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Predictions: People & Process Trends – 2014

Jan 20, 2014   //   by admin   //   Blog  //  No Comments

RFG Perspective: The global economic headwinds in 2014, which constrain IT budgets, will force business and IT executives to more closely examine the people and process issues for productivity improvements. Externally IT executives will have to work with non-IT teams to improve and restructure processes to meet the new mobile/social environments that demand more collaborative and interactive real-time information. Simultaneously, IT executives will have to address the data quality and service level concerns that impact business outcomes, productivity and revenues so that there is more confidence in IT. Internally IT executives will need to increase their focus on automation, operations simplicity, and security so that IT can deliver more (again) at lower cost while better protecting the organization from cybercrimes.

As mentioned in the RFG blog “IT and the Global Economy – 2014” the global economic environment may not be as strong as expected, thereby keeping IT budgets contained or shrinking. Therefore, IT executives will need to invest in process improvements to help contain costs, enhance compliance, minimize risks, and improve resource utilization. Below are a few key areas that RFG believes will be the major people and process improvement initiatives that will get the most attention.

Automation/simplicity – Productivity in IT operations is a requirement for data center transformation. To achieve this IT executives will be pushing vendors to deliver more automation tools and easier to use products and services. Over the past decade some IT departments have been able to improve productivity by 10 times but many lag behind. In support of this, staff must switch from a vertical and highly technical model to a horizontal one in which they will manage services layers and relationships. New learning management techniques and systems will be needed to deliver content that can be grasped intuitively. Furthermore, the demand for increased IT services without commensurate budget increases will force IT executives to pursue productivity solutions to satisfy the business side of the house. Thus, automation software, virtualization techniques, and integrated solutions that simplify operations will be attractive initiatives for many IT executives.

Business Process Management (BPM) – BPM will gain more traction as companies continue to slice costs and demand more productivity from staff. Executives will look for BPM solutions that will automate redundant processes, enable them to get to the data they require, and/or allow them to respond to rapid-fire business changes within (and external to) their organizations. In healthcare in particular this will become a major thrust as the industry needs to move toward “pay for outcomes” and away from “pay for service” mentality.

Chargebacks – The movement to cloud computing is creating an environment that is conducive to implementation of chargebacks. The financial losers in this game will continue to resist but the momentum is turning against them. RFG expects more IT executives to be able to implement financially-meaningful chargebacks that enable business executives to better understand what the funds pay for and therefore better allocate IT resources, thereby optimizing expenditures. However, while chargebacks are gaining momentum across all industries, there is still a long way to go, especially for in-house clouds, systems and solutions.

Compliance – Thousands of new regulations took effect on January 1, as happens every year, making compliance even tougher. In 2014 the Affordable Care Act (aka Obamacare) kicked in for some companies but not others; compounding this, the U.S. President and his Health and Human Services (HHS) department keep issuing modifications to the law, which impact compliance and compliance reporting. IT executives will be hard pressed to keep up with compliance requirements globally and to improve users’ support for compliance.

Data quality – A recent study by RFG and Principal Consulting on the negative business outcomes of poor data quality finds a majority of users find data quality suspect. Most respondents believed inaccurate, unreliable, ambiguously defined, and disorganized data were the leading problems to be corrected. This will be partially addressed in 2014 by some users by looking at data confidence levels in association with the type and use of the data. IT must fix this problem if it is to regain trust. But it is not just an IT problem as it is costing companies dearly, in some cases more than 10 percent of revenues. Some IT executives will begin to capture the metrics required to build a business case to fix this while others will implement data quality solutions aimed at fixing select problems that have been determined to be troublesome.

Operations efficiency – This will be an overriding theme for many IT operations units. As has been the case over the years the factors driving improvement will be automation, standardization, and consolidation along with virtualization. However, for this to become mainstream, IT executives will need to know and monitor the key data center metrics, which for many will remain a challenge despite all the tools on the market. Look for minor advances in usage but major double-digit gains for those addressing operations efficiency.

Procurement – With the requirement for agility and the move towards cloud computing, more attention will be paid to the procurement process and supplier relationship management in 2014. Business and IT executives that emphasize a focus on these areas can reduce acquisition costs by double digits and improve flexibility and outcomes.

Security – The use of big data analytics and more collaboration will help improve real-time analysis but security issues will still be evident in 2014. RFG expects the fallout from the Target and probable Obamacare breaches will fuel the fears of identity theft exposures and impair ecommerce growth. Furthermore, electronic health and medical records in the cloud will require considerable security protections to minimize medical ID theft and payment of HIPAA and other penalties by SaaS and other providers. Not all providers will succeed and major breaches will occur.

Staffing – IT executives will do limited hiring again this year and will rely more on cloud services, consulting, and outsourcing services. There will be some shifts on suppliers and resource country-pool usage as advanced cloud offerings, geopolitical changes and economic factors drive IT executives to select alternative solutions.

Standardization –More and more IT executives recognize the need for standardization but advancement will require a continued executive push and involvement. In that this will become political, most new initiatives will be the result of the desire for cloud computing rather than internal leadership.

SLAs – Most IT executives and cloud providers have yet to provide the service levels businesses are demanding. More and better SLAs, especially for cloud platforms, are required. IT executives should push providers (and themselves) for SLAs covering availability, accountability, compliance, performance, resiliency, and security. Companies that address these issues will be the winners in 2014.

Watson – The IBM Watson cognitive system is still at the beginning of the acceptance curve but IBM is opening up Watson for developers to create own applications. 2014 might be a breakout year, starting a new wave of cognitive systems that will transform how people and organizations think, act, and operate.

RFG POV: 2014 will likely be a less daunting year for IT executives but people and process issues will have to be addressed if IT executives hope to achieve their goals for the year. This will require IT to integrate itself with the business and work collaboratively to enhance operations and innovate new, simpler approaches to doing business. Additionally, IT executives will need to invest in process improvements to help contain costs, enhance compliance, minimize risks, and improve resource utilization. IT executives should collaborate with business and financial executives so that IT budgets and plans are integrated with the business and remain so throughout the year.