How to prepare your organisation for a service defined world

In our third annual Global CIO Survey (take part here), Logicalis is examining the shift from technology-focused to services-led IT. The consumerisation of IT has meant that technology previously only available to the privileged few, is now available to everybody. As the cloud causes technology to become further abstracted from the underlying infrastructure, the focus has moved away from the piece of equipment and towards the service being delivered. It’s all about instant gratification and user experience, and that’s achieved by buying technology ‘as a service’. There’s a reason why Software as a Service (SaaS) usage has exploded; providers are offering something that business users can purchase and use almost as soon as the contract is signed.

In the keynote at last week’s CIO Summit in Sydney, Sally Parker, Research Director, Enterprise Systems and Software at IDC, discussed the priorities for Australian businesses in 2015. At the top of the list is operational efficiency and productivity, but how can organisations improve on this when most of their time and money is tied up in the maintenance of legacy systems? A service-centric model is the answer.

The threat to IT

As specialist providers deliver more services directly to end-users, consumers are becoming accustomed to an on-demand lifestyle. The IT department cannot compete with the rapid adoption of cloud technologies and is slow to react in comparison. As Oliver Descoeudres, Marketing Director at Logicalis, says, “If IT can’t deliver what line-of-business users and managers need to do their jobs, they’ll turn elsewhere to procure those services”. Cue shadow IT and the relegation of IT to the backroom.

In response, CIOs need to take measures to ensure they remain relevant in their organisations. The way to do this is to transform into a service provider of their own, what Logicalis refers to as the ‘Service Defined Enterprise’ (SDE). If IT can make the transition to fully supporting an SDE, its relevance will increase significantly.

Defining service

Of course, not every organisation that embraces the SDE vision will progress along these individual transformations at the same rate, just as no two organisations will have the same transformation priorities. It is relative to the nature of the business and current stage of software and hardware refresh cycles.

Getting from here to there

The first step toward this SDE model is embracing a software defined data centre, something that three out of four CIOs claimed a year ago they were making a priority. This year’s survey aims to find out how successful CIOs have been in this transformation. Last year, over a third of respondents were already planning to adopt automation and pre-validated architectures to simplify IT. Similarly, a third of respondents were focusing on the end-user experience as a desired outcome.

Of most importance in this transition is the development of external partnerships. Interestingly, the results from our 2014 CIO survey found that CIOs are unenthusiastic about the prospect of outsourcing, but outsource they must if they want to spend more time on strategic planning and innovation initiatives. Paul Kennedy, CIO of APG & Co and also a presenter at the CIO Summit, said IT leaders need to “invest in a world class logistics operation”, and this is done by leveraging partners. He added: “IT people are often afraid of putting people out of work, but if you don’t do it, your competition will”. The SDE realises that doing everything in house is not an option. Instead, it needs to identify, integrate and manage a number of service providers into one unified solution.

CIOs can’t be afraid to look externally first for business IT services. As CIO and Logicalis customer, Greg Booker from RACQ, said at the CIO Summit, “It is not wise to play in a space you don’t have the expertise in".  Of course, there will be some operations that are far too important not to keep in house, and it is wise to work out which resources and skills you will need to manage these systems prior to deciding on an outsourcing strategy. Only then can the business ensure that anything it decides to build internally and operate itself will deliver a comparable user experience, be equal or superior to the standards of an external service provider, and will be delivered at a competitive cost.

Moving into tomorrow

IT needs to be more agile to respond to business needs, and that requires a transformation in technologies and in its operational and consumption models. The source of this agility is a partner who can deliver the most appropriate service to the organisation or line of business at the most acceptable cost, speed and risk level. In Sally Parker’s words, organisations must “partner with those who will take [them] into tomorrow” or they risk being left behind.

We’d like to get your insights in this year's Logicalis Global Insights Research. Your responses form part of a global study, now in its third year. This research benchmarks how 'aligned' IT is with the business across 16 countries and looks at the various aspects of IT's transformation from cost centre to business enabler.

Complete the Australian CIO Pressures & Priorities Survey here. We’ll send you a small thank you gift and a copy of the report, which will be published in October 2015.

You may also be interested in downloading our complimentary whitepaper: ‘Why every CEO wants to lead a Service Defined Enterprise – and why the CIO needs to make it happen’.

Tags Innovation, CIO summit, Internal Enterprise Service Provider, outsourcing, service centric, service defined enterprise, SDE, service provider


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