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Driving Change With Cloud Services

Patrick Kavanagh on February 8, 2018

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It's just getting too hard to support the business that wants more flexibility, cheaper service provision, faster implementation, connectivity worldwide and the supply of information to multiple user access devices. All must be delivered on a reduced budget.

Can anyone help?

Why Change?

ICT has transformed how organisations operate and interact with each other. This has encouraged major corporations and Government institutions to embark on a transformational agenda to invest in new technologies to deliver better, more efficient services across the supply chain, enterprise or to the public.

Unfortunately, the majority of these very large IT/IS enabled change programmes have been plagued by the “human factor” outlining a history of failure characterised by:

  • Delay, poor performance and abandonment that has led to excessive overruns in time and cost;
  • Lack of clear Senior Management leadership, governance, programme/project management;
  • Underestimation of the business change required and ineffective engagement with

This has led to legislatures, statutory authorities and regulators creating a complex array of new laws and regulations designed to force improvement in organisational information governance, security, controls and transparency. The impact of these legislative changes led to a global revolution in governance, best practice with legislation that directly affects Information Management practices whose focus is the integrity, protection and value of data. Multinational Organisations and companies that do business internationally may also be subject to the laws of foreign jurisdictions.

These may include:

  • AS8015 Australian standard for corporate governance of information and communication technology
  • ISO/IEC 27001 Information security management systems
  • ISO/IEC 20000 IT Service management
  • AS4590 Australian Standard for the Interchange of Client Information
  • i2010 – A European Information Society for growth and employment (EU)
  • The Computer Misuse Act 1990 (UK)
  • Financial Services Modernization Act of 1999 (USA)
  • The Homeland Security Act (HSA) of 2002 (USA)
  • Information and Technology Act 2000 (India) 

This complex array of legislation that is underpinned by standards and best practice has led to a significant burden being placed on the traditional ICT department who are constantly struggling to deliver compliant ICT services that provide value to their customers.

Taking these concerns into account is it time to radically rethink how traditional services are delivered in the future to Corporate/Public sector users and whether organisations, in particular the Public Sector, deliver ICT services using a 'Cloud/Utility Model' similar those used within the Telecommunications industry.

These services may include core, enterprise and industry specific applications.

If your ICT department is faced with this dilemma, what is the answer? As a provider of ICT services are you asking yourself the following questions?

  • Are we satisfying the current demands of the business, and how will we satisfy future demands?
  • Why can’t we deliver ICT services that the business accepts as value for money?
  • Why do our customers always complain about the costs of ICT services?
  • Why can't we find the right skills to supply ICT services that the business demands?
  • Why are the users unsatisfied with the level of ICT services that we supply?

To answer these types of questions this paper puts forward a practical approach that explores alternative service options.

Overview of The Approach

We have believe the best approach to ascertain if a cloud strategy/solution would benefit a given organisation, is to apply a combination of management principles from Managing Successful Programmes (MSP) and Information Technology Infrastructure Library (ITIL)v3. Experience has taught us that from a people, process and technology perspective organisations have different levels of management maturity, so adaptation of this model would vary accordingly.

Leonardo Consulting employs a unique approach to prioritise the programme of work to gain most benefit from options such as cloud services. This overall approach is illustrated at Figure 1 and further outlined within this document.

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Figure 1: Service Transformation Model

Step 1: Understanding the business direction

The first step in ascertaining if the business would be better supported using a 'Cloud' based services, is to understand the aspirations of the business.

In particular:

  • What are their aspirations over a five-year time period?
  • What goods and services will they be supplying now and into the future?
  • What are their growth aspirations etc?

In large institutions this information is usually documented with in the strategic five-year plan.

 

Step 2: How does ICT support the business

Once the strategic business direction is understood, an analysis of the information systems and underpinning information infrastructure is undertaken to get an appreciation of what enhancements or creation of new services are required to support the business strategy. The overall objective is to align ICT to the business in its future state and specify the ICT pipeline. Analysis of the ICT department is required to identify the services that are currently being supplied to the business and at the same time assess overall maturity level of these services. In organisations that have implemented service management best practice this information would be found within the service catalogue.

To achieve this we would apply the following steps:

  • Identifying and document the service portfolio in accordance to ITIL v3 best practice;
  • Map the service portfolio to the business at process and departmental levels;
  • Determine the 'business value' of each service by specifying the cost and value to the business;
  • Determine the 'customer value' of each service by ascertaining if the service is 'fit for purpose' and 'fit for use';
  • Production of a service status

Service Dimension Model

Leonardo Consulting will then evaluate each service using a 4D value dimension model to determine the 'business value' and 'customer value'.

Business value evaluates the service from a business value perspective.

To determine business value, the following dimension measures are assessed:

  • ‘Strategic Alignment’ to the business in its current and planned future
  • ‘Service Cost’ in relation to how many users there are of the service. Identifying the number of users who actively use the service and dividing this by the cost of supplying the service determines

Customer value evaluates the service from the customer perspective.

To determine customer value the following dimension measures are assessed:

  • 'Fit for Use' capability, for example, does the service definition clearly articulate what it actually delivers to the business and by using the service does it deliver the outcomes the business 
  • 'Fit for Purpose' This is determined by carrying out an evaluation of service reports that are attributed to the service.

Each of the value dimensions are scored from 0 - 10 attracting a red, amber or green colour as illustrated at Figure 2. The output of this analysis is then placed on a service status map, as illustrated at Figure 3.Service_4D_Dimension_Model.pngFigure 2: Service 4D Dimension Model

 

Step 3: How ICT will support the business in the future

After analysis and placing the services onto the service status map a clear picture will evolve across the entire service portfolio identifying services that 'meets expectation', those that would require some 'realignment or improvement'  and those that 'fails expectation'. We use this analysis to prioritise services that could be transferred to cloud service offerings. 

In some cases after analysis we have discovered that all services can fall within the ‘fails expectation’ part of the map. This is usually due to inadequate supply of the underpinning information infrastructure. To resolve this particular issue it would be wise to seek providers who supply Infrastructure as a Service (laas), Unified Communications as a Service (UCaaS) or Platform as a Service (PaaS) cloud solutions. 

Another cause of multiple failures can be the lack of integrated service management processes. To resolve this issue consideration should be given to move all services to a cloud service or instigate a service improvement programme to uplift the 'fit for use' service component.

  Service Status Map (incorporating Service 4D Dimension Model.png

Figure 3: Service Status Map (incorporating Service 4D Dimension Model)

 

Step 4: Define The Programme of Work

The analysis performed in step 3 will expose the services that are difficult to supply effectively. The next step is to create a transformation programme whose likely objectives will be:

  • To improve the services that fall with in the 'requires improvement' segment of the map;
  • Establish the root cause regarding the services that fall within the 'fails expectation' part of the map and then plan the appropriate

Likely root causes:

  • Service levels do not match business expectations;
  • The technology that underpins the service is vintage; 
  • The skills required to supply the service are inadequate;
  • The cost to supply the service seem excessive;
  • The service is not reliable;
  • The service is not customer

The ultimate goal of the transformation programme is to move all services to the 'meets expectation' part of the map. To achieve this you may consider moving some of the services to cloud providers. lf this analysis points to cloud provision it would be necessary to consider the organisational changes needed to be made within the incumbent ICT team from both a people process and technology perspective. It is for this reason we recommend MSP as an enabler to manage the transformation. Applying this management method to the transformation will ensure that from the outset the benefits are fully articulated, strengthening the case for transformation across the stakeholder community. It would also provide the necessary governance across the programme and incorporate organisation change leading to the assurance of benefits.

To assist on this journey Leonardo Consulting has identified current industry offerings in a number of capabilities marketed as Cloud or Utility Computing. 

These fall into three main categories: 

  • General;
  • Software; and
  • Hardware

Relationships to software and infrastructures are shown below in Table 1.

 

General

Software

Infrastructure

Cloud Computing

Application as a Service (AaaS)

Servers (Beyond Blades)

Grid Computing

 Application Platform as a Service (APaaS)

Virtualisation

 Client Server Model

 Platform as a Service (PaaS)

 Infrastructure as a Service (IaaS)

 

 Software as a Service (SaaS)

 Hardware as a Service (Haas)

 

 

 Unified Communications

 

 

Unified Communications as a service (UCaaS)

 

 

On-demand self service

 

Table 1: Cloud Offerings

The levels of service offered for Cloud can be grouped into the following three levels.

  • Infrastructure as a Service (IaaS): In this most basic cloud service model, cloud providers offer computers, as physical or more often as virtual machines, and other resources. Examples of IaaS include: Amazon Cloud

Formation (and underlying services such as Amazon EC2), Rackspace Cloud, Terremark and Google Compute Engine.

  • Platform as a Service (PaaS): In the PaaS model, cloud providers deliver a computing platform typically including operating system, programming language execution environment, database, and web

Application developers can develop and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software layers. Examples of PaaS include: Amazon Elastic Beanstalk, Heroku, EngineYard, Mendix, Google App Engine, Microsoft Azure and OrangeScape.

  • Software as a Service (SaaS): In this model, cloud providers install and operate application software in the cloud and cloud users access the software from cloud clients. The cloud users do not manage the cloud infrastructure and platform on which the application is running. This eliminates the need to install and run the application on the cloud user's own computers simplifying maintenance and support. Examples of SaaS include: Google Apps, Quickbooks Online, innkeypos, Salesforce.com and Microsoft Office 365.

Step 5: Transition to the new service model

Once the programme has been defined and agreed the programme will enter into the mobilisation stage, likely to include the following activities:

  • Mobilisation of the communications strategy;
  • Messaging to stakeholders, specifically giving them updates regarding the benefits;
  • Distribution of the programme definition outlining the programme project portfolio;
  • Programme project kick-off;
  • Instigation of the programmes detailed project

Step 6: Was it successful

During the programme definition stage benefits will have been identified and profiled. As the programme progressed through its lifecycle, programme governance would have ensured the benefits were tracked and reported on. The measurement criteria specified within the profiles will be used to report on the programmes success.

Conclusion

If you take a look at the telecommunications industry you will notice that a majority of the services they provide are done so by a utility supply model.

This model will be further adopted by the IT industry as standards and ways of working mature, thus migration to utility provision will become a reality.

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Topics: BPM - Business Process Management, Intergration

5 Questions to Ask About Your Middleware/ ESB Strategy

Adam Mutton Adam Mutton on November 13, 2017

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Do you use an on-premises Enterprise Service Bus (ESB) architecture to integrate applications and services? If so, you’ve probably noticed that cracks are showing up in your IT infrastructure. This will accelerate as more applications migrate to the cloud. Chances are, you’ve invested heavily in these solutions and are reluctant to replace them.

There is a way to extend your investment and achieve a more modern architecturethat can handle the complexity of today’s more demanding data, platforms and business systems. First, it makes sense to review the reasons you may want to begin modernising your on-premises legacy middleware solutions today.

A primary reason is reducing the total cost of ownership (TCO) of your current ESB/ Integration solution.

Answering these 5 questions will give a better understanding of the overall cost you might be incurring now with your aging middleware solutions, as well as future upgrades you might be undertaking or planning to pursue. 

1. Are you factoring in operational expenditure? (OPEX)?

When calculating the costs of integration platforms, companies typically consider only the capital expenditure angle, but OPEX can be significant. In addition to the hardware and software costs outlined in your budget, take a look at the expenses associated with DIY development.

2. What are your compliance and security costs?

If your data includes personal health or financial information like credit card numbers, you’ll have to invest in certifications to demonstrate that you’re compliant with data privacy and security regulations like PCI and HIPAA.

3. What is the real cost of developer productivity?

Another important consideration is the rising cost of employing and retaining iPaaS developers, which offsets productivity gains.

4. What does it cost to accommodate new data sources and formats?

To calculate the overall costs of ESB ownership, you must factor in the expense of dealing with new data streams and formats. 

5. What does ESB cost in terms of lost opportunities to innovate?

The IT professionals who are engaged in integration don’t have time to focus on more strategic tasks and gaining insights to advance your business and meet your customer needs. This type of expense is almost never factored into the total cost of ESB ownership. It should be.

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Topics: Intergration

Shifting business operations to an ‘as-a-service’ delivery model

Dane Porter Dane Porter on August 16, 2016

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As SaaS solutions become commonplace in several industries, the market has felt the effects. IDC research shows that SaaS technologies are projected to constitute a quarter of all new enterprise software purchases by 2016, while PWC estimates that SaaS delivery will make up approximately 14.2 percent of all software spending. Overall, the entire SaaS market is projected to expand at a compound annual growth rate of 21.3 percent over the next two years.”

As a consultant working within a number of large and medium sized organisations over the past several years, I’m used to seeing common problems being solved over and over again, everywhere I go. Some big and some small, some more necessary than others and some with varying degrees of ‘fit for purpose’ tweaks. After all, every business is different and every implementation needs to fit the business context around what it supports.

Shift toward ‘as-a-service’

However, there is a shift taking place and more and more businesses are starting to see the benefits of moving towards “as a service” type arrangements. The transformation isn’t necessarily a new one; the introduction of web based email and corporate social networks have become a staple of the modern organisation, as well as support and maintenance team products such as Sharepoint, Dropbox and Skype. 

All of these functions within the business which have begun the transformation to Software as a Service offerings have one thing in common which confuses the bigger picture. They generally still fall into the IT or technology bucket of the organisation. They perform well serving their single purpose but very often they support a technical role within the business - after all they are still technical tools.

Business Function/Operations ‘as-a-service’

The bigger piece of the pie which is yet to be realised by large business is that the ‘as a service’ offering shouldn’t be limited to internal tech centric applications. The transformation should be steering towards the business function and operations ‘as a service’. That is to say, the foundation on how that business actually conducts itself and generates revenue. 

It very often still dominates business projects, and projects take time. Time costs money, and money is often the thing which is trying to be made or saved when projects are kicked off. 

Occasionally, we still the response from project teams and management which is to throw people at the problem. But more people equals more churn and faster turnaround time – and we all know how that one ends. The project blows out and you’re likely no closer to achieving the goal set out to in the first place. 

I’m talking specifically about the technical delivery of projects, and even more specifically about the system integration component of technical project delivery – the thing which enables the business to achieve its outcomes, service its customers and generate revenue.

When I talk about the difficulty of successfully implementing projects which have a large integration requirement, one of the main issues that arises consistently (n.b. this could be due to a potential disconnect between responsibility and understanding) is that it is underestimated just how specialised systems integration is.

Considering the people required to deliver the role on the project, reflect on the complex role for an integration specialist. It requires someone with an array of technical know-how across varying applications, with enough knowledge to understand how different systems work and what they are capable of handling. Projects additionally require that same someone to demonstrate an understanding of business functions, use cases and context in order to be able to implement appropriate solutions to business problems. In order to do that effectively, they also need to be a product specialist, and have a deep understanding of the very tool, or tools, which will be used as the integration platform of choice.

It’s a tough ask, and in the grand scheme of things it’s not surprising that these people are both expensive and difficult to find.

A pain point for many project managers is ‘Where do you start when you need to find someone with the right skills for the job, with experience in the appropriate industry, within the allowed budget and available when you need?’

Benefits can be truly realised for many businesses to de-risk and implement the move towards ‘delivery as a service’. Here are benefit we see from taking such as shift:

  1. Reduce IT expenditure / cost overheads and barriers associated with everything that comes with integration projects.
  2. Speed up delivery, and clear the path for far more efficient implementation teams.
  3. Improved project alignment and operation efficiency. 

The first step in the ‘as a service’ movement has been taken by many businesses, and has reached the technical support functions. It’s now time to consider the bigger picture and broaden the possibilities of what can be achieved by paving the way for integration delivery to be provided as a service as well.

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Topics: BPM/EA Technology, Intergration

Is Efficient, Cost-Effective Integration Possible?

Adam Mutton Adam Mutton on August 14, 2016

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An analysis on the next major paradigm shift.

The goal of most business is to grow revenue, whilst reducing costs and increasing profits - sounds simple enough.  

The problem is, we often have to invest a substantial amount of capital in the business only to get a return on that investment over a number of years.  It is this investment that is usually an inhibiter to a business adopting a best of breed approach resulting in sub-par solutions full of technical debt which is then difficult to maintain.  The business gets bound to key staff, infrastructure that becomes obsolete, software that requires constant upgrades and excessive ongoing ’business-as-usual’ costs.  

As modern businesses attempt to become more efficient through the use of technology, they sometimes hedge due to the risk/ROI ratio that includes a large ticket price and a moderate time to market.  

They essentially see the benefits like opening up their ‘digital channel’, or making their core systems more cohesive and the business more efficient.  However, they can’t justify the unguaranteed ROI over a multi-year return period. 

It’s a problem faced by Tier-n companies as they are constantly under pressure to reduce IT costs and until now their options have been limited to some form of outsourcing.  Anyone who has worked in the industry knows that it does not work and quality is the victim.  It’s a strategy mostly enforced by short term thinkers who need to hit short term KPI’s and who create a problem for the next person to fix.  It’s time for a paradigm shift in thinking how we can reduce cost and maintain quality and even improve it.  

Let’s look at this considering an analysis of 4 different models. 

We’ll assume that a company or business has decided it can achieve process improvement through systems integration, or they just need to reduce IT costs, and that includes the yearly integration bill.  It might seem odd to bundle these two opposing motivations into the same motivation for change – but in essence they are the same: Positive IT outcomes that help improve the business at a reasonable cost.

What options do these organizations have:

  • Enterprise Integration Software - Mature, fully featured established integration platforms which are the preferred option, however the higher license costs make these an expensive option
  • Opensource software - Whilst this option is appealing due to the lower license fee (opensource rarely means ‘free’), the business will most likely spend the majority of any license costs savings on building the appropriate framework and establishing a platform 
  • A Custom Solution - Many tier 2 or 3 organizations feel they can get away with developing a custom solution to suit their needs.  What often happens is the final solution is barely functional and lacks the inherent platform functionality often required to meet minimal requirements or regulatory requirements 
  • Managed Integration Delivery as a Service (MiDaaS) - The paradigm shift. A complete subscription based managed service.  This option gives you the full feature stack of the Enterprise Software at an affordable price, lower overheads and a quicker time to market.

Let’s take a look at where each of these options may work:

Enterprise

Traditional approach with large overheads, establishment costs, large license and support fees, and are generally tied to larger transformation projects.  This results in maintaining staff and capability over a longer period.

Opensource

The perception that opensource is freeware is a misconception.  These platforms do have a licensing component, and there is also the issue of resourcing with skilled people, and the software itself having the inherent frameworks of the Enterprise software.  This may result in cheaper licensing costs, however, it will most likely result in a more expensive development cost.  It also does not solve the issue of maintaining capability, staff and infrastructure overheads.

Custom Solutions

From the seeds of a custom solution, I give you technical debt and key resource reliability and constraint.  Custom solutions are good if you are tweaking your spreadsheet, or writing a small piece of code to make you irritating daily task easier to do, but in the realm of system integration, there is always a techie who thinks they can build their own integration platform. 

This is OK if you have 2 systems doing point to point and 1 or 2 integrations and you don’t want to expose those systems for consumption elsewhere.  All custom solutions very quickly outgrow their use as they soon discover that logging, message affinity, auditing etc., are pretty important things.  What seemed like a quick time to market at the time soon becomes a functionally limited highly customized piece of software that 1 person knows how to fix…

Managed Integration Delivery as a Service (MiDaaS)

  • Has the horsepower of the Enterprise software
  • Lower Total Cost of Ownership
  • Makes the organization technology agnostic
  • No technical debt will be carried by the business
  • Key resources/Capability maintenance/Staff overheads are no longer a problem
  • Subscription based pricing includes all infrastructure, design, build, test, maintenance, monitoring and alerting are all included
  • Reduces yearly cost of integration by a significant amount
  • Local account presence
  • Quality assured and consistency of service
  • Upgrades, maintenance, monitoring and alerting are all included 

Summary

In today’s world we are seeing a shift to the cloud and a form of managed services that see organizations infrastructure being managed by 3rd parties, but the actual work being done on the applications on that infrastructure is still managed in-house.  What I’m talking about is managing the complete Integration service from Design to BAU.  Sure all of the other approaches have their place for the moment because existing systems, teams, IT managers etc. are all in place and can’t see how to make the move to a fully managed service.  However, if we can make the move to the cloud, it shouldn’t take much to nudge us further along.

We are already seeing companies move to this model as they can see the immediate benefits and cost savings they can realize for their business.  This shift will continue at an increased pace once other companies see the benefits being realized by their competitors.

The paradigm shift is here.

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Topics: BPM/EA Technology, Intergration