Business Continuity in an Outsourced Environment - Business Continuity in an... · hyper-growth of business as-a-service economies Exploding and Interconnected Digital Universe 33%

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© 2013 International Business Machines Corporation 1

Business Continuity in an Outsourced Environment:Enabling business outcomes and expanding sourcing options

Marnix GillisIBM Distinguished Engineer

Region Belgium/Luxembourg

32nd Regional Conference



Abstract

� With the growing success of cloud, most of the consultant companies agree that the job

of a CIO is evolving from (business) manager of an IT department to a function of a

"broker of services", supporting new (and existing) business systems.

� The choice and mix of delivery models has an impact on the CIO's retained

organization, but also declares the switch that (some) providers make to "enabling

business outcomes" rather than delivering infrastructure services.

� This presentation will describe both trends in the sourcing industry.

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Trends: Cloud, Mobile, Analytics, and Social are fueling the

hyper-growth of business as-a-service economies

Exploding and Interconnected

Digital Universe

33% of all new business software

spending will be Software as a Service

1 billion

workers will be

remote or

mobile

1 trillion connected

objects (cars,

appliances,

cameras)

� 1B Mobile Internet users

� 30% growth of 3G devices

Embracing New Technologies,

Adopting New Business Models

Mobility

Cloud / Virtualization

Social Business

Bring Your

Own IT

Large existing IT

infrastructures with a

globalized workforce,

3rd party services,

and a growing

customer base

30 billion RFID tags

(products,

passports,

buildings,

animals)



These trends increase pressure on CIOs and their teams to deliver

transformative business value

Of Fortune 500 and popular websites contain a vulnerability

40%Increased risk

Of senior management rank technology as critical to business success

68%Increased expectations

Of the average IT budget is dedicated to ongoing operations.

71%Budgetary constraints

Desired Outcomes:

� Create new business models

� Manage business innovation from strategy

to execution

� Deliver robust business analytics

� Align applications with business processes

and platforms

� Improve application flexibility

� Align technology with business strategy

� Improve infrastructure efficiencies

� Create a more flexible infrastructure with

delivery options, like cloud computing

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Forward-thinking leaders are forging strategic partnerships for

financial value, business growth and innovation

Source: IBM Studies

Cost-cutters

Growth-seekers

Innovators

Reduce cost

of operations

Increase

efficiency and

effectiveness

across

value chain

Achieve

faster time to

marketDrive front office

effectiveness

Better

anticipate and

respond to

disruptive

forces

Proactively

manage

security, risk

and compliance

Share risks

and rewards

based on

business

outcomes

Streamline

Improve

Transform

CEOs partner with external providers to drive innovation.

59%CIOs partner to change the mix of skills, expertise and capabilities.

2/3Of CIOs view cloud computing as critical to their plans

60%



Design

Control

Security

Self-Service

Service Levels

Delivery

Infrastructure

Resources

Service Mgmt

Cost Structure

Custom Standard

Complete Shared

Custom Standard

Low High

Custom Standard

On-Site Remote

Dedicated Shared

In-house Partner

Manual Automated

Capex Opex

Cloud: PrivateTraditional IT Cloud: Multi-tenancyManaged Services

Assumes a typical deployment

Enterprises should determine the best mix of delivery models

based on a set of attributes.

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Networking

Storage

Servers

Virtualization

O/S

Middleware

Runtime

Data

Applications

Traditional

On-Premises

Networking

Storage

Servers

Virtualization

O/S

Middleware

Runtime

Data

Applications

Platform

as a Service

Networking

Storage

Servers

Virtualization

O/S

Middleware

Runtime

Data

Applications

Software

as a Service

Vendor Manages (in Cloud) Client Manages

Standardization; OPEX savings; faster time to value

Networking

Storage

Servers

Virtualization

Middleware

Runtime

Data

Applications

Infrastructure

as a Service

O/S

A mix of sourcing models gives CIOs the opportunity to gain

operational & capital expense savings while maintaining

application differentiation



Sourcing services from a variety of delivery models, with increased granularity, results in an IT infrastructure that is dynamic, virtual, potentially providing higher business continuity, but … complex

Public Private

Desktops

Smartphones, tablets & other mobile devices

Traditional data center

Business Partners

Enterprise

Customers

Hybrid

Other service

providers

Employees

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Sourcing granularity to the extreme

Glasbergen cartoon



Changes in IT demands, new sourcing models and increasing

complexity requires the role of the CIO to evolve

<2000 –

2005

2006 – 2010

2011 – 2015

CIO as “application”

implementer

• Expansive, on-premise applications

• Highly customized, with dedicated

hardware

• Internal staff and external trusted

advisor

CIO as head of virtualization

and standardization

• Early SaaS and cloud adoption

• Acceleration of virtualization and

standardization

• Less staff, multiple suppliers

CIO as service integrator

or “broker of services”

• Widespread SaaS and cloud

adoption

• Highly standardized and

virtualized, delivered as

a service

• Even less staff, many more

suppliers and new modes

of delivery

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Do not underestimate the impact on governance and the “retained”

organization. Two examples:

Cloud or external service

In House

Non s

tandard

interf

ace

integrated service management processes

standardized interfaces for integrated

business processes



Source: IBV Analysis

..into a methodology using

tools and best practices

Strategic Decisions

Considerations

Business

Design

Service

LevelsDeployment

Outcomes

Economics

Accountability Performance

Security Shared

Location

FlexibilityAvailability

outcomeseconomics

accountability

availability

security

performance

flexibility

shared

location

Decisions

Shared

Multi-tenant

Deployment models

hybrid

governance

migration

managementFixed vs. Variable costs

benefits

ownership

planning

Bringing together diverse

(non-functional)

requirements

A structured approach is required to assess client requirements and

make thoughtful decisions on a sourcing service delivery strategy

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CIOs have to create and deliver an integrated, interconnected,

dynamic multi-sourcing strategy

1Consider your business and IT needs, and the processes and services required to support them

2Use a disciplined approach to

make the right decisions using

best-practice tools and

methodologies

3Deliver an integrated multi-

sourcing strategy spanning

your enterprise

Business Service Management

Infrastructure Application Process

Service Delivery Considerations

Business Design Service Levels Deployment Choices

Sourcing

Traditional IT Managed Services Cloud Services

Integrated Service Delivery Platform

• Outcomes

• Accountability

• Economics

• Performance

• Security

• Resilience

• Flexibility

• Shared

• Location



Does TOGAF help? It certainly does, but relationships might change ...

* IBM Research modeling and estimating infrastructure impact

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A shift is taking place from delivering IT outcomes to delivering business

outcomes

Reduce IT cost

IT outcomes

Manage IT cost

Increase business revenue

Reduce business cost

Business process availability

Business outcomes

Align with enterprise’s

business outcomes

Va

lue

1980 1990 2000 2010 2020

“IT Value Is Dead. Long Live Business Value.”

Business outcomes from technology investments are all

that really matter. The CIO’s challenge is finding new

ways to prove IT’s worth.

Source: CIO.com, Stephanie Overby, May 12 , 2011

Top 10 Business Priorities 2014Top 10 Business Priorities 2014

Increasing enterprise growthIncreasing enterprise growth

Improving OperationsImproving Operations

Attracting and retaining new customersAttracting and retaining new customers

1

2

3

Source: Gartner, 2011 CIO Survey



Sourcing market is undergoing profound changes…

Cost savings �� business value

Generic �� industry context

Task driven �� broad capability

access

Horizontal �� vertical integration (infra, apps, bus proc)

Single service �� integrated value chain

Traditional IT �� all delivery models (traditional IT, mgd service, cloud)

Vendor �� strategic partner

CIO ��C-suite and business LOB

Industrialized approach �� client centricity

Desired

Outcomes

New Relationship

Models

Expanded

Scope

� What capabilities do you need to acquire?

� What do SLAs look like – and are they related to business outcome? (“BLA’s” ?)

� What is the governance model and who needs to participate?

� Should partner relationships be horizontal or vertical?

� How do you move from a vendor to a strategic relationship?

� What are the essential control points?

But to deliver business outcomes, relationships with service providers must

evolve to be more strategic

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� Bringing together asset-based offerings and

standardized solutions to deliver predictable,

business-value outcomes

� Using industry best practices, proven processes

and tools and close client partnerships

� Outcomes that are tied to client-defined value:

– Achieving faster time to market

– Expanding globally

– Anticipating and responding to disruptive

technological changes and market forces

– Strengthening the organization’s culture of innovation

– Seeking new business models and developing new

markets

The value is delivering business outcomes – based on technology, market, and industry best practices

and insights - across infrastructure, application and business processes

Platform built on proven processes and tools for

standardization and automation

Service integration enabling a transparent,

agile value chain

Deep technological expertise and rich

market/ industry insights

Best of breed technologies – analytics, cloud, social and mobile

Integrated Service Management

Business model innovation

Application and Business Process

optimization and innovation

Infrastructure optimization

and innovation

This implies that not only the CIOs but also their Service Providers have in-

depth industry knowledge – becomes a selection criteria



Service Providers are not necessarily the ones we know today: agile, scalable,

and consumable business as-a-service will shift the business services market –

2 real life examples

Core Externalization

� Define services to be exposed (User,

Location, Payment)

� Map APIs to back-office applications

� Expose API (internally or externally)

Service Integration

� Define workflow to interact with Telco

APIs

� Integration effort to stitch together APIs

in apps

� Deploy and publish apps

API Management

� Define usage and access policies to ensure

security and scalability

� Manage interaction between apps and

back-office

� Manage metering, throttling,

security, and translation

BSS

Network

OSS

Exte

rna

lize

GM Telco: building solutions to enable millions of

unbanked subscribers to purchase goods via

mobile devices

MM Telco: experimenting by enabling facebook

app developers to support in-app purchases for

telco subscribers

User

Location

PaymentStd

API

Telco

Back-office

GM Telco

Telcos are opening up core payment capabilities to capture value in the online payment market

MM Telco

Std

API

Std

API

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Get started by integrating preferred business outcomes into your

IT and – by extension - sourcing strategy

Consider your business and IT needs, and the processes and services

required to support them

Look beyond your organization’s borders to maximize value derived from

your sourcing strategy

Establish shared responsibility for your sourcing strategy and governance

across Business and IT services

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Not too much different from the ideal world today, with some extra attention points



Questions?

Documents

Business Continuity in an Outsourced Environment - Business Continuity in an... · hyper-growth of business as-a-service economies Exploding and Interconnected Digital Universe 33%