We Need More IT Graduates and Now!

I read with dismay in the Irish Independent lately of Intel's decision to move a project apparently earmarked for Ireland to Romania because of a lack of IT graduates in Ireland. Apparently this is not the only case of this happening. It is also reflective of what I have been seeing during our latest graduate recruitment drive in Deloitte.



A constant supply of quality IT graduates is a necessity for businesses generally but most especially for software development companies and IT services organisations. Graduates are the lifeblood of these organisations in terms of expanding, getting the work done and developing the next generation of senior IT professionals. There is no doubt that their long term growth and the development of the smart economy is inhibited by a lack of these graduates.



In an era of such high unemployment it seems crazy to be complaining about a lack of staff but that is the actual situation that companies are grappling with at the moment. Unfortunately there is no quick fix to the problem as it takes three to four years to educate an IT graduate. Nevertheless there are actions that we can start to take now:



1. Immediately establish a working group consisting of individuals from the IT industry, academia and any relevant government agencies to tackle the problem. The members of the group must be chosen carefully and it must be an active, outcome driven group with an ability to make things happen. It should not waste any time producing reports or fancy strategy documents but should instead focus on outcomes and what actions need to be taken to achieve them.



2. Actively Promote IT as a career. For too long IT has been suffering from poor PR. We need to actively promote IT as a career in secondary schools, highlighting the benefits and rewards of a career in the sector. The industry needs to support this by attending and hosting career events, supporting work experience initiatives etc.



3. Encourage Post graduate qualifications in IT. The third level sector is producing a large number of graduates with non IT degrees who are finding it impossible to find jobs. We need to encourage a greater number of these to do post graduate degrees or diplomas in IT. The third level sector may need to consider increasing capacity in this regard.



I don't pretend to have to have all the answers. However I believe that the steps above will serve as a good starting point to addressing what is becoming a critical problem and a lost opportunity.

Software Testing is easy and Other Myths

A colleague of mine recently published a paper Software Testing is Easy and Other Myths (http://tinyurl.com/28aymok) which makes for a great read.

This caused me to reflect on a recent assignment I completed for a client where I assisted them in developing an operating model, business case and implementation roadmap for a testing center of excellence. The engagement was challenging and ultimately successful and for me once again proved that some of the often repeated critical success factors for consulting projects such as these are true:

1. Executive sponsorship. We had great executive sponsorship which allowed us to cut through a lot of the 'noise' associated with projects such as these quickly. I can contrast this with similar engagement I undertook a couple of years ago in the same sector where this wasn't the case and the project was consequently less successful.

2. Staff buy-in. The creation of the CoE is going to mean a lot of change for existing testing (and non testing) staff. We recognised this early on and decided that we needed to make testing a recognised and supported career path and make people feel that they were part of a team/community. Some of the things we did in this regard included making communications a key component of the rollout plan and defining a testing career model with associated training and external certification. The idea was to make testing an attractive and valued career path in the organisation. Without this why would staff engage with the programme at all?

3. Understand the as-is situation. Ultimately the Testing Center of Excellence was being created for two reasons - to improve efficiency and quality. However to measure the success of the CoE it is important to understand and measure the current situation so that progress can be objectively assessed. This is often easier said than done as many of the metrics or KPIs that you would like to track often do not exist today and need to be created or estimated. We certainly had to do this on this engagement but clearly called out where we had extrapolated and committed to start building more accurate as-is metrics as the CoE was rolled out.

While there were many other critical elements to the success of this engagement the three above once again proved the most critical. We are just about to start the first phase of the rollout of the center of excellence which no doubt will prove just as challenging, interesting and successful. In either case I'll let you know!

Productivity in the Cloud - A Practical Example

I have blogged previously on cloud computing and its benefits. Consequently I thought it would be worth sharing a real world example of its benefits.

I work for Deloitte in Ireland where I am a director in our technology consulting practice. Recently we have been undertaking more and more projects for clients based on software as a service. One project in particular serves as a great example of how much more efficient software development in the cloud is to more traditional methods. The goal of the project was to automate a sales and fulfilment process for a major commercial client and thus significantly reduce the time it took to both take and fulfil a customer order. Some of the members of the current team had built a key part of the existing solution over 10 years ago. At the time the design phase alone of that project took somewhere between 3 and 4 months. Using a SaaS based solution combined with agile techniques we managed to build and deploy into production the new solution in just over 10 weeks and that included functionality (such as mobile) not available in the current solution and was undertaken by a smaller team. This is a truly huge saving in IT time and effort, let alone the time to market gains made by the client. Internally we have reflected on what a win this is for our client and ultimately for us but you can't help but ponder on what this ultimately means for the systems integration business model.

Enterprise Architecture Blueprinting

The soon to be published results of the Deloitte 2010 CIO Survey suggests that Irish IT organisations are beginning to emerge from the worst of the recession and look to the future. The question for these organisations is what does this future like and how do they get there. Enterprise Architecture Blueprinting is a technique for helping organisations to answer this question. The diagram below provides a high level overview of the blueprinting process.
The first step in the process is to develop a high level view of the current business and technology landscape. They key items to identify are the current organisational capabilities (sales, backoffice, marketing, manufacturing etc.) and the business processes, people and organisational structures that deliver these capabilities. Supporting IT capabilities (systems, people, process) should then be mapped to this model.

The next step is to decide what the future should look like. They key input to this process is the Business strategy (in whatever form it is available). This is used to identify the organisational capabilities required and the business processes, people, organisational structures and projects required to provide these capabilities. Based on this the required IT capabilities (systems, people, process, information) can be identified and mapped to this model.

Undertaking a gap analysis to identify the IT capabilities that should be retired, built or bought is the next step. This leads to the final step where a roadmap for the delivery of the future state architecture is developed and ultimately implemented.

This in turns leads back to the first step where the architecture is maintained and governed on an ongoing basis.

This simple process can scale from individual projects to large scale entire enteprise programmes and provides IT organisations with a fraemwork in which they can attain (the often elusive) goal of IT/Business alignment.

Up Close & Personal with Vendors' SaaS Plans

I am currently assisting a client in the definition of their strategy for the next three to five years. As a part of the process I have engaged with the vendors of the key applications in my client’s application architecture. There is a good variety of applications from ERP systems to finance, HR and payroll as well as a few other nice products. It was particularly interesting to get up close and personal with the vendors in terms of their SaaS plans. A couple of things struck me in this regard.

Firstly there was a strong move towards Software As a Service amongst ‘traditional’ software vendors for whom SaaS threatens traditional license and professional service fees. All of the vendors to a greater or lesser extent were planning cloud based versions of their applications. While for many this was not necessarily a great commercial proposition it was clear that customers were demanding SaaS offerings and that the vendors were beginning to respond.

Secondly, it was clear that while SaaS versions of the applications were being planned, for many vendors the multi tenant model demanded by SaaS was going to mean a significant change to the technology platform and data models underpinning their applications. Given this customers should consider carefully when it is the right time for them to migrate to these offerings!

Thirdly, all the vendors I met were planning to begin by delivering point or module based SaaS solutions that could be used standalone or in some cases interfaced with on premises versions of their applications rather than starting by completely rebuilding their current application.

Finally and perhaps most importantly I suspect that the vendors, while outwardly committed to SaaS based offerings, were unsure how it would really impact their business and that of their customers. Nevertheless given the variety of applications and vendors I met I became even more convinced that SaaS is going mainstream.

We Need an IT Talent Strategy for Ireland's Smart Economy

The ‘Smart Economy’ is at the core of the government’s strategy for Ireland’s economic recovery and for our long term growth. A key element of this strategy is to invest heavily in research and development and incentivise multi-nationals to locate more R&D capacity in Ireland. A workforce with the right skills and in sufficient quantity are key to achieving this. Indeed the government’s paper ‘Building Ireland’s Smart Economy: A Framework for Sustainable Economical Renewal’ recognises this and states that ‘A key feature of this approach is building the innovation or ‘ideas’ component of the economy through the utilisation of human capital – the knowledge, skills and creativity of people - and its ability and effectiveness in translating ideas into valuable processes, products and services.’.

What then are the skills that will be key to incentivising multinationals to locate more R&D here? A recent report by Deloitte and CIO – ‘Mind the Talent Gap – Key Findings from a global executive survey on IT Talent’ provides some valuable insights in to the type of IT Skills that are required by multi-nationals and in particular those that are in short supply. The report highlights the fact that for many organisations a lack of IT skills was hampering their ability to innovate and was having a material impact on their key measures of success including quality, time to market, customer relationships and growth. The IT skills that they cited as being in particular shortage were of a strategic nature and included Enterprise Architects, IT Architects, Risk managers and project managers. These were also seen as key roles that had a disproportionately high impact on the organisations’ overall performance as well as representing the key leadership required during good and bad economic times.

Ireland has an opportunity to differentiate itself from the competition for the R&D dollars of multi-nationals by ensuring that we can fill this IT talent gap. After all, what better incentive can we offer than to show multi-nationals that we have a ready supply of strategic IT talent that will have a disproportionally positive impact on their company’s performance?

The report authors call for companies to develop an IT Talent Strategy. Ireland Inc. needs to do the same in order to make sure that we are a part of these talent strategies. The Smart economy depends on it.

The full report ‘Mind the Talent Gap – Key Findings from a global executive survey on IT Talent’ can be found here.

Contactless Payments On a Sticker

I have been working on a couple of projects over the last year where contactless payment devices have been a current or future requirement. Therefore a headline caught my eye today on Finextra regarding CitiBank's rollout of a sticker based contactless payment device. The idea is that CitiBank customers attach the sticker to the back of their mobile phone and tap it at any MasterCard PayPass terminal. The sticker uses RFID technology to transmit card information to the PayPass terminal and the customer completes the transaction by tapping on the PayPass terminal. The sticker is tied to a prepaid account, presumably with a relatively low top up amount.

The sticker technology was developed by a company called BlazeMobile(http://www.blazemobile.com/). Various versions of contactless payment technology have existed for years, but this sticker based version is a simple but very smart innovation. It will be interesting to see if it takes off and with 50 million Mastercard PayPass devices in use worldwide (not to mention the competing alternative from Visa) hopefully we will see it soon in Ireland too.

The original Fixextra article can be found at: http://www.finextra.com/News/Fullstory.aspx?newsitemid=21481

SOA - So What?

In conversation with a client of mine recently I was reminded of the need to always look deeper before embracing technology change. My client's IT architecture consists of a number of packaged applications, with one core ERP style application at its heart. Interfacing between these applications is currently achieved using a number of ETL style interfaces. Not necessarily pretty, but it works.

The vendor of this core application has recently announced that it is effectively rebuilding the application and in a SOA style. Sounds good on the face of it. My client and I were having a conversation as to what this would mean to him and his business users. We talked about all the nice things SOA would bring around loose coupling, agility etc. and agreed that these were good things. However, when we asked ourselves why this would be a good thing for the business users we came up short - there were very few reasons we could come up with regarding why they would (as opposed to should) care. It was a classic example of why it is so difficult to make a business case for SOA. We instinctively knew it made sense but couldn't assign any monetary value to any of it. Sure it might bring benefits in the future, but not now.

My client will migrate towards a SOA, at least in the context of this core application, but it will be driven by a need to stay in support as opposed to any great desire to go through the large migration project and all the headaches that the upgrade will inevitably bring.

We are both big advocates of SOA, but in this instance and in the current budgetary climate we were left saying SOA - So What?

What do you want to see covered in the Deloitte 2010 CIO Survey?

Last year in Deloitte I ran our inaugural and very successful first CIO Survey. (see http://short.ie/rn2oe2 for more details). We made great use of Social Media tools to generate discussion around the results and I blogged about the success of it here.

We currently planning the 2010 survey and plan to launch it in the next month or so.
The survey is split in two parts, the first part is fixed from year to year so we can map trends and the second part is reserved for topical issues.We are currently considering topics such as Cloud Computing, Green IT and Regulatory reporting in this category. This year we want to reserve one of these topics/trends for the ideas of the IT community in Ireland.

I would like to get your input regarding topics/trends you would like to see the survey cover.

Let me know what you would like to see here - add a comment!

Cloud Computing firmly on the Public Sector CIO Agenda

Cloud Computing is firmly on the agenda of the public sector in the U.S. in an attempt to drive down the costs of their huge IT budget - and Obama is talking about it.

A recently article in SearchCIO on Cloud Computing highlighted efforts being made in the U.S. to drive greater use of cloud computing services. The U.S. Federal CIO Vivek KundraFederal recently launched a website apps.gov to explain, promote and facilitate the procurement of cloud computing services in the U.S. public sector. Through the site, agencies can not only learn about cloud computing, but can also purchase a range of services including Business, Productivity and Social Media Applications.

Here in Ireland we have the same or, arguably, more serious budget pressures in the public sector. The U.S. has provided us with a great example of how to promote innovation in the public sector. A similar approach in Ireland is surely required?

XBRL - What is and Why Should You Care?

XBRL has been around for quite some time but has only recently begun to grab people's attention in any serious way as regulatory authorities have started to mandate it use for the filing of company annual returns. In Ireland the Revenue Commissioners have recently announced support for XBRL, resulting in a heightened awareness amongst Irish companies of their need to understand what XBRL is and what it offers.

So What Is XBRL?
XBRL stands for eXtensible Business Reporting Language and has been designed specifically for financial reporting. Essentially it is an XML schema and associated taxonomy for communicating and exchanging financial information. XBRL can be used by companies to report their financial results to governments, tax authorities, stock exchanges and anyone else that is interested in a single, consistent manner, thereby saving both sides time and money.

An example of some XBRL is shown below:

<?xml:namespace prefix = xbrli /><xbrli:context id="BJ2004">
<xbrli:entity>
<xbrli:identifier scheme="www.iqinfo.com/xbrl">ACME</xbrli:identifier> </xbrli:entity>
<xbrli:period>
<xbrli:instan>2004-01-01</xbrli:instant>
</xbrli:period>
</xbrli:context^gt;

As you can see from the example XBRL in of itself is not technically unique or challenging - in essence technically it is just an XML schema. The real power lies in the fact that it is an open standard and that it brings together the technical financial reporting/accounting world and XML to create something simple, effective and extensible that can save both companies and regulatory authorities time and money.


Why Should You Care?
As I alluded to earlier XBRL is gaining momentum worldwide. In the U.S. the SEC has made it mandatory for filers above 5 billion dollars to report in XBRL and this is sure to be extended in the near future. In the U.K. companies currently have the ability to report using XBRL and it will be mandatory from 2011. Similar moves are afoot or have already been taken in Australia and the Netherlands amongst others. Here in Ireland the Revenue Commissioners recently announced that they will provide the ability for large cases to report in XBRL from September of 2010. Mandatory filing cannot be far away.
Apart from the emerging requirement to report in XBRL, there are other benefits to companies using XBRL such as the ability to provide data once and in a standard format to multiple government agencies as part of an attempt by governments in Ireland and abroad to reduce the administrative burden on companies. For example by filing annual returns once in XBRL with the tax authorities there is no reason why this could not be passed on automatically to companies registration offices and other statistical bodies without any additional burden on the submitter. For the submitter there are also advantages in streamlining the preparation of financial accounts, particularly in organisations with multiple subsidiaries whose accounts need to be consolidated before submission.

More Information

More information on XBRL in Ireland can be found http://www.xbrl-ie.org/ or through BRIL members such as Deloitte (for whom I work) - http://www.deloitte.ie/.

Challenges for CIOs in 2010

I have recently published a paper on Deloitte's website regarding the challenges facing CIOs in 2010 and beyond. See http://short.ie/jybug0. I thought it would be worth recapping what those challenges are here:



1. Take Control
Working in partnership with suppliers requires fostering a positive relationship but also means controlling costs and focusing on business value. CIOs should be actively managing service delivery, reviewing long-running deals and enforcing favourable rates where possible, without impairing service delivery to the business.


2. Transform your costs
CIOs should be exploring the benefits of migrating business services into the cloud; particularly in areas such as email and office productivity tools where proven alternatives are available. Cloud-based services offer the ability to flex service capacity and replace capital expenditure with operating expenditure.

3. A virtual reality
A focus on controlling spending should include examination of service delivery transformation by exploring innovative methods. Virtualising desktop and server assets can offer greater control over service delivery without limiting accessibility for business users.

4. Streamlining talent
Now is the time to identify and address talent gaps to optimise delivery capability. Where possible, consolidate and centralise teams while seeking additional ways to supplement capabilities by taking advantage of alternative delivery options. Actively managing retention will be critical to maintaining key skills within the core team.

5. Recognise your value
CIOs who have successfully reduced the cost of IT while continuing to deliver business value through these tough times will have demonstrated credibility with their business colleagues and are well-positioned to play a greater role in advising and deciding on project and programme investments. Successful portfolio management means direct engagement with senior business stakeholders to align delivery with business strategy.


6. Power in your hands
Opportunities to generate competitive advantage exist in mobile service delivery to both business customers and consumers. Applications delivered to mobile devices not only improve accessibility but also positively impact business agility and responsiveness.

7. Spring clean and benefit from green
Many organisations retain an IT legacy which is expensive to maintain and support. With out-of-support application and energy costs rising, now is the time to review, rationalise and refresh the legacy in order to reduce overhead and maximise value for money.

8. Managing change
While IT organisations have embraced methods such as the IT Infrastructure Library (ITIL) for service delivery and realised improvements as a result, there is not the same level of maturity around programme and project delivery. CIOs should lead IT in delivering training on – and consistent use of – robust methodologies, enabling change delivery to meet the high standards achieved within service delivery.


9. Keep in touch
The rise of social networking has been dramatic and is now making inroads into the corporate environment. CIOs should be helping their organisations benefit from social networking’s ability to deliver direct participation through feedback and collaboration, while implementing controls to manage data security risks.

10. Be prepared
CIOs should be prepared for a broad range of business challenges, ranging from natural disasters through increased regulation and market volatility. CIOs have a responsibility to build resilience into the foundation of IT operations, and be prepared to demonstrate this resilience to the Board, shareholders and markets.


For me the most important of these challenges are

2 - Transform your costs by migrating to the cloud, there is no doubt that the cloud presents a great cost saving opportunity if appropriately exploited.

5 - Reconginise your value and more importantly make sure the business do too. There is little point delivering value if you are not being recognised for it. CIOs need to make sure that they have the proper mechanisms in place to do this in terms of benefits tracking (long past go-live) and having a forum to highlight these benefits to the business.

8 - Managing change. CIOs need to ensure that their delivery organisations are just as well organised in terms of process and governance as their operational organisations which are these days typically ITIL based. They also need to make sure that these two parts of the organisation work in unison by taking an end to end project view from the start of the project that integrates architecture, delivery and operations in one team.

eDiscovery in the Cloud - Watch Out!

It is clear from many surveys and indeed from my previous posts on cloud computing that data security, accessibility and location are key concerns for companies considering cloud computing solutions. However there is yet another area of concern around data in the cloud that requires consideration and discussing with cloud vendors before embarking on a cloud computing project. This area of concern, which isn' t much talked about in cloud computing circles, relates to eDiscovery.
As with any on premises application, courts and other authorities can issue eDiscovery orders at short notice and with tight delivery timelines (in some jurisdictions this can be as little as 24 hours). The question organisations must ask themselves is will their cloud vendor be able to support them in responding to such an eDiscovery request within the required timeframes. Remember responding to such a request will often require trawling through large volumes of data. This is difficult enough when all the resources are in your control. However, in the cloud scenario where infrastructure is shared between customers this becomes more complicated - for example how will the data be searched without impacting your operational performance for you and that of other customers and will the vendor have the resources and tools at hand to do discovery at all?

None of these issues are insurmountable but it does highlight again the absolute need to think through all impacts of the cloud computing model in advance of embarking on the journey and to ensure you have a comprehensive SLA in place with your vendor.

A Brief Introduction To Cloud Computing Part III - IAAS

In this post in my series on an introduction to cloud computing, I am going to look at the categories of Infrastructure As A Service in some more detail. Like SAAS there are a number of sub categories of Infrastructure As A Service offerings. Key amongst these are:

• Storage
• CPU / Server
• Database
• Integration

Storage

Storage As A Service enables organisations and individuals to store their data in the cloud at a much lower cost and with good disaster recovery and availability options. This is growing in popularity as a low cost archiving and backup option. The ability to quickly scale and up down the required storage is a key benefit of storage as a service.

Examples include Amazon Web Services and Right Scale.

CPU/Server

This is probably the most talked about category of Infrastructure As A Service and effectively involves renting processing power. I prefer to think of this as just that - processing power - as opposed to a particular type of server which somehow seems contrary to the general cloud concept. Having said this, in reality, computing power is normally purchased based on server type, operating system type etc. Again key benefits here apart from price are flexibility, ability to easily scale up and down and the outsourcing of administrative operational tasks.

Examples include Amazon, RightScale and GoGrid.

Database As A Service

Database As A Service offerings provide access to a database or database management system in the cloud. Often this is an add on to CPU as a service where an users requests a CPU with a particular database platform pre-loaded.

Examples include Amazon Web Services.

Integration As A Service

Sometimes this is classified as Software As A Service but I prefer to classify it as infrastructure as a service because of its 'plumbing' nature. Integration As A Service offerings are relatively immature but aim to make integrating cloud and on premise applications easier.

Examples include: Pervasive and CastIron.

In my next post on Cloud Computing I will look at the categories of Platform As A Service offerings.

LinkedIn as a business funding tool

I found this article on how an Irish Software company raised funding using just LinkedIn. While the money raised wasn't huge, I thought it was a great example of how Social Media tools are changing how business is and can be done on the Internet. The article is available here: http://tinyurl.com/yecz8lk.

IT in 2010 - The Right Solution At The Right Time

One of Deloitte's 2010 Technology predictions (www.deloitte.com/ie/tmtpredictions) is that Moore's Law is alive and well but in a different form that heretofore. In this era of mobile and handheld devices the predictions argue that rather than the focus being on faster chips it will instead be on chips that are 'good enough' for the job at hand in terms of processing power but which are cheaper and require less power.

This prediction struck a chord with me in terms of some of my recent client experiences and the pressing need to make IT cheaper and more efficient. As a general rule the IT industry (and their business customers) have often defaulted to 'gold plated' technology solutions, be it in the form of big CRM systems, high availability, disaster recovery or a myriad of other areas. In far too few cases have these decisions being challenged. Ask yourself did you really need that tier one CRM solution?, did that service really need a hot standby DR capability? why does that application need 99.9999 availability? Often, an honest assessment of the business needs and the risks can lead to a much cheaper and sometimes more effective solution that is good enough for what the business needs. This is not to say that we shouldn't design and deploy solutions that consider future business needs and which are flexible, but rather that we should deploy the right solution at the right time.

In 2010 lets try to focus on doing just that with renewed vigour.

2010 TMT Predictions - Whats the difference between T, M and T anyway?

As you know I work for Deloitte. Today Deloitte published the 2010 Technology, Media and Telecommunications predictions. Personally I found them fascinating. You can find them at http://short.ie/ie377t.

The Predictions
I particularly like the Moore's Law, Net Tablet and linear TV schedule predictions.

Top Technology Predictions include:
1. IT procurement stands on its head
2. From grey to green: technology reinvents cement
3. Smaller than a netbook, bigger than a smartphone: net tablets arrive
4. Moore's Law is alive and well in 2010
5. Cloud computing: more than hype, but less than hyper
6. Thinking thin is in again: virtual desktop infrastructures challenge the PC
7. CleanTech makes a comeback. But solar stays in the shadows

Top Media Predictions include:
1. Linear's got legs: the television and radio schedule stays supreme
2. Publishing fights back: pay walls and micropayments
3. The shift to online advertising: more selective, but the trend continues
4. eReaders fill a niche, but eBooks fly off the (virtual) shelves
5. Music as a service rises up the charts
6. TV and the Web belong together, but not necessarily on the same screen
7. Video-on-demand takes off - thanks to the vending machine
8. One step back, two steps forward for 3D TV

Top Telecommunications Predictions include:
1. The smartphone becomes a search-phone
2. Mobile VoIP becomes a social network
3. Widening the bottleneck. Telecom technology helps decongest the mobile network
4. Paying for what we eat. Carriers change data pricing and make regulators happy
5. Nixing the nines
6. Contract 2.0: long-term solutions shorten and multiply
7. The line goes leaner. And greener 8. Reliability redefined and reassessed

My Thoughts

I was involved in putting together Deloitte Ireland's point of view on the results and so spent quite some time going through each prediction for each of the TMT areas. What struck me was the blurring of the lines between the predictions. Almost without exception the media and telecommunications predictions were reliant on technology. For example the telecommunications predictions talked about the SmartPhone becoming a search phone and mobile VOIP becoming a social network. While these are certainly telecommunications predictions, I don't think many of us would have been surprised to see them in the technology predictions either. Similarly on the media side there was a debate around eReaders, Music As a Service and TV v xPlayer services. Consequently, when debating which of our clients to send them to I argued that all our CIO and Senior IT contacts would be interested in all three.

I wonder next year will we have just one set of predictions?

A Brief Guide To Cloud Computing Part III - SaaS in more detail

In this third post on Cloud Computing I will look at SaaS in a more detail. Software As A Service can be thought of a web based services that supports one or more business processes. The services are targeted at the business user (in general) and business super users or business oriented techies who configure the applications and how they integrate with other cloud based or in house applications.

There are many SaaS services available in the market and more are being added every day. However, most of these fit into a couple of sub segments -

• Customer Relationship Management.
• Enterprise Resource Planning
• Supply Chain Management
• Digital Content Creation
• Communication Oriented Services supporting collaboration, instant messaging, video conferencing etc.
• Integration services for managing messaging between systems.

CRM
The CRM sub segment consists of those services related to all aspects of customer relationship management and is one of the most mature segments. Examples include SalesForce.com (the market leader), SugarCrm, RightNow and of course Oracle and SAP's offerings. There are also a range of other offerings in particular niches.

Communication Oriented Services
This category covers a wide variety of services including e-learning, collaboration, enterprise content management, instant messaging, email and team collaborations and is probably the most widely adopted SaaS sub segment.

ERP
To date there has been relatively little adoption in this area. The most successful services are those that can be used for business processes that are relatively generic accross all industries e.g. HR, recruitment, expenses etc. Examples are SAP By Desigm, WorkDay and NetSuite.

Supply Chain Management
This segment is focused on services that enable organisation to manage and improve their supply chain and suppliers. This segment is currently growing quickly and new offerings are appearing regularly. Examples include Descartes, Ariba and Ketera.

Digital Content Creation
This SaaS segment is currently fairly underdeveloped despite a huge demand for digital content creation applications. Examples include Adobe and YouTube.

Integration Services
This part of the market is also relatively immature and is unlikely to grow very quickly due to the cost of switching. It does however have great potential. Examples include Pervasive, CastIron and BoomI.

Summary
The list above is far from exhaustive. As can be seen above there are many SaaS offerings in the market and the market is growing and changing rapidly. Predictions as to growth in the sector vary but in general there is general agreement that the CRM and Communication Oriented Services segments will continue to grow strongly over the next 18 months.

In my next blog posting I will look at Infrastructure As A Service in some more detail.

A Brief Guide To Cloud Computing Part II - Drivers & Inhibitors

In my last post on Cloud Computing I provided a brief introduction to what cloud computing was and promised that in my next post I would look at the inhibitors and drivers of cloud computing in an attempt to bring greater clarity to the subject.

As we all know there is no such thing as a free lunch and like most things in life Cloud Computing is a trade off. There are clear advantages to adopting the technology but at the moment there are a number of issues which are inhibiting its adoption. For organisations considering adopting these technologies it is a case of balancing these two sides of the equation.



Drivers

Lets first look at the drivers of cloud computing - the why would you do it question. The primary drivers for cloud computing are:

1. Financial


2. Speed of Deployment


3. Flexibility & Scalability


4. Focus on core competencies


5. Less deployment risk


6. Less IT Maintenance and
   upgrade activities


7. Easier Procurement

Financial

If you remember from previous posts one of the key characteristics of cloud computing was that it was multi-tenant and paid for on a pay as you-go basis. One of the benefits of this is that it leads to lower capital costs related to the cloud infrastructure and/or software. In fact the costs become purely operational and at pretty much any point you can withdraw or up/down scale the size of your cloud solution without any financial penalties or having to write off capital investments. A side affect of this is that the capital that is freed up can be used to accelerate other capital intensive initiatives in the wider organisation that might otherwise be possible. Clearly lower capital costs also lead to improved ROI and a shorter payback period.

Speed of Deployment

Cloud solutions can be deployed much faster than traditional IT solutions because the solutions tend to be standardised, based on pre-defined templates (that limits customisation) and make extensive use of technologies such as virtualisation.

Flexibility & Scalability

Following on from the previous point the speed of deployment benefit does not apply to just the initial deployment but also to scaling the solution up and down. Cloud based solutions are designed from the ground up to be immediately scalable in either direction, thus allowing organisations to rapidly react to daily, seasonal or yearly spikes in demand for computing power.
Focus on Core Competencies

By leveraging Cloud Computing to effectively outsource all or some IT functions organisation can focus on what they regard as the competencies that gives them competitive advantage.

Less Deployment Risk

Deploying cloud solutions is generally automated and largely taken care by the service provider thus lowering the deployment risk for IT organisations.

Less IT Maintenance and upgrade activities

As I've alluded to above by leveraging Cloud Computing organisations lessen the burden on themselves in relation to performing mundane IT maintenance activities. Upgrades are also taken care of by the service provider, for SaaS offerings often up to 4 times a year, thus freeing IT organisations from these sometimes complex tasks and avoiding the situation where an application becomes hopelessly out of date and requires a large and expensive upgrade at some point in the future.

Easier Procurement

Because Cloud Computing solutions do not require major up front capital investments the internal procurement process is made much easier as less approvals and reviews are usually required. This can be especially useful in getting pilot projects off the ground.

Inhibitors

Given the obvious benefits of Cloud Computing described above why isn't everyone vigorously adopting these new technologies. The answer to this question lies in the inhibitors I have listed below. These include:

1. Security & Compliance concerns


2. One size fits all approach


3. Required Mind shift in IT


4. Provider maturity and viability


5. Integration with on-premises applications

Security & Compliance concerns

This is probably the biggest inhibitor to wide scale adoption of cloud computing. Security is a particular concern for many organisations who fear that they will be exposed in a multi-tenant world with data located outside of the corporate firewall. It can be argued that these fears are overblown as the data centers operated by many of the cloud service providers have very robust security features (including SAS70, SOX, HIPPA and PCI compliance) and that the data centers offer security capabilities in excess of those in place in many using organisations.

Regulation presents another problem, particularly in the public sector. In many countries data privacy and other regulations stipulate that certain data (e.g. related to a citizen) may not reside outside the country. This can be a very real inhibitor for many organisations, though vendors are beginning to offer solutions that either guarantee data is located in a particular country or group of countries or which offer a hybrid model which combines the cloud with hosted data solutions.

One Size Fits All Approach

Cloud solutions, particularly SaaS solutions, provided facilities to enable customers to customise their solutions, however these are limited and will usually mean that organisations need to make compromises or change their business processes in order to integrate the solution into their business. While an inhibitor, this does have an upside from a maintainability and cost perspective.

Required Mind shift in IT

This inhibitor is probably the least understood as it is people related. The introduction of cloud computing into an IT organisation introduces change and requires a mind shift from those in the IT organisation. When fully implemented, Cloud Computing moves the focus away from operational activities and more towards visioning, service provisioning and relationship management. This implies changes both for how the organisations is structured and for the individuals within the organisation. Job roles will change, new skills will be required, process will need to change and quite possibly the size of the IT organisation will most likely shrink.

Provider maturity and viability

Cloud Computing is still an emerging and fast moving technology. Cloud Service providers are emerging all the time and even some of the more established vendors are no more than 10 years old. This makes provider viability a concern particularly in a market where consolidation is likely over the coming years. However many established vendors from the traditional IT arena are now entering the market and with careful vendor assessment and due diligence the risk involved can be mitigated.

Integration with on-premises applications

In many cases it will be necessary to integrate on-premises (particularly legacy) applications with applications in the cloud. This involves integrating outside the firewall and over the Internet. There are a number of challenges related to this including interfaces protocols and security particularly where an existing application or system has not been exposed externally before. Ultimately it is unlikely that this will inhibit the adoption of a cloud computing solution, however it does add a degree of complexity.

In Summary

Ultimately each organisation must weigh up the risks versus the benefits of Cloud Computing for their particular organisation. However, it seems to me that Cloud Computing is here to stay and it is more a case of when rather than if organisations adopt these technologies.

In my next blog on Cloud Computing I will look in a bit more depth at Software As A Service and look at some of the sub categories of solution offerings such as CRM, ECM and Digitial Content Creation.

A Brief Guide To Cloud Computing

Cloud computing is the latest technology trend to lack an agreed definition and as usual this is causing much confusion. This is the first in a series of blogs where I explore cloud computing. This first post addresses the question of what it is.

What is the Cloud?

In my experience when people talk about cloud computing they can be talking about anything from hotmail to Microsoft Azure to storage in the cloud. In this post I attempt to bring a degree to clarity to the definition.

I think that the best way to describe a definitionless concept such as the cloud is to think of its characteristics.
With this in mind, the essential characteristics of the cloud are:

1. It is multi-tenant. By this I mean that multiple companies and organisations share the cloud and its capabilities. No one organisation 'owns' a piece of cloud infrastructure or software.




2. It is highly abstracted. Users of the cloud do not know or need to know any of the details of how (or even which and what) piece of the physical cloud (e.g. server) they are using.




3. You pay as you go. Access to cloud services is paid for on a pay as you go basis. Upfront capital costs do not feature.




4. It is flexible and immediately scalable. Cloud services can be scaled up or down at the users discretion and without the need to provide advance notice or incur penalties.

So what is Cloud Computing?

I think the best way to look at computing in cloud is based on a model that divides cloud 'services' into three categories - Infrasturcture As a Service (IAAS), Software As A Service and Platform As a Service (Saas).

Infrastructure As A Service

This category is easily understood as in essence it involves renting and accessing CPU, storage and certain infrastructure related software (e.g. databases) from and through an internet based third party rather than having them located in your data center. The advantage is that IT departments are freed from many of the basic administration functions of these components and costs are contained as in general IaaS costs become operational rather than capital based. Additionally, capacity can be easily scaled up and down as daily, year end or seasonal demands dictate while containing the costs in involved in doing so.

Examples include: RightScale, Amazon, Go Grid, SkyTap.

Software As A Service

Saas is probably the category that is best understood because of the success of salesforce.com. Nevertheless even a cursory google search reveals a broad and every growing set of cloud based offerings in a range of areas including CRM, enterprise content management, billing, business process management and security to name but a few.

One of the great advantages of SaaS is speed to deployment. SaaS solutions can be up and running very quickly at a low cost and at low risk - doing a SaaS based proof of concept is very cost effective as, depending on the project, there are no capital software or hardware costs involved.

Examples include: SalesForce.com, SugarCRM, OpenText, GoogleApps

Platform As A Service

This is probably the hardest category to understand and is probably the least developed. Platform As A Service offerings such as Microsoft Azure and GoogleApps are essentially web application software development platforms in the cloud. Rather than having the development environment and tools in house they are instead hosted in the cloud. Essentially, using these platforms, developers 'program in the cloud'. In order to do this PaaS offerings provide all the features necessary to support the complete lifecycle of building and delivering web applications and services.

I hope this provides a degree of clarity to what cloud computing is. In my next post related to cloud computing I will look at the drivers and inhibitors of cloud computing which should help in bringing more clarity to the topic.

Reflections on Deloitte 2009 CIO Survey

Deloitte Ireland, for whom I work, released the 2009 CIO Survey results late last year. I was responsible for the survey from inception to completion and thought it was worth reflecting on the process.

A couple of things come to mind:

1. It was a really worth while exercise that genuinely provided an insight into the state of IT organisations in Ireland. It wasn't clear at the begining that this would be the case. The results are available here: http://www.deloitte.com/view/en_IE/ie/services/consulting/cio-survey-2009/index.htm



2. It takes a lot of work to run a survey like this, especially in the first year, but I expect that next year will be a lot easier. The biggest effort was required in formulating the survey distribution list and in following up to get responses from those invited. We built a dedicated results website which also took quite a bit of work, though mainly because it was a new concept. Processing the survey results, spotting the trends and creating the summary report was more straightforward than expected.



3. Social media proved a fantastic tool in building momentum around the results and driving traffic to our results website. We used three tools: a. LinkedIn - we used the 'what are you doing' portion of my own and a couple of others in my group profiles' to publicise the fact that the results were coming and when they were released. We also started discussions in relevant LinkedIn discussion groups around the survey results. b. Twitter - we tweeted about the results and their release. c. We submitted a post to the Irish Internet Association's guest blog. This also went out in their weekly email newsletter. These first and last of these items drove large amounts of traffic to our website, with LinkedIn coming first (by a big margin) followed by the IIA blog. Twitter came in 7th and our own direct marketing emails 5th. We also appeared very high up google searches around CIO Surveys. These results created quite a buzz around social media tools in Deloitte Ireland and is a very valuable lesson to all regarding the power of social media tools.



4. We invited people to comment on the results on the website, but few did. Perhaps this is because of the nature of some of the results (budgets etc.) and a certain 'shyness' in the targetted population to publically contribute. I still think that providing this facility was the right thing to do and think we will continue to do so in the years ahead. An interesting thing that I am finding is that people seem more interested in contributing comments to linkedin discussion groups - Deloitte are releasing the 2010 Technology Media and Telecomms predictions soon and I started a discussion inviting people to submit their predictions. This has generated a very good response and we haven't issued the predictions yet!




Though involving hard work, running the survey was a lot of fun and proved rewarding. We will be running the survey again this year. The 2009 results can be found at: http://www.deloitte.com/view/en_IE/ie/services/consulting/cio-survey-2009/index.htm