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Business Applications Get the "Cool" Factor

Outsourcing Center, Patti Putnicki, Business Writer

Admit it. We all loved getting emails on our Blackberries when mobility first burst on the scene. And back in the day (maybe four years ago), most of us thought of our smartphones as portable computer Mini Me’s, giving us things like mobile banking, mCommerce and a means to book a reservation or check for flight delays while we sat in pre-airport traffic. With the convergence of cloud and mobility, coupled with the new functionality of smartphones and tablets, everything has changed. Today, nearly every type of business or organization is looking at mobility from a different angle – finding new ways to gain efficiency, improve processes or connect with their customers more intimately. These solutions take advantage of the breadth of imbedded mobile device technology – like Bluetooth®, GPS  and camera – to transform “business as usual” into a more agile, efficient, engaged environment with the potential for big benefits. Augmented Reality Apps Get Down to Business One emerging trend is the use of augmented reality applications. If you don’t know what augmented reality apps are (or don’t have a teenager to ask), they’re a means of gaining a virtual view of the real world that can be extended with graphics, video, text, gyroscopes and GPS data. Basically, it’s technology that builds a virtual world on top of the real one to provide a little clearer view. Let’s say you’re on vacation and see a structure or statue and want to know more about it. If your smartphone has an augmented reality application, you can enable the app and point the smartphone’s camera, as if you were taking a picture, at the structure itself. The application retrieves a whole plethora of information on what your smartphone (and you) are “seeing.” This same technology is used in golf apps, where users can point their phone down a fairway and identify where hazards are located, distances, and various obstacles on the way to the green. Augmented reality is also bridging the gap between past and present at a Canadian museum’s  dinosaur exhibit. Visitors point their smartphone cameras at markers strategically placed throughout the museum, and the dinosaurs come to life on the phone screens. iPads are also mounted throughout the facility to give a clearer picture of how these dinosaurs moved or would have behaved when they roamed the earth. Cool, right?  But, does this technology really have a place in business? “Augmented reality has huge business potential,” explained Erik McMillan, president and CEO of BestFit Mobile. “Although most people think of these applications as ‘fun,’ I think the success will be in real business cases.” Think store planograms, for instance. “You work in a nationwide retailer and you’re putting together the window display. With augmented reality, you can hold your tablet up to the window, see the layout of products from corporate, as well as instructions for exact set up,” McMillan said. “It makes life easy for employees, while adding a level of consistency you can’t get with instructions alone.” McMillan also sees great potential in warehouse environments. “Imagine an iPad secured to the front of a forklift in a warehouse. Using low-energy Bluetooth® on the iPad, in conjunction with RFID (radio-frequency identifiers) throughout the warehouse structure, this technology can tell forklift operators where to place and retrieve inventory,” McMillan explained. “There’s a huge business potential with this technology that we’re just beginning to explore.” Every Industry Has a Mobile Story Nearly every industry is getting creative with mobile – and gaining big results. The retail industry was the mobility front-runner,  engaging this technology early on to drive customer loyalty and to better connect the shopper with the store employee.  The service industry added tablet computers to technician’s toolboxes, enabling them to do everything from accessing repair manuals to closing out a ticket electronically. But, that’s just the starting point. “Mobility is a natural for realtors,” explained Craig Johnston, senior manager, mobile strategist and evangelist of NTT DATA’s mobile practice. “Realtors can take pictures of properties with their iPads, schedule their lives in real time, and integrate social media. A new house comes on the market; the realtor sends a Tweet to prospective buyers. A realtor goes to meet a new client and finds out more about him or her on Facebook, Twitter or Linked In for faster relationship building.” The hospitality industry is also seeing the light at the end of the iPad – transitioning many employees from a clipboard to a tablet that’s practically as easy to use. “In the hospitality industry, the iPad is beginning to replace the clipboard and the walkie-talkie,” said Danny Nguyen of Xerox’s ITO group. “These verticals are engaging mobility to track how fast rooms are being cleaned, how long customers are waiting in the registration lines, then pushing back real-time, dashboard analytics so the managers can take action to get productivity back up to the benchmarks.” According to Nguyen, hotels, resorts and entertainment venues are also using technology to enhance the customer experience, from pushing out offers based on preferences or where they are in the facility to identifying ways to make their stays more memorable. Car dealerships are exploring the use of tablets to improve close rates and alleviate the dreaded back-and-forth with the sales manager. With the tablet as the conduit, salespeople and customers no longer move to the back office, instead staying in close proximity to the “dream car” during price negotiation, purchase and loan application. Even hospitals are engaging mobility in new and unusual ways.  Think iPad mounted on the wall of the operating room. “The operating room is the most profitable room in the hospital, so starting surgery on time is critical. Mobility can be used for asset checking – ensuring the doctors, nurses and equipment are all there, ready to go,” explained McMillan of BestFit Mobile. In this application, the nurses, anesthesiologists and doctors all sign in on the mobile device. When everyone and everything is there, the device sends a message that the procedure …

A Merger, a Consolidation and a Transformation: The Critical First Steps

Outsourcing Center, Patti Putnicki, Business Writer

16th Annual Outsourcing Excellence Awards – Best ITO: Towers Watson and Dell Services  “The biggest mistake companies make is picking a provider and then treating them like a vendor. You can hire the best company in the world, but if you don’t work with that provider as a team, you are going to fail.”John Dabek, Chief Technology Officer, Towers Watson “It’s not where you start, it’s where you finish,” is a philosophy that works for some things. But, according to Towers Watson Chief Technology Officer John Dabek, when it comes to a massive transition, it’s the initial planning and change management that ensures you finish strong. Today, Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company was formed in 2010 by the merger of Watson Wyatt and Towers Perrin, two formidable firms on their own. The result was a 14,000-employee powerhouse with a very intricate IT challenge ahead of it. The data center models at the two merging companies were completely different, with a combination of outsourced and internally managed infrastructures. The goal was not simply consolidation–but a transformed operation. “We didn’t want to push nine data centers into two. We wanted a transformation; to create a whole different model with standardized provisioning, the implementation of a Service Catalog, a multi-tiered storage model and high rates of virtualization,” Dabek explained. As soon as company executives knew that the merger was forthcoming, Dabek and team began an “exhaustive” process and analysis to find the right transformation and managed services partner. “We knew that it was critical to partner with the right people, so we involved key people in all roles throughout our selection process. We were going to be working together, so we had to find the right fit,” said Dabek. “I think a lot of companies look at outsourcing as a procurement exercise when it’s really far more personal than that.” Ultimately, Towers Watson chose Dell Services as its partner. “We saw our match in Dell Services. Their executive leadership made it clear that they were going to do everything that they could to make us successful. At the time, Dell had recently acquired Perot Systems, and what we were doing mirrored where Dell wanted to go as a company,” Dabek said. “We also were given an excellent Customer Executive who stays actively involved. If there’s an issue, he wrestles it to the ground.” The Fine Art of Change Management The Towers Watson IT leadership worked with the Dell Services team to jointly develop a business case and “Transform to Manage” implementation strategy designed to reduce IT spend by 40 percent while creating a more flexible, predictable IT infrastructure.  This strategy included the development of a new, highly standardized reference architecture that relied heavily on virtualization, standing up that infrastructure in two new data centers, transforming the existing platforms to this architecture and migrating the applications to the Dell-managed centers. But, the success of a transformation of this magnitude isn’t based on technological skill alone. “We had two companies coming together, a technology transformation and a tremendous amount of change happening. So, change management was key,” Dabek said. “As we laid out strategies, we involved stakeholders we provide services for as part of the process.” Continual, honest communications with every party involved was also critical. “You can’t communicate enough in a situation like this – you have to communicate and communicate again, even if it’s bad news,” Dabek said. “You have to invest time and money in the change model and embrace your internal stakeholders to create a real sense of team.” That team concept extended to how Towers Watson works with Dell Services. “The biggest mistake companies make is picking a provider and then treating them like a vendor. You can hire the best company in the world, but if you don’t work with that provider as a team, you are going to fail,” Dabek said. “Towers Watson was as critical to this project as Dell Services, but only if we worked as a single unit. You can’t create that kind of relationship if it’s ‘us’ and ‘them’.” Go Big or Go Home Towers Watson and Dell Services took a phased approach to the transformation, with the first actual migration involving the two Towers Perrin data centers, which were the most complex of the migrating operations. “Although they were complex, these data centers were well-organized, as they had been outsourced with another provider and had been consolidated six years ago. Now, we were taking them to the next step with virtualization,” Dabek said. This approach was a smart financial strategy as well. “This migration provided the greatest synergies so, with the monies saved, we could fund the rest of the project,” Dabek said. The transition happened over a period of weeks, pulling applications over in logical groupings. Not only did the migration happen with clockwork precision, it worked to further build trust among stakeholders and solidify the team. “With that first transition, when people saw how non-disruptive it was and that our strategy was working, that was our defining moment,” Dabek said. “Everything fell into place from there.” Great Expectations, Outstanding Results Although orchestrating the subsequent transitions has been a continuum, with next-stage planning going on at the same time the current transition is taking place, Dabek believes it’s important to take a moment to celebrate the successes and do it as a team. “It is rare that one assembles a team that accomplishes something of this magnitude. And in the process, these people get beaten down enough. It’s important to counterbalance that with a sense of success,” Dabek said. After that first major milestone, all the key people from Dell Services, Towers Watson and others who contributed went out to dinner and celebrated as one.  The recognition of these shared victories continually strengthens the companies’ relationship, and, in many ways, fuels the desire to work a little harder. “I think as a client, …

Automation: the Key to a Successful Dynamic Enterprise in the "Now Economy&quot

Simon Shah, Redwood

There’s a reason automation solutions are on every business owner’s mind. Today’s business enterprise is in a state of continuous change—the pressure to optimize performance while lowering costs is enormous. The real-time expectations of the ‘now’ economy is no longer limited to manufacturing and shipping but is driven by information services, an increasingly mobile workforce and time-sensitive legislation. This means that quick response, transparency and real-time reporting are essential. So with all this going on, how do you manage your business processes to make sure you stay ahead of the competition?  When the left hand doesn’t know what the right hand is doing One flipside of a growing business is that processes and technologies tend to evolve on a piecemeal basis. This creates business processes that are designed, structured, supported and run totally independently of one another. It becomes a case of the left hand not knowing what the right hand is doing. As you would expect—and probably know only too well—this leads to duplication in technology and manpower. Best practices are nigh-on impossible. Enterprise-level integration is expensive, painful and time consuming. Your business becomes more susceptible to security and compliance risks and less agile, less innovative, less informed and less able to manage costs. So what’s the solution? Hands off for a hands-on approach Bill Gates said: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency.” The multi-billionaire knows what he’s talking about. It’s shocking how many enterprises still undertake critical processes manually.  Fear of change seems to hold back many people who are in a position to transform the system. In the insightful words of Belasco and Stayer in their management tome, The Flight of the Buffalo: “Change is hard because people overestimate the value of what they have—and underestimate the value of what they may gain by giving that up.” So if, for example, if your financial close takes 20 days and your competitor is doing it in half the time because they’ve automated, you really should be thinking about the value behind making a change. Enterprise-bridging solutions that tie up every process, end-to-end, under one ubiquitous automated platform do now exist. What’s more, you can go for a process-as-a-service option run from the cloud so your business critical processes become easy, agile and cost-effective, freeing you to focus on your core business. It’s no longer a question of ‘Can this be done?’ but of ‘How do we get this done?’ Case studies Here are some examples from our own client portfolio here at Redwood, in which automation solutions have saved companies millions of dollars: A U.S. electricity supplier increased cash flow receipts by $10 million per month through connecting and automating their meter -to-cash process. A Fortune 50 aeronautics and defense company improved its bottom line for every single contract, and reduced its financial close from two weeks to two-and-a-half days. A Fortune 500 industrial supply company eliminated latency and reduced the time to process order-to-cash transactions from 36 hours to six hours, which allowed them to comply with the mandated 24-hour GAAP standard requirement. Automation solutions or nothing It’s never easy to step out of your comfort zone, but as corporate budgets remain tight post-recession, it’s important to consider that the upfront costs and inconvenience you might associate with switching to an automated system will be wiped out quickly by the costs saved by streamlining many manual processes into one automatic one.  Automation solutions aren’t only about efficiency; they’re about responsibility. Saving your company money that can get passed on to other departments (or even to the customer) will, in the long run, more than make up for any short-term drawbacks to change.  

Study: U.S. Companies Prefer “Farshore” to Nearshore Outsourcing, Send Higher Value Work Abroad

Outsourcing Center, Samuel Crow, Senior Business Writer

For all the talk of the new allure of nearshore or even stateside outsourcing, most U.S. companies today still prefer to base their service operations half a world away, according to researchers at the Center for International Business Education and Research (CIBER) and the International Offshoring Research Network’s (ORN) Project at Duke University’s Fuqua School of Business. While outsourcing to Latin America is growing, according to the results of ORN’s global corporate client survey, clients prefer locations such as India, China and the Philippines, particularly for IT infrastructure and application development and maintenance (ADM) functions. In finance and accounting, the percentage of operations located in Latin America did increase from 10 percent to 16 percent over three years, according to the survey, and ADM services sourced rose from 7 to 12 percent over the same period. But ORN found that a whopping 76 percent of offshored IT infrastructure operations are located at least nine time zones away, while 70 percent of offshored ADM work is undertaken in similarly faraway geographies. Part of the reason for the continued preference for distant delivery locations may be the relative maturity and size of the outsourcing industry in Latin America, say the ORN researchers. But it also may be a result of familiarity. IT service buyers have spent the last decade or more laying down roots offshore with IT operations, business process offshoring sites and contact center facilities as well as developing better processes for managing distant service providers along the way. Forty-three percent of U.S. offshoring operations in IT infrastructure, ADM and innovation services are currently located in India, according to ORN’s most recent data, which offers mature service providers significant knowledge of most industries in addition to a talent pool. Another 12 percent of corporate America’s offshore operations sit in Eastern Europe, while 10 percent reside in China. Most U.S. companies see little justification in nearshore outsourcing. “Relocating to a nearshore location or back to the U.S. is not cost free. It requires planning, management effort, possible disruption to operations [and other] transition costs,” says Arie Lewin, Fuqua professor of strategy and director of CIBER. “And companies have actually learned to manage these remote relationships.” In addition, decisions about where to source IT and business process services are no longer made in isolation, based solely on cost, and so nearshore outsourcing is starting to lose its sheen. Offshore labor arbitrage, Lewin and his ORN research team have found, dissipates over two to three years. Instead, the choice of location may be driven by larger business strategy—such as expansion in a particular market–which also may help to explain the continued penchant for trans-global sourcing. Offshore location choice may be more likely to be driven by top-line growth plans than bottom-line considerations today. Among the biggest drivers for those companies making offshoring decisions were the company’s larger global strategy (from 40 percent to 67 percent), corporate growth strategy (up from 49 percent to 66 percent), location-specific advantages (up from 28 percent to 57 percent), and access to new markets (up from 24 percent to 48 percent). “As they move to increase top-line growth in China and India, they use the offshore capabilities to serve their growing markets in these countries—[a kind of] nearshore support,” says Lewin. To compete in—or capture—those new markets, American companies are sending more functions and higher value work abroad, particularly in the areas of IT infrastructure, ADM and innovation services. According to the ORN survey, 43 percent of such offshore operations now involve the entire function-related processes and responsibilities rather than discrete tasks, up from 32 percent in the previous survey. Access to qualified personnel—which may be scarce domestically—along with internal employee resistance to long-term assignments abroad may be part of the reason, says Lewin. But the increasingly sophisticated nature of the work and processes being offshore may also be less suited to disjointed, dispersed delivery chains. Of the IT infrastructure, ADM and innovation services tasks being done offshore, 43 percent involve “creating new capabilities or competitive advantage,” according to the survey, and 64 percent involve complex “tasks that are assigned to multiple individuals or teams and are technically highly interdependent.” Yet, despite the trend of offshoring work higher up the value chain, U.S. companies would rather hand off this work to third parties than set up their own captive centers overseas. ORN researchers found that captive centers consistently generate greater cost savings and operate more efficiently than offshore outsourcing relationships; during the first year of launch, captive operations generate savings of 38 percent compared to 24 percent for outsourced relationships, according to the survey. Ongoing captive operations delivered average annual savings of 34 percent versus 22 percent for third-party delivery centers. And American companies operating captive models reported better performance on average than third-party sourcers—a trend that held true regardless of company size, according to Lewin. Nonetheless, U.S. customers are more likely to opt to outsource; two out of three newly launched operations were farmed out to a service provider, according to ORN. In the context of the bigger picture, that preference makes sense, says Lewin, corresponding with the growing importance respondents placed on strategic business drivers for offshoring across the board. Outsourcing to a third party may mean faster speed to market and better access to qualified personnel that setting up a captive shop. Offshoring is not just about cost cutting anymore. What do you think? Should nearshore outsourcing still be the first preference?  

When Should You Begin to Prepare for the End of an Outsourcing Contract?

Robert Joslin, Managing Director, Alsbridge

Hint: 12 Months Out is TOO Late When should you start working on your next outsourcing contract? Many organizations do not address the end of a contract until the last year of its term. The notification period in the contract, typically 6-to-12 months, usually triggers this discussion. However I believe this is a mistake. Developing an end-of-term strategy for an outsourcing relationship is a complex task, because it is about much more than the contract. And the planning and effort involved is just as much, if not more, as the original outsourcing scope since you are now also including the complexities from the current outsourcing relationship as well as the market changes and internal learnings. The approach that organizations take to address the next evolution of their outsourcing contracts and relationships should be based on adjusting to the constant changes in their businesses and the service delivery offerings that are available to address those needs. This industry is not new to change, but never before has it experienced the number and magnitude of changes we have seen over the last decade. Developing an end-of-term strategy Organizations experiencing an end-of-term event in the next 18-to-24 months must develop a detailed strategy that addresses not only the pending contract expiration but the internal and external pressures as well. They must complete an analysis to determine the correct direction. Some of the changes organizations face include: Internal Changing business direction Cost reduction requirements Access to new technology Change in service requirements Support of M&A activities Performance of current partner External Introduction of disruptive technologies Consolidation of suppliers Changing options for service locations Increase geopolitical risk Regulatory changes Entrants of new service providers External changes: The continual growth and expansion of technology across the globe has created a global infrastructure that continually increases the footprint of service delivery locations options for outsourcing service providers. This has fostered the introduction of highly-skilled and cost-effective labor, which has been a game changer in the outsourcing industry. This change has not only driven how service providers develop their offerings but also how buyers of the services want to consume them. Internal pressures: Internal changes continue to drive pressures within organizations that impact what and how they procure outsourcing services. The fluctuating economy is requiring many organizations to move to a highly-variable model supporting both internal and external users. This flexible demand management model has changed how organizations look at services both in terms of what and how they procure them from the suppliers. The pending end-of-term is often a catalyst forcing organizations to look deeply at the: Performance of the current supplier Cost-effectiveness of the relationship Competitiveness of the solution Alignment of services to requirement Target operating model for the next contract term (typically five years) Desired delivery model Most organizations’ end-of-term strategy is to use a competitive procurement process to address their end-of-term event. Recompeting the services is significant as the switching cost from one supplier to another is often five-to-seven percent of the total contract value. The key to success: start two years out The key to successfully addressing an end-of-term event is to start developing the strategy early enough to address all the factors, both internal and external, that will impact the strategy. The window within an outsourcing agreement to develop this strategy is 24-to-30 months before the end of contract. Why? There are various scenarios companies need to explore as a result of the current strategy these may lead to varying paths. For example, should the strategy be to restructure the existing relationship with the incumbent supplier? What if that renegotiation does not yield the desired results? The buyer now needs time to execute a market RFP for some or all of the services. Too many organizations look at the end of contract as just a pricing exercise when it is really how an organization can realign the services it is currently receiving with its new requirements. That may be the time to continue to receive services from the incumbent as well as add new ones now available in the market. Only a proper assessment that is not rushed can determine the proper strategy.  

CyberSecurity Professionals and Compliance Officers at Odds Over Cloud Security

Outsourcing Center, Staff Writer

Enterprise IT and compliance groups agree on one thing for certain: their cloud environments could use some work on the security front. Less than half of the 1,018 IT security practitioners and enterprise compliance officers surveyed by the Ponemon Institute, which conducts independent research on privacy, data protection and information security policy, believe their organizations have adequate technologies to secure their infrastructure-as-a-service (IaaS) environments (35 percent of IT practitioners and 42 percent of compliance officers). Beyond that, the two groups differed wildly on issues of IaaS security—from whether the cloud is as secure as on-premise data centers to who is responsible for cloud data security to what security measures should be put in place to prevent unauthorized access to data. Just one-third of IT security practitioners said that cloud infrastructure environments are as secure as their own on-site data centers, while half of compliance officers rated IaaS as secure as on-premise infrastructure. There was  also significant disagreement about whether their organizations had sufficient processes in place to enable the secure use of cloud infrastructure. Only 34 percent of IT respondents believed that there were sufficient procedures in place, while 52 percent of compliance respondents were satisfied with their security policies. Both groups thought encryption was important to protect against unauthorized data access, although they differed on who they were trying to keep out of the systems.  IT practitioners said encrypting data to make it unreadable by cloud service providers was the most important IaaS security measure to take, while compliance officers said encryption should be used to prevent IT administrators from accessing data they do not need to perform their jobs. Yet, according to the study, few cloud vendors offer encryption to their customers. Only 31 percent of respondents said their organization’s major cloud providers use encryption to protect data from insider threats. The majority of respondents were more likely to employ firewalls, anti- virus and anti-malware software, and identity and access management technologies to protect sensitive or confidential information exposed to the cloud. On the subject of vendor due diligence, 59 percent of IT respondents say that security was either a low priority or not considered at all when evaluating IaaS providers, while 56 percent of compliance officers said it was a very high or high priority. As for who is in charge of cloud security, the greatest number of compliance officers (21 percent) said that they are responsible for defining security requirements in the cloud, while the greatest number of IT security respondents (22 percent) believed business unit leaders are responsible for defining security requirements in the cloud. Both groups did agree, however, that business unit leaders are responsible for enforcing cloud security and no single person or group maintains responsibility for the actual implementation of security measures. That, says Ponemon Institute chairman and founder Larry Ponemon, gets to the heart of the matter: ownership for security in the cloud is dispersed throughout organizations, further clouding the security issues surrounding as-a-service offerings. As a result, enterprise-wide cloud security strategies are difficult to implement. And while IT and compliance haggle over security strategies, tactics, and ownership, internal audit groups are sitting on the sidelines. More than half of respondents said their organization’s internal audit review does not provide any feedback on the security of cloud infrastructures. Security concerns do not seem to be slowing down cloud adoption, however. More than half (56 percent) of IT practitioners surveyed stated that security concerns would not prevent their organizations from implementing cloud services. Companies were most likely to store unstructured data, such as emails, files, and documents, in IaaS environments, according to the study. In addition, cloud services accounted for approximately 20 percent of the IT budget of those responding to the survey, and their cloud budgets are expected to increase approximately 31 percent in the next one to two years. Not surprisingly, however, the two groups quarreled over the real benefits of cloud computing initiatives. IT respondents cited business agility, speed to roll out new services, and fewer personnel and management requirements as their biggest cloud drivers. Compliance respondents said cloud adoption lowered operating costs, improved compliance, and provided better quality infrastructure.  

Managing Enterprise Mobility in a Bring-Your-Own-Device World: Trends, Challenges and the Role of Outsourcing

Outsourcing Center, Patti Putnicki, Business Writer

It is the era of the 24/7 employee – but no one seems to be complaining. Cloud computing, collaboration convergence and the need for access-on-the-go have driven a surge in mobility technologies. Instead of wanting to “get away from it all,” people want to take it all with them – accessible through the lightweight devices of their choice. In such a world, how does one go about managing enterprise mobility? “The iPhone put forth the concept that mobility could be fun, fast and touch friendly. The iPad took this to the next level, with other tablet manufacturers following suit,” explained David Bankston, executive vice president, co-founder and chief technology officer for INgage Networks. “In just a year and a half, tablets have eaten away at 11 percent of the PC market – with no slowdown in sight. That’s largely because of consumer purchases.” These consumers aren’t buying the latest and greatest electronics for watching movies and catching up on Facebook. Instead of company-issued devices going home with employees for the weekend, people are bringing their own devices into the workspace. Why? Because they’re probably way-cooler than their company-issued option. “The Consumerization of IT is now setting the standard for what a device should be,” said Phil Constantinou, vice president of products for Evernote Corporation. “Some years back, your company might give you a PDA that connected to corporate email, but there was nothing delightful about it and nothing to engage the user for an optimum experience. Now, the expectations are higher. “ In many ways, the future of the mobile enterprise rests in consumers’ hands. “Ultimately, it will all come down to the operating system, with the winner being the maker of the platform that dominates the consumer space,” Bankston explained. “Who’s going to own that platform, right now, is anybody’s guess. But one thing is certain: consumer demand will drive the mobile platform for business.” Managing Enterprise Mobility in a BYO World Okay, let’s assume that one day, two or three operating systems will emerge as the winners. Until that time, employees are bringing their own smartphones, netbooks and the next iteration of mobile wonders to work. How can a company manage and secure all of these disparate mobility devices? The real answer? It’s complicated. “Mobile Device Management (MDM) is a huge market right now, with no real leader. Companies are concerned – and rightfully so – about security and compliance on devices that they don’t totally own and control. This presents a tremendous opportunity for outsourcers,” explained Danny Nguyen, director of product strategy, Collaboration & Mobility for ACS. “But, before companies start looking for an MDM provider – they need to map out their own security policies around mobile devices. That has to be the first priority.” Are there applications that should be blacklisted? If so, how can you apply policies to prevent employees from installing these items on their own devices? What is the process for identifying whitelisted, or “good,” applications and how will continual evaluation occur? These are all important considerations. “Some companies also require employees to disable certain phone or tablet functions in the office,” Nguyen said. “For example, a biotech company might want to disable cameras while employees are in certain facilities to prevent intellectual property leakage. All this has to be documented upfront, as well.” One thing is certain: with mobile devices extending the reach of the enterprise and taking it to the street, the door is wide open for security vendors and MDM providers with the right solutions to penetrate the market. Very few companies have the manpower or expertise to manage the complexities of mobile internally. Getting Everything in Sync Although managing enterprise mobility isn’t easy, no one can deny the productivity it provides. In today’s global business world, the ability to access information, make decisions and work anytime, anywhere, is more critical than ever. Cloud computing and mobile adoption make this highly efficient, untethered work environment possible. “The whole concept of sync – where everything is available on every device, everywhere, is the differentiator,” Constantinou said. “A computer is bad at taking pictures, whereas a phone is pretty good. A tablet is good at consuming information, but not as efficient for creating information. Each mobile platform is ideal for certain functions, and sync makes it all fluid. “ Even connecting with someone by phone (as Stone Age as that concept may sound) is easier. “Now, one phone number can connect to a mobile phone, work phone and computer, so the user can answer the call in the most convenient way,” Nguyen said. Phone tag – and the wasted time associated with it — becomes a thing of the past. The Rise of the Micro App In the mobile enterprise as well as the traditional IT enterprise, it’s all about the apps. Many companies are mobilizing traditional, core enterprise applications, ranging from CRM to ERP and everything in between. “SAP, for example, is mobilizing key application functions like workflow approvals and notifications, giving users the ability to perform business functions remotely through their mobile apps,” Nguyen said. To function in a mobile environment, enterprise apps must be trimmed down to support transaction-based types of interactions. In other words, they have to play well in the simplistic world of mobile. “Desktop-based applications are more monolithic. Outlook has a calendar, a journal and a to-do list – multiple functions in one app. In the mobile world, each of these functions would be a separate, individual app,” Constantinou said. “That’s just the nature of mobile.” The growing prevalence of the mobile enterprise – and the belief by some that the mobile enterprise may one day be “the” enterprise – have motivated developers to skip the desktop version altogether and focus instead on micro apps, which are applications created specifically for the mobile environment. Many companies are turning to outsourcing for the development of custom micro apps supporting all areas of their business, then distributing these through their own, private version of the ubiquitous …

Keeping Your Head in the Clouds: Creating an Effective Cloud Strategy

Outsourcing Center, Patti Putnicki, Business Writer

If you were ranking the most talked-about topics of the year, Cloud Computing would probably rank pretty high. But, in most cases, that talk hasn’t translated into a groundswell of action. According to a recent Alsbridge eSeminar survey, one of the stumbling blocks appears to be the initial planning – namely creating a viable Cloud strategy. How do you start the process? What factors do you need to consider? How can you develop an approach that best mitigates risk? We asked some industry experts to weigh in with their advice for a great cloud strategy. The First Step: Change Your Mindset “To start with, I think it’s important to get past the hype and see Cloud for what it really is: a new computing model that drives efficiencies,” explained Chris Mankle, chief technology officer for ACS, A Xerox Company. “Companies used to own their own telephone systems. Now, they get these services from a Telco in a utility-based model. Cloud delivers infrastructure services on a utility model, just like you buy phone service or kilowatt hours of power.” While the genius of Cloud is the flexibility to add or subtract capacity on the fly and the opportunity to turned fixed costs into variables, it is not the end-all and be-all. The greatest benefits come from using this model where it makes the most sense for that company. A start-up will use the model differently than an established enterprise. “It’s also important to note that there are different solutions within various cloud models. Public, private and virtual private clouds all provide different options,” said Ryan Reed, product marketing manager, Cloud Computing for HP Enterprise Services. “Your ultimate solution will not be ‘the Cloud, but a hybrid of traditional IT and specific types of Cloud with the ability to manage across both environments.” Identify The Business Problem Although most people focus on the technology itself, the foundation of your Cloud strategy should be all business – namely, what do you want to accomplish? “Everything starts with identifying the business problem you want to solve with the Cloud model,” said David Mitchell, director of enterprise operations for Sabre Holdings. “Do I want to incorporate automated provisioning to solve my delivery problems? Do I want to throw hardware at a new release that’s not working to increase my technical efficiency? Identify the business problem then see if that problem can be solved by Cloud. Otherwise, you’re just going after new technology for technology’s sake.” Inventory What You Have Today Before you can determine your options for a Cloud strategy, you need a detailed inventory of your current infrastructure. “List out what you have today to deliver business functions and the scope of each system in those key areas,” Mankle said. “How is each system used by employees or customers; what does each system talk to – and is the reach global or regional?” In addition to the technical overview, companies should identify any constraints, like older software releases that need updating. Also make sure the base requirements of your infrastructure will fit into a Cloud environment. Unique hardware platforms or vertically scaled systems simply don’t translate in this model. Identify Apps That Could Most Easily Cross Over While understanding the environment is important, the true “make or break” of what you do in Cloud are the applications. These are the undisputed rock stars of the IT infrastructure and require thorough review upfront. “Make sure you look at the security, storage growth rate and compliance issues for each application,” Mankle said. “Review how you test your environment and whether or not these steps hold up in Cloud. Look at how you do audits or deal with failures in a traditional environment. Also document your inbound and outbound networking requirements for each app, because these could impact costs.” Although the optimal Cloud entry point will vary from company to company, experts agree on one thing: less critical, low-demand applications are typically the best place to start. “I think you go for the two extremes when considering a Cloud strategy – the very mature applications and the very new applications,” Mitchell said. The mature, non-mission critical applications, including off-the-shelf products, are great first entries into Cloud for a number of reasons. Because your people know them, inside and out, they can focus on gaining a better understanding of how these apps “work” in a Cloud environment. Bulk email, for example, is often used for proof-of-concept pilots. “The least mature applications are also good options because these typically have more of the problems that Cloud can fix,” Mitchell said. “Maybe they have code that’s a memory hog – Cloud can hide that. As long as they’re not essential to your business operating model, these applications are great candidates for Cloud.” According to Reed, testing and development are also good options for proof-of-concept. “Think about it – in an enterprise with 2,000 servers, 30 percent to 50 percent of those could be test servers, used for development, testing and staging,” Reed said. “Moving this environment to Cloud can have a significant impact on cost with minimal risk.” Prepare Your Due Diligence But, what about the fear factor often associated with moving to Cloud? The best defense is strong due diligence – asking for what you want and understanding how your potential providers operate. “I think it’s important to note that, even though it’s Cloud, the work is still run out of a physical data center. Most providers position those data centers in various parts of the world. So, if you want to pick up server capacity closer to your customer, ask for it,” Mitchell said. “For us in the travel industry, location is important, because it means faster response time for our customers.” If you plan on a significant capacity spike, make sure your providers can deliver. “If you are a large player, you need to understand how the vendor is going to manage to that capacity. If you’re going to scale from three servers to 2,000, you …

Trends in Transportation: Driving Innovation Through Outsourcing

Outsourcing Center, Patti Putnicki, Business Writer

Can transportation outsourcing be a catalyst for innovation? The answer is a definite “yes.” Today, transportation organizations are partnering with outsourcers to do more than reduce cost. Transportation outsourcing enables finding creative ways to decrease congestion, improve safety and protect the environment, all while positioning to respond to the needs of a new generation of commuters. “I do think state and local government agencies are contracting with outsourcing providers at higher levels than we’ve seen before, for economic gains, to access to new skill sets and to stay on top of technological changes,” said Scott Belcher, president and CEO of The Intelligent Transportation Society of America. Take tolling, for example. Initially, outsourcers were engaged to integrate front-end tolling technology and handle the back-end operations, ranging from violation processing to customer care. This solution evolved into an all-electronic tolling option, eliminating physical tollbooths by enabling toll tag or license plate information to be captured as the vehicles travel by at highway speeds. “Now, we can give our clients the ability to set up high-occupancy traffic (HOT) lanes with dynamic pricing options. Agencies can raise or lower the price of the toll based on time of day or level of congestion,” explained Parker Williams, Vice president of Transportation Solutions for ACS, A Xerox Company. “Varying prices encourages commuters to take alternate routes, car pool or take public transportation. We’re managing traffic by changing driver behavior.” According to Williams, higher-quality camera and character recognition technology is only part of the reason these new solutions are possible. “Not only do we have new types of media available, but we’ve done a lot of work to automate processes within the infrastructure. Instead of someone looking at a license plate on a computer screen to match that plate with an owner, we’ve created software that can automatically extract and read the plates, pull ownership information from a database, and either bill that owner or deduct that toll from the owner’s account,” he said. “It’s a story of efficiency as well as creatively filling a need.” Smart Cards for Fare Collection While toll tags eliminate the need for cash collection on the roadways, contactless bank cards, either credit or debit, are bringing the same kind of efficiency to public transportation. Instead of a ticket, riders can use a contactless pay-enabled card or fob for any transit fare where the system is installed. The rider simply taps the card or device, boards the vehicle and goes on his or her way. The fare amount is charged to the credit card or deducted from the debit card. In addition to speeding throughput and improving fare collections, these cards also give transit agencies something they didn’t have before: actionable customer data. “Now, transit agencies can track when and how riders use their services, so they can make changes to better meet demand. They can add routes, change stops and get a clearer picture of their clientele,” Williams said. “The agencies gain insight while reducing costs, increase throughput and make it easier for their riders to pay.” The Brilliance Behind “Smart” Parking The innovation isn’t limited to roadways only. Smart parking is a huge growth area right now, because it benefits agencies, drivers and the environment alike. “We spend 30 percent of our time driving around looking for a parking space,” Belcher said. “By guiding drivers to open parking spaces, smart parking increases safety and driver satisfaction while positively impacting the environment.” Basically, smart parking places metal-detecting sensors in each parking space, which can identify whether a car is present or not. The sensors transmit “occupied or vacant” data to a central processing center that then transmits this information to cell phone applications, message signs or triggers a green light above the open space to alert drivers. Drivers can pay parking costs with smart cards or credit cards, or, in the case of airport parking, payment can be tied back to that consumer’s toll account. Again, many agencies are relying on outsourcers to handle this integration. The Impact of the “Connected” Generation It would be impossible to talk about trends in transportation without exploring the impact of today’s connectivity tools. “The whole smartphone-Internet-social media revolution is making its way into transportation and changing it, as it has so many other industries,” Belcher said. “Just look at how many cell phone apps have something to do with getting from one place to another.” Drivers can get real-time traffic information, driving directions, or share congestion information with other travelers. Vehicle location systems let riders know when their bus or train will arrive. Travelers can go online to find shared rides, compare different forms of transportation, or find out where they can rent a Zipcar® for an hour. “The emerging generation isn’t as car crazy as ours, evidenced by the fact that they’re waiting longer to get their drivers’ licenses,” Belcher said. “This generation is extremely tech savvy, likes to stay connected through technology, and has less of an expectation of privacy. That means they’re more receptive to sharing rides, and to use social media to not only share the best place to get gasoline, but to report things like potholes or signal light outages. “ The ones who are driving now want cars that have all of the capabilities of their phones. “Every major auto manufacturer is working on a vehicle that offers the online access and real-time information drivers want, in a way that keeps the drivers safe,” Belcher said. “Ultimately, we’re moving toward the age of the connected vehicle – one that combines wireless technology with transportation systems, giving it the ability communicate with other vehicles on the road as well as the roadside itself. Hundreds of companies are working on smart technologies to support this goal.” The result would be a car that kept the driver informed of everything from traffic tie-ups to whether he or she was veering from a designated lane. “Smart technology and the connected vehicle have the potential to reduce the number of non-impaired accidents …

Ten Pitfalls in Outsourcing Transitions

Outsourcing Center, Kathleen Goolsby, Senior Writer

There’s no shortage of methodologies and advisories on best practices and risk mitigation strategies for the transition phase of outsourcing relationships. Even so, many buyers encounter situations they didn’t foresee when structuring their arrangement, which cause costs to rise and delay time to value. Outsourcing Center studied these types of situations by surveying companies nominated for the Outsourcing Excellence Awards program and found the following 10 pitfalls. 1. What you don’t know will cost you The Center asked the surveyed buyers this question: “There is a well-known saying that what you don’t know will cost you. Please describe something your company didn’t know at the outset of the outsourcing relationship, which ended up costing you and led to a change in the outsourcing arrangement.” The situations they described covered the gamut from technology issues to human behavior to lack of knowledge as well as operational structures that were too tight or too loose. 2. Technology connectivity Challenges arose in the provider’s ability to establish timely connectivity to all of its customers’ necessary systems because they were not aware of the various groups and business processes that governed connectivity. Remedying this situation involved forming a dedicated connectivity team with both business and network members. The team then built relationships within the customer’s technology group, seeking to understand the ownership and flow of information and also to help work through the issues more quickly. 3. Aggressive go-live date Two different relationships faced the same challenge of having to extend their original planned go-live date, but the causes of the problems differed. In one, the service provider encountered difficulty in recruiting the right talent in a remote area in the short transition time frame. In the other case, the buyer was transitioning from an incumbent provider to a new provider, but the bureaucracy and contractual negotiations in ending the prior relationship delayed the planned transition time line. In both cases, the aggressive ramp-up was necessary to achieve the desired time to value. Both buyers also had to spend time with their management teams and other stakeholders to lessen the potential negative impression and increased costs from having to extend the go-live date. 4. Service level agreement In a relationship delivering IT services to the customer’s 25+ facilities, the customer made the mistake of including all the facilities in the metrics for downtime. The situations they encountered as a result of these problematic service level measurements led to a contract renegotiation. As the customer stated, “Even if the downtime SLA is 99.9, it leaves a lot of wiggle room when you take that across all the facilities.” The renegotiated arrangement now measures the downtime/uptime percentage per facility. 5. Total cost of ownership A customer shared that, shortly after the outsourcing relationship was established, her company launched an initiative to determine its total cost of ownership (TCO) of various business processes. But the company was unable to determine TCO for the processes in its outsourcing scope because it lacked transparency into the service provider’s underlying enabling IT costs that were variable rather than fixed costs. When they renewed the contract, they renegotiated the pricing arrangement to ensure cost component transparency. This ultimately also enabled the customer to understand whether it was getting the most value for the price at both a service line and transaction level. 6. Software licensing Unexpected software licensing costs during the transition phase hit a company outsourcing several IT components. The transition involved moving from a standard database to a real application clustering database model (a cluster of servers to eliminate hardware downtime). The licensing cost structured across the CPUs was different than the buyer anticipated. It also encountered another issue around the server license component of a security product. Root-cause analysis found that these added-cost issues were due to a lack of communication. In some cases, the buyer assumed costs rather than communicating with the provider to determine if its assumption was correct. In other cases, the provider’s communication to the buyer was inaccurate because of ineffective communication among the different divisions of the provider’s business. 7. Managing the relationship Several buyers reported they incurred extra costs because they entered into the outsourcing relationship with the wrong mindset. As one buyer stated to Outsourcing Center, “There’s a lot of difference between working with an outsourcer and working with a team of people who are subordinate to you.” Not understanding that change up front, the buyers had to go through a learning process – and often relationship struggles as well as delayed time to value – to understand how to manage the relationship and the outcomes. 8. Learning curve Multiple buyers stated their costs increased because the learning curve was more difficult and took longer than they had anticipated. In some cases, the learning curve was for the provider’s team to learn the buyer’s business and its IT systems; in other cases, it was for the buyer’s end users to learn new systems and procedures. In either case, both parties had to step in and “save” the other by making sure they operated the processes and technology correctly and fixed the errors. Both parties lost money because the time to value was extended significantly. 9. Offshore readiness It’s not uncommon for buyers and providers to find out – when in the midst of the transition phase – that a specific component of an entire process scope is not ready for offshoring or, in some cases, is prohibited from being sent offshore. One buyer shared with Outsourcing Center that it encountered issues with the security controls of certain applications that were in the outsourced scope, and those controls prevented managing those applications from offshore locations. The costs in this case included suspending the transition midway through it and working together to redeploy teams and applications. 10. Communication around quality The transition phase of an outsourcing relationship often erupts in “noise” from the customer’s end users around dissatisfaction with the quality of services. Often, an analysis finds that the source of the …

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