it to the application and data access layer:

  • Business layer
    Business is typically not just a single entity: It consists of your internal business and external B2B organisations that collectively form your business ecosystem. While your business will provide a core service, in the future it’s likely that smaller, more nimble organisations like start-ups will utilize your core business services and APIs to provide customers with innovative products. Your applications and data will not just be consumed internally, but also by external organisations as business-to-business transactions.
  • Application delivery platform
    The application delivery platform is a standardised access point where your consumers will access applications, data, and desktops. The key features of this abstracted application access layer are:

    • Device independence
    • Centralized management via policy
    • Auditable access and usage
    • Accessed over secure channels
    • Simplified ease of use

Where security and control was traditionally applied at the device and operating system level, it is now abstracted to the application and data access layer.

  • Lightweight device management
    In this context, lightweight management means the minimal IT controls necessary to manage devices, primarily for security reasons. While rigid, locked-down control has historically been the norm, in the transformed environment only lightweight controls are applied. For example, mobility devices use mobile application management (MAM) containerisation to ensure IT can remotely wipe or lock access only to the corporate container. Data, applications, virtual desktop access, and security controls are now applied at the application delivery platform layer via centralized policy controls.

Finally does this constitute a transformation? Let’s review the impact through the lens of people, process, and technology:

  • People
    A modernised EUC environment is a catalyst to elevate staff from traditional, task-based to knowledge creation activities using the productivity platform that best suits their work style. By unleashing staff from the rigid model of yesterday, staff exercise increased creativity, providing a real point of competitive differentiation through innovation.
  • Process
    The traditional EUC environment is awash with layers of process to manage a monolithic computing stack. From processes to deploy applications and patches to service desk support, they add complexity with many moving parts to manage. Shifting the focus to the application delivery platform with lightweight management of devices introduces policy-controlled automation and simplified management controls.
  • Technology
    Businesses today struggle with BYOD, security, and management. By abstracting the management to the access layer, BYOD becomes a moot point. IT is no longer concerned, apart from connectivity, about what device is being used. Security is applied where it should be, at the application and data layer. Finally, management is focused on controlling access to data and applications via policy, rather than managing a desktop and laptop stack.

I’ve really just scratched the surface of what constitutes an EUC transformation. The role of unified communications, changing work practices such as activity based working, the software-defined enterprise, and the changes to the IT organisational structure to support the transformed environment — can and should be significant components of a transformation program.

I’d be interested in your view from the trenches. What EUC initiatives do you have planned and how are they transforming your business?
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Daryl Bishop is a business solutions architect with VMware Accelerate Advisory Services and is based in Melbourne, Australia.

VMworld-graphicCheck out the VMworld 2014 Operations Transformation track for opportunities to hear from experienced VMware experts, practitioners, and the real-world experiences of customers transforming their IT infrastructure and operational processes.

Managing Your Brand: Communications and Marketing for Today’s IT

By Alex Salicrup

Let’s talk about the subject in which every IT department lacks expertise — and that is how to effectively market your capabilities and communicate value. And readers may think I am exaggerating on my next statement: IT departments around the world are ubiquitous in that their consumers usually have a less than favorable opinion of them.

Of course, we know that this perception is not true in all cases. However, in my experience, IT does not do a good job at managing consumer perceptions. And in the IT service provider world, managing these perceptions is critical. Unlike yesteryear, IT service providers now have to compete with public cloud providers that manage their brand very well and educate prospects on how their capabilities map to consumer needs.

During my time at VMware, I’ve had the pleasure of working with industry-leading global entities. Many of their IT organizations claim that their consumers are not taking advantage of using external providers, only to find out that they actually are — and in a big way. Others have accepted the fact that competition exists, and that they must address it.

Many IT organizations have concluded that they must manage consumer perception of their capabilities and offerings. In other words, they are trying to figure out how to sell their brand and services internally. Most have no idea how to achieve that. That’s where I come in.

IT communications and marketing is not just building out an IT education campaign.  It’s making a significant change in how IT strategizes and changes its internal culture to think and act like a hungry service provider. IT begins looking at a service as though it were a puzzle, with consumer needs as pieces of the puzzle.

Let me share a few areas to consider as you begin to develop your communications and marketing strategy. I concentrate on eight areas when assembling a marketing and communications plan:

  1. Understand your audience
  2. Interpret consumer perceptions
  3. Define your brand
  4. Identify the catalyst for change
  5. Create your vision
  6. Who, how, and what to communicate
  7. Managing organizational change
  8. Brand perception metrics

Understanding Your Audience
In every organization there are three main levels of strategic and tactical execution, as shown below:Salicrup-Comms Mktg graphicExecution is different at each of the three levels. Individuals within each level listen to and address solutions based on their domain of responsibility, and they understand solutions only from the point of view of addressing the needs of their level. This in turn needs to be addressed with the appropriate message for each level.

Interpreting Customer Perceptions
Marketing campaigns are designed to create perceptions (we’re better than those other guys). Consumer perceptions are always our reality. Understanding consumer perceptions help us identify how to manage them, and, how to package a solution.

The problem with negative consumer perceptions about your IT organization or the service you provide is that those perceptions are hard to change. So how do you communicate to your consumers that your people and services are the best solution for their unique needs?

Defining Your Brand
Brand is synonymous to reputation but also aspiration. However, a positive brand, as with reputation, takes time to build and is easily tarnished. Service providers have a good awareness of their brand perception with their consumers. This allows the provider to shape a consistent message, improve credibility, and enhance its brand through advertising its goals and achievements.

Identifying the Catalyst for Change
Change is not easy. There are two groups within any business that have to experience change. The group most impacted is the IT group. They are transitioning from traditional IT delivery to a service provider model. Therefore the hardest task — the part takes the longest — will be converting the IT personnel. Identifying why change is necessary and “what’s in it for you” can motivate your staff to follow your vision.

Creating a  Strong Vision
The critical aspect of a successful service communication strategy is the clear articulation of the vision.

Your vision must:

  • Be strategically feasible
  • Be effective
  • Incorporate the current position of the enterprise and catalyst(s) of change
  • Be ambitious
  • Be evidently accomplishable

Managing Organizational Change
No one is really happy about change. Turning your organization from traditional IT or project-based consumption to a service-based consumption model will incur role and cultural changes. The former is easier than the latter, and it needs strong leadership to guide it there. Furthermore, IT is changing the way that the business deals with IT. This is why organizational change management is so important. It is not just a operating change, it’s a massive behavioral change that people need to be guided through. If this is done crudely it will impact the brand severely and cast doubt about IT’s capabilities.

Effective communications are key — it’s very important that IT staff understand the unified message. They should become active ambassadors of the IT brand and the services the team provides. Communication, in this sense, refers to the art of persuasion. Crafting a message that is persuasive is a learned skill and essential if a perception is to be changed successfully.

In order to be persuasive, the IT team really needs to learn how their consumers think, and, predict what consumer reaction will be to events and solutions. People who are good at persuasion develop a keen sense of what solutions work and how messages need to be successfully crafted. This is paramount for any emerging service provider. Communication is about knowing what influences decisions at the three levels illustrated in the figures above. Therefore, different messages need to be crafted to persuade the different levels.

However, one of the highest risks a service provider has is individuals within IT not believing in the solution, the need for it, or how it’s being delivered. These individuals that are skeptical pose a threat of creating doubt within the consumers of the solution and its merits or capabilities.

A critical and difficult aspect of change for the IT staff is the understanding, adaptation, and dissemination of the vision and how they choose to communicate it. It is essential that leaders understand the dynamics of their teams, customers, and stakeholders. Understanding how to communicate and use your team to promote your brand and vision is important to your success. (Stay tuned for a future post, where I will talk more about individual motives and capabilities and how they can be mapped to three distinctive groups…)

Measuring Success — Brand Perceptions Metrics
It is imperative that an IT organization gauges how its consumers feel about the services they’re consuming from the service provider. The IT team needs to put in place metrics that capture performance against the needs of the customer and set realistic targets on what is to be measured.

This does not have to be complex — a simple 5-question survey is a great way to start. If the response is mainly positive, the IT team can include that message to its consumers to reinforce the positive perceptions. If the response highlights challenges, it’s a great way for the IT team to focus energy on fixing them — a catalyst for change.

In conclusion, I have covered steps and actions in this post that are fairly simple — perhaps perceived as common sense. However, IT traditionally does not have these communication and marketing skillsets. And, the IT organization has not needed them before the advent of public cloud — but they are needed now.

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Alex Salicrup is a transformation strategist with VMware Accelerate Advisory Services and is based in California.

5 Tips to Successfully Adopt End-to-End IT Services

By Barton Kaplan

IT organizations are at a crossroads. More technology savvy business partners, combined with compelling third-party cloud service offerings, are leading to an explosion of “shadow” IT. Gartner estimates that 35 percent of all technology spending will occur outside of IT by 2015.[1] As a result, traditional IT organizations face a stark choice: 1) fundamentally transform their operating models to win back the confidence of the business or 2) maintain the status quo and become full-time caretakers of the legacy environment.

In response, IT organizations have initiated efforts to roll out various XaaS offerings — infrastructure, platform, software, database, disaster recovery, and so forth. This is a necessary step, but ultimately insufficient. It will be extremely difficult for internal IT organizations to compete effectively in commodity-oriented services with external providers given the scale, low costs, ease of use, and rapid innovation they can bring.

IT organizations shouldn’t view these services as the end point, but rather as a stepping stone to end-to-end IT services. CEB defines end-to-end IT services as the “packaging of all the technologies, processes, and resources across IT needed to deliver a specific business outcome.”[2] Rather than offering separate services, applications and infrastructure organizations come together to offer integrated services (e.g., collaboration).

End-to-end IT services bring inherent advantages, including:

  • More closely aligned to the business
  • Focused on business and not IT outcomes
  • More cost efficient
  • More differentiated than XaaS offerings

When implemented successfully, the results can be dramatic. CEB estimates annual IT budget savings at 17 percent. One high tech company that adopted end-to-end IT services was on target to reduce “lights-on” spending as percentage of the total budget by nearly 50 percent over five years. An insurance company I worked with saw a 250 percent increase in spend on innovation.

So how do IT organizations get there? Achieving end-to-end IT services is a multi-year journey, not a flip of the switch. To reduce the risk of increasing irrelevance, however, IT needs to start now. Here are five proven tactics that leading practitioners have followed to successfully implement end-to-end IT services:

1)     Pursue an evolutionary approach, not a big bang. Successful organizations focus first on a single service that they can roll out enterprise-wide, or a willing business unit around which they can develop an initial set of services.

2)     Define your services based on business capabilities. Don’t define your services in terms of technology, but rather the business outcome they can impact. The most effective means to do so is through business capabilities.

3)     Adopt the goldilocks principle when it comes to the service portfolio. Not too many, not too few. A handful of services is likely too few; more than a couple dozen services is likely too many.

4)     Govern and prioritize based on services, not projects. End-to-end IT services require a fundamental change to the IT operating model. Projects don’t go away, but they are subservient to the needs of the service, and no longer the primary means through which business needs are met.

5)     Manage end-to-end services like a product in the marketplace. Service owners ought to act like product managers, not operations support. Key measures of business value should be based on adoption rates and service use.

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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] CEB CIO Leadership Council, “The New Model for IT Service Delivery”, 2012

Reflections on IDC’s Worldwide CIO Agenda 2014 Top 10 Predictions

By Paul Chapman

Paul Chapman-crioAs I read through IDC’s Worldwide CIO Agenda 2014 Top 10 Predictions, I was reminded that in the world of IT, one thing is certain: change. The roles of the CIO and the IT organization overall continue to evolve and increase in complexity at the rapid pace of technology evolution. The IDC report tackles this complexity, presenting areas of focus and solid guidance around critical topics. Here are a few key topics that caught my eye.

Addressing the Skills Gap
While IDC’s first prediction regarding a need for CIOs to focus on innovation and business strategy isn’t news, it reinforces a truth we as IT executives know all too well. The difficulty in shifting from technology services to business strategy and services stems directly from the skills gap. In my organization, I see us trying to move people from deep technical roles into data analytics roles, and it’s not something they gravitate towards. For example, a network engineer is not necessarily the best person to do network forensics. The focus on business services will happen gradually, as new skills are recruited or trained into mature organizations.

The skills gap shows up as an important theme in the report, which says, not surprisingly, that new skills are required for these new cloud-related jobs. I equate the situation today to placing an ad for an Oracle database administrator 25 years ago. You wouldn’t be able to find one because they didn’t exist. We need to create new roles, like cloud services administrators. At VMware, we are developing a college grad program where we immediately put new hires into new types of roles to help seed the acceleration.

A Need for Mobile Services
That leads directly into the report’s call for a rapid shift to ensure support for the “ubiquitous mobile and socially connected lifestyle.” IDC suggests that within the next 12 months organizations “create a portfolio of mobile services for inclusion in the IT service catalog.” This is bigger and broader than mobile. It’s imperative that every organization builds a holistic strategy around end-user computing. IT may place more heavy emphasis on technology but this is really about organizational change management. New generations of employees embrace change much faster then previous digital transients; they adapt much faster, they consume technology differently, and their expectations are different.

New Cloud Security Concerns
IDC also predicts increased exposure to risk through cloud adoption in an attempt to reduce IT costs. Of course, security is always a major concern, but we have to keep in mind the distinction between private and public cloud options. On the public side, cloud services companies’ reputations depend on their ability to provide the best security available. Many organizations worry too much about doubling-down on security when the service provider has it covered more fully than most companies could do themselves internally.

On the flip side, some companies will never move to public cloud because of security and IP protection concerns. That doesn’t prevent them from taking a similar internal private cloud approach. You can take the same kinds of capabilities, flexibility, and agility from a public cloud and build your own internal private cloud. This way you can control the security.

Outsourced Enterprise Architecture?
On the topic of employing consultants to support enterprise architecture, I’m not necessarily sold. I think enterprise architecture will change drastically in the coming years, and what we build today may be obsolete fairly quickly. I see enterprise architecture shifting to a central focus around the network and the data center. We’re moving so much compute into massive data centers and they all have to be connected together; performance and quality of service have to be the focus. Architecture will need to have a heavy focus on networking and physical location. You can’t just push everything out to the cloud and expect them to perform—you need to know where things are and have the right tools and forensics is place to proactively manage quality of service.

Budgets Shift to LOB
When it comes to shifting budget to the lines of business (LOB) for third-platform investments, this typically means the IT organization processes do not get the LOB what they need fast enough. This shift isn’t necessarily a bad thing. Investments in some business processes are better off using an external provider. IT should manage the crown jewels: the cash register, the strategic things that differentiate you in the market place, and the things that need strong protection. Finance has to play a bigger role to say it’s okay for people outside of IT to buy services independently. I think it’s a good thing as long as IT embraces it and partners to deliver, instead of resisting and trying to control it. At the end of the day, the company is paying for all of it. At VMware we embrace this model and partner with our LOB leaders and come up with the right decisions together.

I highly recommend reviewing the IDC paper—there are interesting new insights alongside some core points that bear repeating.

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Paul Chapman is Vice President, Global Infrastructure & Cloud Operations at VMware. You can follow him on Twitter @PaulChapmanVM

5 Tactics Leading IT Organizations Use to Realize the Promise of Business Capabilities

by Barton Kaplan

Almost every IT executive I speak to these days is actively working toward becoming a service provider, and for good reason. VMware survey data[1] indicate that the benefits can be powerful. IT as a service organizations are 37 percent more responsive to requests, invest 50 percent of their budgets in innovation and realize operational cost savings of 30 percent, among other benefits.

But a necessary prerequisite to achieve this status is good IT-business alignment. In order for business partners to feel confident having their service requests brokered through IT, they have to believe that IT understands their needs, that IT strategy reflects business priorities, and that IT will ultimately choose a service provider that best meets their specific requirements.

Unfortunately, this is where many IT organizations fall short. CEB data[2] shows that only 18 percent of business leaders believe IT prioritizes the investments that are most important to them. To align to the business, IT has typically focused either on business strategy or business processes. But business strategy is often too high-level and changes too frequently. Business processes, meanwhile, are too granular and function-specific to be meaningful at the enterprise level.

So how do IT organizations overcome this impasse? Many IT executives I’ve worked with have embraced business capabilities to bridge the divide between IT and the business. Simply put, business capabilities are activities an enterprise performs to achieve specific business outcomes. They are more stable than business strategy, but at a high enough altitude that they can be understood across the enterprise.

Despite their promise, business capabilities are no panacea. IT groups that have embarked on business capability initiatives struggle to realize a return on their investment. Their issues usually fall into one of the following areas:

  • Hard to define: Attempts to create business capability models can quickly become theoretical exercises and use language with which business partners are unfamiliar.
  • Hard to engage: Frequently when these efforts initiate out of IT, business partners become skeptical of the value and are unwilling to take ownership.
  • Hard to execute: Once a business capability model is in place, it should actually inform IT investment decisions. Most often, it does not.

To address these challenges and realize the true promise of business capabilities, leading IT organizations are adopting the following five best practices:

  1. Build business capabilities collaboratively. Successful capability models cannot be built in isolation. If business partners are expected to own the business capabilities, then they have to be involved in the effort to define those capabilities from the outset.
  2. Recognize that capabilities go beyond technology. Without a holistic understanding of what enables a business capability, it’s easy for an IT organization to default to a technology solution when the problem may lie elsewhere. One utility company I worked with that adopted a business capability-based approach went into the exercise thinking that 70 percent of its business issues were technology-related. It came out realizing that in fact only 30 percent were. The other 70 percent revolved around people and process issues.
  3. Prioritize capabilities. Putting together a capability model is a necessary but insufficient step. In order for business capabilities to become meaningful for planning purposes, they must be prioritized. A large government agency I worked with heatmapped its capability model by looking at the strategic importance of a capability and its maturity.
  4. Tie business capabilities to IT services. To ensure the services that IT creates will actually be consumed by end users, those services need to be defined in business terms. Instead of building services from the bottom up based on technology, they should be built top down based on the business capabilities they are designed to enable.
  5. Include business capabilities in IT roadmaps. To raise business confidence that IT investments will be directed to the most important business priorities, all IT programs should be mapped to business capabilities. At one financial services organization, this resulted in 2.5 times more IT spend on strategic initiatives.

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


[1] VMware “VMware IT Evolution: Today and Tomorrow – Insight from the VMware 2013 Journey to IT as a Service Study.” August 2013
[2] CEB 2013 Business Engagement Assessment Survey