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Tag Archives: Service Broker

Commodity IT – It’s a good thing for everyone!

les2By Les Viszlai

Traditionally, IT commodity services and products have the highest percentage of being outsourced in our industry. There is a belief among a majority of people in our industry that IT commoditization is a very bad thing.

In its simplest form, a company’s success is measured by its capability to produce a product or service efficiently and to meet the market demand for that product or service.  Running IT as a business implies that we need to also do the same for our internal customers by providing products and services cost effectively with repeat-ability and predictability at an agreed cost.  IT organizations are viewed as a business enabler and trusted advisor by getting out of the business of building and running commodity IT products and services and focusing on providing the business with resources that provide new product capabilities and business differentiators in their market.

We need to understand what a commodity is in order to change how IT is run and provide that business focus.

commodity starts as any thing that has a perceived value by a consumer. A more common understanding of a commodity is a product that is generic in nature and has the same basic value as all similar items. (a simplified example is a Server)

For example, virtualized hardware, in the IT data center context, is a device or device component that is relatively inexpensive, widely available and more or less interchangeable with other hardware of its type.

By definition, a commodity product lacks a unique selling point. In an IT context, the term usually differentiates typical IT products from specialized or high-performance products. A commodity, when looked at this way, is a low-end but functional product without distinctive features.  Generally, as hardware moves along the technology cycle, that hardware becomes a commodity as the technologically matures in that marketplace. That implies that most hardware products, like network switches, that have been around for a long time are now available in commodity versions, although they aren’t generally marketed as such.  In the past, physical networking infrastructure was viewed as specialized until the maturity of virtualization of this layer of technology became available and more widely spread.

Example IT Transformation Journey - Commodity Services

Example IT Transformation Journey

Lets look at a more traditional commodity example, the local gas station.  The gas at your pump is the same as the gas at any of the other pumps. It’s also the same as the gas at the station across the street or across town.  There may be a very slight change in price, but the products essentially sell for the same basic price and are the same regardless where they are purchased.  Can your consumers of IT products and services get this same consistency? Are we trying to refine our own gas before providing it to our consumers?

When we compare this scenario to a traditional IT organization we need to ask ourselves, what commodity areas are we focusing on reinventing and providing. From the IT standpoint, can we virtualize our hardware environment and reap some of the benefits like “FASTER TIME TO MARKET”, “COST EFFECTIVENESS” and “IMPROVED QUALITY”.  Are we already doing this and can we drive further up the technology curve build and/or broker services and products such as IaaS, PaaS or SaaS to drive faster business value?

Our common fear is that “Commodity IT” implies low quality and cost or that our roles will be outsourced.  In comparison, a commodity product or service is not sold cheaper that it takes to produce or run it.  Like wise a commodity IT product or service should have affordability, repeat-ability and predictability in delivery and as brokers not builders,  IT organizations can provide this service to the business.

In summary, studies have shown that IT organizations focus a lot of effort and resources on building and running products and services at the back end of the transformation curve.  This is the area with the least amount of business value but consumes a majority of IT time & resources.  IT organizations need to shift focus to the front of the technology cycle and help the business create and engineer new products and services that drive revenue.

IT best practices exist to help IT organizations move to the front of the technology cycle by reorganizing people, process and technology to use the building blocks of various commodity products and services to provide affordable, repeatable and predictable services. This allows IT organizations to focus on the front of the curve.  Now that’s a lot more valuable and fun.

Commodity IT – It’s a great thing for everyone!

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Les Viszlai is a principal strategist with VMware Advisory Services based in Atlanta, GA.

Solving the Shadow IT Problem: 4 Questions to Ask Yourself Now

Harris_SeanBy Sean Harris

Most IT organizations I speak to today admit they are concerned about the ever-increasing growth in the consumption of shadow IT services within the business; the ones that are not concerned I suspect are in denial. A common question is, “How do I compete with these services?” The answer I prefer is: “Build your own!”

What Would It Mean for My IT Organization to Truly Replace Shadow IT?

Totally displacing Shadow IT requires building an organization, infrastructure and services portfolio that fulfills the needs of the business as well as—or better than—external organizations can, at a similar or lower cost. In short, build your own in-house private cloud and IT-as-a-Service (ITaaS) organization to run alongside your traditional IT organization and infrastructure.

Surely your own in-house IT organization should be able to provide services that are a better fit for your own business than an external vendor.

IT service providers often provide a one-size-fits-all service for a variety of businesses in different verticals: commercial, non-commercial and consumer. And in many cases, your business has to make compromises on security and governance that may not be in its best interests. By definition, in-house solutions will comply with security and governance regulations. Additionally, the business will have visibility into the solution, so the benefits are clear.

How Do I Build My Own Services to Compete With Shadow IT?

Answering the technical part of this question is easy. There are plenty of vendors out there offering their own technical solutions to help you build a private cloud. The challenge is creating the organizational structure, developing in-house skills, and implementing the processes required to run a true ITaaS organization. Most traditional IT organizations lack key skills and organizational components to do this, and IT organizations are not typically structured for this. For example:

  • To capture current and future common service requirements and convert these into service definitions, product management-type skills and organizational infrastructure are needed.
  • To promote the adoption of these services by the business, product marketing and sales-type functions are required.

These are not typically present in traditional IT organizations. Building this alongside an existing IT organization has three main benefits:

  • It is less disruptive to the traditional organization.
  • It removes the pain of trying to drive long-term incremental change.
  • It will deliver measurable results to the business quicker.

What If External IT Services Really Are Better?

It may be discovered after analyzing the true needs of the business that an external provider really can deliver a service that is a better fit for the business needs – and maybe even at a lower cost than the internal IT organization can offer. In this case, a “service broker” function within the IT organization can integrate this service into the ITaaS suite offered by IT to the business far more seamlessly than a traditional IT organization can. The decision should be based on business facts rather than assumptions or feelings.

How Do We Get Started?

As part of VMware’s Advisory Services and Operation Transformation Services team, I work with customers every day to map out the “Why, What and How” of building your own ITaaS organization to compete with Shadow IT services:

  • Why
    • Measurable business benefits of change
    • Business case for change
  • What
    • Technology change
    • Organizational change
    • People, skills and process change
  • How
    • Building a strategy and roadmap for the future
    • Implementing the organization, skills, people and process
    • Measuring success

In the end, customers will always choose the services that best meet their needs and cause them the least amount of pain, be it financial or operational. Working to become your business’ preferred service provider will likely take time and resources, but in the long run, it can mean the difference between a role as a strategic partner to the business or the eventual extinction of the IT department as an antiquated cost center.


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

An SDDC Helps IT and Marketing Meet in the Middle

AUTHOR: Enrico Boverino

Companies need to deploy a modern workplace and innovative infrastructure in order to digitize business processes, and that often calls for organizational and financial shifts in both the IT and marketing departments. Can a software-defined data center (SDDC)—which at first glance may appear to be purely a technology strategy—help CIOs and CMOs work together to deliver competitive business innovation while reducing budgets? I believe so.

A standard definition of digital services is difficult to nail down, but I found this one helpful: A digital service is one that has been entirely automated and which is controlled by the customer of the service. This describes a wide swath of new applications, personalized services, social interaction, and data analysis that might also include digital marketing initiatives. In this context, CIOs are now expected to show the business results of technology investments, and CMOs are also increasingly open to spending budgets outside traditional marketing in order to reach new users.

Different goals, complementary skills
In general, CMOs know about product placement, go to market, and new customer demands; they also have to protect the business from surprises like new competitors and disruptive business models. Increasingly, time is a precious commodity, as emphasis shifts to short product lifecycles to test new markets and services.

CIOs typically have a great understanding of corporate business processes, information security, and available resources. They are skilled at scouting new technology and solutions with a focus on expenditures and new areas of savings. It seems obvious that enabling greater coordination between these two worlds will lead to a more competitive, robust, and agile organization. But how?

It’s interesting to see how both goals and approaches of the two departments diverge in my engagements with customers— it tends to look like this:

Despite the best intentions to collaborate for mutual advantage and company-wide success, challenges quickly surface when we lay out each department’s specific objectives in an organizational matrix, especially when it comes to personal MBOs.

How can a software-defined data center help?

Having the ability to exploit a unified data center platform that provides new standards for automation, flexibility, and efficiency can bridge the different perspectives. In an SDDC, the compute, storage, networking, security, and availability services are pooled, aggregated, and delivered as intelligent, policy-driven software. Other key components include self-service, financial visibility, and policy-based provisioning for infrastructure and application. This provides business users with faster deployment and more reliable access to differentiating technology tools.

When CIO and CMO strategies are joined, it’s important to highlight the impacts an SDDC will have on efficiency (cost control), agility (revenue contribution), and reliability (quality of service and risk mitigation). The impacts of an SDDC adoption,  together the priorities associated with the opportunities CMOs and CIOs are striving to take advantage of, will help to define and exploit personalized roadmaps.

When we consider impacts on agility, an SDDC implementation has three capabilities that can facilitate conversation between the CMO and CIO:

  1. Abstraction of applications from the underlying infrastructure enables true self- and automated provisioning of services, overcoming manual steps and the wait time that exists when multiple siloed IT groups need to communicate.
  2. The policy-based automation of pre-configured applications can simplify the processes related to the rework, which are often required to change configurations, or distribution of systems geographically.
  3. Governance and brokerage of public cloud services from IaaS to SaaS, which can also provide agility-related benefits such as lower costs and time to market, but must be evaluated and in many cases integrated within existing processes.

Over the past two years, I have helped many customers gain visibility and insights into their current level of maturity using a software-defined reference framework. Capturing meaningful KPIs helps to build an executable roadmap that aligns with user demand and provides the ability to measure improvement over time.

For example, the impact on agility described earlier can be measured through metrics that include:

  • Revenue generated by new services
  • Customer satisfaction
  • Percent of workload offloaded to hybrid clouds
  • Percent of requests fulfilled via self-service and standard catalog
  • Time to provision additional capacity

Using their results to determine action plans needed to improve these metrics, CMOs and CIOs can decide which capability to address first and which marketing/IT joint investments will lead to the most beneficial business outcomes within the shortest amount of time.

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

The 4 Components of a Service-Focused Culture


Author: Alex Salicrup

I have made bold observations in my recent blogs about the need for a cultural shift to that of a service-driven culture. This is a culture with a strong focus on customer needs, customer services, and meeting deadlines. This type of culture also allows the IT organization to scale and adapt to changing business needs rather than rigidly following old strategies. Although a cultural shift like this might seem an insurmountable task, I’ve seen it occur—and faster than you might think.

Here are the four components of a strong service-focused culture, according to my experience with today’s successful IT organizations:

  1. Strategic vision: IT must have a strong strategic vision that is anchored to the broader business goals. Short-, near- and long-term success criteria should be clearly defined and routinely reviewed by the full spectrum of stakeholders.
  2. Vision translation: The executive and director-level managers still need to disseminate the strategic vision to IT staff but should work hand-in-hand with service owners. Together they present a far more efficient method for evangelizing the strategic vision and leading a service lifecycle management process that keeps functional groups focused on internal deliverables as well as the interdependent needs of other groups.
  3. Strategic framework: The service owner is a key role, but he is like an orchestra conductor—he needs to have the sheet music from which to direct the many individual musicians. The strategic framework is that sheet music. This framework should outline the operational readiness of IT and prioritize the work streams necessary to deliver on the IT strategy and services. This is also an opportunity to establish a roadmap to the desired service capability maturity level.
  4. Risk: IT organizations tend to mitigate most risk within their sphere of control. They are uneasy asking other business groups to mitigate risks, even though these groups may be better positioned to do so. It is a wasted opportunity to have a great service-driven strategy if the business areas that IT depends on can’t catch up. This is where a strategic vision that is tied to a business-wide strategy can help, by clarifying which business functions are best suited to assess specific risks and giving them an outline for doing so.

Of course, no single plan will cover every IT organization’s needs, but this will present a good place to start a conversation. When I’m called in to help an organization with establishing a service-driven strategy, I start by establishing the end-state vision with the executive representatives for the organization, and then assess the operational capabilities of the business to deliver on that vision. The assessment then allows the IT organization to create a strategic framework by which the areas of improvement can be prioritized and remediation can be executed. This process has proven to expedite the journey of organizations in reaching service-driven capabilities.

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Alex Salicrup is a business solutions architect for VMware Accelerate Advisory Services
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Is Your Organization Ready for the New Wave of IT?

While most IT organizations have a high-level vision for their end-state cloud, and they have the people needed to implement the technology, many are missing the strategy to connect the two. What do you execute, at what stage, and how do the people and processes need to change to support that? The video below provides a strong starting point.

Don’t miss Accelerate Advisory Services strategist Padmaja Vrudhula’s great explanation of a service-based approach to change management. She provides tangible examples of how IT executives can shift the way they classify services and personnel roles to support the move to IT as a service.

Padmaja Vrudhula is a strategist with VMware Accelerate Advisory Services, based in Washington.

Constant Change in Technology Is the Steady State

The VMworld Barcelona TV crew caught up yesterday with Paul Chapman, VMware VP of Global Infrastructure and Cloud Operations. In this short video, he describes how VMware is challenged with the same IT complexities as other large, global corporations—we have to run the business on a day-to-day basis, take orders, ship products, recognize revenue and so forth. And, because internally we’ve solved real-world issues that resonate with many of our customers, we’re now in a position to share how to solve many of those problems in a game-changing way.

IT’s Next Step—Are You Ready?

Leading-edge companies are seeing notable results from making the transition to a true broker of strategic business services, according to a recent CIO MarketPulse survey of IT decision makers conducted by IDG Research. And, one of the foundational building blocks enabling IT’s metamorphosis to service broker is the software-defined data center.

IT’s evolution to a service broker also requires organizational and process changes in addition to a game-changing architectural approach. Defining the business value for the transition and aligning it to measurable metrics is a mandatory first step. Much of the process and related cultural change can be addressed through a cloud center of excellence (COE) to promote standards, foster knowledge sharing, and codify best practices.

As shown in the diagram below, survey respondents most often view better alignment between IT and business and increased productivity as important potential benefits of a cloud COE.

Also new on CIO.com this week, Accelerate strategist Mark Sarago shares his insight in an IDG Enterprise webcast on the results of the survey, and why more and more corporate executives are evaluating the benefits of migrating to a software-defined data center.

While IT’s journey to service broker to the business will be challenging, companies that are actively pushing virtualization to the next stage and embracing new concepts as part of a software-defined data center have a solid head start. The companion white paper, IT’s Next Step: A Journey to the Software-Defined Data Center, provides more information on the results of the survey and the concept of a software-defined data center.

 

Getting Started on Your Journey: On-Demand Services

Author: Michael Francis

IT organizations are experiencing the change from monopoly holder of IT service delivery to being a supplier of many IT services to the business. And as a supplier of services, IT needs to engage with the business with competitive differentiation.

As CIO, you know that your business customers will migrate to paths of least resistance to achieve their desired business outcomes—many times this means engaging public cloud services. The risk to your IT organization and the enterprise is a lack of governance and the risk of increased cost. Inevitably this approach, which initially may result in agility for the business customer, can quickly become detrimental to achieving broader business initiatives for the enterprise.

I see a second bump on the hype curve of public cloud in my region—Australia. Many of my customers are planning the relocation of assets to the public cloud, with the assumption that it must be more cost-effective. But as the CIO, it’s critical to understand what you’re gaining from relocation and why. Analyzing what drives costs in your private cloud and why these will be reduced in the public cloud is a critical element for success.

Public cloud does play a role in extending enterprise IT capabilities—everything from SaaS-based applications to IaaS-platforms—and today’s CIO needs a strong financial and capability-centric business case to act as a service broker. Transforming your IT organization to deliver more value to the business requires a focus on enabling new business capabilities in a more agile way—a focus on the business needs rather than on a commodity that may or may not be more cost effectively delivered by a third-party supplier.

To successfully transition to an IT broker, the transformation of people, process, and technology must begin with the CIO. Without the support of the CIO, any change will likely be incomplete and focus on only one axis of the people, process, and technology composition.

The next step in architecting an IT broker environment is to envision what the environment may look like in the future and why it will look this way. The image below depicts a progressive, mature enterprise IT architecture. IT services are delivered to the presentation layer and consumed through the brokerage layer implemented in the corporate services cloud. This enables the consumer to access a service with an SLA-based agreement between the consumer and IT. The brokerage layer located in the corporate services cloud is responsible for vendor management and SLA reporting.

Once the CIO and enterprise architects share a common vision for the future, the next step is to identify the existing business services offered by the IT organization and their common SLA requirements. This commonality forms the basis to define the initial IT service offerings. Initially this process would only consider infrastructure-level SLA requirements such as availability, recovery, performance, and security. Start with the infrastructure layer, as it tends to have a high degree of commonality and minimal differentiation. It is also the foundation for more advanced IT service offerings like PaaS and SaaS.

To recap, as CIO you will maximize the probability of success at the onset of your journey to becoming an IT service broker by having a shared vision with your enterprise architects—I can’t overemphasize the importance of a clear and shared understanding of the desired future state. The next step is to implement a brokerage capability—the combination of people, process, and technology operations. Lastly, identify the common SLAs defined for existing business services—these will form the first IT service offerings.

On-demand services can provide the efficiency and agility needed to transform your IT organization from reactive provider to engaged service broker, and finally, to a strategic partner driving the goals of the business.

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Michael Francis is a principal systems engineer at VMware, based in Brisbane.

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Delivering and Deploying IT Services: The Poison and the Remedy

AUTHOR: Eric Ledyard

IT is caught in the middle of two opposing forces at all times—balancing the demands of the business with the challenges of IT. To be successful, the IT organization needs to change the way it creates, deploys and runs the services it provides the company.
I find when working with most of my customers that there is a dichotomy between the goals of the business leadership teams and the goals of IT. For the CIO to be successful, she needs to solve for the challenges facing her organization while enabling the business to achieve its goals—in a full strategic partnership—through the delivery of products and services as an IT service provider.

The first step for the CIO is to build an agile IT infrastructure that streamlines the development and deployment process of new and existing IT products, which speeds time to market of new services, which then enables the business to attract and retain new customers thereby increasing enterprise growth. This also allows the company to either retain its industry leadership or gain market share by outpacing its competition.

I continuously reinforce with my customers that IT should be viewed not as a cost center as it traditionally has been, but rather as the vehicle for driving additional top-line revenue within the company. The compelling benefits of modernizing the application development lifecycle, as an example, and the profound impact that can have on the business is detailed in this recent VMware Accelerate white paper.

The next challenge the CIO faces is how to reduce the operating costs to provide services to the business without impacting the flexibility and agility that allows her IT organization to drive down the time to provision and deploy services. This has always been a daunting question for the CIO—how do you continue to provide the highest levels of service to your users and respond quickly to business needs without overcompensating through inefficient staffing and/or underutilized infrastructure?

The Journey to IT Service Provider Excellence
In working with many large organizations, most recently one of the largest global financial institutions, I have determined that there is a solution to achieving the goals of the business while dramatically reducing costs. The IT organization’s journey is made up of three core pillars: operational (which includes organizational), financial (ITBM and ITFM), and the infrastructure and technology stack. Only by optimizing all three core pillars will the CIO meet the goals of both the IT organization and the business.

By optimizing operational and organizational aspects, the CIO can fix many of the problems of traditional IT environments. Time to market is reduced from weeks to hours by automating processes and procedures. The number of people it takes to get services built and provisioned into the environment is further reduced by leveraging integrated development and deployment tools. The IT organization is streamlined by eliminating silos of disparate teams working on isolated projects—bringing them together as one team, with a common set of goals and focus.

Implementing an integrated IT financial management and IT business management suite provides visibility into actual costs to provide services to customers, and, can optimize the environment in real time—making decisions that keep costs low by choosing the most effective way to provide services. In the same way that a stock broker makes decisions based on a toolset that tracks real-time markets, the CIO gains the power to become an IT service broker—making decisions based on real-time financials coming out of the environment.

Finally, an elastic, agile infrastructure stack can introduce new, increased levels of agility and response time to provision and deploy new services. The CIO can keep costs low by moving away from complex siloed infrastructure pools toward software-defined resource pools on common infrastructure. Then, by leveraging IaaS capabilities such as full automation and self-service provisioning, time to market is reduced and solid application platforms are provided quickly and reliably.

Ultimately, the ability for the CIO to provide the business with the services it needs has never been easier to achieve. Technology advancements and toolsets allow today’s CIO to become a valued business partner, driving top-line revenue and increasing earnings per share to company shareholders.

Coming soon…how to become the best service provider in the industry to the business.

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Eric Ledyard is a business solutions architect for VMware Accelerate Advisory Services. Follow him on Twitter @ericledyard

VMware Accelerate Advisory Services can help you define your IT strategy through balanced transformation plans across people, process and technology. Visit our Web site to learn more about our offerings, or reach out to us today at: accelerate@vmware.com for more information.

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