Browsing articles tagged with " staffing"

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.

Disruptive Changes

Apr 25, 2013   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

Amazon Inc. and Microsoft Corp. lowered their pricing for certain cloud offerings in attempts to maintain leadership and/or preserve customers. Similarly, Hewlett-Packard Co. (HP) launched its next-generation Moonshot hyperscale servers. Meanwhile, IDG Connect, the demand generation division of International Data Group (IDG), released its survey findings that show there may be a skills shortage when it comes to the soft skills required when communicating beyond the IT walls.

Focal Points:

  • Earlier this month Amazon price reduced the prices it charged for its Windows on-demand servers by up to 26 percent. This brought its pricings within pennies of Microsoft’s Windows Azure cloud fees. The price reductions apply across Amazon’s standard (m1), second-generation standard (m3), high-memory (m2), and high-CPU (c1) instance families. CEO Jeff Bezos stated in the Amazon annual report the strategy of cutting prices before the company needs to, and developing technologies before there is a financially motivating factor, is what protects the company from unexpected markets shifts. Microsoft has responded by aggressively cutting its prices by 21 to 33 percent for hosting and processing customer online data. In order for customers to qualify for the cuts they must make monthly commitments to Azure for either six or 12 months. Microsoft also is making its Windows Azure Virtual Network technology (codenamed “Brooklyn”) generally available effective April 16. Windows Azure Virtual Network is designed to allow companies to extend their networks by enabling secure site-to-site VPN connectivity between the enterprise and the Windows Azure cloud.
  • HP launched its initial Moonshot servers, which use Intel Corp. Atom low-cost, low-energy microprocessors, This next-generation of servers is the first wave of hyperscale software defined server computing models to be offered by HP. These particular servers are designed to be used in dedicated hosting and Web front end environments. The company stated that two more “leaps” will be out this year that will be targeted to handle other specific workloads. HP claims its architecture can scale 10:1 over existing offerings while providing eight times the efficiency. The Moonshot 1500 uses Intel Atom S1200 microprocessors, utilizes a 4.3U (7.5 inch tall) chassis that hosts 45 “Gemini” server cartridges, and up to 1800 quad-core servers will fit into a 42U rack. Other x86 chips from Advanced Micro Devices Inc. (AMD), plus ARM processors from Calxeda Inc., Texas Instruments Inc., and Applied Micro Circuits Corp. (AMCC) are also expected to be available in the “Gemini” cartridge form factor. The first Moonshot servers support Linux, but are compatible with Windows, VMware and traditional enterprise applications. Pricing starts at $61,875 for the enclosure, 45 HP ProLiant Moonshot servers and an integrated switch, according to HP officials. (For more on this topic see this week’s Research Note “HP’s Moonshot – the Launch.”)
  • According to a new study by IDG Connect, 83 percent of European respondents believe there is no IT skills shortage while 93 percent of U.S. respondents definitely feel there is a gap between the technical skills IT staff possess and the skills needed by the respondents’ companies. IDG attributes this glaring differentiation to what are loosely defined as “hard” (true technical skills and competencies) and “soft” (business, behavioral, communications, and interpersonal) skills. The European respondents focused on hard skills while their American counterparts were more concerned about the soft skills, which will become more prevalent within IT as it goes through a transformation to support the next-generation data center environments and greater integration with the business. As IT becomes more integrated with the business and operational skill requirements shift, IDG concludes “companies can only be as good as the individuals that work within them. People … are capable of creative leaps of thinking and greatness that surpass all machines. This means that any discussion on IT skills, and any decision on the qualities required for future progression are fundamental to innovation. This is especially true in IT, where the role of the CIO is rapidly expanding within the enterprise and the department as a whole is becoming increasingly important to the entire business. It seems IT is forever teetering on the brink of bigger and better things – and it is up to the people within it to maximize this potential.”

RFG POV: IT always exists in a state of disruptive innovation and the next decade will be no different. Whether it is a shift to the cloud, hyperscale computing, software-defined data center or other technological shifts, IT must be prepared to deal with the business and pricing models that arise. Jeff Bezos is correct by not sitting on his laurels and constantly pushing the envelope in pricing and services. IT executives need to do the same and deliver comparable services at prices that appeal to the business while covering costs. This requires keeping current on technology and having the staff on board that can solve the business problems and deliver innovative solutions that enable the organization to remain competitive. RFG expects the staffing dilemma to emerge over the next few years as data centers transform to meet the next generation of business and IT needs. At that time most IT staff will not need the current skills they use but skills that allow them to work with the business, providers and others to deliver solutions built on logical platforms (rather than physical infrastructure). Only a few staff will need to know the nuts and bolts of the hardware and physical layouts. This paradigm shift in staff capabilities and skills must be anticipated if IT executives do not want to be caught behind the curve and left to struggle with catching up with demand. IT executives should be developing their next-generation IT development and operations strategies, determining skills needed and the gap, and then begin a career planning and weaning-out process so that IT will be able to provide the leadership and skills needed to support the business over the next decade of disruptive innovation. Additionally, IT executives should determine if Moonshot servers are applicable in their current or target environments, and if so, conduct a pilot when the time is right. 

Blog: Data Center Optimization Planning

Dec 13, 2012   //   by admin   //   Blog  //  No Comments

Lead Analyst: Cal Braunstein

Every organization should be performing a data center optimization planning effort at least annually. The rate of technology change and the exploding requirements for capacity demand IT shops challenge their assumptions yearly and revisit best practices to see how they can further optimize their operations. Keeping up with storage capacity requirements with flat budgets can be a challenge in that capacity is growing between 20-40 percent annually. This phenomenon is occurring across the IT landscape. Thus, if IT executives want to transform their operations from spending 70-80 percent of their budgets on operations to more than half the budget spent on development and innovation instead, executives must invest in planning that enables such change.

Optimization planning needs to cover all areas of the data center:

  • facilities,
  • finance,
  • governance,
  • IT infrastructure and systems,
  • processes, and
  • staffing.

RFG finds most companies are greatly overspending due to the inefficiencies of continuing along non-optimized paths in each of the areas; thereby providing companies with the opportunity to reduce operational expenses by more than 10 percent per year for the next decade. In fact, in some areas more than 20 percent could be shaved off.

Facilities.  At a high level, the three areas that IT executives should understand, evaluate, and monitor are facilities design and engineering, power usage effectiveness (PUE), and temperature. Most data center facilities were designed to handle the equipment of the previous century. Times and technologies have changed significantly since then and the designs and engineering assumptions and actual implementations need to be reevaluated. In a similar vein, the PUE for must data centers is far from optimized, which could be resulting in overpaying energy bills by more than 40 percent. On the “easy to fix” front, companies can raise their data center temperatures to normal room temperature or higher, with temperatures in the 80° F range being possible. Just about all equipment built today is designed to operate at temperatures greater than 100° F. For every degree raised organizations can expect to see power costs reduced by up to four percent. Additionally, facilities and IT executives can monitor their greenhouse gas (GHG) emissions, which are frequently tracked by chief sustainability officers and can be used as a measure of savings achieved by IT operational efficiency gains.

Finance.  IT costs can be reduced through use of four key factors: asset management, chargebacks, life cycle management, and procurement. RFG finds many companies are not handling asset management well, which is resulting in an overage of hardware and software being paid for annually. Studies have found this excess cost could easily run up to 20 percent of all expenses for end-user devices. The use of chargebacks better ensures IT costs are aligned with user requirements. This especially comes into play when funding external and internal support services. When it comes to life cycle management, RFG finds too many companies are retaining hardware too long. The optimal life span for servers and storage is 36-40 months. Companies that retain this equipment for longer periods can be driving up their overall costs by more than 20 percent. Moreover, the one area that IT consistently fails to understand and underperforms on is procurement. When proper procurement processes and procedures are not followed and standardized, IT can easily spend 50 percent more on hardware, software and services.

Governance.  The reason governance is a key area of focus is that governance assures performance targets are established and tracked and that an ongoing continuous improvement program is getting the attention it needs. Additionally, governance can ensure that the reasonable risk exposure levels are maintained while the transformation is ongoing.

IT infrastructure and systems.  For each of the IT components – applications, networks, servers, and storage – IT executives should be able to monitor availability, utilization levels, and virtualization levels as well as automation level. The greater the levels the fewer human resources required to support the operations and the more staffing becomes an independent variable, rather than one dependent upon the numbers and types of hardware  and software used. Companies also frequently fail to match workload types to the infrastructure most optimized to those workloads, resulting in overspend that can reach 15-30 percent of operating costs for those systems.

Processes.  The major processes that IT management should be following are application instances (especially CRM and ERP), capacity management, provisioning (and decommissioning) rates, storage tiers, and service levels. The better a company is at capacity planning (and use of clouds) the lower the cost of operations. The faster the provisioning capability the fewer human resources required to support operational changes and the likelihood of less downtime due to human error. Additionally, RFG finds the more storage tiers and automation of movement of data amongst tiers the greater the savings. As a rule of thumb organizations should find the savings as one moves from tier n to tier n+1 to be 50 percent. In addition to tiering, compression and deduplication are other approaches to storage optimization.

Staffing.  For most companies today, staffing levels are directly proportional to the number of servers, storage, network nodes, etc. The shift to virtualization and automatic orchestration of activities breaks that bond. RFG finds it is now possible for hundreds of servers to be supported by a single administrator and tens to hundreds of terabytes handled by a single database administrator. IT executives should also be looking to cross-pollinate staff so that an administrator can support and of the hardware and operating systems.

The above possibilities are what exist today. Technology is constantly improving. The gains will be even greater as time goes on, especially since the technical improvements are more exponential than linear. IT executives should be able to plug these concepts into development of a data center optimization plan and then monitor results on an ongoing basis.

RFG POV: There still remains tremendous waste in the way IT operations are run today. IT executives should be able to reduce costs by more than 40 percent, enabling them to invest more in enhancing current applications and innovation than in keeping the lights on. Moreover, IT executives should be able to cut annual costs by 10 percent per year and potentially keep 40 percent of the savings to invest in self-funding new solutions that can further improve operations.