IT Outsourcing Alternatives: Emerging IT Markets Around the Globe — Part 1

by Doug Smith

IT Outsourcing Alternatives: Exploring the Emerging IT Markets Around the Globe

Part 1 of a Three-Part Series

For years the term IT outsourcing has been synonymous with sending work over to India. But as India’s IT outsourcing market has become overrun, other countries around the world have begun to step-up as viable alternatives. This three-part series will explore the emerging markets that have begun to take on work that may have been automatically routed to India just a few years ago, as IT outsourcing moves to different sectors across the globe.

IT Outsourcing Makes Its Way To South America and Latin America

The potentially greatest benefit of IT outsourcing is also one of its stumbling blocks — geographical location. When you outsource an IT project you no longer have to worry about location restrictions, paying relocation fees, or wondering if that senior IT director will really leave his hometown to come work for you. IT outsourcing provides the best of the best, without the hassle of wooing a certain skill set.

Additional benefits include:

  • Enhanced skill set. — Outsourcing provides you with access to the brightest minds across the globe.

  • Higher education for your team. — IT outsourcing opens several educational doors for your team. It allows you to recruit someone who can elevate the educational level and skill set of your internal team, while costing less than a typical IT director’s yearly salary.

  • Improved collaboration — Outsourcing allows you to gain both a bird’s eye view and a detailed look at your IT problems, as well as their inherent solutions. In short, outsourcing creates a collaborative environment that typically delivers the optimal results.

With the aforementioned benefits of IT outsourcing in mind, many countries have tried to topple the reigning king of outsourcing — India. To date, Latin American and South American countries have quickly risen through the ranks to become sought-after IT providers. Mexico, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Mexico, Nicaragua, Panama, Peru, and Uruguay all provide IT outsourcing solutions with a number of unique advantages.

  • Latin American and South American countries are typically in the same time zone as the majority of U.S. states. This means that a full workday overlap can occur, which enhances the ability for educational and collaborative opportunities.

  • There are many cultural similarities between the U.S. and South and Latin American countries. Many U.S. IT firms prefer to work with IT specialists from Argentina, due to the fact that the country shares a similar culture. The closer the cultural similarities, the easier it is to establish a certain level of comfort and trust on the given project, and the easier it is to create open lines of communication.

  • Labor is still relatively inexpensive in Latin and South American countries, especially when the accelerated skill set is considered. Additionally, India is currently experiencing an increase in the cost of living, which has subsequently driven up the cost of IT outsourcing.

  • As the population of native Spanish speakers continues to increase within the United States’ borders, the appeal of working with Spanish cultures grows. Generally speaking, U.S. workers have an easier time understanding English that is spoken with a Spanish accent versus English that is spoken with an Indian accent.

  • Geography is one of the biggest benefits of IT outsourcing; however, it can also be a challenge. Fortunately for Latin American and South American countries, it is fairly easy to reach their borders with a short flight from the U.S. Conversely, traveling to India to review work with your chosen IT team is a lengthy and expensive process.

As the list of advantages continues to grow and the countries begin to invest more money into their IT infrastructure and development, Latin America and South America will steadily become the chosen source for IT outsourcing solutions. Stay tuned for Part 2 of this three-part series, published at http://thinkwgroup.com/insights/#/journal, where we will explore rural regions of the United States and the domestic IT sourcing solutions that they provide American companies.


If you’re at a point where re-evaluating your sourcing strategy, providers, or locations makes sense, WGroup can assist you with IT outsourcing advisory services, including strategy, provider evaluations, site risk evaluations, and much more. Visit http://thinkwgroup.com/services/sourcing/ to learn more.

Posted in Default | Comments Off on IT Outsourcing Alternatives: Emerging IT Markets Around the Globe — Part 1

Optimizing Your Application Portfolio in 5 Steps

by Carlton Greene

All companies, from SME’s to multinational enterprises, struggle with balancing investment in applications. With the dizzying array of options, it can often be difficult to know where and how to spend limited financial resources. These five steps will get you started optimizing your organization’s application portfolio, improving IT outcomes, and increasing the cost effectiveness of IT initiatives.

  1. Look at the whole enterprise – It is extremely important that IT leaders seek to align IT objectives with broader business goals. Look at how applications will affect costs, productivity, sales, and user experience for the entire company, and use that to inform application investment decisions. Many IT departments take an insular approach to applications, considering only those they directly manage. However, this doesn’t reflect today’s reality. Technology is a major component of almost every business function, and IT must work closely with the entire company to achieve positive results.

  2. Set prioritization criteria – There is no way to optimize your company’s application portfolio without first setting criteria for prioritization. In order to do this, leaders must consider several factors. Cost, reusability, strategic importance, regulatory requirements, and a wide range of other issues must be evaluated based on your individual company’s needs and goals. Take time to carefully analyze how each of these factors will affect your organization and prioritize applications across the enterprise based on your analysis.

  3. Think long term – Although one application may appear more cost effective or functional today, it is important to take a long term view when making decisions. Maintenance costs, usability, upgradability, vendor support, and SLA’s can all have a major effect on the total cost and value of a particular application. Don’t overlook these factors.

  4. Engage shadow IT – One important part of taking a company wide view of application optimization is looking at shadow IT. Many IT leaders do not have the resources to focus on technology managed outside of their own department, but it can have a major impact on them despite this. When users inevitably come back to IT with problems related to their own shadow initiatives, it becomes IT’s responsibility. That’s why it’s important for IT leaders to understand that although you can’t, and shouldn’t, stop all shadow spending, you can help influence it. IT leaders can guide other business leaders and point out potential security, performance, or compatibility challenges. By working with other leaders, rather than against them, CIO’s can make greater strides towards more efficient business wide IT.

  5. Continually review the portfolio – It is important to remember that portfolio optimization is always a work in progress. As technologies and the company’s needs change, so should your portfolio. CIO’s must regularly review application portfolios to ensure that they are still driving business goals and retire those that aren’t. It is also important to stay aware of current trends and advancements to take advantage of new developments.

Building a robust application portfolio optimization strategy requires cross departmental collaboration, dedication, and a deep knowledge of current technology and company needs. This can often be challenging for IT leaders, but the benefits can drive business goals and make IT more efficient and more cost effective. Taking the time to develop an effective, informed ongoing strategy for your application portfolio management is critical to the success of any CIO.

You may also be interested in Fighting Rising IT Costs With Application Portfolio Rationalization. Click here.

Posted in Default | Comments Off on Optimizing Your Application Portfolio in 5 Steps

The Art of Negotiating with Your IT Service Providers – Part 3

by Brad Friedman

In this last part of the post we address the legal side of IT purchases. While no one wants to focus on litigation, legal components can be critically important to the purchasing lifecycle. In addition, we will discuss some “deal closers”.

Legal – Contracted legal terms and conditions rarely avail themselves, but when they do, it is typically problematic to the business environment. Here are some areas that top our list:

1. Force Majeure (beyond the reasonable control) – There are a few items beyond the reasonable control of a party like “acts of god” or war. Items like shipping delays, labor disputes, and telecommunication often get bundled into force majeure language but can be managed in an alternative manner. These items should not be classified as force majeure issues.

2. Governing Law and Venue –Typically, you want the governing law and venue to be based in the state where your business is headquartered. UCITA states (MD, VA) laws tend to be pro-licensor. Other states, like TX, MA, CA, IL, IA, and HI tend to be complex. New York is a reasonable alternative but the ultimate choice should be one that you are comfortable with and does not present a disadvantage to your organization.

3. Intellectual Property (IP) Indemnification – Always be sure to protect against IP infringement. There should be no limit on liability and only 3 acceptable resolutions to IP infringement: repair, replace, or a full refund.

4. Limitations of Liability – Vendors always want to limit their liability and typically is an arbitrary amount that is less than the overall value. Liability caps are acceptable as long as they are mutually (painful). Base liability caps on direct damages only specifically excluding damages from IP infringement and breach of confidentiality or gross negligence/willful misconduct.

5. Statute of Limitations – Keep an eye out for language that artificially limits your legal options and deviates from the governing venue limitation statutes.

6. “Missing Documents” and URLs – Many contracts reference and incorporate external documents. This is not troubling unless the documents can be amended at the sole discretion of the vendor. Allow for notification of changes to the referenced documents and your ability to terminate the contract should a modification be detrimental to your company.

7. Regulatory Compliance – Understand the compliance regulatory implications of your industry and how the vendor manages their own compliance efforts and facilitates yours.

8. Contract Terminations – There are very few reasons for termination of a perpetual license (which is a company asset) other than non-payment of the initial license.

9. Audits – License compliance audits are fine but they should be mutual, narrow in scope, limited to no more than once a year, and the costs borne by the auditing party. To minimize your business disruption, try to limit the audits to attestation of compliance. If you are out of compliance, license “true-up” costs should be based on your discounted volume pricing.

It’s time to finish the deal, but what other items can add value to your organization and minimally impact your vendor?

1. Training – Minimal impact to the vendor’s margin and potential high value to your success

2. Points of Contact – allow for more than the vendor specified maximum

3. Look to the Future – lock in discount percentages for other products in your vendor’s portfolio

4. Add-ons – Don’t neglect software options that can present a significant cost and often get shadowed by the core product negotiations.

5. “Your business to keep” clause – provide ability to migrate away from a vendor without penalties for reduced services during the migration. The vendor’s incentive to accept this language is the prospect of continued income stream.

6. Limit end of term contract extensions – Require the vendor to provide you an end of term notification well before your obligation to renew. Until renegotiated, renewal terms should automatically convert to month to month with the same existing terms and costs.

Posted in Default | Comments Off on The Art of Negotiating with Your IT Service Providers – Part 3

IT Service Provider Transition – 3 Keys to Making it Flawless

by Tony Ross

Transitioning from one IT service provider to another can be a stressful, drawn out process that leads to lost productivity and poor outcomes. Many organizations are underprepared and rush into a transition without a well formulated plan. But it doesn’t have to be this way. If the right steps are followed, changing IT service vendors can reduce costs and improve the performance of services, allowing the IT department to more effectively drive business goals.

This article will discuss three keys to making a successful IT service transition and forming the foundations for a productive relationship with the new vendor.

  1. Full organizational participation

  2. One of the greatest points of failure in an IT service vendor transition is a lack of participation within the organization. It is important to remember that success will require substantial effort and foresight. In order to carry out an IT service provider transition, it is absolutely critical that the company be fully committed to the process. Leaders within the IT organization and within the business should work together to ensure the transition is successful and that the goals of the entire organization are met. There should also be robust data gathering prior to making the transition in order to develop consistent metrics and to build a plan to achieve those metrics. As the process unfolds, there should be structures in place to continually implement the plan’s components and continually adapt it based on failures and changing needs. Transitioning always takes longer and is more difficult than the company thinks, it’s important to remain committed to a strong plan in order to see it through to the end.

  3. Transition governance structures
  4. Keeping a transition plan on track and ensuring that the current and future provider deliver expected services while under contract requires robust governance. A skilled team should be in place to oversee the transition, track progress, and make adjustments. This team should regularly meet with senior management and stakeholders to maintain alignment with broader business objectives and ensure accountability.

    In order to effectively implement governance, it is important to build a plan based on trackable work. This means creating a timeline for the transition period with regular milestones agreed upon with the IT service vendor. These milestones should be based on the accomplishment of business driven goals, with payment made to the vendor upon successful completion. This helps ensure that the vendor stays motivated to complete projects successfully and in a timely fashion. There should also be mechanisms to rapidly resolve any disagreements within the organization or with the vendor to keep the transition from stalling.

  5. Strong transition team skills
  6. Above all, it is key for companies not to underestimate the work and skill required to successfully transition IT service vendors. If the company doesn’t have the necessary experience, they won’t know what’s coming and won’t be prepared to deal with problems. For example, one common pitfall is failure to properly manage the incumbent vendor during transition. If the incumbent loses out to another vendor during the bid process, they are often very unhappy, and may severely cut efforts to provide good IT service. Knowing how to manage situations like these, and tailor a plan to ensure that any problems are quickly addressed, is extremely important to a successful transition. Companies must have the right people on their side in order to balance speed and risk and work with the company and vendors to facilitate a seamless transition.

Learn more about maximizing your vendor management with our white paper, The Top 9 Trends in Vendor Management, available at http://www2.thinkwgroup.com/Top9TrendsinVendorManagement

IT leaders who are contemplating a change in IT service provider can rely on WGroup’s advisory services. See http://thinkwgroup.com/services/transition-management/ for more information.

 

Posted in Default | Comments Off on IT Service Provider Transition – 3 Keys to Making it Flawless

The Art of Negotiating with Your IT Service Providers – Part 2

by Brad Friedman

In the first part of this post, we outlined pricing and licensing techniques. In this second part of the three-part series of posts, we will address maintenance and professional services.

Maintenance – Maintenance is not just for repairing defects but primarily for functional and other improvements. Pricing varies widely: 15-22% or more annually of the purchase price. There are situations where maintenance is not warranted. For example, hardware with a 3 years NBD warranty or desktop productivity software that is not upgraded at least once every 3 years. Regardless, there are some basic guidelines when purchasing maintenance. Maintenance costs should be based on the NET cost of the product after all discounts. Future increases in maintenance costs should be limited to a maximum of 2-3% per year and/or costs locked in for several years. It is beneficial to waive the cost of the maintenance for the first year, especially if the maintenance clock starts ticking in parallel to the implementation.

Your company will be impacted if your vendor gets acquired. Protecting against negative affects is critical. Negotiate “end of life” business requirements that include transition to new versions or product lines, locking in sunset support to meet migration requirements, and credits for sunk costs to offset transition costs. New functionality should not trigger an increase in maintenance costs. Ensure that product enhancements are included in the maintenance costs. Most importantly, but often bypassed, is ensuring end of life software functional replacements are provided at no additional cost (primarily seen during an M&A event). A new product (a new potential maintenance stream) that encapsulates the old functionality should be provided free. If the vendor cannot segregate the “added functionality” from the old, then require the additional functionality to be provided at no cost.

Some vendors create maintenance dependencies between components (line items). Beware the all or nothing clause prohibiting the removal of individual maintenance components. Each component should stand on its own unless it is a pre-requisite for another. It is also a good idea to specify maintenance reinstatement fees and business downturn clauses that allow for service level reductions.
Establish SLA’s that are not only based upon standard metrics like response and repair time but align with your internal business requirements. Allowing vendors to earn back penalties for exemplary performance can be an incentive. When problems arise, make sure that you have the ability to escalate problem severity.

Implementation Professional Services – It is a good practice to tie payments to implementation milestones, using acceptance testing where possible, and in some cases, a holdback percentage on payments until the project is completed.

Ensure that the work performed is the company’s asset to use as desired. Payment for services does not mean you own the end product. Ensure contracts specify the services are “work for hire” and include intellectual property assignment or at least an unfettered right to use in the ordinary course of your business operations.

Manage your contractors as you would your own employees. You control their “acceptability”, adherence to your company policies, service termination, etc. Preserve a “first right of refusal” for extending the services of key contractor resources. In addition, ensure agreed timelines are maintained even if a service provider needs to replace a contractor. Always pre-approve assigned contractors.

Remember that contracted professional services are outsourced services. Outsource the service but never outsource the management. It is your responsibility to control the services provided as well as their time, travel, expenses, and invoices.

In the third part of the series we will cover important legal concepts and additional opportunities.

Posted in Default | Comments Off on The Art of Negotiating with Your IT Service Providers – Part 2

The Art of Negotiating with Your IT Service Providers – Part 1

by Brad Friedman

Great disparity exists in an imperfect technology marketplace. No two companies pay the same for technology, pricing fluctuates widely, sellers have a distinct advantage over buyers and they rarely have “real-time” access to market pricing. Most purchasers ignore the potential impact of future business model changes in their negotiations.

In this multi-part series, we will review best practices to improve negotiating skills and positions when acquiring technology outlining procurement, maintenance, professional services, legal, and some miscellaneous opportunities. Technology negotiation is not about a “WIN-WIN” but more about being “TOUGH BUT FAIR” in order to provide you reasonable pricing and establish/maintain an ongoing valued-added mutually respectful vendor/customer relationship.

Software & Hardware, Pricing

The elusive search of the right price versus retail. It takes time to find the “basement”. Utilize the outlets that are available to you: research analysts, peer networking, price negotiating companies, competing offers, etc. Of course, the end of fiscal period deal can result in additional savings, however, the general rule of thumb is: the deal available today will be available tomorrow (regardless of the sales pitch).

Pricing is not just about the selling price. Try to lock in future pricing or discounts. Exceptions include, price erosion prone markets (like storage) which can always be negotiated at a later point in time. Base your payments on your acceptance and full production use, not on delivery or invoicing. Depending on the product and implementation timeline this could defer some expenses for many months. The downstream maintenance costs are also positively impacted.

Software & Hardware, Warranty and Licensing

Most vendors differentiate between warranty and maintenance periods. Extend the warranty as long as possible and ensure that maintenance runs serially to the warranty (atypical in the industry) and all the maintenance value added services are provided as a component of the warranty.

It is very easy to buy low cost servers with 3-year next business day repair/replace warranty for no additional charge. Round the clock coverage with four-hour response is an upcharge that needs to be evaluated against a low cost spare pool and reduced MTTR (mean time to repair) service levels.

There are more licensing models today than ever before. Perpetual, Subscription (XaaS), Hybrid, etc. and various license compliance metrics multi-core processor counts, user count, company revenue, etc. Staying on top of the right choices is purely a business decision surrounding your company’s business model, culture, and cash flow.

Beware of the “appliance” pricing trap. Your vendor will love to charge you for the software every 3 or so years when the appliance hardware platform is no longer supported. Ensure you protect your software investment (by far the majority of the cost) when refreshing appliance hardware platforms.

Regardless of the licensing model, address future pricing up front. Stay away from increases based on your company growth. Your company’s success should not necessarily translate to an increased income stream for your vendor. Most vendors are more than willing to allow for “organic” growth if you protect them from lost revenue due to an acquisition. Also, let accumulated subscription fees act as prepaid perpetual license fees (just in case your business model changes).

In our next part of the series, we will cover maintenance and professional service components.

Posted in Default | Comments Off on The Art of Negotiating with Your IT Service Providers – Part 1

Your Business and the Internet of Things – Updated With E-Book!

by Israel del Rio

Originally published in December, 2015, this blog article has been one of the most popular we’ve posted. Now, we’re also offering it in a PDF e-book format so that you can download it and share and forward to your associates. Click the link at the bottom of the article to get your copy.

WG15 Cover Image 251x201


Your Business and the Internet of Things:

The emergence of IoT, potential pitfalls and why you should care

Introduction

There’s been a lot written about the Internet of Things (IoT), but many people don’t have a firm grasp of its current state today and how it will affect their business. In this article, we will explore the booming growth of IoT, what it means for companies now, and how your business can leverage it to drive business goals.

What is IoT?

In short, the IoT is a network. Just like the Internet connects people, the IoT connects devices. This way, a wide range of physical objects can exchange and transmit data. What this means in practice is that things like refrigerators, cars, manufacturing equipment, and HVAC can be controlled, monitored, and analyzed in much the same way that computer systems can. This can provide incredible benefits to consumers and business, allowing for increased efficiency, marketing opportunities, reduced costs, and innovative new products.

IoT today

The IoT is evolving rapidly from a mere novelty to an integral part of the modern economy. Its first iteration was a prototype soda machine that could tell researchers at Carnegie Mellon University its current stock levels and whether drinks were cold. Today it encompasses a wide range of devices, technologies, and functions and is only expected to continue evolving for the foreseeable future.

Rapid growth

The Internet of Things is truly emerging. Gartner predicts that by 2020 there will be 26 billion units and IoT related products and services will generate revenues in excess of $300B.[1] There is little doubt that the IoT is already significant and that by in the next decade an enormous number of devices will have network connected functionality. This trend is driving substantial growth for businesses and allowing them to improve operations and develop new products, providing an estimated economic value add of $1.9 trillion across sectors by 2020.[1]

The “basket of remote controls” problem

Unfortunately, rapid growth also poses potential problems. Businesses must be aware that the IoT is developing in a disorganized fashion. New technologies are being added device by device, vendor-by-vendor, with little to no coordination. This means that devices from different manufacturers may not be able to communicate or users may have to coordinate across several different interfaces to track all their devices.
For example, someone may have a Fitbit device, an Apple iWatch, and an Internet enabled home security camera. These devices, and others, connect according to vendor-specific protocols and technologies such as WiFi or Bluetooth which prevent their linkage under common access and management frameworks. This problem is made even worse by the fact that each vendor requires ad-hoc device configuration according to their own IP, DNS address, password, and naming standard requirements.

IoT may be exploding, but it will be several years before a standard emerges that make it easier to leverage. This situation is akin to having a basket of remotes, with each one operating a different device in the entertainment center. This state of affairs is still very fluid, even as new technology leaders are joining forces to create standards for communication between devices.

Why is this happening?

The scenario we see developing in IoT is not unique. Practically every major technology started with an abundance of incompatible vendor offerings. Early day computers operated according to vendor-specific platforms until de-facto or government standards were introduced. Before TCP/IP became the standard protocol, there were a wide range of networking options including NetBIOS/NetBEUI, UUCP, and AppleTalk. In all cases, the trend has been the same. As these technologies matured, a standard emerged to which most companies adhered. IoT is, in all likelihood, following a similar pattern of progression.

What is the future of IoT?

In order to leverage the power of IoT most effectively, companies need to understand how the new technology will likely progress. IoT will follow a trajectory similar to past technologies. This includes five distinct stages that companies should closely monitor to determine their strategy.

Hype – This is the peak of expectations for a new technology. In IoT terms, this can be thought of as the point when network functionality was added to devices primarily for a novelty factor, but the technology was not in widespread use.

Vendor driven zoo – In this transition period, vendors are beginning to realize the potential of a new technology and each racing to develop the standard. This leads to a number of competing technologies, making it difficult for consumers and other businesses to choose and use products effectively. This is the stage we are currently in.

Consolidation – This is an intermediate stage between the vendor driven zoo and standardization. There will be a decrease in the number of competing technologies, but still no uncontested standard.

Standardization – In this stage, a standard emerges and other technologies fade into the past. Companies should pay careful attention to signs of this stage to stay ahead of the curve and not get stuck with legacy technology.

Commoditization – This is the final stage of an emerging technology, when the standard is so ubiquitous that it becomes a commodity. This is the current stage of technologies like TCP/IP.

What will drive IoT adoption?

The keys to enabling IoT across a greater number of devices are pervasive networking, sensors, and actuators. These technologies will make IoT more cost effective and more powerful, expanding the scope of its viability.

Pervasive networking – In order for devices to stay connected, there must be more widespread access to WiFi, Bluetooth, and 4G/5G data. Another roadblock is the limited number of IPV4 addresses available. The protocol provides only 4.3 billion address, with many available only for special uses. As of September 2015, four out of five North American internet registries exhausted allocation of all blocks not reserved for IPv6 transition. IPv6 provides for 3.4 x 1038 unique addresses, more than enough for the foreseeable future, but the new protocol is not ubiquitous. If billions more devices are going to be connected to the Internet, there must be a broader deployment of IPV6 address protocols capable of uniquely identifying every possible device in the universe.

Sensors – The availability of low cost sensors such as RFID readers or machine recognition devices will further expand the area of applicability for IoT. As costs and ubiquity of these technologies increases, IoT will become more powerful and cost effective.

Actuators – Actuators allow network connected devices to actually do control things. Many of the most exciting IoT applications will require the addition of actuation devices that can be remotely controlled to perform specific functions.

What can companies do today?

The last thing any company wants is to end up with the Betamax equivalent of IoT. But that doesn’t mean that you should wait to act until things become clearer. An even worse scenario than picking an unpopular technology is getting left behind by not adopting any IoT technology at all. Being reactive, rather than proactive, will only lead to missed opportunities. It is unwise to wait until a competitor or disruptive new entrant takes your business.

The time to frame IoT strategy is now

Leveraging IoT in a future forward way means aggressive adoption while still having an awareness of current limitations and potential pitfalls. Start by gathering your team and envisioning how your products will fit into an IoT enabled world. What enhanced functions would it provide? How can IoT best be implemented?

Choose a participation model

There is a wide range of ways IoT can be implemented in your company. Before moving forward, it is important to think about how your company’s products and solutions fit into a network connected framework. You will need to reach an internal consensus on what participation models you will pursue and in what timeframe. The below models capture various levels of IoT implementation, with each progressively more involved than the last.

Model 1 – Focus only on leveraging the IoT reach capabilities for promotional and advertisement purposes. This primarily means tracking user activity, delivering location aware ads, and developing promotions such as automatically reminding users when their device needs to be replaced or upgraded.

Model 2 – This model involves a more proactive stance to IoT. Companies will envision and prototype current product extensions by adding IoT functionality. An example of this might include adding basic network controls to an existing line of thermostats.

Model 3 – IoT will offer many opportunities for companies to innovate and develop new products to take advantage of emerging functionality. In model 3, companies will offer unique additional functionality and products that use IoT.

Model 4 – In this model, companies are actual IoT players, rather than simply users. This means that they develop and introduce components or services to augment actual IoT capabilities. This role involves more innovation in the IoT sphere and represents the first level in which companies may actually influence the future of the technology.

Model 5 – In this stage, IoT becomes a significant part of company strategy. This involves implementation of IoT core technologies across many areas and a role in developing standards and the direction of technologies according to your business needs.

What are the best strategies for models 1 and 2?

For companies targeting the lower levels of IoT implementation, there may not be significant will or resources available to track emerging standards and develop new technologies. However, in order to stay ahead of the curve, it is important to begin investing now. Some key strategies for success at these levels include:

Stay vendor neutral – Do not lock up to a particular IoT vendor’s vision yet. It is too early to know which technologies will still be around in the next five years. Companies should instead focus on identifying potential partnerships that might provide an early adopter advantage. In particular shop around for potential IoT development houses that can help you implement IoT more effectively.

Identify component gaps – Look for areas that your company needs to work on to bridge the gap between product ideas and current technology. For example, your idea may require a new type of sensor or actuator dongle that you can develop and patent with the help of external manufacturers. This will help form the foundation for a future IoT strategy.

Begin R&D – After identifying gaps between your current technology and IoT vision, initiate an R&D effort to begin bridging that gap and prototyping possible extended functions and products.

Hire talent – Without the right people, your company cannot develop innovative, effective IoT products. To stay ahead of the competition, start hiring and developing skills now, rather than later. Keep in mind that this talent does not have to be internal. Many companies can benefit from third party consultants and outside companies to help track standards closely and to keep a pulse on the rapidly changing IoT field. It is also important to have people to consider the potential security threats that the new technology can pose and ensure that your products are safe.

Evaluate core architecture – Many companies believe that strong mobility services are all about having beautiful, modern apps. Although a nice UI helps, it is important to remember that most functionality occurs on the backend. Re-evaluate your core architecture to ensure that the central systems can provide the required business processes and data access necessary to support IoT in your business.

What is the best strategy for model 3?

Most of the recommendations for models 1 and 2 also apply to model 3, except your investment on R&D, involvement with standards, and identification of partners’ efforts will more closely mirror the recommendations for models 4 and 5 below.

What are the best strategies for models 4 and 5?

Companies targeting levels 4 and 5 likely already have a much clearer understanding of the most effective strategies and need less guidance. They should keep the advice for models 2 and 3 in mind, but take it further by getting more involved and staying proactive.

Get involved with standards – Don’t allow other companies to decide on the future of IoT. Form coalitions with other leaders and get involved today to steer standards towards technologies that will be beneficial to your company

Invest in R&D – At this stage, model 4 and 5 companies should be making significant investments in R&D and hiring staff with the skills necessary to make their goals a reality.

Identify partnerships – By developing technologies with other companies, you can help create more robust and innovative IoT offerings. Emerging technologies demand cooperation.

Closing thoughts

Although IoT is rapidly shifting and there is no clear standard, your company cannot afford to ignore it. Network connected devices will become ubiquitous with or without you, and it is important to stay proactive to monitor emerging trends and form partnerships to remain competitive. In order to benefit from the new technologies, companies must be aware of the potential for certain technologies to rapidly fall out of favor and dark horses to emerge victorious. At this stage, it is important to remain vendor neutral, but begin planning for a future in which a standard emerges. IoT is coming, by planning for the future standardization and commoditization of the technology, your company can gain a competitive advantage and drive business goals.


Request a PDF e-book of this article by clicking the link here or visiting http://www2.thinkwgroup.com/YourBusinessandtheInternetofThings

Download

Read more WGroup perspective on the Internet of Things in our blog post The Internet of Things (IoT): What is in store for 2016?

    References:
    [1] http://www.gartner.com/newsroom/id/2636073

    Posted in Default | Comments Off on Your Business and the Internet of Things – Updated With E-Book!

Measuring ITSM for Value Creation

by Rick Letourneau

Did you know that ITIL 2011 has 26 process towers and you could measure more than 200 elements within those towers to gauge effectiveness of each process?  As you can imagine, measuring more than 200 elements would take a staff of two or three just to collect and analyze the data.

Deciding on the meaningful elements to measure is key to the success of your ITIL implementation.  One must start with a basic evaluation of the maturity of each ITIL process tower implemented.  The table below can be used to measure each of the processes in place.

Level Maturity Description
0 Does not Exist No evidence of any activities supporting the process being evaluated.
1 Ad-Hoc Random activities supporting the process are observed, but no one is aware of how each activity relates to the other.

 

No formal documentation or dedicated resources identified to own the process.

2 Aware Activities support the process but there is no measurement of the effectiveness of the process.

 

A tool is in place to support the process, resources are defined but roles and responsibilities are not clearly defined between the resources and other functional IT areas.

3 Controlled Process is defined and measured.

 

Resources understand their roles and responsibilities.

 

Processes are measured and reviewed on a regular basis.

 

Management conducts formal improvement planning and resources are measured on their effectiveness.

4 Integrated Processes are well defined, measured and continuous improvement is in place.

 

Linkage between processes are defined and understood by all in the organization.

5 Optimized Process have direct links between IT and corporate policy, continuous improvement is embedded into the process and teams.

Any organization should strive to at least achieve a maturity level 3 and have well defined processes in place for the ITIL process towers implemented.  One should also review the process towers not implemented and develop a roadmap to continue to introduce ITIL processes and enhanced the processes in place to improve IT service management and operations.

What’s the “magic” in identifying the right service elements to measure which will drive value?

There are some basics that will yield the most benefit to drive the desired outcomes for your customers.  These basics are considered the fundamental IT service management processes that provide the organization the necessary process framework to operate and expand capabilities.

Focus on the core: Incident, Problem, Change, Availability and Service Catalogue.  WGroup recommends measuring and tracking the following:

Service Catalogue Request Management

  • Percentage of time a service request is fulfilled with in the expected time

Incident Management

  • Mean time to restore service
  • Count of Incidents by priority
  • % of incidents which caused lost sales, product or SLA penalties.

Problem Management

  • Root Cause Analysis responsiveness – expected time for the RCA to be created
  • % of SEV 1 and 2 incidents where root cause was identified and corrected

Change Management

  • Number of undocumented/unauthorized changes
  • Number of failed changes as a percent of all changes
  • Count of changes by category (critical, standard, etc.)
  • Count or percent of changes that caused outages

Availability Management

  • Infrastructure availability
  • Application availability
  • System availability

Organizations that embrace ITIL standards and drive continuous improvement realize operational efficiency benefits that translates into overall service improvement and lower operating costs. Some organizations fear ITIL because it appears to be too complex, time consuming and costly. Service management requires an investment in tools, technology and people and should be a journey versus a destination. These five (5) process areas represent a service foundation that every IT organization needs to be proficient in order to provide good fundamental IT services.

Posted in Default | Comments Off on Measuring ITSM for Value Creation

The Internet of Things (IoT): What is in store for 2016?

by WGroup

The Internet of Things: What is in store for 2016?

The Internet of Things (IoT) is built on a network of cloud computing and data-gathering sensors. It is mobile, it is virtual, and it is soon to be everywhere. At an IT conference in September 2015, Marty Trevino, Organizational Architect and Senior Strategist for the National Security Agency was quoted as saying, “In a few years the average person will come into contact with more than 5,000 connected devices on a daily basis.” This astounding prediction doesn’t seem so outlandish when you examine current IoT trends.

Current and Future IoT Trends

With inventions like the all too popular FitBit, which tracks all sorts of personal daily exercise and movement data, IoT has quickly made its way into our everyday lives. Consumers can now wear connected technology, they can control their home’s heating and cooling systems from afar, and they can even receive alerts from their appliances about needed maintenance. In short, IoT has become a well-established member of the private sector. But what about the public sector?

Experts predict that IoT will become a large part of the public sector starting in 2016. Gregory Crabb, Acting Chief Information Security Officer and Digital Solutions Vice President for the United States Postal Service (USPS) was quick to point out that, “At the Postal Service, we’ve been looking at connected devices for over 20 years. Our goal is to take these connected device and make our business more efficient and effective.” The USPS is planning on deploying more than 200,000 mobile delivery devices to mail carriers in the near future. These IoT devices will help to improve the customer experience by tracking and recording a wealth of delivery information. From the best time to deliver packages to certain customers to the expected delivery time period, the USPS is looking forward to re-vamping the mail delivery industry with the help of IoT.

Other public sector agencies have announced that IoT solutions will continue to be explored in 2016. The reason behind the additional exploration can be summarized in a word, “data.” As seen with the latter USPS and FitBit examples, the amount of information that an IoT device can gather is staggering. The efficient and effective collection of relevant data could be incredibly beneficial to public sector agencies that are struggling with meeting key milestones on limited budgets. However, the large amounts of data collected does present a certain set of new challenges, such as the network size needed to handle the data to the security of information that is collected.

In 2016 look for the public and private sectors to adopt more IoT devices, while simultaneously conducting risk analysis to combat future IoT challenges. The amount of data that an organization can retrieve with IoT devices will continue to grow, which will require organizations to actively combat the aforementioned challenges, while also endeavoring to fully understand all of the new data. As the use of IoT expands in 2016, be on the lookout for new organizational policies and guidelines that are designed to reap the benefits of IoT devices and also protect the end user.

WGroup helps companies embrace new technology and align IT with business objectives. Visit http://thinkwgroup.com/services/ to see how we can help you with your IT transformation.

Posted in Default | Comments Off on The Internet of Things (IoT): What is in store for 2016?