By: Mark McGregor, Research Director, Bloor Research Posted: 28th November 2011 Copyright Bloor Research © 2011

There are many words now being written, especially in marketing circles, about the "gamification" of BPM and process improvement. However, there appears to be little consensus on what it might be and what it might mean.

The linkage of game theory with process technology has been occurring for some time. However the most successful company in the space historically did not make a lot of noise about it. Alan Trefeler of Pegasystems is a chess master and has been using the gaming principles of chess as the core of the company's software for many years. While TIBCO founder Vivek Ranadive believes that in applying the principles of how great game players succeed to business will provide greater competitive advantage.

As someone who has been using scenario and role play based training for some years it is interesting to see how the tide is turning. It used to be that people laughed or, worse still, resisted the idea that you were going to encourage their people to play games in order to learn. Now it seems that teaching and learning via games is highly fashionable.

Singularity, BizzDesign and 21apps all make use of and promote the idea of game play in order to extract requirements and motivate people for change in the process arena. In the case of the first two their focus is on ensuring that their customers deliver better applications faster. As we know, any vendor needs happy referenceable customers and ensuring that the systems built with their technology are more effective is important to Singularity and BizzDesign. Both of these companies use structured role/scenario play to speed up leaning and enable people to quickly discover problems for themselves.

My impression is that, while the structure is extremely effective as a learning and discovery tool, the challenge is that people may not always follow through with buying your technology afterwards.

In the case of 21apps it is more a case of using games as tools, so continuing to use traditional techniques like SWOT analysis or brainstorming, but using game ideas to make the sessions more effective.

Two recent books are driving much of the current interest, "Gamestorming" by Dave Gray, Sunni Brown and James Macanufo and "Innovation Games" by Luke Hohmann. Both books are packed with ideas and games to help you in all sorts of different situations. Luke Hohmann also has his own web site where you can play many of the games online.

The rationale for playing games is grounded in good learning theory. We learn and retain information faster when playing. Cast your mind back to when you were 4 or 5 years old and think of the games you used to play, either on your own or with your friends. It might be that you were like me at that age and loved maths! Well actually I loved the games the teacher played and found that they helped me learn maths. At that age I found maths easy and fun - all because of the games we played. In my case, wind the clock forward 8 years to a bigger school where there were lectures and stern teachers and, surprise, surprise, I quickly learned to hate maths! And my skills failed to live up to the teacher's ideas of what they could or should be - how I wished they understood learning and games theory then. Your specific experiences will be different, but I suspect if you think hard enough you will find similar instances in your own past.

As an organisation looking to gain or build consensus, capture requirements, generate ideas, overcome resistance or any one of a hundred other things, the use of games via a skilled facilitator will speed up your results, increase motivation and overcome challenges. If you are not already applying games as a part of your process workshops then you are definitely missing an opportunity.

It is not all upside though; much role and game play success is down to the interactions among people and the dynamics of the group and this is an area of worry when it comes to vendors and tools.

There are online games, such as IBM's Innov8 and others, that make use of interactive worlds like Second Life. Their biggest appeal will always be to those who might normally play computer games, especially in an online community. This, for me, brings a high risk, for these situations might provide realistic business and process scenarios for us to work on, but fail to provide a great deal of real world interaction among people, thus diminishing some of the potential return.

In summary, all businesses should be looking at the latest developments in games and the application of games to learning. In order to leverage the techniques you will need to access or train good facilitators, measure success by the outcomes and not by the bulleted "you will learn lists", and be prepared for you and your teams to discover things about themselves and their work that they may not have ever thought of.

Lastly, do not be seduced by technology. The use of games theory, as applied by people like Trefler and Ranadive, has sound roots. They are helping to create systems that work more like we, as people, do. Others who take games and simply computerise them are not leveraging the underlying theory benefits and may, in fact, also destroy some of the interaction benefits they purport to support.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 22nd November 2011 Copyright Bloor Research © 2011

Some of you may have read my recent blog posting on Progress OpenEdge version 11; the company's 4GL application development environment. I was very interested to know more as I am a firm believer in the need of ERP applications to embrace BPM as a means to assist in making the ERP solutions more agile and flexible to meet the current business requirements. Of course there is also a need to make these applications more mobile as well move to a service-based architecture so reduce costs. So I was interested to see what Progress were delivering to their business partners with this new release.

Understanding OpenEdge

Progress has positioned OpenEdge as "The complete development platform to rapidly build business process-enabled applications for secure, reliable deployment across any platform, any mobile device, and any Cloud." They have been very successful creating over 1500 Progress business partners who have built over 5000 applications in 150 countries with the platform. These ASPs and ISVs use Progress Software's products to build and deliver packaged software applications. These applications are currently under active development and generate more than $5 billion annually. Progress Software applications are used by more than 2 million people worldwide, second only to SAP. So we are dealing with a major ERP infrastructure.

For those of you not familiar with OpenEdge, you will want to understand what the components are in the product architecture, so I will provide just a short piece to whet your appetite. For those of you who already know the product please skip to next section.

OpenEdge platform was first announced by Progress in 2001. It is built on two core components: the Progress RDBMS and DataServers and the Progress AppServer. The DataServers provide developers with an alternative to Progress's own database, giving access through ODBC to other DBMS products such as Oracle. Microsoft SQL Server or IBM DB2/400. Figure 1 shows the major software components in the architecture.

Figure 1: OpenEdge V11 Architecture (Source: Process Software)

Other parts of the platform include:

• OpenEdge Studio automates much of the work in creating user interfaces and business components with visual tools included in the AppBuilder. The AppBuilder is a central workbench providing visual tools for defining objects, laying out interfaces, and linking data.
• WebSpeed Workshop is an integrated suite of development tools for building ITP (Internet Transaction Processing) applications that run on the WebSpeed Transaction Server component of the OpenEdge Application Server.
• Roundtable TSMS delivers integrated Software Configuration Management (SCM) to Progress OpenEdge development. Roundtable provides a complete solution that integrates task management, version control, impact analysis, smart compilation, release control, and schema management.
• OpenEdge Translation Manager and Visual Translator provides tools for preparing and delivering files, translating the application objects themselves, and integrating the applications back into the original source code to support multilingual application.

Strategy

What drives Progress Software's strategy and product decisions? Progress told me that they listen closely to their customers and partners, while looking into and researching the market and industry trends. Current trends are that businesses need to change rapidly to take advantage of emerging business models (like SaaS) to integrate applications and functionality, both within the four walls of the enterprise and within the extended enterprise of suppliers, partners, and customers.

In its SaaS technology delivery, Progress Software has identified the following seven key success factors:

• Multi-tenancy: the ease of going from 1 to N on-demand customers (tenants).
• Information security and compliance: ensuring that data and applications are accessed only by those who need to know.
• UI flexibility: being able to easily use the UI technologies that meet the needs of the customer.
  
  
  Figure 2: OpenEdge UI Strategy (Source: Progress Software)

• Personalization: ensuring that the application looks exactly as the tenant and end-user want.
• Integration: the ability to easily integrate with any other application by supporting all relevant standards
• Operational excellence: being always available with the ability to scale to any size.
• Productivity: a highly productive environment focused on a versatile platform and industry best practices.

Another key to Progress' strategy is their channel activity with partners and their focus on solution selling. The market in 2011 effected Progress's financial results for the 3rd quarter in September last year, when Richard D. Reidy, president and chief executive officer of Progress Software, said: "With our focus on solution selling, delays in closing larger deals have a material impact on our quarterly results. Total revenue grew in the Application Development Platforms (ADP) segment due to continued strong performance in our application partner and OEM channels. "

Role of Partners

The Progress Software Partner Program provides support to their partners, ensuring that they are fully trained and certified on Progress Software's solutions in order to meet the requirements of customers. The program provides materials to enable partners to market, sell, implement, and support Progress solutions. These materials are made available through the Progress partner portal, Web-based training, as well as custom instructor-led training. There is a history of working together on joint sales opportunities.

So Partners play an important role in Progress's revenue stream. The OpenEdge Platform provides partners with a versatile development environment to develop applications solutions both quickly and to quality.

Issues identified

The requirement from business organisations is for flexible and agile solutions that can be delivered quickly. Organisations are looking to reduce their total cost of ownership (TCO) by driving down the cost of deliver and deployment of applications with in addition a reduction in the cost of customization. However it is not just TCO that is being looked for but also a reduction in time-to-market (TTM) so as to be more responsive to changes in user and market needs; this requires faster application deployment. Progress stated at a recent partner conference that, "Where business applications are responsive to changing business conditions and customer interactions - the moment they occur there is an increase in revenue, profit is maximised and losses are minimised,"

Over time what has happened in application development is a process to simplify the writing to enable maintenance to be able to be performed more quickly. Firstly we saw the introduction of DBMS technology to "simplify "the way we retrieved and maintained data. The next move, which started in the 80's but really got going through the late 90's and 2000's was to remove the business process from the code through the use of BPMS technology. In conjunction with this has come the need to remove the UI code as the proliferation of different devices has expanded and so was born the concepts of "portals", which also introduced the first aspects of personalisation of applications to how business users actually worked. Another development has been to look at removing the business rules that carry the decisions that need to be automated through the use of BRMS technology (If the reader wants to know more about BPMS and BRMS please look at the Market Reviews produced by Bloor over the last years.) During the last 20 years we have also seen the acceptance of organisations basing their IT strategy around a service-oriented architecture (SOA)

So what developers of applications need now is a common toolset that will allow them to exploit all of these developments from a single entry point. The toolset also therefore has to exploit more standards - although most of them are based on XML!

Progress Software's Response

Progress has stated that, "Regardless of the size or industry, BPM is at the core of every responsive business and modern IT infrastructure." They see BPM as providing the following:

• Visibility - through the use of graphical modelling tools business processes can be captured in a way that all business users can "see" how the business operates;
• Agility - As the processes are modelled, not coded, changes to requirements can be made faster than with traditional applications;
• Improved Processes - Processes can be automatically monitored to identify areas for improvement
• Leverage Existing Investment - Avoiding "rip and replace" projects by modernizing existing business applications to take advantage of workflow and new BPM capabilities.

The strategy for OpenEdge was summarised by Matt Cicciari, Progress Software's Product Marketing Manager for OpenEdge, as based around 4 precepts:

1. Business Process Management (BPM) to provide a business user with the ability to assimilate the business process based on assumptions as to the frequency of the process execution and resources required to execute different steps of the process, and it will also automatically generate comprehensive documentation of the process.
2. Cloud deployment to provide a way of better servicing business' requirements by providing applications as a service that leverage elasticity thus reducing the TCO and TTM.
3. Simplifying development and deployment to cater for move towards a personal computing environment where business users are increasingly mobile and using devices of their choice to access business applications.
4. Patent -pending multi-tenancy built directly into the database to physically separate sensitive data and support growth for SaaS business models, especially in the Cloud.

Savvion acquisition

At the beginning of 2010, Progress acquired Savvion. I wrote an article on this (BPMS Market consolidation continues: Progress buys Savvion). Richard D. Reidy, president and chief executive officer, Progress Software said at the time: "We believe that achieving operational responsiveness has become a business imperative, enabling business to achieve the highest level of operational performance. Our acquisition of Savvion enhances our goal to provide unprecedented business visibility, responsiveness and business process improvement, coupled with the highest degree of data integrity and integration."

OpenEdge BPM

With the announcement of OpenEdge v11, Progress has started the process of merging seamlessly the Savvion BPMS platform with the OpenEdge Development platform. What does this mean? Well when v11 goes to general release at the end of this year, the OpenEdge and Savvion development environments will be merged to be one seamless toolset. Thus allowing an application developer to model and define the business process and link the process steps defined to different programs that he/she may have defined using Open Edge's Eclipse environment. Cicciari told me that in 2012, Progress plans to complete the merger of the 2 products by merging the run time environments

Multi-tenancy

OpenEdge v11 also introduces support for multi-tenancy, the real key to delivering a platform to support effective cloud computing. Progress has implemented support with physical separation occurring within database, rather than using virtual technology. Tenant authentication is required for data access. Additional tenant aware features include auditing and transparent data encryption, and support for groups. Progress provides powerful back-end administrative tools like a web-based DBA console to streamline tenant provisioning within the application. Additionally, ISVs can take advantage of new APIs that enable the application to provision new tenants "on-the-fly" to support dynamic businesses.

Arcade

Progress Software describes Arcade is a Cloud deployment platform. The Arcade portal environment provides access to an online Cloud community to assist partners and customers to test, demo and deploy SaaS and Cloud-enabled business applications. It also provides on-demand, Cloud-based access to Progress products, allowing a user to learn about the capabilities and benefits offered by these products. Arcade's focus is on public clouds, with Amazon being their first, but the architecture and design of Arcade was built with the purpose of allowing multiple Cloud vendors to be utilized. Mike Ormerod, Software Architect at Progress Software, in a recent blog[1] stated, "It's perfectly feasible that using Arcade you could have an Application Server running on one public cloud vendors infrastructure in one geographic region, and an associated Web Server running on a completely different cloud vendors infrastructure in a different part of the world, allowing the deployment of servers close to the user for maximum performance."

Moving to the new release

Progress have realised that Partners will want to move to this new version of the platform and make use of the new capabilities. To ensure success with the release, Progress have identified a certain number of key partners to work with initially to establish best practice that can be transferred to others later. This segmented approach is also based on the partners' customer base as some industry markets are more ready than others.

However it is not just about software and Progress have been clever in putting together an approach to development that partners can take advantage of, whether this is for enhancing existing solutions or building new ones. This involves the following steps:

• Define the process of the application, using the Progress Savvion BPA tool.
• Identify code segments in the existing application, which acts as external source (often external sources of data information). If those code segments are not Web services yet, consider converting them to Web services at the same time.
• Map code segments that implement interfaces to steps in the process. If those interfaces are not Web-based yet, then Progress suggests that they are re-implementing using Progress Savvion BPM Web Form Designer.
• Identify code segments that implement business logic associated with the steps in the process.
• Identify exception-handling and error-processing code segments.
• Consider combining code segments in the above three steps into services that implement steps in the process.
• Eliminate dead code. Often there will be some code that is not need and does not form part of any of the business process. Those segments of code are dead code. They are not necessary, and can be eliminated.

Conclusions

We are moving into a world in which process plays a more and more important place. To be able to work in today's business world where agility and flexibility and quickness of response are important, our business processes have to be event-driven, so as to allow the rules to be separated out for easy maintenance. But there is one more dimension to the way that we have to look at the process world now and these processes have to be people centric. What does this mean? The "Y" Generation of new workers are very computer literate, but not in the same way as those of us in the "X" generation. By this I mean the Y Generation have grown up texting, playing video games, using Facebook and Twitter everyday. They have grown using collaborative software and with a great deal of mobility and use of different devices to interact with. So to support people-centric event-driven processing world, we need a software infrastructure that allows us to separate our business rules and business processes out of the code of our applications and most importantly can run on any device without major configuration.

So how does the new version of Progress Software's OpenEdge development environment measure up to these requirements? Bloor's overall view is that the strategy ticks many of the boxes - for instance, process code and business rules separated out by using the Savvion platform; the use of an interface to separate the user interface from the application code. Progress Software has considered how their solution partners can use the new version to migrate their current solutions. Bloor would have like to see the use of Automated Business Process Discovery technology to have helped discover the process. However in a subsequent briefing on Savvion only, I learnt that the new release of Savvion doe in fact support ABPD using transaction monitoring technology to gather details about events that can then be used to create process diagrams. So Progress solution partners can not only enhance their existing applications using an add-on style, but can if they desire rebuild their applications completely on to the new platform using the process improvement technology on Savvion.

The bottom line is that Progress Software have made a major step toward providing a development platform fit for solutions to be delivered to business that supports people-centric, event-driven processes.

[1] http://blogs.progress.com/openedge/2011/04/progress-arcade-whats-that-can-i-play.html

By: Mark McGregor, Research Director, Bloor Research Posted: 26th October 2011 Copyright Bloor Research © 2011

Earlier this year we saw the acquisition of Metastorm by OpenText, who then went on to acquire Global 360 as well. For many observers, whilst the opening moves being from OpenText may have been a surprise, the fact that vendors were looking at cross acquisitions certainly was not.

In some ways, BPM vendors may well have been positioning themselves for takeover when they launched into Case Management, for in doing so they will have raised their profile with ECM vendors and potentially made it clearer to them why they needed to beef up process within their portfolio.

The linkage between the two markets makes a lot of sense, and Case Management just proves it, especially in the financial and insurance sectors. These sectors have been highly document-focused with heavy regulation and, of course, the routing of and acting on of documents has been a key part of their many process initiatives over the years. It is likely that, in some part, the purchases will have been driven by the view that BPMS sales were beginning to hurt traditional ECM sales, at least in some vertical markets.

What may be most surprising is that, until this week, we had not seen any similar moves by other players in the ECM sector. EMC, Adobe and Xerox might have been expected to follow the lead of OpenText, but it seems for now they are either happy to let others lead, or are still trying to find a position that works for them.

So, this week, the unexpected announcement was that Lexmark was the first to follow OpenText, by acquiring Dutch BPMS vendor Pallas Athena. It is taking Pallas Athena into its standalone business unit, Perceptive Software.

With a reported price paid of $50m, this also marks one of the smaller number of BPMS acquisitions where the purchase price was publicly stated. Industry watchers will be sure to be looking at the Pallas Athena deal along with the Global 360 one in order to get stronger ideas on the value of remaining BPMS players.

Of course, while OpenText  may be credited with being the first in the current round, others would suggest that IBM actually started the trend with their acquisition of Filenet some years ago.

This latest acquisition is one of many over the past couple of years in the BPM space causing some to question the long-term survivability of BPM vendors. I think it is true that now people are starting to see what value others are putting on companies, further acquisitions are likely, but probably no more than one would expect in a relatively fragmented market.

What will be more interesting is to see which type of convergence will dominate, the taking of BPM into ECM, or the folding of BPM into applications by ERPM or CRM type vendors, or integration markets. The initial rounds of acquisition were certainly driven by Integration - witness the TIBCO acquisitions and the WebMethods acquisitions at the start.

In the short term don't be surprised to see another two or three BPM vendors joining up with or being acquired by others in the ECM sector. It does not make sense for those without a strong BPM story to remain on the sidelines much longer.

Whichever way you look at it, process is being increasingly seen as a key driver and the need to provide customers with easy ways to gain insight into, improve and create agile processes is a must.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 25th October 2011 Copyright Bloor Research © 2011

At the end of September this year (20th September), SAP announced their intention to acquire business-to-business integration provider Crossgate. I was intrigued by this release and wanted to know more.

Who are Crossgate?
When you look them up on the Internet what you find is that they are a German company with their headquarters in Munich. The company was founded in 2001 as Indatex and renamed in 2006 to Crossgate. It is a privately owned company with over 200 employees.

What do they sell?
They provide electronic data interchange (EDI) and related services (XML industry standards, outbound e-Invoicing, inbound OCR and fax recognition, SMS, e-mail, WebEDI, Spoke Units, and CAD/CAM) as an on-demand service. They term this a "Business-Ready Network".  The company specialises in linking to SAP and they have more than 40,000 companies who already use their B2B 360° Services for SAP Solutions to exchange documents with customers, suppliers, logistics partners, governments, and banks.

What do these services provide their customers with?
It is pretty complete package covering managed services such as 24/7 professional support and consulting operations. Moreover, the available services also include transaction management, conversion and real-time monitoring, business integration analysis during transactions, long-term archiving, straightforward data transfer, JIT messaging, qualified electronic signatures, and validation services.

Figure 1: Crossgate Business Ready Nertwork (Source: Crossgate)

What I also found out was that SAP had acquired an interest in the company in October 2008. At this time, Crossgate also became a global provider in SAP's business process outsourcing program, following the integration of NetWeaver Process Integration into Crossgate's platform.

In February 2010, Crossgate announced that SAP was to resell Crossgate's B2B functionality as an extension of SAP's application functionality under the name SAP Information Interchange. SAP was to sell and maintain this offering. Most recently, SAP agreed to resell and market the SAP E-Invoicing for Compliance application by Crossgate, which allows companies to send and receive digitally signed, compliant PDFs or EDI invoices electronically. So as you can see Crossgate and SAP have had a recent history in close co-operation.

Therefore, when I came to have a briefing with Peter Kuerpick, SAP's EVP & Corporate Officer, I was interested to know how SAP would integrate Crossgate into the SAP portfolio. Kuerpick explained that the acquisition was part of SAP's Cloud plan. Today Crossgate supports EDI and other similar protocols: what SAP see is the product becoming the backbone of business network. Kuerpick explained that the initial integration would be to provide collaborative design support with full integration come later. As with any acquisition of software, this full integration will probably take somewhere between 12 to 18 months to complete. I asked about the target for this solution as many large enterprises already have a B2B solution in place whereas the larger number of SMEs may not have but do have a need for the capabilities offered by Crossgate. Kuerpick agreed and then showed that there was already support for the SAP products aimed at this market - SAP Business All-in-One, SAP Business ByDesign, and SAP Business One.

This acquisition will fill a gap in SAP's offering to businesses and, by the fact that it is a service, it will have the appeal for SMEs of not being a capital cost but an operational one. Crossgate has already a well-established customer platform and, from their viewpoint, this will enable them to develop business outside of Germany. It would seem to be a real win-win solution for SAP, Crossgate and, not least, their customers and prospects.

By: Mark McGregor, Research Director, Bloor Research Posted: 25th October 2011 Copyright Bloor Research © 2011

For many years it seemed as though the domain of modelling in an SAP environment was the preserve of only one tool. IDS-Scheer, with their ARIS tool, was the undisputed dominant player. Whether this was because of both companies being German, whether it was to do with the cross shareholding, or simply great sales and marketing by IDS-Scheer, other vendors fought shy of fighting the ARIS dominance. But now it seems that is changing.

Ever since the acquisition of IDS-Scheer by Software AG, there has been a sense of opportunity among other vendors. The last 18 months have seen several vendors talk about that opportunity and consider entering the fray. I know from my own experience that, in some cases, senior management within vendors has been split on whether to enter the market or not.

Historically, vendors such as MEGA International and Nimbus Partners have dabbled, but not really appeared to make great headway. Casewise, too, has in the past attempted, without great success, to address the SAP market, but did announce last year that they were planning to re-enter the fray with their Casewise4ERP offering.

Today though, things have changed. IBM, iGrafx and QPR are addressing the needs of the SAP community head on. QPR originally partnered with Nobultec Ltd to provide the interfacing between the company's modelling offering and SAP, and then they purchased the company.

Meanwhile, IBM turned to UK-based Silwood Associates to provide the required interfaces for their System Architect product. iGrafx, meanwhile, chose to partner with the German vendor Transware.

While the opportunity to tray and service more than 100,000 organizations using SAP in more than 120 countries is obviously a factor, vendors also have their eye on other prizes - with Oracle and other Software AG competitors as targets, as well as SAP themselves. Most vendors believe that Oracle and the others will increasingly be looking at alternative business modelling solutions for their own practices and systems, so the prize of an illusive major OEM contract is also driving them forward.

The acquisition of Nobultec by QPR was definitely a smart move and surely increases the market value of both Transware and Silwood. Some years ago another company aimed to act as a bridge between tools. That vendor, Software One, was quickly snapped up by Oracle and thus others were prevented from easy interfacing between tools. It remains to be seen whether history might yet repeat itself in this space.

One thing we can be sure of is that SAP customers have never had such choice before and, for them at least, the opportunities to reduce the cost of the modelling aspects of implementation will be pleasing.

At the time of writing, no particular SAP-related deals had been announced although IBM is understood to have closed some SAP/System Architect deals within 7 days of their announcement! IBM, iGrafx and QPR all have products being demonstrated and shown; as yet I am not aware of Casewise having a commercial product, but rumour has it the company may well have recently closed a $1m deal as a result of their Casewise4ERP offering.

It remains to be seen which, if any, of these vendors may take over the mantle of "dominance" in the SAP space, but having cost effective, easy to use options and, most of all, choice, has to be a good thing.

SAP customers should, for the most part though, remain cautious, as many of these offerings come as a result of partner technology, which may or may not be available in the market on a longer term basis. As has been stated, even IBM are offering via partner technology.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 15th August 2011 Copyright Bloor Research © 2011

During the last month, I have had two briefings from OpenConnect around their Comprehend product which overlaps not only the Automated Business Process Discovery (ABPD) but also business intelligence and also workforce analysis and optimisation. The company describes Comprehend as a process intelligence and workforce analytics solution.

Who are OpenConnect? They have their headquarters on the LBJ Freeway in Dallas, Texas. They were founded in the 1980s and initially concentrated their software development on products to make using the mainframe easier. The company has an impressive technology development record with 9 patents granted and multiple patents pending. They sponsor a research chair at the Katholieke Universiteit, Leuven in Belgium on Business Process Discovery & Intelligence.

Figure 1: OpenConnect product development timeline (Source: OpenConnect)

With Comprehend, OpenConnect have concentrated on the financial services and healthcare insurance sectors where 6 of top 20 US healthcare players are customers as well as a leading global property and casualty provider. As an example, major healthcare insurance players include WellPoint, Blue Cross Blue Shield of Florida, Blue Cross Blue Shield of Minnesota and multiple others.

From an alliance perspective, OpenConnect is a supporting member organization to America's Health Insurance Plans (AHIP), the national trade association representing the health insurance industry and with NASCO, the integrated membership and claims processing system for some of the largest Blue Cross and Blue Shield Plans.

OpenConnect has 3 primary technology partners:

• Mark Logic Corporation with its XML server, to store, manage, search and dynamically deliver content;
• IBM: OpenConnect are members of PartnerWorld for Software and PartnerWorld for Developers programs; and
• RSA Security: OpenConnect has integrated RSA Security's encryption technology into their products. OpenConnect has received RSA SecurID and RSA ClearTrust Certifications which validate WebConnect SSO's interoperability with RSA Security's array of identity and access management solutions.

So how do OpenConnect go to market? In the US, the company has its own sales personnel. OpenConnect's key markets in Europe, which include Germany, France, the UK, Austria and Switzerland, also have direct sales. Its EMEA headquarters resides in Munich, Germany.

So what does Comprehend do? The product was first released in 2005 at the prestigious DEMO Conference and was specifically aimed at discovering processes in mainframe based systems. Although the mainframe is still a major part of their story, OpenConnect are able to cover other types of systems as well. The product can be broken down into a number of components as shown in Figure 2.

The first component - The Collectors - captures information about an organisation's business processes using passive techniques. They are system-specific solutions to capture keystroke/click level activity from web, desktop or mainframe based systems. Currently the following collectors are available out-of-the-box and the others shown in Figure 2 are in development:

• Web: TCP/IP intercept allows passive capture of full web interaction for internal users and external customers.
• IVR: Log files of customer interactions are used to provide details of menu interactions.
• Desktop: A small (less than 1.5mb) applet is downloaded on the desktop to capture keystrokes and events based on a central configuration.
• Mainframe: TCP/IP intercept allows passive capture of users interaction with 'green-screens'.
• Files / Databases: Log files and databases can be interrogated to discover root cause of process and workforce operational inefficiencies.

Figure 2: Comprehend Architectural overview (Source: OpenConnect)

Comprehend contains 4 intelligence engines which form the knowledgebase to carry out the analysis of the information gathered and produce the process maps.

• User Activity Replay: the information from the Collectors can be fed into User Activity Replay to replay exactly what a user saw and did across a single or multiple systems.
• Analytics Cluster: the information from the Collectors forms the basis of user workflow analysis in Analytics Cluster. While multiple collectors can feed the engine, it provides a system-specific (e.g. web or IVR or mainframe...) view of how users are moving from screen to screen. Activities are defined in the engine that converts keystrokes/clicks into events. By defining the set of pages/screens that makes up an activity, every time a user executes any subset of clicks/transactions within an activity, an event is generated. All of the data extracted from the pages/screens that were part of the activity become attributes of the event.
• Process Intelligence Cluster: the events derived in the Analytics Cluster provide the basis for the Process Intelligence Cluster to discover, analyze and provide actionable intelligence for process improvement. It combines events from multiple sources to produce a single process view. The engine provides:
  • Workforce Intelligence-where are users spending time, what is the variations between workers, or job types.
  • Process Intelligence-what is the actual lifecycle of a claim, loan, or other 'job'. What's driving re-work or process delays.
  • Customer Intelligence-where are customers struggling using an organisation's applications, abandoning a self-service channel for more expensive communication.
• Dashboards and Reporting: The analysis in the Process Intelligence Cluster can be simplified and exposed as conventional table oriented data. This allows standard reporting tools to utilize the data and insights from the engine analysis into everyday operational reports and dashboards

OpenConnect have taken their experience of working with their customers using Comprehend to deliver specific services and preconfigured versions of Comprehend to the market. These include:

• Understanding the claims process - this is based on the auto-adjudication % and also are able to show the lifecycle of a claim.
• Workforce management

OpenConnect Comprehend has an impressive set of capabilities that shows the company's pedigree and knowledge of their target market. The diagrams and reports are very comprehensive and easy to understand.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 17th February 2011 Copyright Bloor Research © 2011

I can remember the many hours of heartache trying to work out what actually happened when I was trying to document a business process for a customer. Invariably, Joe tells you one thing, Sarah tells you something completely different and “Old Bob” tells you that for “X” we do it that way. Trying to untangle these conflicting issues to understand the business rules and the process paths is hard work but vital.

So it was with a lot of enthusiasm (as well as scepticism) that I agreed to be briefed by Teemu Lehto, QPR Software’s Vice President of Business Development about their new product ProcessAnalyzer v2, described as an Automated Business Process Discovery (ABPD) tool.

So what is Automated Business Process Discovery? ABPD is an emerging field that discovers the business processes based on examining the electronic footprints the users leave in the IT assets supporting the process. This allows the business process to be automatically discovered and documented in near real time. Approaching the business process “bottoms-up” from the detailed facts of instances of the process provides a detailed depiction of the business process, complete with all the nuances of the process, complete with detailed statistical information on how often different variations of the process are executed, how long it takes, what data conditions give rise to process variations, and what variations there are between different users or groups.

Why should you be interested? Well, Jim Sinur, Gartner Research VP, listed the topic as number 2 in their The Top Ten BPM Technologies in March 2010. Gartner have seen ABPD as a means to overcoming the following issues in the way we currently model processes. It is a costly and time-consuming process that is vulnerable to human interpretation, where we come across inadequate business knowledge and a lack of objective validation techniques. Pretty hard on those of us who have made a living out of working through this morass to get to the heart of the matter—the actual process. To give Gartner their due they do recognise that ABPD will be an aid to making the process quicker and less costly and I would certainly agree with this. Forrester have also introduced ABPD as a new evaluation criterion in their Forrester Wave: Business Process Management Suites, Q3 2010. So the two senior industry analyst houses see this as an important area. From Bloor’s viewpoint we also see that ABPD is an important technique to aid in the discovery of processes which are already in operation.

So what about the new entrant, QPR Software’s ProcessAnalyzer v2? Lehto explained that QPR had started work on the product back in 2009 and, during last year (2010), they put a first release out to some of their customers to test the waters. These initial tests proved that the functionality was right, so QPR then redeveloped to make it easier to use. ProcessAnalyzer can extract the necessary information it requires from a number of different data sources including SQL databases, ODBC, web services (XML) and OLAP. The first striking thing about ProcessAnalyser is the user interface—Microsoft Excel—thereby making it very familiar and easy to use for a large majority of users. Now we all know that currently Excel has a limit of 1million rows, so I asked Lehto what happened if you were dealing with more than 1million rows of data. QPR then used SQL Server to hold the data.

Figure 1: QPR Software ProcessAnalyzer capability summary (Source: QPR Software)

In the demonstration I was shown, an Excel spreadsheet with patient number, process step, organisation unit, start time and end time was used to generate a process flow diagram with swim lanes based on the organisation unit data and each process step contained the number of instances as well as the total and average duration of the step. When moving to the flow view, incoming and outgoing processes are shown with green and red arrows respectively. The flow arrow that is most used is thickened and on each flow the volume of the flow and its duration is shown. The process visualization capability allows the user to drill down to individual cases. The chart shows the average duration of each activity within the swim lane (organisation unit for the demonstration). The resource load analysis report shows the resources used on a timeline. Simultaneous cases are shown on top of each other. The colours classify the cases based on their duration. The case comparison report is a graph describing the total duration of cases. As in the previous graph, the width of a box describes the average duration of the activity and the colours classify the cases based on their duration.

Lehto outlined what QPR Software saw as an example project. The first step would be to analyse the project specification and then set the objectives and define the scope. The next step would involve the identification of relevant IT systems and specifying analysis data. The data then has to be gathered before the analysis is carried out. The various outputs from the tool are then presented and discussed. The project is completed by fine tuning the analysis based on feedback.

QPR ProcessAnalyzer Desktop version is priced very attractively at €780/month/user and can be purchased directly from the QPR website. A person familiar with log files and Microsoft Excel learns the usage with the provided tutorial and can make the analysis himself. There is also a  Starter Pack, which includes 1 month usage for 1 person plus 2 days of training and consulting service.

Who else offers ABPD solutions? Here are 4 vendors and their products that I have identified:

• With the acquisition of ARIS, Software AG offer the ARIS Process Performance Manager. ARIS has had a very close relationship with SAP and is used by the latter in documenting the processes within the R/3 package. This provides similar capabilities to what I have described for QPR.
• Fujitsu, with their latest release of Interstage BPM V11, have incorporated an automated discovery engine, originally developed by their services division for client projects. This tracks all the ad hoc subtasks, and can make suggestions on improving the process based on how the process was actually executed including the user-created subtasks, rather than how it was originally designed. It uses Flash to view how many times each path was traversed in the process. The product uses system logs as input.
• StereoLOGIC, based in Toronto, Canada, offer StereoLOGIC Discovery Analyst. It is niche company only offering this tool.. The discovered business processes are published in standard BPMN and XML formats and can be exported into Microsoft Visio and IBM WebSphere Business Modeler.
• Pallas Athena of Apeldoorn, The Netherlands, offer ReflectOne, which uses event logs from applications to extract the information to produce process models.

ABPD is a very useful component to establish exactly what actually happens in a business process so that bottlenecks and unusual exceptions can be identified and improved. By automating the steps, time and effort, as well as human error, are reduced. If you add the ability to simulate and pass through to a BPMS engine to control in the future, we are talking about serious time saving.

Organizations have been looking for this for a long time; QPR has ventured into the market in a much bigger way than anyone else in terms of what you can do with QPR ProcessAnalyzer and how easy to use the product is.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 10th February 2011 Copyright Bloor Research © 2011

As the realisation comes to the software market that the new generation of workers need user interfaces that fit with the lifestyle of Facebook, Twitter and mobile phones with apps, we are starting to see how various software companies are meeting these changes. For the BPMS market, Appian have always been one of the companies leading the way and with the release of Appian 6.5, which includes a new interface called Appian Tempo, they have produced a release that is geared towards the end user of BPMS-driven solutions in terms of a mobile and social interface with cloud capabilities.

Malcolm Ross, Appian’s Director of Product Management, told me “The release delivers a revolutionary way to extend process visibility and participation through native mobile device access, real-time collaboration, filtered and personalised views of key business events, integration to external systems, and the ability to take direct action in a familiar and intuitive social media interface.” So what does the new Appian interface deliver?

Mobility

Appian Tempo provides native client applications for the Apple iPad, iPod Touch and iPhone as well as RIM BlackBerry devices. Ross explained that mobile BPM allows employees to stay connected, allowing them to monitor, collaborate and take action on important business decisions regardless of where they are. It also extends BPM participation beyond pre-defined process participants to include all levels of the organisation. The iPhone and iPad applications are available for immediate download from the Apple App Store. The BlackBerry application is available now from the Appian Forum community site, and will be available shortly on the BlackBerry App World site. A native application for Google Android devices will be available shortly.

Figure 1: Appian Tempo user interface on BlackBerry, iPad and iPhone. (Source: Appian)

Social

There always seems to be a contradiction about incorporating social media into a business world. Social technologies are powerful communication and collaboration platforms, but they must be harnessed in a business context to have business value. Ross explained, “Appian utilises familiar social tools and interfaces to drive business collaboration across the enterprise through personalised, filtered views that allow easy collaboration with the ability to take action when needed.” Users can filter views by relevant application or process areas and subscribe to customised feeds to monitor the key events and information that is meaningful to them. As well, users can comment, pose questions and collaborate on business events through real-time message posts and ad hoc updates to targeted groups within and outside of pre-planned business processes. The last user capability is to “Take Action”; here a user can generate actions and complete tasks from inside the event feed or from a mobile device, using optimised web and mobile forms to capture data and route tasks.

Customer-Driven

Samir Gulati, Appian’s Vice President of Marketing, described how Appian 6.5, and in particular Appian Tempo, had been driven by their customers’ business needs. One example is Archstone, a leading apartment management company, headquartered in the USA. Archstone have a highly mobile and dispersed workforce which is supported by a system built on Appian. David Carpenter, Director of BPM, Archstone, stated that “Appian Tempo delivers a new level of value to our customer service associates through instant mobile access to our key enterprise processes and forms.”

Comment

I was very impressed with the demonstration of Appian 6.5 and the Appian Tempo interface. From an end user viewpoint it opens up the ability to make real-time decisions where and when they are needed by using collaborative technology. The product is definitely easy-to-use and intuitive. While all events and collaborations can be secured at a granular level, organisations that make use of the new Appian release will need to think about the security implications of the information that can be shared.

In addition to on-premise deployment, Appian has emerged as the BPM-in-the-cloud market leader. When you add the capabilities of Appian Tempo to those already in the Appian BPMS and Appian Anywhere, as well as Appian’s specific knowledge about industries such as government and financial services, you have a very compelling proposition.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 23rd November 2010 Copyright Interarbor Solutions © 2010

Three megatrends are shaping the next generation of successful businesses and governments. We're talking about pervasive mobile applications, highly responsive cloud-computing models, and knowledge-adept social collaboration.

Indeed, by the year 2020, The Economist newspaper predicts there will be two trillion devices connected to the Internet. And taking a look at where we are right now, McKinsey Quarterly reported in August that in 2010 some four billion people have cell phones, and 450 million have access to a full web experience.

Moreover, Jupiter Research reports that by 2014 there will be 130 million enterprise users involved with mobile cloud activities. Not only is access pervasive, but the amount of information available is also exploding. The Economist again reports that in 2005 mankind created 150 exabytes of digital data … and in 2010 we will create fully eight times more data.

These changes are at a pace they’ve never seen before as they address them and try to drive these into their business or government environments.

As these trends literally rearrange business ecosystems, a gap will surely emerge between the companies that master change -- and exploit enabling technologies -- and those that fall ever further behind.

For those that do step up to the challenge -- expect a relentless emphasis on rapidly recurring innovation to meet dynamic customer and citizen demands.

Our latest BriefingsDirect podcast therefore focuses on how these trends -- and rapidly evolving customer, citizen, and user expectations -- are newly impacting the enterprise. We also examine how technology advancements are making it possible to drive innovation to meet these new demands for instant gratification.

Please join HP executive Dave Shirk, Senior Vice President of Worldwide Marketing at HP Enterprise Business, as we explore how HP is working to make headway, so that the next few years bring about a generational opportunity -- and not a downward complexity spiral. The discussion is moderated by BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Shirk: We're seeing a lot of shift going on in the marketplace right now. When we look at where consumers are driving business or where citizens are driving government, it's fundamentally changing the way they operate. We've seen three core things come out.

The business models are all starting to change the way in which people approach markets across the globe. That's having to really rethink the ways in which they've approached them versus traditional methods.

The second thing we see is this whole shift in mobile computing meeting cloud computing and the enterprise trying to figure out exactly how to take best advantage of that to create this competitive advantage. Then, the overall demographic piece weighs into that.

We've seen the rise of the millennials, as they're being referred to. All of these things are forcing business and government to stop and say, "You know what, if we're going to grow or we're going to create a service differentiation, we're really going to need to do things differently and we're going to have to do it way faster than we've ever done it before."

According to the Society for Engineers, you now have over 800,000 graduates in China, over 300,000 graduates in India, 100,000 some in Japan, etc. It's over the last 10 to 12 years that each of those graduation rates has occurred. They are part of the workforce now.

When they went through that process, they were always connected and they always were involved in a social network-based environment. They have a level of their lifestyle that is all tied to this always-connected environment. When you think about the ubiquitous computing that that has brought to them, as they enter the workforce, they are looking at things a lot differently than ever before.

They bring new ideas. They bring new ways to that. They're looking for businesses that will support that kind of methodology and structure. ... So, when we think about that Gen X group that's out there, we see them driving an enormous part of this change.

The last statistic I saw was that they are now over 50 percent of the workforce. The analogy that's always used is that, to them, being connected and always involved in some type of networking-based collaboration or information sharing of some sort is about the same as it is for you and me to pick up our remote controls and turn on our television sets. That's already having a very profound effect on how business and government are changing and the expectations that are out there in the marketplace.

It's this [demand for] immediate or instant gratification: "If I can't get what I want in the following way, I’ll find the business or government environment where I can." While the government piece maybe a bit harder to change, the business piece isn't, and so the competitive pressure to serve this audience, both as the consumer and also as employees, is a big part of that shift.

We see technology as the cornerstone to being able to solve some of these trends and some of these challenges.

We call that the "Now Problem." They want this, they want it done now, and they want it to work a certain way. We see technology as the cornerstone to being able to solve some of these trends and some of these challenges.

These changes are at a pace they’ve never seen before as they address them and try to drive these into their business or government environments.

This is probably best represented in the words of Professor Gary Hamel, who is the foremost business visionary person out there in the marketplace. In his book, Future of Management, he described it as "whiplash change."

That's very much the case when I speak with our clients both on the business side and the government side. That's exactly what they're sitting there and thinking and working through right now.

Role of technology

We look at the technology piece of [the change] and say that you really can't [react] any other way -- the pace of it, the speed of it, and some of the complexity associated with it. For a long time, business has tried to use labor as an arbitrage to try to work their way through this and just throw bodies at it. That's quickly dissipating. The speed and the connectedness that we see, and the confidence level that all of these types of services require make it no longer possible to go through that.

What we see is IT completely embedded in the business. Over the next couple of years, that's going to continue to be the trend and the strategy that will play out in the way in which business and government work this. Ultimately, that's going to be the differentiator that drives an ability not only to serve these constituencies but to out-serve them, and that's going to be the name of the game.

[The solution] starts with a desire to change and to drive innovation in a different way. We sit and we think about the fundamental change in this. We talked for years that the business was focused on business processes and business process reengineering. While that’s still very important, it isn't going to go away any time soon.

It's becoming obvious that the bigger driver and the more significant trend is the information process, understanding the segments of business or government that need to be addressed. What their needs are, what they want, what they want to talk about, the ways in which they want to interact is all part of this change that’s taking place.

Closing the gap

So, as we start to pull back and step back from this, we look at that and we look at this vision that we have for the Instant-On Enterprise and how we’re enabling end-users to become a part of that, how we’re enabling businesses and governments to provide that type of capability. It really is about closing the gap between what IT can provide and what the business needs to be able to serve each of those audiences.

What we’ve launched with this vision is to put the foundations in place to make that possible and take a journey with our clients both from the business side and government side and help them move down that particular path, find ways to navigate these challenges and these trends, and to out-serve and to over-serve all the audiences that they need to meet the needs of.

[This change] is inevitable. Different businesses and governments will have, at different times, one of these four elements be more important or more significant to them at different points. All of them share the innovation requirement. We see that in all things.

Our view is that the innovation has to take place throughout that information process. It doesn’t matter whether it happens back at the data center or at every touch point. Innovation has to take place throughout for the business to meet the needs of those segments I’ve referred to earlier -- how it services it, how it conducts itself, and ultimately how it meets our needs or exceeds the needs of the audiences.

Agility really is about instant expectations, and can we turn things on and off, instead of just setting them up for a rainy day and hoping that they will be used.

Agility, optimization, and risk all vary in and out with innovation in terms of their need and their level of importance.

Agility really is about instant expectations, and can we turn things on and off, instead of just setting them up for a rainy day and hoping that they will be used. A big part of technology’s trouble in the past was that we created all of these things and we never had a plan for ending their lifecycle or turning them down slightly, so that we could turn up other activities or other possibilities in an instant-on environment and an instant-on enterprise. A core part of the vision that we see is being able to drive that agility to meet those changing business needs.

When HP looks at the Instant-On Enterprise, the enablement of that is really a journey, and we’ve got to figure out what pieces make the most sense. There are some things that are much easier to focus on first and then, over time, to gain more and more of an Instant-On nature.

Critical success factors

Flexibility, security, speed, automation, and insight, those absolutely are attributes that we look for. We see them as the critical success factors in the way in which every part of the environment that IT leverages, drives, and embeds in the business has to come forward.

And yet, everybody is stuck in this mode of an enormous legacy that they have to deal with, and that gets in the way of being able to provide some of these new capabilities.

We’ve spent a lot of time and gotten a lot of expertise over the years trying to figure out the best ways to address these albatrosses that are keeping IT from being able to deal with the needs of the business. In the Instant-On Enterprise journey, that's a big part of the set of steps that we have to work through and work with our clients to make sure that they understand where to prioritize.

In the first few months that I have been here, one of the things that I've learned is that HP, as a company, has this incredible breath and depth of portfolio.

Our view is that we work with our clients and figure out ways that they can, as we say, shift that equation. How do you shift from 70 percent of that equation being focused on operational management, and 30 percent, if you are lucky, being spent on new and innovation-based capabilities to help or assist the business and its growth versus shifting it the other way? How do you get to 30 percent operational mode, and move forward with 70 percent focused on the business?

Changing business models

When I spend time with clients and listen to them, a big part of what they're asking for is, "We’ve got these pressures. We're seeing the business models change and we're experimenting with some things. We're seeing the mobile and the cloud computing pieces coming at us like a freight train. At the same time, we're seeing the demographic shift both on the end-user consumer side and on our employee side. We need strategic partners to help us with this. How do we navigate this? What is the way in which we should do that? HP, do you have a point of view?"

We're in a unique position, because we're the only company in the marketplace that has a full suite of consumer products, and yet we stretch all the way back through to the data center. All the capability, all the offerings, that are in between, all the services that are necessary to address each of those pieces, are contained inside the portfolio capability that HP has of hardware, software, and services.

We looked at this and said, "How do we take the best combination of that breadth of portfolio and bring those together in a set of solutions to best address what we are hearing over-and-over from some of the research that we’ve done and listening that we’ve done with our clients?"

They need to figure out how to modernize their applications. We want to make sure that we are there and we’ve got a set of solutions for that. They’ve got huge data-center issues in terms of how they're going to transform their data centers and deal with more virtualization-based techniques and capabilities and bring networking and storage and compute power together in some fashion.

They’ve got this issue of enterprise security. They need to figure out how to secure the enterprise. I don’t mean desktops, but all points, all touch points of the enterprise -- how they build applications, how this information is accessed inside and outside of the organization, and then fundamentally optimizing that information, the ways in which you store it, the way in which you deliver it, the way in which you print it for that matter, all those pieces.

Hybrid delivery for us is our answer to the multiple ways in which a customer or client has to go through the process of building or delivering on these various technology services to their enterprise or their government.

Then, they need to underpin that by the best way to figure out how to deliver it. Do we do it for them? Do they build it themselves with our architecture, and our capability set, and our consulting expertise? What combination of ways makes the most sense to set that up?

... We help our clients work their way through that with a series of workshops that we do to get in and investigate. We ask a series of questions, do a series of exploratory-based activities that help prioritize where we think the quickest return on investment is, because all these require some level of return to feed the next one and then the next one.

Hybrid delivery for us is our answer to the multiple ways in which a customer or client has to go through the process of building or delivering on these various technology services to their enterprise or their government.

There’s an enormous amount of talk about cloud in the marketplace today. HP has been at the forefront of that, but we have a little different position. We think it’s unique and we think we're the only ones out there that are really positioned to do this, which is the concept of hybrid IT, where you’ve got a mix. You’ve got a mix of traditional on-premises-based capabilities, but then you figure out what private cloud or public cloud-based capabilities best serve your business on a global basis.

HP comes in and, unlike other companies that try to force you into a one-size-fits-all structure, we sit down with the client. Our unique IP in this area is that we have an incredible depth of intellectual capital in this particular area, which is helping the clients figure out the best balance or mix of the delivery methods.

We can help them build it. They can host it or we can host it for them. We can provide those services from our public cloud-based capabilities or from our private cloud based capabilities. We really don’t care, if that blend changes over time. That’s the beauty to the journey to this Instant-On Enterprise.

Starting small

Our data says that most customers still start with a small private cloud implementation to really understand the value of the cloud and demystify it. We’ve said that there is going to be something after cloud. We don’t know what that level or that style of computing is going to be, but our architecture is built such that we’ll be ready for that. For our clients, we’ll help navigate them through each of these pieces, and that’s the important thing for us.

We have our new HP Hybrid Delivery Strategy Service, which is a place for a client to start, get a basic orientation, sit down and understand kind of where we think they might consider beginning that journey. So that, along with a number of other capabilities that we have to help them through these various workshops, I think is really the best place for them to start.

There are a whole series of workshops globally that our teams are set up to do, everything from a small couple-of-hour based interaction to a full suite of in-depth analysis and consulting engagements to work with a client. ... We ask a series of questions, do a series of exploratory-based activities that help prioritize where we think the quickest return on investment is, because all these require some level of return to feed the next one and then the next one.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Learn more. Sponsor: HP.

You may also be interested in:

• Shoemaker on how HP CSA Aids Total Visibility in Services Management Lifecycle for Cloud Computing
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• HP eyes automated apps deployment, 'standardized' private cloud creation with integrated CloudStart package
• HP adds new consulting services to smooth the enterprise path to cloud adoption

By: Louella Fernandes, Principal Analyst, Quocirca Posted: 4th October 2010 Copyright Quocirca © 2010

Xerox is on a mission: to reinvent itself as a leading business process and document management company, disrupting the legacy perception of a brand which is synonymous with photocopiers. Its acquisition of the services company ACS in 2009 for $6.4 billion was a bold move in this transformation aiming to combine the Xerox brand, global reach and innovation with ACS's established IT outsourcing (ITO) and business process outsourcing (BPO) business. 

Indeed, ACS's heritage in business process management and information technology services means Xerox is already processing 37 billion public transport fares annually, processing 900 million healthcare claims annually and handling 1.5 million phone calls daily in 150 call centres. Consequently, thanks to the ACS acquisition, Xerox services revenue has climbed to 50% of its total sales in 2010, from 23% in 2009. The market opportunity is real. According to figures quoted by Xerox, it has now moved from focusing on a $132 billion global market, which included office and production hardware and document outsourcing, to a $500+ billion market, which now also includes the thriving BPO and ITO segments.

Ready for real business
The ACS acquisition has signalled a new era for Xerox, and catalysed significant investment in the Xerox brand. Its global "Ready for real business" campaign demonstrates how businesses can outsource areas such as document management, business process management or IT services to Xerox, enabling them to focus on their core business. Its microsite http://www.realbusiness.com/ highlights its work with companies such as Marriott Hotels & Resorts, Target, Procter & Gamble, The New York Mets, Ducati and the University of Notre Dame. These case studies highlight Xerox's capabilities beyond the printed page, demonstrating its credentials across IT outsourcing, customer care, finance and accounting and human resource support, as well as its breadth of reach across many verticals—all areas where many do not realise Xerox is participating in.

Traditional equipment sales not forgotten
With a business rooted in the printed page, Xerox is not giving up on its traditional printing, copying and document management businesses which now accounts for 44% of annual revenue. However, the highest revenue opportunities are in colour print, where adoption is still low, representing only 30% of its installed base. For all vendors in this market, the key to broadening the reach of colour products is to drive down the cost of colour printing. Xerox is banking on its latest ColorQube printer, which uses solid ink rather than ink cartridges, to achieve this. Xerox claims ColorQube printers can reduce the cost of colour printing by 62% and produce 90% less waste than comparable color laser devices.

With SMB customers accounting for approximately 60% of revenues from its mid-range business, Xerox must continue to capture further sales through the IT sales channel. One way it is aiming to differentiate here is through its partner led managed print service, Xerox Partner Print Services (XPPS). With over 150 partners engaged, this service, which also supports multivendor products, promises to help garner Xerox more services revenue through the channel. Nevertheless the IT-centric reseller channel is a hard nut to crack when it comes to print services due to the need to incorporate cost per page printing, break/fix and supplies replenishment. In response to the need for simple service packages in this area, other vendors, such as HP, are also coming to market with value print services, which aim to increase service revenue for channel partners.

Leadership in enterprise managed print services (MPS)
For some time now, the burgeoning managed print services market has helped printer and copier companies to move from a mature, low margin hardware business to one which offers long term customer relationships and recurring revenue opportunities. With contracts 5 years long, MPS enables vendors to manage the complete print environment of a customer, and gain predictable revenue streams from printed pages, often across a heterogeneous printer fleet.

According to Xerox it has retained 100% of its enterprise MPS clients who have signed a contract since 2001, it manages around 1.5 million devices through its MPS contracts, over 50% of which are manufactured by competitors. Its most recent addition to its MPS suite—mobile print—was a result of the Xerox and P&G Innovation Council, enabling employees to print directly from smart phones.

Due to its long established heritage in delivering managed print services (now part of its Global Document Outsourcing division) and its broad service portfolio, which encompasses the office environment to the print room, Quocirca considers Xerox a leader in the MPS market. However its closest rival HP is performing well, boosted by is dominance in the office print environment, its acquisition of EDS and its strategic alliance with Canon.

Expanding market reach
The ACS acquisition means that the combined company can now pursue opportunities across the document outsourcing, ITO and BPO segments, exploiting the respective customer bases of Xerox and ACS. Xerox already has signed managed print services (MPS) deals for companies that were existing ACS customers, such as Ingersoll Rand. According to Xerox, such cross selling initiatives are taking place in more than one hundred accounts across all regions, which have generated over 10 ACS signings to date and a $2.5 billion pipeline.

With only 8 months having passed since the ACS acquisition closed, Xerox still has some way to go to before it can offer an integrated Xerox/ACS offering. This is likely to be more challenging in Europe where the profile of ACS is lower than North America—currently 90% of ACS revenue comes from the US. Nevertheless, Xerox recognises that a global company still needs localised presence and offerings, especially in a diverse region such as Europe, and is working to develop a consistent global approach which is complimented by local and regional delivery capabilities.

Conclusion
The ACS acquisition certainly promises to set Xerox apart from its competitors, and success in Europe will require Xerox to truly integrate its offerings, build out a European service organisation and demonstrate the pedigree of ACS in Europe. Particularly in the document outsourcing market, Xerox should remain watchful of companies such as Canon and Ricoh who are expanding their capabilities. Meanwhile HP's IT and networking heritage positions it well for companies looking to outsource both the desktop and print infrastructure.

Certainly ITO and BPO bring added value to the Xerox Enterprise Print Service portfolio, but Xerox will face challenges developing an integrated sales strategy given the different stakeholders across MPS, ITO and BPO engagements. As with any acquisition, success will rely on the investment in staff and training but probably most fundamental is whether Xerox will retain ACS as a separate brand.

Quocirca believes that although the European market presence of Xerox may do well to push the ACS brand, ultimately the best approach would to be recast ACS as Xerox Enterprise Services or similar, to avoid confusion and support a cohesive go to market approach. For now, Quocirca expects that the majority of synergistic opportunities will reside in the US region. Mindful of this, Quocirca will be watching closely how Xerox approaches and executes on its promises to the European market.

By: Julian Stuhler, Director, Triton Consulting Ltd Posted: 22nd September 2010 Copyright Triton Consulting Ltd © 2010

In recent years the move to outsource IT or business processes has really taken hold. There are definite benefits to outsourcing all or part of an organisation's database management systems. Access to specialised resources, which may not be available or are in short supply internally, is a major factor.

Rather than outsourcing their IT systems lock stock and barrel, organisations can look to supplement their internal resources with niche technical skills for interim staffing, ad-hoc consultancy or even just as an "insurance policy" back-up. Specialist service providers bring insight into how other companies are solving their business problems. These "war stories" from previous engagements can really help build a customer's knowledge of best practice. Rather than outsourcing to a good "all-rounder", organisations should look to specialist providers for the in-depth technical knowledge required to support mission critical systems.

Lack of skills
An actual lack of skills may well not be the issue. Unless they are moving to a new technology of which the organisation has little experience most organisations will have a good level of skills internally. However, availability of those skills can be an issue. Increasing workloads can often mean that individuals are tasked with ever growing and diverse responsibilities. If this sounds like a familiar scenario in your organisation then you're not alone. In a survey of DBAs by IDUG & CA the most significant database activity undertaken in 07–08 was upgrading the current database — at 67%. Daily maintenance was 56%. Particularly in smaller organisations (1–1000 employees); just 31 % said they were primarily involved in database administration. This means that DBAs are being pulled away from day-to-day maintenance into different projects.

Something has to give. Farming out all or part of the day to day tasks can be a useful way to free up time for a highly skilled team to be more usefully deployed and is almost certainly more cost effective than bringing in an extra team member to take on those tasks.

If the team is lacking skills then most outsourcing service providers can also offer mentoring, knowledge transfer and training solutions as well.

Cover
This one really depends on the size of the existing DBA team. Organisations with really large teams are unlikely to experience real issues with having the right amount of cover out of hours or during peak holiday seasons.

However, for those running smaller teams this can be a real problem. Some organisations are simply coping with what they have and are lucky enough not to have experienced any major issues — yet. It is a fact of life that people take holiday, get sick and have time off to look after children. For smaller teams, managing this can be a minefield. If there is a break in cover IT bosses have to be prepared for the consequences of a major database failure during that time — it could happen and the buck has to stop somewhere.

It is possible for organisations to enhance their existing teams with an out-of-hours only service that kicks in when the team clock off or an ad-hoc service which can be called upon when the team is stretched.

Service providers have SLAs to meet and they don't take annual leave or get sick!

What to look for in a provider

• Cost: Make sure that the service is cost effective for the business needs. How much does the service cost vs the cost of internal DBAs? It is impossible to predict how many hours or calls will be needed so check whether there is a limit to the number of service calls/number of hours available on the contract. What seemed like a good deal initially can end up being more costly than first thought; extra calls or time have to be purchased.
• Skills: This has to be a major consideration. Many companies offer a managed service solution for IT systems. The key, though, is finding the organisation with the specialist knowledge of the particular database software in use to be sure that any issues can be quickly and professionally dealt with.
• Cover: Be sure to find a provider with flexible packages which give the support and cover required. Perhaps cover is only needed out of hours because the in-house DBA team can cope with the day to day management. Or perhaps the system needs the assurance of 24/7 support.
• Proactive vs Reactive: Not all service providers can give proactive support. Looking for a supplier who can provide proactive monitoring means that there is no need to worry about users experiencing issues before it has been flagged to the team.

Specialist service providers bring a new dimension to outsourcing, one that gives organisations the peace of mind that they are working with a provider who really understands and has the skills necessary for the job. Rather than outsourcing to a good "all-rounder", organisations should look to specialist providers for the in-depth technical knowledge required to support mission critical systems.

About Triton
Triton Consulting are Data Management specialists and IBM Premier Business Partners. Specialising in DB2 for both the mainframe and distributed systems, Triton provide a full range of services from consultancy through to education and remote support.

The Remote DBA service allows organisations to benefit from remote DB2 support to suit them - from out of hours only to 24/7 cover. With Consultancy on Demand, organisations can purchase 20, 50 or 100 hours of support which can be used for training, consultancy or to cover absences within the existing DBA team. For more information on Triton visit http://www.triton.co.uk/ManagedServices.php

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 26th July 2010 Copyright Interarbor Solutions © 2010

Coming to you from The Open Group’s Security Practitioners Conference in Boston, we’ve assembled a panel this week to delve into the advancing role and powerful potential for enterprise architecture (EA).

The economy’s grip on IT budgets, and the fast changing sourcing models like cloud computing, are pointing to a reckoning for EA—of now defining a vast new promise for IT business alignment improvement or, conversely, a potentially costly lost opportunity.

The need for EA seems to be more pressing than ever, yet efforts to professionalize EA do not necessarily lead to increased credibility and adoption, at least not yet.

We’ll examine the shift of IT from mysterious art to more engineered science and how enterprise architects face the unique opportunity to usher in the concept of business architecture and increased business agility.

Here to help us better understanding the dynamic role of EA, we're joined by Jeanne Ross, Director and Principal Research Scientist at the MIT Center for Information Systems Research and noted author; Dave Hornford, an architecture practice principal at Integritas Solutions, as well as the Chairman of The Open Group Architecture Forum, and Len Fehskens, Vice President for Skills and Capabilities at The Open Group. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Fehskens: [Enterprise architecture] is really just a gleam in many people’s eye at this point. If you look at the discipline of EA and compare it to mature professions like law and medicine, we’re back 200–300 years ago. We’ve been doing a lot of research recently into the professionalization of other disciplines.

Most of the people studying the subject come up with a fairly short list of characteristics of professions. They usually include things like a well-defined body of knowledge, and well-defined educational program and particular degree programs, often offered by schools that are specifically focused on the discipline, not just the department within a larger organization.

There's some kind of professional certification or vetting process and often even some kind of legal sanction, a right to practice or right to bear the title. We don’t have any of those things right now for EA.

The body of knowledge is widely distributed and is largely proprietary. We’re at a state similar to going to a lawyer, and the lawyers try to sell themselves based on secret processes that only they had that would allow you to get a fair shake before a judge. Or similar thing with a doctor, who would say, "Come to this hospital, because we’re the only people who know how to do this particular kind of procedure."

So, we’ve got a long way to go. The big thing we’ve got going for us is that, as Jeanne pointed out, the stakes are high and so many organizations are becoming dependent upon the competent practice of EA as a discipline.

There's a lot of energy in the system to move forward very quickly on the professionalization of the discipline, and in addition to take advantage of what we’ve learned from watching the professionalization of disciplines like law, medicine, engineering, civil architecture, etc. We’ve got long ways to go, but we are running really hard to make some progress.

Ross: The stakes are high, because organizations are becoming more digital out of necessity. It’s a more digital economy. Thus, IT is more strategic. I think people see that, but outside of people who have already embraced architecture, there is some reluctance to think that the way we get more value from IT is basically by taming it, by establishing a vision and building to standards and understanding how that relates back to new ways of doing business, and actually developing standards around business processes and around data.

... The architect’s role is to make sure that there is a vision. You may have to help provide that vision as to what that process is, and how it fits into a bigger vision. So there is a lot of negotiation and envisioning that becomes part of an architect’s role that is above and beyond just the technology piece and the methodology that we’ve worked so hard at in terms of developing the discipline.

... We’ve learned a lot about methodologies, disciplines, and tools, but there is an art to be able to take the long-term vision for an organization and not just say, "It’ll come guys, be patient," but rather, "I understand that starting tomorrow, we need to begin generating value from more disciplined processes."

... There is a piece of it that’s just not appealing [across the organization]. Besides, we feel like this should all be about innovation, which should be all exciting stuff. Architecture just doesn’t have the right feel for a lot of businesspeople.

Hornford: The stakes are high in the sense that should someone in your industry figure this out, they will change the game on you, and you will now be in serious trouble. As long as all of your competition is struggling as long as you are, you’re okay. It’s when someone figures it out that they will change the game.

Where people are doing it well is where they are focused on business value. The question of what is business value is highly dependent. People will mention a term, “agility.” I work with a mining company. They define agility as the ability to disassemble their business. They have a mine. Someone buys the mine. We need to remove the mine from the business. A different organization will define agility a different way, but underpinning all of that is what is the business trying to achieve? What is their vision and what is their goal?

Practitioners who are pursuing this have to be very clear on what is the end state, what is the goal, what is the business transformation, and how will the digital assets of the corporation—the IT asset—actually enable where they’re going, so that they’re able to move themselves to a target more effectively than their competition.

... The fundamental with leadership in EA is that architects don’t own things. They are not responsible for the business processes. They are not responsible for the sales results. They are responsible for leading a group of people to that transformation, to that happy place, or to the end-state that you're trying to achieve.

If you don't have good leadership skills, the rest of the fundamentally doesn’t matter. You’ll be sitting back and saying, "Well, if I only had a hammer. If I only had authority, I could make people do things." Well, if you have that authority, you would be the general manager. You’d be the COO. They're looking for someone to assist them in areas of the business at times that they can't be there.

... If you do not lead and do not take the risk to lead, the transformation won’t occur. One of the barriers for the profession today is that many architects are not prepared to take the risk of leadership.

Fehskens: A phrase that you’ll hear architects use a lot is "compelling value proposition." The authority of an architect ultimately comes from their ability to articulate a compelling value proposition for architecture in general, for specific architecture in a specific situation. Even if you have a compelling value proposition and it falls on deaf ears, for whatever reason, that’s the end of the road.

There isn’t any place you can go, because the only leverage an architect has is the ability to articulate a compelling value proposition that says, "I’ve recognized this. I acknowledge this is promise, but here’s why you have reason to believe that I can actually deliver on this and that when I have delivered on this, this thing itself will deliver these promised benefits."

But, you have to be able to make that argument and you have to be able to do it in the language of the audience that you're speaking to. This is probably one of the biggest problems that architects coming from a technical background have. They'll tell you about features and functions but never get around talking about benefits.

... Architects are ultimately charged with making sure that whatever it is that they're architecting is fit for purpose. Fitness for purpose involves not doing any more than you absolutely have to. ... The architect’s approach to dealing with the architectural way of problem solving means that agility and cost cutting sort of are not short-term focuses. They are just built into the idea of why we do architecture in the first place.

... My experience with businesspeople is they don’t really care how you do something. All they care is what results you're going to produce. What you do is just a black box. All they care about is whether or not the black box delivers all the promises that it made.

To convince somebody that you can actually do this, that the black box will actually solve this problem without going into the details of the intricacies and sort of trying to prove that if I just show you how it works then you’ll obviously come to the conclusion that it will do what I promise, you can’t do that that. For most audiences that just doesn’t work. That’s probably one of the most fundamental skills that architects need in order to work through this problem—getting people to buy into what they are trying to sell.

Ross: The thing to recognize about business agility is that it’s a journey. You don’t want to start making your compelling business values something you can't deliver for three years. Many times the path to agility is through risk management, where you can demonstrate the ability of the IT unit to reduce downtime to increase security or lower cost. The IT unit can often find ways to lower IT cost or to lower operational cost through IT.

So, many times, the compelling value proposition for agility is down the road. We've already learned how to save money. Then, it’s an easier sell to say, "Oh, you know, we haven’t used IT all that well in the past, but now we can make you more agile." I just don’t think anybody is going to buy it.

It’s a matter of taking it a step at a time, showing the organization what IT can help them do, and then, over time, there's this natural transition. In fact, I'm guessing a lot of organizations say, "Look, we're more agile than we used to be." It wasn’t because they said they were going to be agile, but rather because they said they were going to keep doing things better day after day.

Hornford: If we're going to look at our sourcing options, using the word "component" as opposed to "platform," I can acquire a benefit. I can acquire a benefits engine as a service or I can build my own and manage my own processes, whether fully manual or digitized. Those choices come down to my value in the business.

Different organizations will have different things that matter to them. They will structure and compose their businesses for a different value chain for a different value proposition to their customers.

If we get back to the core of what an architect has to deliver, it’s understanding what is the business’s value, where are we delivering value to my customers?

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 24th June 2010 Copyright Interarbor Solutions © 2010

They say we have big brains because we have all needed to work better together over the past 150,000 years. The more people work together, the more tools they need to make collaboration a productive art, rather than a befuddled mess.

Rather than wait for human evolution to keep up the pace, Salesforce.com has delivered its Chatter cloud-based collaboration service, based on social networking methods more common on Facebook or Twitter.

Directed first at enterprise help desk and customer service processes, Chatter has the strong potential to become a company-wide collaboration accelerant. And if that happens, more data and insights into what people do to solve problems can be identified, refined, repeated, automated, and extended. The cloud model makes this easy to afford, to get to and to expand.

Chatter, and its ilk quickly sprouting up elsewhere, can foster better, targeted and self-directing collaboration; can spur and capture the data about processes in progress, and can become a service feature within nearly any business application, process or ecosystem.

Email can not do this. Instant messaging, no. Portals, not quite. Chatter shows that email's role is overextended, counter-productive, and in need of a replacement.

But what caught me by surprise in watching Salesforce.com's Chairman and CEO Marc Benioff introduce Chatter in San Jose, CA, was not that consumer-focused social media motifs have a place in the productivity enterprise portfolio. What screams to me of "killer app" is that the data from social interaction are freer in the enterprise than they are on the open Web.

The data and analytics derived from Chatter are not defined by privacy boundaries, or the attempt to define and maintain them. Any user company controls the data, and so the data is free to be cultivated, consumed, analyzed, reused, extended, captured, codified, integrated, innovated from.

The data from social media and network activities in the enterprise therefore is far more free and open to the enterprise needs than Facebook, Twitter, Yahoo or Google are free to use or share the data they have about what their (your) users do.

Virtual scrum for the rest of us
Chatter helps to sort out what comes next when processes and people collide. Like with our communicative ancestors as they faced challenges in the dynamic wild, self-selecting groupings, pairings and open-ended dialogue about how to react to a situation can arise and amend via Chatter. This is a tool that entices and abets collaboration, rather than confines or stifles it. Too often machine-made silos confine today's online interactions into point-to-point email threads that swiftly run aground.

The sweet spots to try out these cloud- and participant-accelerated cooperative scrums are help desk, service desk and IT. But it can and will go much further. Already more than 6,000 of Salesforce.com's customers have adopted the new social collaboration application, out of 77,300 potential customers for the San Francisco-based SaaS business applications and services development platform provider.

HP has seen the powerful confluence of IT functions and social networking tools and UIs, as evidenced by its limited-beta 48Upper SaaS collaboration tool. I received a demo of 48Upper last week, and all the things that make Chatter powerful work there as well. I hope HP targets 48Upper beyond the IT department. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

For while such uses as in software development and IT support are a no-brainers for Chatter and 48Upper, as they align well with agile and scrum methods, this is but the beginning. In a fast-paced business world, these app dev principles now have huge relevancy across many more business functions and processes. And Chatter can be the catalyst for doing so. It fits in well with Japanese kaizen and Deming-derived thinking too.

What's more, Metcalfe's Law has a supporting role, in that the more people that use Chatter, the more valuable it is; and there's a qualitative branch to the support—the better the dialogue and sharing, the higher quality the thinking in the Chatter ongoing scrum, the more everyone benefits. This is the 100,000-year-old self-reinforcing frontal lobes cognition that makes us our human best ... together.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 18th June 2010 Copyright Interarbor Solutions © 2010

Welcome to a special BriefingsDirect podcast series coming to you from the HP Software Universe 2010 Conference in Washington, DC.

Our topic for this conversation focuses on the challenges and progress in conducting massive and comprehensive backups of enterprise live data, applications, and systems. We'll take a look at how HP Data Protector is managing and safeguarding petabytes of storage per week across HP's next-generation data centers.

The case-study on HP's ongoing experiences sheds light on how enterprises can consolidate their storage and backup efforts to improve response and recovery times, while also reducing total costs.

To learn more about high-performance enterprise scale storage and reliable backup, we talk to Lowell Dale, a technical architect in HP's IT organization. The interview is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Dale: One of the things that everyone is dealing with these days is the growth of data. Although we have a lot of technologies out there that are evolving—virtualization and the globalization-effect—what we're dealing with on the backup and recovery side is an aggregate amount of data that's just growing year after year.

Some of the things that we're running into are the effects of consolidation. For example, we end up trying to backup databases that are getting larger and larger. Some of the applications and servers that consolidate will end up being more of a challenge for some of the services such as backup and recovery. It's pretty common across the industry.

In our environment at HP, we're running about 93,000–95,000 backups per week with an aggregate data volume of about 4 petabytes of backup data and 53,000 run-time hours. That's about 17,000 servers worth of backup across 14 petabytes of storage.

It's pretty much every application that HP's business is run upon. It doesn’t matter if it's enterprise warehousing or data warehousing or if it's internal things like payroll or web-facing front-ends like hp.com. It's the whole slew of applications that we have to manage.

The storage technologies are managed across two different teams. We have a storage-focused team that manages the storage technologies. They're currently using HP Surestore XP Disk Array and EVA as well. We have our Fibre Channel networks in front of those. In the team that I work on, we're responsible for the backup and recovery of the data on that storage infrastructure.

We're using the Virtual Library Systems that HP manufactures as well as the Enterprise System Libraries (ESL). Those are two predominant storage technologies for getting data to the data protection pool.

One of the first things we had to do was simplify, so that we could scale to the size and scope that we have to manage. You have to find and simplify configuration and architecture as much as possible, so that you can continue to grow out scale.

We had to take a step-wise approach on how we adopted virtual tape library and what we used it for. Virtual tape libraries were one of the things that we had to figure out. What was the use-case scenario for virtual tape? It's not easy to switch from old technology to something new and go 100 percent at it.

We first started with a minimal amount of use-cases and little by little, we started learning what that was really good for. We’ve evolved the use case even more, so that in our next generation design that will move forward. That’s just one example.

We're still using physical tape for certain scenarios where we need the data mobility to move applications or enable the migration of applications and/or data between disparate geographies.

HP Data Protector 6.11 is the current release that we are running and deploying in our next generation. Some of the features with that release that are very helpful to us have to do with checkpoint recoveries.

For example, if the backup or resource should fail, we have the ability with automation to go out and have it pick up where it left off. This has helped us in multi-fold ways. If you have a bunch of data that you need to get backed up, you don’t want to start over, because it’s going to impact the next minute or the next hour of demand.

Not only that, but it’s also helped us be able to keep our backup success rates up and our tickets down. Instead of bringing a ticket to light for somebody to go look at it, it will attempt a few times for a checkpoint recovery. After so many attempts, then we’ll bring light to the issue so that someone would have to look at.

Data Protector also has a very powerful feature called object copy. That allowed us to maintain our retention of data across two different products or technologies. So, object copy was another one that was very powerful.

There are also a couple of things around the ability to do the integration backups. In the past, we were using some technology that was very expensive in terms of using of disk space on our XPs, and using split-mirror backups. Now, we're using the online integrations for Oracle or SQL and we're also getting ready to add SharePoint and Microsoft Exchange.

Now, we're able to do online backups of these databases. Some of them are upwards of 23 terabytes. We're able to do that without any additional disk space and we're able to back that up without taking down the environment or having any downtime. That’s another thing that’s been very helpful with Data Protector.

Scheduling overhead
With VMs increasing and the use case for virtualization increasing, one of the challenges is trying to work with scheduling overhead tasks. It could be anywhere from a backup to indexing to virus scanning and whatnot, and trying to find out what the limitations and the bottlenecks are across the entire ecosystem to find out when to run certain overhead and not impact production.

That’s one of the things that’s evolving. We are not there yet, but obviously we have to figure out how to get the data to the data protection pool. With virtualization, it just makes it a little bit more interesting.

Nowadays, we can bring up a fairly large-scale environment, like an entire data center, within a matter of months—if not weeks. This is how long it would take us. The process from there moves toward how we facilitate setting up backup policies and schedules, and even that’s evolving.

Right now, we're looking at ideas and ways to automate that, so that when a server plugs in, basically it’ll configure itself. We're not there yet, but we are looking at that. Some of the things that we’ve improved upon are how we build out quickly and then turn around and set up the configurations, as that business demand is then turned around and converted into backup demand, storage demand, and network demand. We’ve improved quite a bit on that front.

Being able to bring that backup success rate up is key. Some of the things that we’ve done with architecture and the product—just the different ways for doing process—has helped with that backup success rate.

The other thing that it's helped us do is that we’ve got a team now, which we didn’t have before, that’s just focused on analytics, looking at events before they become incidents.

With some of the evolving technologies and some of the things around cloud computing, at the end of the day, we'll still need to mitigate downtime, data loss, logical corruption, or anything that would jeopardize that business asset.

With cloud computing, if we're using the current technology today with peak base backup, we have to get the data copied over to a data protection pool. There still would be the same approach of trying to get that data. If there is anything to keep up with these emerging technologies, for example, maybe we approach data protection a little bit differently and spread the load out, so that it’s somewhat transparent.

Some of the things we need to see and we may start seeing in the industry are load management and how loads from different types of technologies talk to each other. I mentioned virtualization earlier. Some of the tools with content-awareness and indexing has overhead associated with it.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 15th June 2010 Copyright Interarbor Solutions © 2010

The latest BriefingsDirect executive interview centers on gaining visibility and control into the IT services management lifecycle while progressing toward cloud computing. We dig into the Cloud Service Automation (CSA) and lifecycle management market and offerings with Mark Shoemaker, Executive Program Manager, BTO Software for Cloud at HP.

As cloud computing in its many forms gains traction, higher levels of management complexity are inevitable for large enterprises, managed service providers (MSPs), and small-to-medium sized businesses (SMBs). Gaining and keeping control becomes even more critical for all these organizations, as applications are virtualized and as services and data sourcing options proliferate, both inside and outside of enterprise boundaries.

More than just retaining visibility, however, IT departments and business leaders need the means to fine-tune and govern services use, business processes, and the participants accessing them across the entire services ecosystem. The problem is how to move beyond traditional manual management methods, while being inclusive of legacy systems to automate, standardize, and control the way services are used.

We're here with HP's Shoemaker to examine an expanding set of CSA products, services, and methods designed to help enterprises exploit cloud and services values, while reducing risks and working toward total management of all systems and services. The discussion is moderated by me, Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Shoemaker: When we talk about management, it starts with visibility and control. You have to be able to see everything. Whether it’s physical or virtual or in a cloud, you have to be able to see it and, at some point, you have to be able to control its behavior to really benefit.

Once you marry that with standards and automation, you start reaping the benefits of what cloud and virtualization promise us. To get to the new levels of management, we’ve got to do a better job.

Up until a few years ago, everything in the data center and infrastructure had a physical home, for the most part. Then, virtualization came along. While we still have all the physical elements, now we have a virtual and a cloud strata that actually require the same level of diligence in management and monitoring, but it moves around.

Where we're used to having things connected to physical switches, servers, and storage, those things are actually virtualized and moved into the cloud or virtualization layer, which makes the services more critical to manage and monitor.

Cloud doesn’t get rid of all the physical things that still sit in data centers and are plugged in and run. It actually runs on top of that. It actually adds a layer, and companies want to be able to manage the public and private side of that, as well as the physical and virtual. It just improves productivity and gets better utilization out of the whole infrastructure footprint.

I don’t know many IT shops that have added people and resources to keep up with the amount of technology they have deployed over the last few years. Now, we're making that more complex.

They aren't going to get more heads. There has to be a system to manage it. The businesses are going to be more productive, the people are going to be happier, and the services are going to run better.

We're looking at a more holistic and integrated approach in the way we manage. A lot of the things we're bringing to bear—CSA, for example—are built on years of expertise around managing infrastructures, because it’s the same task and functions.

We’ve expanded these [products and services] to take into account the public cloud ... . We've been able to point these same tools back into a public cloud to see what’s going on and making sure you are getting what you are paying for, and getting what the business expects.

CSA products and services are the product of several years of actually delivering cloud. Some of the largest cloud installations out there run on HP software right now. We listened to what our customers would tell us and took a hard look at the reference architecture that we created over those years that encompassed all these different elements that you could bring to bear in a cloud and started looking, how to bring that to market and bring it to a point where the customer can gain benefit from it quicker.

We want to be able to come in, understand the need, plug in the solution, and get the customer up and running and managing the cloud or virtualization inside that cloud as quickly as possible, so they can focus on the business value of the application.

The great thing is that we’ve got the experience. We’ve got the expertise. We’ve got the portfolio. And, we’ve got the ability to manage all kinds of clouds, whether, as I said, it’s infrastructure as a service (IaaS) or platform as a service (PaaS) that your software's developed on, or even a hybrid solution, where you are using a private cloud along with a public cloud that actually bursts up, if you don’t want to outlay capital to buy new hardware.

We have the ability, at this point, to tap into Amazon’s cloud and actually let you extend your data center to provide additional capacity and then pull it back in on a per-use basis, connected with the rest of your infrastructure that we manage today.

A lot of customers that we talk to today are already engaged in a virtualization play and in bringing virtualization into their data centers and putting on top of the physical.

We announced CSA on May 11, and we're really excited about what it brings to our customers ..., industry-leading products together with solutions that allow you to control, build, and manage a cloud.

We’ve taken the core elements. If you think about a cloud and all the different pieces, there is that engine in the middle, resource management, system management, and provisioning. All those things that make up the central pieces are what we're starting with in CSA.

Then, depending on what the customer needs, we bolt on everything around that. We can even use the customers’ investments in their own third-party applications, if necessary and if desired.

As the landscape changes, we're looking at how to change our applications as well. We have a very large footprint in the software-as-a-service (SaaS) arena right now where we actually provide a lot of our applications for management, monitoring, development, and test as SaaS. So, this becomes more prevalent as public cloud takes off.

Also, we're looking at what’s going to be important next. What are going to be the technologies and the services that our customers are going to need to be successful in this new paradigm.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 7th June 2010 Copyright Interarbor Solutions © 2010

The more you delve into how cloud computing can reshape business, the more clear becomes the importance of ecosystems.

No one cloud provider is likely to forecast and deliver all that any business needs or wants. More importantly, the role of the cloud provider is less about providing complete services than in enabling the ease and adaptability of acquiring, delivering and monetizing a variety of services in dynamic combination.

We're now seeing that the marketplace of cloud-hosted APIs is rich and exploding. But it's a self-service, organic market model that's emerging—not a top-down ERP-like affair. And that is likely to make all the difference in terms of fast adoption.

Do providers like Apple, Google and Amazon produce the lion's share of services themselves—or do they provide a fertile garden in which others create services and APIs that make the garden most valuable to all participants, inviting more guests, more development, more collaboration?

The organic model is also likely to repeat in ecosystems that allow buyers and sellers to align, and business processes between and among them to flourish. The business-to-business (B2B) commerce cloud is now being built. Recent acquisitions, like IBM's buy of Cast Iron and intent to buy Sterling Commerce, point up the "business garden" goals of Big Blue. Cast Iron allows the cultivation of hybrid clouds, clouds of clouds and rich services integration. Sterling brings EDI-based networks into the fold.

IBM clearly likes the idea of playing match-maker between traditional and new business models. And this cloud garden party effect aligns perfectly with IBM's tendency to avoid providing packaged business applications in favor of the platforms, middleware, process enablement and collaboration capabilities that support others' discrete applications.

The recent announcement then of a cloud collaboration partnership between IBM and Ariba furthers the emerging prominence of cloud commerce ecosystems. To encourage more ecommerce, the IBM-Ariba deal matches B2B buyers and sellers via LotusLive collaboration and social networking services, all through cloud delivery models.

Conference capstone
The announcement came as a capstone to the Ariba Live 2010 conference in Orlando. [Disclosure: Ariba is a sponsor of BriefingsDirect podcasts.] I had fun at the conference spouting off on cloud benefits, and tweeting up some of the mainstage events under #AribaLive.

Ariba plans to integrate its Ariba Commerce Cloud with IBM LotusLive to help buyers and sellers communicate and share information more fluidly and effectively, leading to faster, more confident business decisions, the companies said. Ariba plans to integrate IBM’s LotusLive with Ariba Discovery, a web-based service that helps buyers and sellers find each other quickly and automatically helps match buyers’ requirements to seller capabilities.

Both Ariba and IBM are recognizing the power and huge opportunity of being at the center of cloud-based commerce. And being at the center means allowing the participants to do the actual driving, to enable the community to seek and find natural partners via social interactions. We're likely to see the equivalent of app stores and social networks well up for B2B commerce, scaling both down and up, in the coming months and years.

“The successful combination of LotusLive and the Ariba Commerce Cloud will provide such a matchmaking comfort zone in which networks of partners, suppliers and customers can easily work together across company boundaries to help do their jobs more efficiently and cost-effectively, and perhaps even develop lasting relationships," said Sean Poulley, Vice President, IBM Cloud Collaboration, in a release.

As Ariba Chairman and CEO Bob Calderoni says, what's now good for consumer commerce is soon to be good for the business side of the equation. It's simply the most efficient.

After IBM set its sights on Sterling, I at first wondered if IBM and Ariba might find themselves competing. But the deal shows that ecosystems rule. One-in-all cloud provider aspirants should take note. The way to making the network most valuable is by empowering the business (both sellers and buyers) to carve out what they want to do themselves.

IBM Lotus collaboration services plus Ariba's cloud and commerce network services seem to be striving to reach the right balance between providing a fertile arena and then getting out of the gardeners' way.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 20th May 2010 Copyright Interarbor Solutions © 2010

The latest BriefingsDirect panel discussion centers on improving data-center productivity by leveraging all available sourcing options and moving to modernized applications and infrastructure.

IT leaders now face a set of complex choices, knowing that discretionary and capital IT spending remain tight, even as demand on their systems increases. Economists are now seeing the recession giving a way to growth, at least in several important sectors and regions. Chances are that demands on IT systems to meet this growing economic activity will occur before IT budgets appreciably go up.

So what to do? A panel of experts examines here how to gain new capacity from existing data centers through both modernization and savvy exploitation of all sourcing options. And—by outsourcing smartly, migrating applications strategically, and modernizing effectively—IT leaders can improve productivity while still under tightly managed costs.

One choice that may be the least attractive is to stand still as the recovery gets under way and demands on energy and application support outstrips labor, systems supply, and available electricity.

Learn more on managing for growth by examining three data-center transformation examples that uncover how effective applications and infrastructure modernization improves enterprise IT capacity outcomes. The panel also examines modernization in the context of outsourcing and hybrid sourcing, so that the capacity goals facing IT leaders can be more easily and affordably met, even in the midst of a fast-changing economy.

Please welcome the panel: Shawna Rudd, Product Marketing Manager for Data Center Services at HP; Larry Acklin, Product Marketing Manager for Applications Modernization Services at HP, and Doug Oathout, Vice President for Converged Infrastructure in HP’s Enterprise Services. The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Oathout: When you look at the budgets still being tight, but business is starting to grow again, IT leaders really need to look strategically at how they're going to tackle their budget problems.

What they need to do is to start to think about how, and what, major projects they want to take on, so that they can improve their cash flow in the short-term while improving their business outcomes in the long-term.

In the past, companies have looked at outsourcing as a final step, versus an alternate step in IT. We're seeing more clients, especially in the tight economy that we have gone through, looking at a hybrid model.

There are multiple sourcing options, there are multiple modernization tasks as well as application culling that they could do to improve their cost structure. At HP we look at modernization of the software and we look at outsourcing options and cloud options as ways to improve the financial situation and to improve the long-term cost structures.

There is a model evolving, a hybrid model between outsourcing and in-sourcing of different types of applications in different types of infrastructure.

Acklin: If you look at your current spend and how you are spending your IT budgets today, most see a steady increase in expenses from year-by-year, but aren't seeing the increases in IT budgets. By doing nothing, that problem is just going to get worse and worse, until you're at a point where you're just running to keep the lights on. Or, you may not even be able to keep up.

We call that "the cost of doing nothing." That's the real challenge.

The number of changes that have been requested by the business continues to grow. You're putting bandages on your applications and infrastructure to keep them alive. Pretty soon, you're going to get to a point where you just can't stay ahead of that anymore. This is the cost of doing nothing.

If you don’t take action early enough, your business is going to have expectations of your IT and infrastructure that you can't meet. You're going to be directly impacting the ability for the company to grow. The longer you wait to get started on this journey to start freeing up and enabling the integration between your portfolio and your business the more difficult and challenging it's going to be for your business.

Rudd: Clients or companies have a wider variety of outsourcing mechanisms to choose from. They can choose to fully outsource or selectively out-task specific functions that should, in most cases, be able to provide them with substantial savings by looking at their operating expenses.

It's not going to get any cheaper to continue to do nothing. To support legacy infrastructure and applications, it's going to require more expensive resources. It's going to require more effort to maintain it.

The same applies for any non-virtualized or unconsolidated environment. It costs more to manage more boxes, more software, more network connections, more floor space, and also for more people to manage all of that.

The risk of managing these more heterogeneous, more complex environments is going to be greater—a greater risk of outages—and the expense to integrate everything and try to automate everything is going to be greater.

We help clients maintain their legacy environments and increase asset utilization, while undertaking those modernization and transformation efforts. From an outsourcing standpoint, the types of things that a client can outsource could vary, and the scope of that outsourcing agreement could vary—the delivery mechanism or model or whether we manage the environment at a client’s facility or within a leveraged facility.

Working with a service provider can help provide a lot of that insurance associated with the management of these environments—and help you mitigate a lot of that risk, as well as reduce your cost.

The risk to the client, to the client's business, should be better mitigated, because they're not having to coordinate with four or five different vendors, internal organizations, etc. They have one partner who can help them and can handle everything.

Oathout: As you look at service providers or outsourcers, there is a better menu of options out there for customers to choose from. That better menu allows you to compare and contrast yourself from a cost, service availability, and delivery standpoint, versus the providers in the marketplace.

IT managers have choices on where to source, but they also have choices on how to handle the capacity that fits within their four walls of the data center.

We see a lot of customers really looking at: How do I balance my needs with my cost and how do I balance what I can fit inside my four walls, and then use outsourcing or service providers to handle my peak workloads, some of my non-critical workloads, or even handle my disaster recovery for me?

So IT managers have choices on where to source, but they also have choices on how to handle the capacity that fits within their four walls of the data center.

... We can get a 10:1 consolidation ratio on servers. We can get a 5-6:1 consolidation ratio on storage platforms. Then, with virtual connectivity or virtual I/O, we can actually have a lot less networking gear associated with running those applications on the servers and the storage platform.

So, if we look at just standard applications, we have a way to migrate them very simply over to modern infrastructure, which then gives you a lower cost point to run those applications.

When you look at modernizing your applications and look at modernizing infrastructure, they have to match. If you have a plan, you don't have to buy extra capacity when you start. You can buy the right capacity then grow it, as you need it.

Acklin: Outsourcing can drive some initial savings, maybe up to 40 percent, depending on the scope of what you're looking at for a client. That's a significant improvement on its own.

Not every client sees that high of a saving, but many do. The next step, that migration step, where we’re also migrating over to a consolidated infrastructure, allows you to take immediate actions on some of your applications as well.

In that application space, you can move an application that may be costing you significant amounts of the dollars, whether it be license fees or due to a lack of skilled resources and so forth on a legacy platform. Migrating those or keeping the application intact, running on that new infrastructure, can save you significant dollars, in addition to the initial work you did as part of the outsourcing.

The nice thing, as you do these things in parallel, is that it's a phase journey that you are going through, where they all integrate. But, you don't have to. You can separate them. You can do them one without the other, but you can work on this whole holistic journey throughout.

The migration of those applications basically leaves those applications intact, but allows them to have a longer lifespan than you may typically would. ... We can still drive significant 40–50 percent saving, just through this migration phase of moving that application onto this new infrastructure environment and changing the way that those cost structures around software and so forth are allocated toward that. It frees up short-term gain that can turn around to be reinvested in the entire modernization journey that we're talking about.

As you continue that journey, you're starting to get your cost structures aligned and you're starting to get to a place where your infrastructure is now flexible and agile. You’ve got the capacity to expand. When you move into that modernized phase, you're really trying to change the structure of those applications, so that you can take advantage of the latest technology to run cloud computing and everything operating as a service.

... The idea of putting the outsourced, migrated, modernized phases together is that they're not sequential. You don't have to do one, then the other, and then the other. You can actually start these activities in parallel. So, you can start giving benefits back to the business immediately.

For example, while you're doing the outsourcing activities and getting that transition set up, you're starting to put together what your future architecture is going to look like for your future state. You have to plan how the business processes should be implemented within the application and the strategic value of each application that you currently have in your portfolio.

You're starting to build that road map of how you are going to get to the end state. And then Even as you continue through that cycle, you're constantly providing benefits back to both the business and IT at the same time.

Oathout: One example that we worked very closely was in services with our customer France Telecom. France Telecom transitioned 17 data centers to two green data centers. Their total cost of ownership (TCO) calculation said that they were going to save 22 million (US $29.6 million) over a three-year period.

They embarked on this journey by looking at how they were going to modernize their infrastructure and how they were going to set up their new architecture so that it was more flexible to support new mobile phone devices and customers as they came online. They looked at how to modernize their applications so they could take advantage of the new converged infrastructure, the new architectures, that are available to give them a better cost point, a better operational expense point.

France Telecom emphasized the migration. They migrated a number of applications to newer architectures and they also modernized their application base. They focused on the modernization and the migration as the key components for them in getting their cost reductions.

Rudd: The things we're talking about don't have to occur in this particular order. I know of other clients for whom we've saved around 20 percent by outsourcing their mainframe environments.

Then, after successfully completing the transition of those management responsibilities, we've been able to further reduce their cost by another 20 percent simply by identifying opportunities for code optimization. This was duplicate code that was able to be eliminated or dead code, or runtime inefficiency that enabled us to reduce the number of apps that they required to manage their business. They reduced the associated software cost, support cost, etc.

Then there were other clients for whom it made more sense for us to consider outsourcing after the completion of their modernization or migration activities. Maybe they already had modernization and migration efforts under way or they had some on the road map that were going to be completed fairly quickly. It made more sense to outsource as a final step of cost reduction, as opposed to an upfront step that would help generate some funding for those modernization efforts.

Acklin: We offer something that's called the Modernization Transformation Experience Workshop. It's basically a one-day activity workshop, a slide-free environment, where we bring you and take you through the whole journey that you'll go on.

We'll cover everything from how to figure out what you have, what you are planning, how to build the road map for getting into the future state, as well as all the different ways that will impact your business and enterprise along the way, whether you are talking technology infrastructure, architecture, applications, business processes, or even the change management of how it impact your people.

You come out understanding what you're getting yourself into and how it can really affect you as you go forward. But, that's not the only starting point. You can also jump into this modernization journey at any point in the space.

We can do a full assessment of your environment and figure out how your apps and your infrastructure are working for your business or, in most cases not working for your business. HP can help you figure out the right place for beginning that journey.

... Many of our clients we talk to, don’t know how they would pay for a journey like this. Actually, you have a lot of options right in front of you. There are good methods on how to cover this, how to put things together like these three-phase activities (outsource, migrate, and modernize), or how to go on these journeys that can still work for you even in tough financial times.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 19th May 2010 Copyright Interarbor Solutions © 2010

Ariba, the spend and procurement management solutions provider, hopes small- to mid-sized businesses will take their enthusiasm for cloud computing to the business processes around contract management.

Ariba’s latest solution, StartContracts, works to do just that. An on-demand solution, StartContracts combines technology and best practice processes to help organizations manage buy and sell side agreements with greater speed and lower costs. The solution also promises to mitigate risk, drive compliance and increase revenue, says Ariba. [Disclosure: Ariba is a sponsor of BriefingsDirect podcasts.]

Those are tall promises, but ones that Steve Markle, senior director of Solutions Management at Ariba, is willing to stand by. As he sees it, effective contract management is a “critical lever” that companies can pull to find contract information, optimize profits, and identify risks and opportunities quickly.

Here’s what you get with this new software-as-a-service (SaaS) solution:

• Create a central, online contract repository
• Specify important fields and terms within agreements to be monitored
• Manage contracts across the organization using robust free-text search and reporting capabilities
• Establish task-driven reminders based on important dates and milestones to drive use and compliance
• Go paperless and sign agreements electronically
• Optional electronic signature capabilities streamline and make contract execution more affordable and more secure.

Ariba is billing StartContracts as affordable, enterprise-class software that is delivered on demand. Markle went so far as to say that the solution makes possible capabilities that were once only affordable for large enterprises. How affordable? The company is offering an introductory price of $199 a month.

Like a lot of cloud services, this may take hold in SMBs, but migrate into departments and then more of the enterprise core. And, as with most SaaS and cloud services, contract management as a service can quickly become a dynamic process ingredient for more transformative efficiencies. I expect that the analytics from these pure services-composed processes will also prove quite powerful.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 14th May 2010 Copyright Interarbor Solutions © 2010

Increasingly, sellers of IT are finding it harder to win large software and hardware capital purchases contracts, which traditionally followed three- to seven-year obsolescence and refresh cycles. The shifts in technology and business models accelerated by the recession are forcing these vendors in particular to adopt more of a professional services revenue model.

Buyers of technology, on the other hand, are moving to IT shared services and software-as-a-service (SaaS) models to get off of the capital outlays roller coaster. They want smoother and more predictable operating and charging models, beginning with long-term professional services and outsourcing engagements.

Both the buyer and seller of services therefore need to focus on the implementation and integration of solutions, placing a complex burden on the services delivery personnel themselves, as well as those who managing the services providers.

We’re here to find out some new, best ways of managing and automating these intellectual resources that support the professional services lifecycle. We’ll see how recent research shows that more of a just-in-time (JIT) methodology is required to keep the skills in balance with myriad project requirements and obligations.

To learn more about resource utilization and management in the global services economy, we're joined by Lori Ellsworth, Vice President of Changepoint Solutions at Compuware, the sponsor of this podcast, and by Mark Sloan, Chief Operating Officer of RTM Consulting. The discussion is moderated by BriefingsDirect's Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Ellsworth: The change and the focus on professional services is moving from something that was nice to have, to something that is necessary to have to be successful.

Software companies are a great example. Historically, companies in that sector may have done mostly product business and less service. Services are now necessary to deliver success, and the services business is a very healthy part of the software business and is contributing significantly to the bottom-line.

Now, organizations have to understand how to get a handle on the people they have working for them, how best utilize them, and how to make sure that your employees, those assets, are challenged and happy, but that you are delivering that service to provide value to your customers.

There needs to be more discipline, more information, and a better process for decision-making and forward planning, so that the organization can scale and scale in a financially successful way.

So, the stakes are higher, in terms of the discipline and the approach that we need to take to manage that professional services part of the business.

Sloan: At RTM Consulting, one of our core areas of focus is in this area of resource management. How can you get the right person in the right place at the right time and drive up utilization, but at the same time, make sure that you're delivering value to your end customers and leaving them satisfied and coming back for more?

When a software company shows up with its professional services arm, the client is expecting that each and every one of the people who show up is an expert in the software, the technology, and the implementation process. The days of people learning on the job and coming up to speed are long gone.

The challenge today is for companies to get visibility into the type of work that’s coming down the pike, so that they can proactively train their internal resources and be prepared for that work, so that when they do show up, they are the experts.

We’ve actually taken the principles of JIT manufacturing and directed them to the professional services organization [via in new service definitions of JIT.]

Just as 30 years ago, any manufacturing company had big inventories of supplies, finished products, sitting in their warehouse. Ten or 15 years ago, the big services organizations were able to have excess resources on the bench, in the office, waiting for that next project to arrive.

What we’ve done is taken those same principles -- forecasting what the future scenarios look like, what the demands look like, and then translating that back into how many resources you are going to need, the types of resources, the skills those resources need to have.

You can, at that right moment, bring on a new employee, go to a third-party contractor to fulfill that demand, or give yourself enough advanced notice to cross-train your existing resources on new technologies, new products, so that they can work across your portfolio and not just focus on one particular area.

Getting to the solution

Ellsworth: There are four critical success factors, but also the building-block approach. In other words, you need to start with the fundamental. You need to understand your people and their skills and get that view of your business. Then, you can start to add levels of maturity, look at forecasting, look at different models for resource allocation, and bring in project management.

As organizations start to put the buildings blocks in place, and adopt the disciplines and build the processes that work in their business, [they can have trouble] scaling that.

You can make that work within a small team or across a couple of small teams, but ... you need visibility ... to scale that to your entire services organization, including management. [But] you can't scale and reinforce that discipline without automation.

The two really have to go together. One won’t be successful without the other in a large professional services organization. Automation brings the scale factor.

The ability to measure and monitoring is something that Mark also highlights as critical success factors. Again, you’ve got a large group of people with a lot of activity going on. There's lots of data, but you have to roll that up to the management level to make it valuable to help drive decisions in the business.

... Our focus has been on driving that view as a professional services organization, but importantly driving that view inside the context of the broader company.

It starts with those building blocks around who are your resources, what are their capabilities, and where are they being utilized. It brings you to the next level of maturity in terms of being able to look at forecasts and do some demand and capacity planning.

And then it goes even further from a resource perspective to that professional development side. Let's look at the gaps in the next six to nine months. Where can we identify resources and put them on a development plan to fill those gaps?

We're managing the day-to-day business of a professional services organization and going beyond that to deal with project management, engagement management, and right through to billing for a professional services organization and for technology companies that also have a strong product side of a business.

The paybacks can be, and are, significant. First and foremost, is really speed to revenue and cash flow.

The Changepoint solution has been active and working with customers in their professional services organization for many years, going back to the late 1990’s. We also deliver a project portfolio management capability to allow them to manage products and manage delivery of those product applications.

Sloan: The paybacks can be, and are, significant. First and foremost, is really speed to revenue and cash flow. Lori mentioned that doing this in a large services organization is critical and an enabling technology is required to make that happen.

I’d argue the same for small professional services organizations. Having the information that tools like Changepoint can put at your fingertips, you can quickly identify people in your organization that have the right skills, that off the top of your head you might not think of, and staff projects quickly with the appropriate resources, ultimately enabling you to get that revenue.

Billable utilization

Secondly, you start to see a significant lift in overall billable utilization. This is for the professional services organization. Again, by getting better visibility into the skills that different resources have, you realize you have many more people in the organization that can do work than you think of.

For more information on resource utilization, read RTM's whitepaper "The ROI of Resource Utilization -- Measuring and Capturing the Real Business Value of Your People."

Learn more about Compuware Changepoint.

Other research points to the fact that companies who do this development of staff and get projects started on time are significantly more likely to finish their projects on budget and on time and drive significantly positive customer satisfaction.

Companies that aren’t able to do this -- take an extra five, 10, or 15 days to fill some of the slots on a project -- tend to go over-budget, don’t get it done on time, and, as a result, have poor customer satisfaction. If you think about it, it's back to that mantra, "Do it right the first time." This process helps you do that.

Ellsworth: As you're adding discipline and increasing maturity, there is participation from the practitioner, if you can position the value to them in terms of increased opportunity or an ability for them to better manage their schedule and not be burnt out. They have access to different opportunities. It's very valuable and can help them actively participate in moving the business forward and not kind of fight against it.

A broader pool of resources comes there to help you respond to customers which just increases the need to understand who those resources are and what they can bring to the table to support these services.

Customers of mine, in Europe for example, are quoting that on a year-over-year basis, they are able to reduce non-productive time -- and therefore the cost of that non-productive time -- by 16 percent.

Other customers will articulate the value of this entire solution in terms of revenue increase, the focus of getting control over their resources, who they have and how they can most effectively deploy them. Another customer of mine in Europe talks about a 30 percent increase in revenue, linked directly to implementing some of these practices in getting that control over their resources.

Sloan: The same lessons apply to shared services organizations, such as internal, large IT departments managing multiple projects per year to deploy technology.

They can leverage the technology that Changepoint offers to keep track of the people, where they are deployed, what skills they have, what new projects are coming in, and achieve a similar increase in productive utilization of those resources. But to your point, in terms of creative organizations, this would apply to any organization that is focused on moving people with particular skill sets to a unique project.

When we architect a solution for clients, it’s a unique solution taking into account the various constraints and the environment of that client.

That includes engineering services organizations, creative agencies that are moving talent from one project to the next -- anyone who relies on definite skills and knowledge that aren’t just easily interchangeable. This helps forecast where you can get the biggest bang for the buck with those people.

In terms of getting started, when we typically work with clients, we come in and do a quick assess and architect phase where we’ll take a look at how resource management is being done today, compare that to the best practices that we’ve defined for JIT Resourcing, and identify areas where you are strong and areas where there is an opportunity for change and improvement. When we architect a solution for clients, it’s a unique solution taking into account the various constraints and the environment of that client.

JIT Resourcing is a defined approach. We have recognized that there are unique aspects to every business, and can tailor the solution to fit there.

By deploying these processes now, you can start to learn the continuous improvement that’s needed, but be enabled as more and more of your clients go to SaaS, but you’ve got to have to deploy people with the moment’s notice.

You're going to get much better at predicting and forecasting what your future needs are, enabling you to align your resources and capabilities accordingly. You want to achieve the benefits we talked about -- speed to revenue, speed to cash-flow, and zero idle resources.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Compuware.

For more information on resource utilization, read RTM's whitepaper "The ROI of Resource Utilization -- Measuring and Capturing the Real Business Value of Your People."

Learn more about Compuware Changepoint.

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By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 13th May 2010 Copyright Interarbor Solutions © 2010

Gut-wrenching recessions have a way of changing things ... for people, families, and companies. They can also, perhaps like no other event, provoke change in large IT vendors like HP, IBM, TIBCO and Oracle.

Based on this week's HP announcements and last week's IBM Impact conference, these two of the very largest, full-service, global IT vendors are betting -- now that the recession has, at the least, bottomed out -- that the extent of change now upon us is more than just another business cycle come full circle.

Far more, these vendors see that the recession has provided a catalyst for a much larger shift in how IT is done and delivered. It's no coincidence that the interest in cloud computing and innovative IT sourcing options, for example, peaked when the recession was at its deepest.

The idea garnering wide attention in the darkest days was not just to save money by downsizing, but to also to start doing things very differently -- to truly innovate, to change the very economics of IT. But now that the worst is over, simply saving money via old IT methods, I'll wager, will prove a lot more expensive in real terms than rapidly investing in new ways of providing IT value as services.

That doesn't mean that some enterprise IT organizations won't try to go right back to business as usual. And some of the IT vendors, with their license auditors in tow, are counting on it.

It does mean that the enterprises that can actually change how they do and pay for IT in the post-recession economy may have an escalating advantage over those that do not.

Not the same old song and dance

HP this week announced the equivalent of a Swiss Army knife for IT transformation, with about as many blades and instruments as there are ways to attack the data center transformation gordian knot. The HP services, software, and sourcing offerings are designed to guide enterprises -- from the starting points of their choosing -- through a seismic transition from cost containment to IT innovation. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Last week, IBM boldly scooped up Cast Iron Systems, a cloud-to-IT integration engine maker, and further polished its view that the way to a smarter planet is via better business processes and a deep understanding of vertical industries, automation and how IT (with professional services) can bring them together. My colleague Tony Baer at Ovum delves into IBM's recasting of the definition of business applications and acceptance of the partly cloudy future.

TIBCO this week at its annual user conference delivered a dozen major announcements and stepped even more boldly into cloud models, too. TIBCO's "Enterprise 3.0" vision emphasizes the importance of real-time and massive scale processing, an integrated development-to-deployment to business process management capability, and now the option of building out an enterprise private cloud to public cloud synergy using partners like Amazon Web Services. TIBCO is also embedding BI capabilities deeply across the portfolio. [Disclosure: TIBCO is a past-sponsor of BriefingsDirect podcasts.]

Oracle, for its part, made good on its "software, hardware, complete" vision via a cameo (and somewhat buffoon-like) appearance by Chairman and CEO Larry Ellison in the debut of the movie Iron Man 2 last week. Perhaps we should expect a fist-sized "arc reactor" for database appliances in the near future? Yet Oracle is also recently drinking deeply from the cloud well, given some its recent speeches by executives as it digests the Sun Microsystems acquisition.

The point is that these vendors know something big is up in IT, beyond business as usual. We're seeing bold moves by them all, from acquisitions to restructuring to Hollywood-delivered group-think and not-so-subliminal brand imagery.

HP tackles the IT funding conundrum

HP is looking to actually help enterprises fund these transformative times. HP's economic rationale for moving to innovation now goes beyond the need for swift and verifiable ROI in IT investments. Additionally, HP is banking on the high and painful costs of not being able to move well in dynamic markets, of incurring costs from inertia, rather than from investing for advancement.

Most urgently, IT cannot miss out in supporting businesses as they face rapid growth and savvy competitors across global markets, says HP.

More succinctly, HP's message from this week's announcements comes as a warning that going back to the old IT ways, of sliding back to the economics of expensive waste as a proxy for brittle peak reliability, risks missing the lessons of the recession.

HP is therefore taking a three-pronged approach to making adoption of innovations the new mantra of IT. The first approach finds way to deliver self-funding projects. The second leverages modern architecture and methodologies so IT organizations can quickly and easily add new functionality, making change the constant. The third approach shows how to freeing up funds trapped in on-going IT operations based on older IT economics.

As enterprises are faced with transformation from old to more modern IT, many are caught in an inertia of avoidance -- frozen by the complexity and scale of the task, according to new research supported by HP. What's needed is incremental change that pays for itself along the way, but which remains aligned with the strategic transformation and direction.

The HP focus on self-funding projects, therefore, includes offering qualified clients a complimentary, hands-on HP Applications Modernization Transformation Experience session that illustrates IT modernization and its benefits. The goal: By retiring legacy applications and eliminating complexity in technology environments, organizations are able to self-fund their modernization journeys.

Cost of lost opportunity

“The phrase ‘time is money’ rings true here, as 99 percent of organizations say that innovation gridlock cost them in lost time,” said Thomas E. Hogan, executive vice president of sales, marketing and strategy for HP Enterprise Business, in a release. “By breaking the innovation gridlock, organizations can regain time to market and capitalize on new opportunities.” More at www.hp.com/go/breakthegridlock2010.

According to research conducted on behalf of HP by Coleman Parkes Research:

• Some 95 percent of business and technology executives said innovation gridlock resulted in lost opportunities for their organizations.

• And 91 percent felt that innovation gridlock cost their organizations in lost effort (from resources). More data is available at www.hp.com/go/HPEnterpriseResearch2010.

Together the promise of cloud, the constraints of the recession, and the quick-paced requirements of modern business agility have conspired to expose the weaknesses of plain old IT ... stack upon stack, brittle apps astride brittle apps, and rack by rack of under-utilized workloads alienated from their fit-for-purpose potential.

HP says the cost of doing nothing to transform IT is too great to ignore. IBM is transforming the very definition of business services and applications with plant-wide efficiencies in mind. TIBCO is refining software delivery that steps up to the cloud challenge. Oracle is enclosing its software in an optimized "iron" support infrastructure to improve performance to cost ratios dramatically.

All these vendors will still sell you the good old IT systems the good old ways. But they are also coming up with some big new tricks. Who will take them up on their hedge against a truly transformative IT future?

You may also be interested in:

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• Mutual embrace of SOA and cloud computing builds into productivity waltz across the IT landscape
  
  
• ArchiMate gives business leaders and architects a common language to describe how the enterprise works

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 11th May 2010 Copyright Interarbor Solutions © 2010

This BriefingsDirect podcast features software-as-a-service (SaaS) upstart Workday, provider of enterprise solutions for human resources management, financial management, payroll, spend management, and benefits management.

Can software-as-a-service (SaaS) applications actually accelerate the use and power of business analytics?
We're going to help answer that by examining a human capital management (HCM) and enterprise resource planning (ERP) SaaS provider, Workday, and show how easily customizable views on data and analytics can have a big impact on how managers and knowledge workers operate.

Historically, the back office business applications that support companies have been distinct from the category of business intelligence (BI). Certainly, applications have had certain ways of extracting analytics, but the interfaces were often complex, unique, and infrequently used.

By using SaaS applications and rich Internet technologies that create different interface capabilities -- as well as a wellspring of integration and governance on the back-end of these business applications (built on a common architecture) -- more actionable data gets to those who can use it best. They get to use it on their terms, as our case today will show, for HCM or human resources managers in large enterprises.

The trick to making this work is to balance the needs that govern and control the data and analytics, but also opening up the insights to more users in a flexible, intuitive way. The ability to identify, gather, and manipulate data for business analysis on the terms of the end-user has huge benefits. As we enter what I like to call the data-driven decade, I think nearly all business decisions are going to need more data from now on.

To learn more about how the application and interfaces are the analytics, with apologies to Marshall McLuhan, please join me in welcoming Stan Swete, Vice President of Product Strategy and the CTO at Workday; Jim Kobielus, Senior Analyst for BI and Analytics at Forrester Research, and Seth Grimes, Principal Consultant at Alta Plana Corp., and a contributing editor at TechWeb's Intelligent Enterprise. The discussion is moderated by me, BriefingsDirect's Dana Gardner, principal analyst at Interarbor Solutions.
Here are some excerpts:

Swete: When I think of how BI is done, primarily in enterprises, I think of Excel spreadsheets, and there are some good reasons for that, but there’s also some disadvantages that that brings.

When I look at the emergence of separate BI tools, one driver was the fact that data comes from all kinds of disparate data sources, and it needs aggregation and special tooling to help overcome that problem.

Also, traditional enterprise applications have been written for what I would call the back-office user. While they do a very good job of securing access to data, they don’t do a very good job of painting a relevant picture for the operational side of the business.

A big driver for BI was taking the information that’s in the enterprise systems and putting a view on some dimensionality that managers or the operational side of the business could relate to. I don’t think apps have done that very well, and that’s where a lot of BI originated as well.

From a Workday perspective, we think that you're going to always need to have separate tools to be data aggregators, to get some intelligence out of data from disparate sources. But, when the data can be focused on the data in a single application, we think there is an opportunity for the people who build that application to build in more BI, so that separate tooling is not needed. That’s what we think we are doing at Workday.

Kobielus: Being able to pull data from wherever into your Excel spreadsheet and model it and visualize it is how most people have done decision, support, and modeling for a long time in the business world.

... I like what you said, that the interface is the analytics. That’s exactly true. Fundamentally, BI is all about delivering action and more intelligence to decision agents. The analytics are the payload, and they are accessed by the decision agents through an interface or interfaces. Really, the interfaces have to fit and really plug into every decision point.

... In the cloud, it has to be like a cloud data warehouse ecosystem, but it also has to be a interface. The interfaces between this cloud enterprise data warehouse (EDW) and all the back-end transactional systems have to be through cloud and service oriented architecture (SOA) approaches as well.

What we are really talking about is a data virtualization layer for cloud analytics to enable the delivery of analytics pervasively throughout the organization.

Grimes: We're definitely in a data-driven decade, but there’s just so much data out there that maybe we should extend that metaphor of driving a bit.

The real destination here is business value, and what provides the roadmap to get from data to business value is the competencies, experiences, and the knowledge of business managers and users.
It’s the systems, the data warehouses, that Jim was talking about, but also hosted, as-a-service types of systems, which really focus on delivering the BI capabilities that people need. Those are the great vehicle for getting to that business value destination, using all of that data to drive you along in that direction.

Swete: The thing that frequently gets left out is a focus on the transactional apps themselves and the things they can do to support pervasive analytics.

For disparate data sources, you're going to need data warehouses. Any time you've got aggregation and separate reporting tools, you're going to need to build interfaces.

But, if you think back to how you introduced this topic Dana, how you introduced SaaS, is when you look at IT’s involvement, if interfaces need to get built to convey data, IT has to get involved to make sure that some level of security is maintained.

From Workday’s point of view, what you want to do is reduce the times when you have to move data just to do analysis. We think that there is a role that you can play in applications where -- and this gets IT out of it -- if your application, that is the originator of transactional data, can also support a level of BI and business insight, IT does not have to become as involved, because they bought the app with the trust in the security model that’s inherent to the application.

What we're trying to is leverage the fact that we can be trusted to secure access to data. Then, what we try to do is widen the access within the application itself, so that we don’t have to have separate data sources and interfaces.

This doesn’t cover all cases. You still need data aggregation. But, where the majority of the data is sourced in a transaction system, in our case HR, we think that we, the apps vendor, can be relied on to do more BI.

What we've been working on is constantly enhancing managers' abilities to get access to their data. Up through 2009, that took the form of trying to enhance our report writer and deliver more options for reports, either the option to render reports in a small footprint, we call it Worklet, and view it side by side, whether they are snippets of data, or the option to create more advanced reports.

This is an ability to enhance our built-in report writer to allow managers or back-office personnel to directly create what become little analysis cues.

We had introduced a nice option last year to create what we call contextual reporting, the ability to sort of start with your data -- looking at a worker -- and then create a report about workers from there, with guidance as to all the Workday fields, where they applied to the worker. That made it easier for a manager not to have to search or even remember parts of our data dictionary. They could just look at the data they knew.

This year, we're taking, we think, a major step forward in introducing what we are calling custom analytics. This is an ability to enhance our built-in report writer to allow managers or back-office personnel to directly create what become little analysis cues. We call them matrix reports.

That’s a new report type in our report writer. Basically, you very quickly -- and importantly without coding or migrating data to a separate tool, but by pointing and clicking in our report writer -- get one of these matrix reports that allows slicing and dicing of the data and drilling down into the data in multiple dimensions. In fact, the tool automatically starts with every dimension of the data that we know about based on the source you gave us.

We're trying to make it simple to get this analysis into the hands of managers to analyze their data.
Self-service information

Kobielus: What you are saying there is very important. What you just mentioned there, Stan, is one thing I left off in my previous discussion, which is self-service information and exploration through hierarchical and dimensional drill down and also mashup in collaborative sharing of your mashups.

It's where the entire BI space is going, both traditional, big specialized BI vendors, but also vendors like yourself, who are embedding this technology into back office apps, and have adopted a similar architecture. The users want all the power and they're being given the power to do all of that.

... My colleague, Boris Evelson, surveyed IT decision makers -- we have, in fact, in the last few years -- on the priorities for BI and analytics. What they're adopting, what projects they are green lighting, more and more of them involve self-service, pervasive BI, specifically where you have more self-service, development, mashup style environments, where there is more SaaS for quick provisioning.

What we're seeing now is that there is the beginnings of a tipping point here, where IT is more than happy to, as you have all indicated, outsource much of the BI that they have been managing themselves, because, in many ways, the running of a BI system is not a core competency for most companies, especially small and mid-market companies.

Grimes: Add in the web. The web is going to be a great mechanism for interconnecting all of the distributed systems that you might have and bringing in additional data that might be germane to your business problems, that isn’t held inside your firewall, and all that kind of stuff. The web is definitely a fact nowadays and it’s so reliable finally that you can run operational systems on top of it.

That’s where some of the stuff that Stan was talking about comes into play. Data movement between systems does create vulnerability. So, it's really great, when you can bundle or package multiple functional components on a single platform.

Swete: When we think about reporting at Workday, we have three things in mind. We're trying to make the development of access to data simple. So that’s why we try to make it always -- never involve coding. We don’t want it to be an IT project. Maybe it's going to be a more sophisticated use of the creation of reports. So, we want it to be simple to share the reports out.

The second word that’s top of my list is relevance. We want the customers to guide themselves to the relevant data that they want to analyze. We try to put that data at hand easily, so they can get access to it. Once they're analyzing the data, since we are a transaction system, we think we can do a better job of being able to take action off of what the insight was.

I call it transanalytics. It's a combination of transaction systems and analytics systems. And really it's a closed loop. It must be.

So, we always have what we call related actions as a part of all the reports that you can create, so you can get to either another report or to a task you might want to do based on something a report is showing you.

Then, the final thing, because BI is complex, we also want to be open. Open means that it still has to be easy to get data out of Workday and into the hands of other systems that can do data aggregation.

Kobielus: That’s interesting -- the related action and the capability. I see a lot of movement in that area by a lot of BI vendors to embed action links into analytics. I think the term has been coined before. I call it transanalytics. It's a combination of transaction systems and analytics systems. And really it's a closed loop. It must be.

It's actionable intelligence. So, duh, then shouldn't you put an action link in the intelligence to make it really truly actionable? It's inevitable that that’s going to be part of the core uptake for all such solutions everywhere.

... The analytics themselves though -- the analysis and the intelligence -- are a core competency they want to give the users: information workers, business analysts, subject matter experts. That's the real game, and they don't want to outsource those people or their intelligence and their insights. They want to give them the tools they need to get their jobs done.

What's happening is that more and more companies, more and more work cultures, are analytic savvy. So, there is a virtuous cycle, where you give users more self-service -- user friendly, and dare I say, fun -- BI capabilities or tools that they can use themselves. They get ever more analytics savvy. They get hungry for more analysis. They want more data. They want more ways to visualize and so forth. That virtuous cycle plays into everything that we are seeing in the BI space right now.

Cost analysis

Swete: Or vision is that, as we can widen our footprint from an application standpoint, the payoff for what our end-users can do in terms of analysis just increases dramatically. Right now, it's attaching cost to your HR operations' data. In the future, we see augmenting HR to include more and more talent data. We're at work on that today, and we are very excited about dragging in business results and drawing that into the picture of overall performance.

And Workday has already built up more than just HCM. We offer financial management applications and have spend-management applications.

So a big part of how we're trying to develop our apps is to have very tight integration. In fact, we prefer not even to talk about integration, but we want these particular applications to be pieces of a whole. From a BI perspective, we wanted to be that. We believe that, as a customer widens their footprint with us, the value of what they can get out of their analysis is only going to increase.

You look at your workforce. You look at what they have achieved through their project work. You look at how they have graded out on that from the classical HR performance point of view. But, then you can take a hard look at what business results have generated. We think that that's a very interesting and holistic picture that our customers should be able to twist and turn with the tools we have been talking about today.

Grimes: There is a kind of truism in the analytics world that one plus one equals three. When you apply multiple methods, when you join multiple datasets, you often get out much more than the sum of what you can get with any pair of single methods or any pair of single datasets.

Some users are really going to get down and dirty with the data and with the analytical methods, and you want to support them, but you also want to deliver appropriate sophistication of analytics to other users.

If you can enable that kind of cross-business functions, cross-analytical functions, cross-datasets, then your end-users are going to end up farther along in terms of optimizing the overall business picture and overall business performance, as well as the individual functional areas, than they were before. That's just a truism, and I have seen it play out in a variety of organizations and a variety of businesses.

Swete: The thing that always occurs to me as an advantage of SaaS is that SaaS is a change delivery vehicle. If you look at the trend that we have been talking about, this sort of marrying up transactional systems with BI systems, it’s happening from both ends. The BI vendors are trying to get closer to the transactional systems and then transactional systems are trying to offer more built-in intelligence. That trend has several steps, many, many more steps forward.

The one thing that’s different about SaaS is that, if you have got a community of customers and you have got this vision for delivering built-in BI, you are on a journey. We are not at an endpoint. And, you can be on that journey with SaaS and make the entire trip.

In an on-premise model, you might make that journey, but each stop along the way is going to be three years and not multiple steps during the year. And, you might never get all the way to the end if you are a customer today.

SaaS offers the opportunity to allow vendors to learn from their customers, continue to feed innovation into their customers, and continue to add value, whereas the on-premise model does not offer that.

See a demo on how Workday BI offers business users a new experience for accessing the key information to make smart decisions.

About Workday

This BriefingsDirect podcast features software-as-a-service (SaaS) upstart Workday, provider of enterprise solutions for human resources management, financial management, payroll, spend management, and benefits management.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Workday.

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By: V Bharathwaj, CMO, 24/7 Customer Posted: 29th April 2010 Copyright 24/7 Customer © 2010

Is chat an effective and efficient customer interaction channel for customer service? Absolutely yes. However while chat adoption for customer service is healthy the leverage of chat as a strong service channel is not so. There are many myths on chat. Consequently its effectiveness as an alternative channel to voice gets constantly questioned by both adopters of chat as well as by those who have not yet adopted chat.

Some of the common myths are that cost per contact in chat is more expensive than phone, customer experience and first contact resolution in chat is lower than voice and that it is not possible to reduce phone volumes through chat. All these myths have some common underlying realities. One, the common approach to implementing service chat has either been a technology or as a website experiment, through small pilots to evaluate the ROI and other benefits compared to voice. Second is the low awareness levels on how to leverage and grow chat as a service channel.

Consider this. 90% of customer service chat experiments/pilots fail to produce the desired results within 4 to 6 months despite choosing a best in class chat technology. Chat cannot be tested as a technology or a website experiment. Running a customer service chat is not about putting a chat button on the website and seeing if customers click to chat, or creating simple rules for targeting website visitors. Creating effective chat interactions requires deeper understanding of consumer contact behavior across channels, segmenting, targeting and driving smart interactions that can avoid potential calls from the website.

Secondly, most chat pilots start with less than 10–15 agents, with the expectation that it can be grown once the ROI is proved. This is a recipe for disaster. Such a small pilot cannot decisively prove anything vs voice and it is guaranteed not to get any executive attention—especially in large contact centers. Chat programs need to start with an optimum number of agents that is modeled based on contact volumes using analytics. Growing the chat volumes requires an integrated execution of the analytical models with sophisticated operations. In addition, chat also needs to be run as a unique channel without trying to lift and shift practices from voice operations. Many chat pilots start with tenured voice agents under the assumption that tenured voice agents have the product/process knowledge and would be the best fit for a pilot. Incorrect. Chat operations require different skill sets and personality types that impact performance and productivity.

In effect running a service chat program effectively to produce significant results needs to be done with the vision to make the service transformation happen, backed by executive commitment and with a clear project plan that is not restricted to pilots. It is a science and not an experiment in art. And only few companies that have truly succeeded in transforming their service operations have cracked the code.

Visit http://www.247customer.com/innovationlabs/blog/ for blogs on related topics.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 21st April 2010 Copyright Interarbor Solutions © 2010

Salesforce.com's buy of Jigsaw is the latest, most indicative market mover in the transition to a lead generation economy.

Twitter's forays into a sponsored tweets business model announced last week at Chirp is another. Yahoo selling its soul to Microsoft for Bing is another. And just about everything that Google does is but another. And everything that Facebook does? Ditto. Apple loves the idea, one download at a time. Amazon? One purchase at a time.

These players are poised to grease the skids leading to a lead generation economy, one that makes conventional and current online advertising no more relevant than rabbit ear antennas for the top of your black and white television.

Only a year into the data-driven decade, and the ways in which user-, buyer- and social-interactions are rapidly being brought to bear on B2C and B2B commerce are piling up -- as never before. The model makes especially good sense for B2B, as these decisions are more often data- and information-driven, not emotionally charged as the advertising-juiced B2C domain so often is. And more and more B2B purchases start and end with an online search.

Adding a powerful ingredient to the mix, Jigsaw has huge data sets and the ability to cleanse and verify who's who on the web. As buyers, sellers, social types and knowledge seekers, people the world over are conducting more and more of their everyday lives and business roles online.

All this leaves trails, crumbs, identities, scraps and gems about who we are, what we do and what we may want -- as individuals, families, businesses, employees. It's a Noah-scale flood of data. And if you take a mere scrap of what you know about someone online from that flood and run it through Jigsaw it will tell you yet more about the person, or verify that what you already have correct and current.

Incidentally Jigsaw does this with data that is updated very rapidly, often daily or less. This is not those big CD-delivered data sets that are obsolete before they leave the hard drive. The whole arena of business intelligence is the gorilla in the room ... it provides even more and better data and helps decide what value to bring to whom and when.

To flesh out the "who" part, Jigsaw, like a lot of others in the field, are building the up-to-date meta directories of who's who and what's what online. From Marc Benioff's choice, we should assume that Jigsaw fit the right mix of being cloud-based, current, comprehensive and B2B-oriented.

Oh, and don't give me the "I'm a victim" crap about how your identify is being pilfered or your privacy invaded by this data collection and cleansing. The data is being contributed by you, and everybody else all the time, ie, Facebook, ... freely and openly -- just by being online. It's the quid pro quo of the web.

You want the benefits of the Internet, you give up some data about yourself along the way. It's life today. If you want privacy, stay off the Internet. For businesses and enterprise buyers, incidentally, they actually want to be known and to know about others. Such data is undoubtably the lingua franca of modern business. Ask Google how it's keywords sales are going.

And so why would Salesforce.com pay $142 million for Jigsaw's cache and carry and data services?

Because now any business that uses Salesforce's CRM, SFA and SaaS, PaaS ecosystem can know a lot more about who's who inside the business processes that they are producing and involved in. That's right ... process. The economy needs to bind services and processes together just as much as buyers and sellers of goods. The common denominator is the users, and their identify data.

So think of Jigsaw as bringing cloud-based ETL from all of your web interactions that feed the leads that enter into your sales and customer resource data bases and interactions. I'm proud and happy to have been successfully experimenting with the knowledge-driven content onramps to the search and social media myself for five years. It's strong, knowledge-based content that precisely attracts and informs the users that begets their participation that begets the data that gets cleansed that nurtures more information sharing that begets the CRM process that leads to a sales cherished by both parties.

Incidentally, if Salesforce.com now straps on a marketing automation service (or ecosystem) to what they have -- cleaning the data all along the way via Jigsaw -- you get a glimpse of the lead generation future. Google could do this any time ... they have all the parts necessary. Indeed, Salesforce.com and Google are on a collision course even more with the Jigsaw buy.

Which brings us to advertising -- the Neanderthal of the ecommerce evolutionary tree. Ads online or off -- search or banner -- are big, dumb, blunt, hairy instruments of joining up buyers and sellers based on ignorance about each other. You want to reach young men with money and a yen for beer and pickup trucks? Spend millions on Superbowl ads. Very efficient.

Trouble is that I also have to watch these ads about beer and trucks, neither of which I need any information on right now. Give me some data I can use in my life and business, please.

I think the future of advertising is dwindling into the role of a cheap sidewalk hawker, and funneling a few unsure souls into a sideshow. Maybe advertising will simply one of many ways that buyers and sellers enter into a more efficient data-driven lead generation process ... Just like the one that Salesforce.com is build, buy and partnering its way to ASAP.

The money now spent on advertising will be moving aggressively to the lead generation portion of the equation, where the ROI is precise and understood by all. Most advertising is bought via the credit default swaps method of tails, I win (the media company), heads, you lose (the advertiser).

The lead generation economy does away with the murky nature of advertising's true value and return. In a lead generation process, you spend X to get Y. All the variables are measured and adjustable -- and it scales up as well as down.

Using readily proffered attention and affinity data, users can get a closer fit to what they actually want in terms of information and opportunity. Sellers can fine-tune the information and offers they direct into the buying process. Over time, this can be a proficient fit right down to a one-to-one relationship, from buying Boeing 787s to a stick of chewing gum.

It's clearly the future: B2B and B2C commerce driven by data-empowered inferences between that buys need, and what sellers have. Only the price needs to be negotiated. Perhaps Salesforce.com will broker that too?

So who will be in the uber hub position, the meta directory and meta facilitator for the lead generation economy future? Media companies want it, technology companies want it, search and social media companies want it. And they all should, it's a trillion dollar business opportunity.

Salesforce.com is clearly in the game. May the best data win.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 19th February 2010 Copyright Interarbor Solutions © 2010

The next BriefingsDirect Analyst Insights Edition, Volume 49, hones in on the predictions for IT industry growth and impact, now that the recession appears to have bottomed out. We're going to ask our distinguished panel of analysts and experts for their top five predictions for IT growth through 2010 and beyond.

To help us gaze into the IT trends crystal ball we are joined by our panel: Jim Kobielus, senior analyst at Forrester Research; Joe McKendrick, independent analyst and prolific blogger; Tony Baer, senior analyst at Ovum; Brad Shimmin, principal analyst at Current Analysis; Dave Linthicum, CEO of Blue Mountain Labs; Dave Lounsbury, vice-president of collaboration services at The Open Group; Jason Bloomberg, managing partner at ZapThink, and JP Morgenthal, independent analyst and IT consultant. The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Shimmin: Mine are geared toward collaboration and conferencing. The first and most obvious is that clouds are going to become less cloudy. Vendors, particularly those in the collaboration space, are going to start to deliver solutions that are actually a blend of both cloud and on-premise.

We've seen Cisco take this approach already with front-ending some web conferencing to off-load bandwidth requirements at the edge and to speed internal communications. IBM, at least technically, is poised do the same with Foundations, their appliances line, and LotusLive, their cloud-based solution.

With vendors like these that are going to be pulling hybrid, premise/cloud, and appliance/service offerings, it's going to really let companies, particularly those in the small and medium business (SMB) space, work around IT constraints without sacrificing the control and ownership of key processes and data, which in my mind is the key, and has been one of the limiting factors of cloud this year.

Number two: I have "software licensing looks like you." As with the housing market, it's really a buyer's market right now for software. It's being reflected in how vendors are approaching selling their software. Customers have the power to demand software pricing that better reflects their needs, whether it's servers or users.

So, taking cues from both the cloud and the open-source licensing vendors out there, we will see some traditional software manufacturers really set up a "pick your poison" buffet. You can have purchase options that are like monthly or yearly subscriptions or flat perpetual licenses that are based on per seat, per server, per CPU, per request, per processor, or per value unit—with a shout out at IBM there—or any of the above.

You put those together in a way that is most beneficial to you as a customer to meet your use case. We saw last year with web conferencing software that you could pick between unlimited usage with a few seats or unlimited seats with limited usage. You can tailor what you pay to what you need.

Third for me is the mobile OS wars are going to heat up. I'm all done with the desktop. I'm really thinking that it's all about the Google Chrome/Android. I know there's a little bit of contention there, but Google Chrome/Android, Symbian, RIM, Apple iPhone, Windows Mobile, all those devices will be the new battle ground for enterprise users.

I think the weapons will be user facing enterprise apps that work in concert with line-of-business solutions on the back-end. We'll see the emergence of native applications, particularly within the collaboration space, that are capable of fully maximizing the underlying hardware of these devices, and that's really key. Capabilities like geo-positioning, simultaneous web invoice and, eventually, video, are really going to take off across all these platforms this year.

But, the true battle for this isn't going to be in these cool nifty apps. It's really going to be in how these vendors can hopefully turn these devices into desktops, in terms of provisioning, security, visibility, governance, etc. That, to me, is going to be where they're going to either win or lose this year.

Four is "The Grand Unification Theory"—the grand unification of collaboration. That's going to start this year. We're no longer going to talk about video conferencing, web conferencing, telepresence, and general collaboration software solutions as separate concerns. You're still going to have PBXs, video codecs, monitors, cameras, desk phones, and all that stuff being sold as point solutions to fill specific requirements, like desktop voice or room-based video conferencing and the like.

But, these solutions are really not going to operate in complete ignorance of one another as they have in the past. Vendors with capabilities or partnerships spanning these areas, in particular—I'm pointing out Cisco and Microsoft here—can bring, and will be bringing, facets of these together technically to enable users to really participate in collaboration efforts, using their available equipment.

And last but not least ... Google Wave is really going to kick in in 2010. I may be stating the obvious, or I maybe stating something that's going to be completely wrong, but I really feel that this is going to be the year that traditional enterprise collaboration players jump head long into this Google Wave pool in an effort to really cash in on what's already a super-strong mind share within the consumer ranks.

Even though they have a limited access to the beta right now, there are over a million users of it, that are chunking away at this writing code and using Wave.

Of course, Google hosted rendition will excel in supporting consumer tasks like collaborative apps and role playing games. That's going to be big.

Linthicum: My top five are going to be, number one, cloud computing goes mainstream. That's a top prediction, I'm just seeing the inflection point on that.

I know I'm going out on the edge on this one. Go to indeed.com and do a search on the cloud-computing jobs postings. As I posted on my InfoWorld blog few weeks ago, it's going up at an angle that I have never seen at any time in the history of IT. The amount of growth around cloud computing is just amazing. Of course, it's different aspects of cloud computing, not just architecture, with people who are cloud computing developers and things like that.

The Global 2000 and the government, the Global 1, really haven't yet accepted cloud computing, even though it's been politically correct for some time to do so. The reason is the lack of control, security concerns, and privacy issues, and, of course, all the times the cloud providers went down. The Google outages and the loss of stuff with T-Mobile, hasn't really helped, but ultimately people are gearing up, hiring up, and training up for cloud computing.

We are going to see a huge inflection point in cloud computing. This can be more mainstream in Global 2000 than it has been in the past. It's largely been the domain of SMBs, pilot projects, things like that. It's going to be a huge deal in 2010 and people are going to move into cloud computing in some way, shape, or form, if they are in an organization.

The next is privacy becomes important. Facebook late last year pulled a little trick, where they changed the privacy settings, and you had to go back and reset your privacy settings. So, in essence, if you weren’t diligent about looking at the privacy settings within your Facebook account and your friends list, your information was out on the Internet and people could see it.

The reason is that they're trying to monetize people who are using Facebook. They're trying to get at the information and put the information out there so it's searchable by the search engines. They get the ad revenue and all the things that are associated with having a big mega social media site.

People are going to move away from these social media sites that post their private information, and the social media sites are going to react to that. They're going to change their policies by the end of 2010, and there's going to be a big uproar at first.

Next, the cloud crashes make major new stories. We've got two things occurring right now. We've got a massive move into the cloud. That was my first prediction. We have the cloud providers trying to scale up, and perhaps they’ve never scaled up to the levels that they are going to be expected to scale to in 2010. That's ripe for disaster.

A lot of these cloud providers are going to over extend and over sell, and they're going to crash. Performance is going to go down—very analogous to AOL’s outage issues, when the Internet first took off.

We're going to see people moving to the cloud, and cloud providers not able to provide them with the service levels that they need. We're going to get a lot of stories in the press about cloud providers going away for hours at a time, data getting lost, all these sorts of things. It's just a matter of growth in a particular space. They're growing very quickly, they are not putting as much R&D into what these cloud systems should do, and ultimately that's going to result in some disasters.

Next, Microsoft becomes cloud relevant. Microsoft, up to now, has been the punch line of all cloud computing. It had the Azure platform out there. They've had a lot of web applications and things like that. They really have a bigger impact in the cloud than most people think, even though when we think of cloud, we think of Amazon, Google, and larger players out there.

With Azure coming into its own in the first quarter of next year in the rise of their office automation applications for the cloud, you are going to see a massive amount of people moving to the Microsoft platform for development, deployment, infrastructure, and the office automation application. The Global 2000 that are already Microsoft players and the government that has a big investment in Microsoft are going to move in that direction.

Suddenly, you're going to see Microsoft with a larger share of the cloud, and they're going to be relevant very quickly. In the small- and medium-sized business, it's still going to be the domain of Google, and state and local governments are still be going to be the domain of Google, but Microsoft is going to end up ruling the roost by the end of 2010.

Finally, the technology feeding frenzy, which is occurring right now. People see the market recovering. There is money being put back into the business. That was on the sidelines for a while. People are going to use that money to buy companies. I think there is going to be a big feeding frenzy in the service-oriented architecture (SOA) world, in the business intelligence (BI) world, and definitely in the cloud-computing world.

Lots of these little companies that you may not have heard about, which may have some initial venture funding, are suddenly going to disappear. Google has been taking these guys out left and right. You just don’t hear about it. You could do a podcast just on the Google acquisitions that have occurred this week. That's going to continue and accelerate in 2010 to a point where it's almost going to be ridiculous.

Lounsbury: I'm going to jump on the cloud bandwagon initially. We’ve seen huge amounts of interest across the board in cloud and, particularly, increasing discussions about how people make sense of cloud at the line-of-business level.

Another bold prediction here is that the cloud market is going to continue to grow, and we'll see that inflection point that Dave Linthicum mentioned. But, I believe that we're going to see the segmentation of that into two overarching markets, an infrastructure-as-a-service (IaaS) or platform-as-a-service market (PaaS) and software-as-a-service (SaaS) market. So that's my number one prediction.

We'll see the continued growth in the acceptance by SMBs of the IaaS and PaaS for the cost and speed reasons. But, the public IaaS and PaaS are going to start to become the gateway drug for medium- to large-size enterprises. You're going to see them piloting in public or shared environments, but they are going to continue to move back toward that locus of controlling their own resources in order to manage risk and security, so that they can deliver their service levels that their customers expect.

My third prediction, again in cloud, is that SaaS will continue to gain mainstream acceptance at all levels in the enterprise, from small to large. What you’ll see there is a lot of work on interfaces and APIs and how people are going to mash up cloud services and bring them into their enterprise architectures.

Of course all of this is set against the context that all distributed computing activities are set against, which is security and privacy issues.

This is actually going to be another trend that Dave Linthicum has mentioned as a blurring of a line between SaaS and SOA at the enterprise level. You’ll see these well on the way to emerging as disciplines in 2010.

The fourth general area is that all of this interest in cloud and concern about uptake at the enterprise level is going to drive the development of cloud deployment and development skills as a recognized job function in the IT world, whether it's internal to the IT department or as a consultancy. Obviously, as a consultancy, we look to the cloud to provide elasticity of deployment and demand and that's going to demand an elastic workforce.

So the question will be how do you know you are getting a skilled person in that area. I think you'll see the rise of a lot of enterprise-level artifacts such as business use cases, enterprise architecture tools, and analytic tools. Potentially, what we'll see in 2010 is the beginning of the development of a body of knowledge: practitioners in cloud. We'll start to recognize that as a specialty the way we currently recognize SOA as a specialty.

Of course all of this is set against the context that all distributed computing activities are set against, which is security and privacy issues. I don’t know if this is a prediction or not, but I wonder whether we're going to see our cloud harbor in 2010 its first big crash and the first big breach.

We've already mentioned privacy here. That's going to become increasingly a public topic, both in terms of the attention in the mainstream press and increasing levels of government attention.

There have been some fits and starts at the White House level about the cyber czar and things like that, but every time you turn around in Washington now, you see people discussing cyber security. How we're going to grow our capability in cyber security and increasing recognition of cyber security risk in mainstream business are going to be emerging hot topics of 2010.

Kobielus: Number one: IT is increasingly going to in-source much of BI development of reports, queries, dashboards, and the like to the user through mash up self-service approaches, SaaS, flexible visualization, and so forth, simply because they have to.

IT is short staffed. We're still in a recession essentially. IT budgets are severely constrained. Manpower is severely constrained. Users are demanding mashups and self-service capabilities. It's coming along big time, not only in terms of enterprise deployment, but all the BI vendors are increasingly focused on self-service solution portfolios.

Number two: The users who do more of the analytics development are going to become developers in their own right. That may sound crazy based on the fact that traditionally data mining is done by a cadre of PhD statisticians and others who are highly specialized.

Question analysis, classification and segmentation, and predictive analytics is coming into the core BI stack in a major way. IBM’s acquisition of SPSS clearly shows that not only is IBM focusing there, but other vendors in this space, especially a lot of smaller players, already have some basic predictive analytics capabilities in their portfolios or plan to release them in 2010.

Basically, we're taking data mining out of the hands of the rocket scientists and giving it to the masses through very user-friendly tools. That's coming in 2010.

Number three: There will be an increasing convergence of analytics and transactional computing, and the data warehouse is the hub of all that. More-and-more transactional application logic will be pushed down to be executed inside of the data warehouse.

The data warehouse is a greater cloud, because that's where the data lives and that's where the CPU power is, the horse power. We see Exadata, Version 2 from Oracle. We see Aster Data, nCluster Version 4.0. And, other vendors are doing similar things, pointing ahead to the coming decade, when the data warehouse becomes a complete analytic application server in its own right—analytics plus transaction.

Number four: We're seeing, as I said, that predictive analytics is becoming ever more important and central to where enterprises are going with BI and the big pool of juicy data that will be brought into predictive model. Much of it is coming from the whole Web 2.0 sphere and from social networks—Twitters, Facebooks and the like, and blogs. That's all highly monetizable content, as Dave Linthicum indicated.

We're seeing that social network analysis has a core set of algorithms and approaches for advanced analytics that are coming in a big way to data mining tools, text analytics tools, and to BI. Companies are doing serious marketing campaign planning, optimization, and so forth, based on a lot of that information streaming in real-time. It's customer sentiment in many ways. You know pretty much immediately whether your new marketing campaign is a hit or a flop, because customers are tweeting all about it.

That's going to be a big theme in 2010 and beyond. Social network analysis really is a core business intelligence for marketing and maintaining and sustaining business in this new wave.

And, finally, number five: Analytics gets dirt cheap. Right now, we're in the middle of a price war for the enterprise data warehousing stack hardware and software. Servers and storage, plus the database licenses, query tools, loading tools, and BI are being packaged pretty much everywhere into appliances that are one-stop shopping, one throat to choke, quick-deploy solutions that are pre-built.

Increasingly, they'll be for specific vertical and horizontal applications and will be available to enterprises for a fraction of what it would traditionally cost them to acquire all those components separately and figure it out all themselves. The vendors in the analytics market are all going appliance. They're fighting with each other to provide the cheapest complete application on the market.

McKendrick: My number one trend is the impact of the economy. By all indications, 2010 is going to be a growth year in the economy. We're probably in this V shape.

See, I'm actually an optimist, not a pessimist. The world may end in 2012, but for 2010, we're going to have a great economy. It's going to move forward.

For this decade, we're looking forward to the rise of something called "social commerce," where the markets are user-driven and are conversations.

Number two: Cloud computing. We’ve all been talking about that. That's the big development, the big paradigm shift. Clouds will be the new "normal." From the SOA perspective, we're going to be seeing a convergence. When we talk about cloud, we're going to talk about SOA, and the two are going to be mapped very closely together.

Dave Linthicum talks a lot about this in his new book and in his blog work. Services are services. They need to be transparent. They need to be reusable and sharable. They need to cross enterprise boundaries. We're going to see a convergence of SOA and cloud. It’s a service-oriented culture.

Number three: Google is becoming what I call the Microsoft of the clouds. Google offers a browser and email. It has a backend app engine. It offers storage. They're talking about bringing out an OS. Google is essentially providing an entire stack from which you can build your IT infrastructure. You can actually build a company’s IT infrastructure on the back of this. So, Google is definitely the Microsoft of the cloud for the current time.

Microsoft is also getting into the act as well with cloud computing, and they are doing a great job there. It’s going to be interesting to see what happens. By the way, Google also offers search as a capability.

Number four: We're going to see less of a distinction between service providers and service consumers over clouds, SOA, what have you. That's going to be blurring. Everybody will be providing and publishing services, and everybody will be consuming services.

You're going to see less of a distinction between providers and consumers. For example, I was talking to a reinsurance company a few months back. They offer a portal to their customers, the customers being insurance companies. They say that they offer a lot of analytics capabilities that their customers don’t have, and the customers are using their portal to do their own analytic work.

They don’t call it cloud. Cloud never entered the conversation, but this is a cloud. This is a company that’s offering cloud services to its consumers. We're going to see a lot of that, and it’s not necessarily going to be called cloud. You're not going to see companies saying, "We're offering clouds to our partners." It’s just going to be as the way it is.

Number five: In the enterprise application area, we've seen it already, but we're going to see more-and-more pushback against where money is being spent. As I said, the economy is growing, but there is going to be a lot of attention paid to where IT dollars are going.

I base this on a Harvard Medical School study that just came out last month. They studied 4,000 hospitals over a three-year period and found that, despite hundreds of millions of dollars being invested at IT, IT had no impact on hospital operations, patient care quality, or anything else.

Morgenthal: Number one: Cyber security. I am beginning to understand how little people actually understand about the differences between what security is and information assurance is, and how little people realize that their systems are compromised and how long it takes to eliminate threat within an organization.

Because of all of this connectedness, social networking, and cloud, a lot of stuff is going to start to bubble up. People who thought things were taken care of are going to learn that it wasn’t taken care of, and there will be a sense of urgency about responding to that. We're going to see that happen a lot in the first half of 2010.

Number two: Mobile. The mobile platforms are now the PC of yesterday, right? The real battle is for how we use these platforms effectively to integrate into people’s lives and allow them to leverage the platform for communications, for collaboration, and to stay in touch.

It seems everywhere I go, people are willing to spend a lot of money on their data plan. So, that’s a good sign for telecoms.

My personal belief is that it overkills information overlook, but that’s me. I know that everywhere I go, I see people using their iPhones and flicking through their apps. So, they hit upon a market segment, a very large market segment, that actually enjoys that. Whether small people like me end up in a cave somewhere, the majority of people are definitely going to be focused on the mobile platform. That also relates to the carriers. I think there still a carrier war here. We've yet to see AT&T and iPhone in the US break apart and open up its doors to other carriers.

Number three: Business intelligence and analytics, especially around complex event processing (CEP). CEP is still in an immature state. It does some really interesting things. It can aggregate and correlate. It really needs to go to that next step and help people understand how to build models for correlation. That’s going to be a difficult step.

As somebody was saying earlier, you had these little Poindexters sitting in the back room doing the stuff. There's a reason why the Poindexters were back there doing that. They understand math and the formulas that are under building these analytical models.

CEP and analytics—and the two tied together. You’ll see that the BI, and data aspects of the BI, side will integrate with the CEP modeling to not only report after the fact on a bunch of raw data, but almost be proactive, and try to, as I said in my blog entry, know when the spit hits the fan.

Number four is collaboration. We’ve crossed the threshold here. People want it. They're leveraging it.

The labor market has not caught up to take advantage of these tools, design them, architect the solutions properly, and deploy and manage them.

I've been seeing some uptake on Google Wave. I think people are still a little confused by the environment, and the interaction model is not quite there yet to really turn it on its ear, but it clearly is an indication that people like large-scale interactions with large groups of people and to be able to control that information and make it usable. Google is somewhat there, and we'll see some more interesting models emerge out of that as well.

Number four is labor. We're at a point where the market is based on all these other things based on the cloud. We had a lot of disruptive technologies hit in the past five years—enterprise mashups, SOA, and cloud computing. The labor market has not caught up to take advantage of these tools, design them, architect the solutions properly, and deploy and manage them.

I think that 2010 has to be a year for training, rebuilding, and getting some of those skills up. Today, you hear a lot of stories, but there is a large gap for any company to be able to jump into this. Skills are not there. The resources are not there and they are not trained. That's going to be a huge issue for us in 2010.

Bloomberg: I'm going to be a bit of the naysayer of the bunch. I just don't see cloud computing striking it big in 2010. When we talk to enterprise architects, we see a lot of curiosity and some dabbling. But, at the enterprise scale, we see too much resistance in terms of security and other issues to put a lot of investment into it. It's going to be gradually growing, but I don't see such a point coming as soon as you might like.

Small organizations are a different story. We see small organizations basing their whole business models on the cloud, but at the enterprise level, it's sort of a toe in the water, and we see that happening in the 2010.

Another thing we don't see really taking off in any big way is Enterprise 2.0. That is Web 2.0 collaborative technologies for the enterprise. You know, "Twitter On Steroids," and that kind of thing. Again, it's going to be more of a toe in the water thing. Collaborative technologies are maturing, but we don't see a huge paradigm shift in how collaboration is done in the enterprise. It's going to be more of a gradual process.

Another thing that we are not seeing happening in 2010 is CIOs and other executives really getting the connection between business process management (BPM) and SOA. We see those as two sides of the same coin. Architects are increasingly seeing that in order to do effective BPM you have to have the proper architecture in place. But, we don't see the executives getting that and putting money where it belongs in order to effect more flexible business process. So, this is another work in progress, and it's going to be a struggle for architects to make progress over the course of the year.

As far as the end of the recession, yeah, we're all hoping that the economy picks up, and I do see that there is going to be a lot of additional activity as a result of an improving economy, but I don't see a huge uptake in spending on software per se.

Spending in IT is going to go up, but in terms of what the executives going to invest in, they're going to be very careful about purchasing software. That's going to drive some money to cloud-based solutions, but that's still just a toe in the water as well.

Software vendors were hoping for a huge year, but they're going to be disappointed. It's going to be a growth year, but it's going to be moderate growth for the vendors.

Those are my first four. Those are the negatives. Not to be too negative, in terms of the positive, what we see happening in 2010 is increased focus on "MSW." You know what MSW is, right? Politely speaking it's "Make Stuff Work." Of course, you could put a different word in there for the S, but Make Stuff Work, that's what we see the architects really focusing on.

They have a good idea now of what SOA is all about. They have a good idea about how the technology fits in the story and the various technologies that have been mentioned on this call, whether it's analytics, data management, SaaS, and the cloud-based approaches. Now, it's time to get the stuff to work together, and that's the real challenge that we see.

The SOA story is no longer an isolated story. We're going to do SOA, let's go do SOA. But, it's SOA plus other things. So, we're going to do SOA, BPM, and the architecture driving that, despite the fact that the CIO may not quite connect the dots there.

SOA plus master data management (MDM)—it's not one or the other now. It's how we get those things to work together. SOA plus virtualization. That's another challenge. Previously, those conversations were separate parts of the organization. We see more and more conversations bringing those together.

SOA and SaaS—somebody already mentioned that SaaS is one segment of the cloud category. It's little more mature than the rest. We see more organizations understanding the connection between those two and trying to put them together. We'll do middleware and we'll do SOA, but we don't really see the connection where we confuse one for the other, and that was a big issue.

We're happy to call this services-oriented, even though the organization, as a whole, may call it variety of different things, depending on the perspective of the individual.

Baer: On cloud and virtualization, basically I agree with Jason, and I don't agree with David or with Joe. It’s not going to be the "new normal." We're going to see this year an uptake of all the management overhead of dealing with cloud and virtualization, the same way we saw with outsourcing years back, where we thought we'd just throw labor costs over the wall.

Secondly, JP, I very much believe that there is going to be convergence between BI and CEP this year. I agree with him that there's not going to be a surge of Albert Einsteins out there. On the other hand, I see this as a golden opportunity for vendors to package these analytics as applications or as services. That's where I really see the inflection curve happening.

Number three: Microsoft and Google. Microsoft will be struggling to stay relevant. Yes, people will buy Windows 7, because it's not Vista. That’s kind of a backhanded compliment to say, "We're buying this, because you didn't screw up as badly as last time." It doesn't speak well for the future.

Google meets a struggle for focus. I agree with Joe that they are aspiring to be the Microsoft of the cloud, but it may or may not be such a good thing for Google to follow that Microsoft model.

Finally, I agree with Jim that you are going to see a lot more business-oriented, whether it's BI, BPM, or IBM buying Lombardi. I hope they don't mess up Lombardi and especially I hope they don't mess up Blueprint. I've already blogged about that.

One other point—and I don't know if this fits into a top five or not—but I found what Joe was talking about very interesting in terms of the let-down on health-care investment in IT. There's going to be lot a of pushing in electronic medical records (EMR) this year. I very much believe in EMRs, but, on the other hand, they are no panacea. We're going to see a trough of disillusionment happen on that as well.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: V Bharathwaj, CMO, 24/7 Customer Posted: 15th February 2010 Copyright 24/7 Customer © 2010

Are opinions on social media a lead indicator for CSAT? Absolutely yes.

With millions of opinions expressed on social media sites, such as Twitter and Facebook, it has become a reality today. For example, we analyse tweets about several companies through 247tweetview and when we compare the sentiments expressed by consumers with the end customer CSAT for our clients there is a clear pattern. Companies do not need to wait for a survey to be done/analysed and then figure out whether their CSAT scores are good or bad. The moment of truth is happening every minute/every day.

Take the following as an indicator. On an average, CSAT survey responses are between 1%–1.5%. For a company that has a million contacts every month, this would be around 10,000 responses in a month. On the other hand a company with a similar contact base would receive anywhere between 50,000 to 60,000 tweets every month.

Even if one discounts 50% of this, it is still a threefold volume in terms of direct voice of customer inputs. And this is only from one source in social media. Compound this with other social media sites and the level of insights one can get from social media cannot be ignored. This does not mean that CSAT surveys are redundant. It only means that CSAT surveys should be seen in conjunction with the opinions expressed in social media. And it will not be long before social media starts driving a redesign of CSAT surveys.

Companies need to start thinking about this as part of their customer service and social media strategy.

By: Rob Bamforth, Principal Analyst, Quocirca Posted: 12th February 2010 Copyright Quocirca © 2010

Terms like ‘unified communications’ (UC) look great on the marketing slides of product vendors, but what do they really mean to those who are, or ‘may be if it can be shown to be worthwhile’, prospective customers? Frankly, not a lot.

The soft and intangible vendor promises that accompany UC don’t always translate into the real benefits that most customers are actually looking for. After all, in many job roles ‘productivity’ is down to employee attitude and time management rather than the clever use of the latest communications tools. Such tools are not always what they seem once the shiny marketing veneer has been rubbed off. Whilst it is true that many communications technologies are converging through the sometimes grudging acceptance of common underlying standards, most vendors are still trying to add that extra bit of differentiation or ‘value add’ that makes their products unique, or, as some might term it, ‘proprietary’ and in some cases ‘incompatible’.

Is this a problem? Well, not for customers who believe a particular vendor’s products will fill all their current and near term needs, or that communications technology will not advance too quickly, or that they will not get overtaken by other changes to the business. That may be the case for a select few, but it’s pretty likely that whatever is implemented will have to fit in with other products, be upgraded or replaced from time to time; to do this there must be a fair amount of flexibility.

So, the first question that should be asked by potential customers of the amalgam of products that will be required to deliver unified communications is ‘what will it look like for us?’.

This is often a tricky question when tabled directly at a specific product vendor, as it is always difficult to demonstrate the fit of its products with others. For example some vendors focus on the desktop, others on IP phones and others in hosted services. It doesn’t matter whether these are all competitive or complementary, but a suitably equipped reseller or integration partner ought to be able to showcase multiple vendors’ products and offer an integrated UC solution.

This is all very well—if all that the customer needed to do was look at the technology—but to really understand the impact, they need to feel it and see it applied to the needs of their specific, and probably complex, environment.

This demands more from the channel partner than the ability to showcase, sell and support various vendors’ technology. They have to demonstrate the ability to integrate them, not only with a customer’s legacy communications tools, but also with that customer’s existing processes, people and working practices. In an ideal world part of the sales process would be to run a pilot where the customer makes a significant commitment with its own systems and people. But this is tough on resources and times are hard so more upfront justification is necessary.

Budding unified communications specialists could take a leaf out of the book of systems integrator and managed services company, Logicalis, which has taken a more direct approach. Logicalis has built a proof of concept staging environment that brings together technology from the major unified communications vendors and allows them to be connected in a variety of ways. The setup is distributed, making use of several locations and has the capacity for building a simplified model of a prospective client’s current communications and then demonstrate how different technologies could be applied to support UC. Diversity of product and technical knowledge helps, but by far the most important success factor will be how well Logicalis understands and models the communications processes of its customers—i.e. its “value add”.

Positive approaches have been adopted by others. Managed communications company Azzurri has recognised that customers look for PBXs and telephony from established telephony vendors and IT products from traditional IT vendors to get a best of breed fit, but Azzurri starts by asking ‘what type of users do you have?’ not ‘how many?’. Systems integrator 2e2 thinks beyond UC in isolation and looks at how communication enables and optimises business processes—2e2 would be disappointed if its customers saw UC as simply a phone system replacement.

Communication, ultimately, is between people, not devices. Joining up the gaps between media and modes of communication in the way that unified communications proponents promote is therefore only worthwhile if it makes a positive change to employee behaviour, streamlining processes, boosting productivity and reducing costs. But without a demonstration of specific impact, these are vague marketing statements.

Any company looking to invest in unified communications should seek out those channel partners—value added resellers, integrators or service providers—who can help with the details of integration—not between technologies, but between people.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 3rd February 2010 Copyright Interarbor Solutions © 2010

The latest BriefingsDirect Analyst Insights Edition, Volume 48, centers on the IT job landscape for 2010. We interview David Foote, CEO and chief research officer, as well as co-founder, at Foote Partners LLC of Vero Beach, Fla.

David closely tracks the hiring and human resources trends across the IT landscape. He'll share his findings of where the recession has taken IT hiring and where the recovery will shape up. We'll also look at what skills are going to be in demand and which ones are not. David will help those in IT, or those seeking to enter IT, identify where the new job opportunities lie.

I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Foote: I co-founded this company with a former senior partner at McKinsey. We developed a number of products and took them out in 1997. We not only have that big IT executive and trends focus as analysts, but also very much a business focus.

We've also populated this company with people from the HR industry, because one of the products we are best known for is the tracking of pay and demand for IT salaries and skills.

We have a proprietary database—which I'll be drawing from today—of about 2,000 companies in the U.S. and Canada. It covers about 95,000 IT workers. We use this base to monitor trends and to collect information about compensation and attitudes and what executives are thinking about as they manage IT departments.

For many years, IT people were basically people with deep technical skills in a lot of areas of infrastructure, systems, network, and communications. Then, the Internet happened.

All of a sudden, huge chunks of the budget in IT moved into lines of business. That opened the door for a lot of IT talent that wasn't simply defined as technical, but also customer facing and with knowledge of the business, the industry, and solutions. We've been seeing a maturation of that all along.

What's happened in the last three years is that, when we talk about workforce issues and trends, the currency in IT is much more skills versus jobs, and part of what's inched that along has been outsourcing.

If you need to get something done, you can certainly purchase that and hire people full-time or you can rent it by going anywhere in the world—Vietnam, Southeast Asia, India, or many other places. Essentially, you are just purchasing a market basket of skills. Or, these days, you can give it over to somebody, and by that I mean managed services, which is the new form of what has been traditionally called outsourcing.

It's not so much about hiring, but about how we determine what skills we need, how we find those, and how we execute. What's really happened in two or three years is that the speed at which decisions are made and then implemented has gotten to the point where you have to make decisions in a matter of days and weeks, and not months.

Resisting the temptation
There have been some interesting behaviors during this recession that I haven't seen in prior recessions. That lead me to believe that people have really resisted the temptation to reduce cost at the expense of what the organization will look like in 2011 or 2012, when we are past this recession and are back into business as usual.

People have learned something. That's been a big difference in the last three years. ... Unemployment in IT is usually half of what it is in the general job market, if you look at Bureau of Labor Statistics (BLS) numbers. I can tell you right now that jobs, in terms of unemployment in IT, have really stabilized.

In the last three months [of 2009] there was a net gain of 11,200 jobs in these five [IT] categories. If you look at the previous eight months, prior to September, there was a loss of 31,000 jobs.

So going into 2010, the services industry will absolutely be looking for talent. There's going to be probably a greater need for consultants, and companies looking for help in a lot of the execution. That's because there are still a lot of hiring restrictions out there right now. Companies simply cannot go to the market to find bodies, even if they wanted to.

Companies are still very nervous about hiring, or to put it this way, investing in full-time talent, when the overhead on a full-time worker is usually 80–100 percent of their salaries. If they can find that talent somewhere else, they are going to hire it.

There are certain areas, for example, like security, where there is a tendency to not want to hire talent outside, because this is too important to a company. There are certain legacy skills that are important, but in terms of things like security, a lot of the managed services that have been purchased in 2009 were small- to medium-sized companies that simply don't have big IT staffs.

If you have 5,000, 6,000, or 7,000 people working in IT, you're probably going to do a lot of your own security, but small and medium size have not, and that's an extremely hot area right now to be working in.

We track the value of skills and premium pay for skills, and the only segment of IT that has actually gained value, since the recession started in 2007, is security, and it has been progressive. We haven't seen a downturn in its value in one quarter.

High demand for security certification
Since 2007, when this recession started, overall the market value of security certs is up 3 percent. But if you look at all 200 certified skills that we track in this survey that we do of 406 skills, overall skills have dropped about 6.5 percent in value, but security certifications are up 2.9.

It is a tremendous place to be right now. We've asked people exactly what skills they're hiring, and they have given us this list: forensics, identity and access management, intrusion detection and prevention systems, disk file-level encryption solutions, including removable media, data leakage prevention, biometrics, web content filters, VoIP security, some application security, particularly in small to medium sized companies (SMBs), and governance, compliance, and audit, of course.

The public sector has been on a real tear. As you do, we get a lot of privileged information. One of the things that we have heard from a number of sources, I can't tell you the reason why, is that a lot of recruiting is happening in the private sector right now with the National Security Agency and Homeland Security -- in-the-trenches people.

I think there was a feeling that there weren't enough real deep technical, in-the-trenches kind of talent, in security. There were a lot of policy people, but not enough actual talent. Because of the Cyber Security Initiative, particularly under the current administration, there has been a lot of hiring.

Managed services looks like one of the hottest areas right now, especially in networking and communication: Metro Ethernet, VPNs, IP voice, and wireless security. And if you look at the wireless security market right now, it's a $9 billion market in Europe. It's a $5.7 billion market in Asia-Pacific. But in North America it's between $4 and 5 billion.

There's a lot of activity in wireless security. We have to go right down into every one of these segments. I could give you an idea of where the growth is spurting right now. North America is not leading a lot of this. Other parts of the world are leading this, which gives our companies opportunities to play in those markets as well.

For many years, as you know, Dana, it was everybody taking on America, but now America is taking on the rest of the world. They're looking at opportunities abroad, and that's had a bigger impact on labor as well. If you're building products and forming alliances and partnerships with companies abroad, you're using their talent and you're using your talent in their countries. There is this global labor arbitrage, global workforce, that companies have right now, and not just the North American workforce.

Listen to the podcast. Read a full transcript or download a copy. Find it on iTunes/iPod.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 18th December 2009 Copyright Interarbor Solutions © 2009

The latest BriefingDirect podcast delivers an executive interview with Robin Purohit, Vice President and General Manager for HP Software and Solutions.

I had the pleasure to recently sit down with Purohit to examine how CIOs are managing their IT budgets for 2010. During the economic recovery, the cost-containment conundrum of "do more for less"—that is, while still supporting all of your business requirements—is likely to remain the norm.

So this discussion centers on how CIOs are grappling with implementing the best methods for higher cost optimization in IT spending, while also seeking the means to improve innovation and business results. The interview coincides with HP's announcements this week at Software Universe in Germany on fast-tracks to safer cloud computing.

"Every CIO needs to be extremely prepared to defend their spend on what they are doing and to make sure they have a great operational cost structure that compares to the best in their industry," says Purohit.

The 25-minute interview is conducted by me, Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Purohit: Well, just about every CIO I've talked to right now is in the middle of planning their next year’s budget. Actually, it's probably better to say preparing for the negotiation for next year’s budget. There are a couple of things.

The good news is that this budget cycle doesn’t look like last year’s. Last year’s was very tough, because the financial collapse really was a surprise to many companies, and it required people to very quickly constrain their capital spend, their OPEX spend, and just turn the taps off pretty quickly.

... [Now] they need to be able to prepare to make a few big bets, because the reality is that the smartest companies out there are using this downturn as an advantage to make some forward looking strategic bets. If you don't do that now, the chances are that, two years from now, your company could be in a pretty bad position.

... There are a couple of pretty important things to get done. The first is to have an extremely good view of the capital you have, and where it is in the capital cycle. Getting all of that information that is timely, accurate, and at your fingertips, so you can enter the planning cycle, is extraordinarily important and fundamental.

When you are going to deploy new capital, always make sure that it's going to be able to be maintained and sustained in the lowest-cost way. The way we phrase this is, "Today's innovation is tomorrow’s operating cost."

When you do refresh, there are some great new ways of actually using capital on server storage and networking that's at a much lower cost structure, and much easier to operate, than the systems we had three or four years ago.

In the past, we’ve seen mistakes made, where people deployed new capital without really thinking how they were going to drive the long-term cost structure down in operating that new capital.

This is where we really see an opportunity: To help customers put in place IT financial management solutions, which are not just planning tools—not just understanding what you have—but essentially a real-time financial analytic application that is timely and accurate as an enterprise resource planning (ERP) system, or a business intelligence (BI) system that's supporting the company’s business process.

New business agenda
Companies want to see the CIOs use capital to support the most important business initiatives they have, and usually they are associated with revenue growth, by expanding the sales force, and new business units, some competitive program, or eventually a new ecommerce presence.

It's imperative that the CIO shows as much as possible that they're applying capital to things that clearly align with driving one of those new business agendas that's going to help the company over the next three years.

Now, in terms of how you do that, it's making sure that the capital spend that you have, that everything in the data center you have, is supporting a top business priority. It's the most important thing you can do.

One thing that won't change is that demand from the business will all of a sudden strip your supply of capital and labor. What you can do is make sure that every person you have, every piece of equipment you have, every decision you are making, is in the context of something that is supporting an immediate business need or a key element of business operation.

It also means there are more things and more new things to manage.

There are lots of opportunities to be disciplined in assessing your organization, both in how you spend capital, how you use your capital, and what your people are working on. I wouldn't call it waste, but I would call it just a better discipline and whether what you're doing truly is business critical or not.

If you don't get the people and process right, then new technologies, like virtualization or blade systems, are just going to cause more headaches downstream, because those things are fantastic ways of saving capital today. Those are the latest and greatest technologies. Four or five years ago, it was Linux and Windows Server.

It also means there are more things and more new things to manage. If you don't have extremely disciplined processes that are automated, and if you don't have all of your team with one play book on what those processes are, and making sure that there is a collaborative way for them to work on those processes, and which is as automated as possible, your operating costs are just going to increase as you embrace the new technologies that lower your capital. You've got to do both at the same time.

Say that you're a new CIO coming to an organization and you see a lack of standardization, a lack of centers of excellence, and a lot of growth through merger and acquisition, there is a ton of opportunity to take out operating cost.

The right governance
We've seen customers generally take out 5 to 10 percent, when a new CIO comes on board, rationalizes everything that's being done, and introduces rigorous standardization. That's a quick win, but it's really there for companies that have been probably a little earlier in the maturity cycle of how they run IT.

A couple of new things that are possible now with the outsourcing model and the cloud model—whether you want to call it cloud or software as a service (SaaS)—is that there's an incredibly rich marketplace of boutique service shops and boutique technology providers that can provide you either knowledge or technology services on-demand for a particular part of your IT organization.

The cost structures associated with running infrastructure as a service (IaaS) are so dramatically lower and are very compelling, so if you can find a trusted provider for that, cloud computing allows you to move at least markets that are lower risk to experiment with those kind of new techniques.

The other nice thing we like about cloud computing is that there is at least a perception that is going to be pretty nimble, which means that you'll be able to move services in and out of your firewall, depending on where the need is, or how much demand you have.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Rob Bamforth, Principal Analyst, Quocirca Posted: 17th December 2009 Copyright Quocirca © 2009

There is no doubt that many companies, as well as individuals, will look to keep budgets under control throughout 2010, and Quocirca research often shows that the cost of telecoms is among the more difficult to constrain. Organisations and individuals gain corporate and personal value from remote access, internet connectivity, mobile phones and so on; however, increased use means spending rises, even as tariffs come down.

Telecoms services are not something organisations can do without or arbitrarily cut, but they can better understand and control their use and cost. During a recession, even services previously considered invaluable have had to justify their costs. Some may even turn out on scrutiny to deserve increased investment, but only better use of all services through improved visibility of their true value will justify total telecoms expenditure. Those responsible for telecoms budgets have a choice in 2010—take proactive control or have changes enforced them and where budgets are cut, heads follow. So here are some suggestions for New Year resolutions for those embattled budget managers:

• Rationalise: Assess the current state of supply—what services are currently in use and how will that change? Look to rationalise and consolidate, do not blindly cut back on items bringing in value or that are saving costs elsewhere, but make sure the value is being measured and most importantly clearly visible elsewhere in the business. Make ongoing assessments as employees come and go, or when services and suppliers are replaced. Mind the gaps and do not pay for leavers who have not been replaced.
• Prioritise: Important for shared or limited resources, such as internet access or wide area data connections that often run many services. Identify and protect the business critical ones—this is no time or place for being even-handed. Does the capacity and network performance meet business needs? Are service level agreements (SLAs) being measured and met? Unreliable or cheap connectivity is a false economy if it fails, especially when applications such as e-commerce and conferencing can save other costs such as transport, energy and rent.
• Shop around: look at supplier alternatives to ensure the best deal. Could an existing supplier offer a better discount or an improved quote or could a new one with more options offer a bundle to reduce overall costs? Short term discounts, while welcome, do not address underlying inefficiency issues, so take a strategic view of total communications as well as trying to make item-by-item savings. Staffing or skilling up is expensive, so can elements be incrementally outsourced, e.g. device management, security or billing? This would avoid costly in-house support and keep costs predictable by exploiting flat rate tariffs and per user per month services.
• Converge: The priority should be to combine budgets, not simply buy-in to a technology or vendor solution. However technologies are converging, so keeping IT and communications costs separate—mobile phones, fixed lines, laptops, data cards are often the responsibility of a mix of IT, procurement, finance and facilities—will tend to increase total complexity and cost. Move to consolidated budgets so that decisions are more strategic and less territorial. Then assess real need, and use the ‘shadow IT' effect of consumer technology entering the workplace to business advantage. Not everyone needs a company supplied laptop, mobile email, smart phone or mobile phone. Work out who does and then support employees' own technology choices where it benefits the business, providing this does not cause other costs, e.g. support and security, to run away.
• Lead: Take active control of access, network resource use and end point devices. This is not only for security and consistency, but also to avoid unexpected costs e.g. from former employees continued use or services they no longer have right too (eg lingering mobile phones). It will also be necessary to face up to personal usage; phone systems, home broadband, business supplied mobile phones and Wi-Fi access are rarely exclusively for business use. This does not necessarily need to be curtailed, but must be recognised and managed. Employees need to be aware of their personal usage and commitments to their employer and the tax collectors, and employers must manage responsibly based on a sensible controls and well-communicated company policy.

Many personal New Year's resolutions are made with good intentions, but are quickly broken as time passes, and other matters take precedence. For many organisations it is unlikely that cost concerns will fall in importance in 2010, and resolving to tackle them head on will benefit any business. This may be especially important if preserving their own job is a personal resolution telecoms budget managers would really like to keep.

By: V Bharathwaj, CMO, 24/7 Customer Posted: 2nd December 2009 Copyright 24/7 Customer © 2009

Customer Satisfaction Surveys have become the default to measure how content customers are. By nature, CSATs tend to be reactive; they measure the satisfaction of customers long after the customers and the business have completed their interactions.

Most CSAT surveys fail because they ask customers to merely rate the business' infrastructure and check whether it meets customer requirements and expectations. A number of questions in CSAT surveys focus on how the agent behaved on the call and less on how the customer wants the experience to be structured.

When carried out by independent organizations such as JD Powers or ACSI or NRF Amex, the results of CSATs eventually find their way into the media for wider consumption. This brings the focus entirely on to ratings, with lower ratings likely to send management teams rushing into devising newer strategies. By merely looking at the numbers coming in from CSATs, everyone is guessing on why the ratings went so low.

And thus, the reactive spiral begins. Different survey methods are adopted; changes in quality assurance are re-looked. The chase is on to improve the CSAT ratings rather than to truly find out how to give consumers what they expect in terms of experience.

And in many cases where CSAT numbers are at expected levels internally or externally, innovation to take customer experience to the next level ceases. CSAT gets into maintenance mode.

There is more to customer satisfaction than what the numbers tell. It is vital to prevent this catch up game and to move from reactive to proactive mode in managing CSAT. Being proactive means looking at CSATs from the customer's perspective and ensuring that the customers get what they need in a timely manner. And for businesses, this could even mean changing their current service infrastructure.

Listening to customers is vital for businesses to prevent dissatisfaction among customers and to predict what they would need in future interactions. Equally important is the timing and methodology of translating such feedback into areas of strength. Customer interactions offer a wealth of data that can be analyzed to derive intelligence for driving future business activities.

Whether a survey happens or not, the end customer is communicating with a call center agent all the time using a multitude of channels such as blogs, social forums, Twitter and also surveys. By constantly monitoring and analyzing what the customers are saying in interactions and in the social media, and correlating this to CSAT, companies can innovatively and proactively manage customer expectations.

While the benefits are obvious, deriving actionable intelligence from disparate sources of data—customer data, agent data, interaction data, and sales data—can be a daunting task. Consumer insights need to be extracted from unstructured conversations and opinions. This requires advanced and sophisticated levels of data mining and conversation mining. Businesses can use the results of such analyses to shape customer experiences the way end-customers want and not in the manner they were created by the business.

The 24/7 Innovation Labs team has been working on these areas for over three years now and has come up with mathematical models and advanced analytics that help companies in making this shift from reactive CSAT to proactive CSAT management.

This approach is game changing and hence requires a change in mindset. Companies have to come out of their CSAT management—which is based only on the traditional ratings approach—and embrace a new one that is based on prediction of customers' needs. The question really is that of readiness to explore and transform and measure and manage based on what and how customers expect their experience to be.