Tuesday, November 13, 2012

For Dell’s Quest Software, BYOD Puts Users First and with IT’s Blessing

Transcript of a BriefingsDirect podcast on how Quest Software, a Dell company, leverages BYOD and VDI interanally to improve user productivity, application support, and security.


Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Quest Software.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Dana Gardner
Today, we present a sponsored podcast discussion on the growing acceptance of bring your own device (BYOD) at enterprises. We will examine why the users’ personal use, ownership and maintenance of the computing and mobile devices of their choosing is making more sense for more organizations. We'll learn about how and why through the example of a company, Quest Software, that has begun supporting BYOD -- even with the full blessing of IT.

We'll see how this has had benefits far beyond just the users’ sense of empowerment, in terms of meaningful IT advancements in centralized applications, control and support, virtual desktop infrastructure (VDI) use, better disaster recovery (DR) practices, better data protection and more.

Here to share insights into how BYOD can work well at Quest Software, and even into their new corporate owner Dell, we are joined by Carol Fawcett, the CIO of Dell Software and the former long-term CIO of Quest Software. Welcome, Carol. [Disclosure: Quest Software is a sponsor of BriefingsDirect podcasts.]

Carol Fawcett: Thank you, Dana.

Gardner: Good to have you with us. I'm really intrigued with this BYOD thing. Just a year or two ago, people were saying, "What?" and scratching their heads, saying, "Are you kidding? You're going to let your users choose their device?" But as this has been put into place and some of the implications have been thought through, it seems to be an interesting possible benefit set.

So let me start with where you began. What were the challenges, or what were the forces or trends at work, too, that got you all at Dell Software involved with BYOD?

Fawcett: Great question, Dana. I don’t think that we actually started down the path of a BYOD project, because as many listening will know, this started years ago. We started a project where we said we wanted to enable our users to access applications and data on a select set of devices, which for us started with the obvious, the iPad. Then came the Android smartphones, and the list continued on.

Carol Fawcett
This list will continue to grow as time goes on and new devices are brought in. The good news is that there are product offerings now in the marketplace that are helping with that demand and helping IT departments everywhere.

So instead of looking at it as BYOD, it’s now turned into a BYO-x phenomena that the C-level started. And as everyone in an organization saw them bringing different devices into meetings, of course, they all wanted to jump on the bandwagon. Slowly but surely, the wave began, and that's how we got where we are today.

Gardner: This is interesting. There is a sort of direction from the user side, which is to say, they probably like the choice and they had some personal preferences, or they've been able to be more productive in their personal lives using certain technologies.

Then there has also been this direction from the enterprise, which is to say, they like the idea of centralizing, controlling apps and data. And then delivering those out to devices (like with VDI) can be a way of encouraging this control. It’s almost like a confluence of two forces -- VDI and BYOD -- that make a whole greater than the sum of the parts. And we don’t see that very often in IT.

Pull it together

Fawcett: It’s one where you have to pull the needs and the demands of an IT organization together with what the users want to go to, and that’s just what we're seeing out there everywhere in the industry. You definitely have to pull it together, try to satisfy the IT governance and the policies that we set up, and balance that against what the users are saying: "I have to have this in order to get my job done."

Gardner: As we learn more about how you've done this there, let’s also explain to our listeners that Dell recently acquired Quest Software, and you were at Quest before that. So tell me a little bit about how the confluence of these two companies also comes to bear on this issue of BYOD?

Fawcett: Absolutely. Let’s start with Quest Software. Where our sweet spot was, and still is, was that we are the IT management software provider that offers a broad selection of software solutions to simplify and solve the most common -- and most challenging -- IT problems for all areas of an IT environment -- from infrastructure, to applications, front-end to back-end, physical or virtual, or even out in the cloud, for that matter.

Dell was looking for a company whose tools could and would complement and expand their own software product offerings in the four strategic areas that they were focused on, which Quest obviously aligned with. Those were systems management, security, business intelligence (BI) and applications.

So you can really see why the partnership between Quest and Dell is such a great partnership and offers so much to the industry.
It's about individuals that are using different devices accessing a set of applications inside your data center or under your control.

Gardner: Let’s go back to how this came about and learn some lessons from your example, sort of a use case perspective, on BYOD use. If I were a CIO at another firm and I wanted to learn something from your experience about moving to the support of multiple devices, what’s something that you might offer in terms of what to think about early on, or some 20/20 hindsight insights that you have?

Fawcett: As you approach the subject you have to really level-set with the team that this is not about devices that an individual will want to use, but instead it's about individuals that are using different devices accessing a set of applications inside your data center or under your control.

This individual, obviously, should have only one set of access rights across all the environments, based on what that person's role is within the company. The different devices that they use should really be an afterthought. Regardless of the device, their access rights need to remain consistent.

If I'm on a desktop, a laptop, or I bring in a tablet, or if I'm using my phone to get email, it shouldn't matter. I should have that same, consistent UI and the same, consistent security rights to get where I need to go to do my job.

Don't get me wrong -- and we know this; we hear it at every conference we go to -- IT will struggle with the management of the many devices, no doubt. The only thing I can really suggest there is something we did.

Different devices

We took that gigantic list that's out there and we said, "Where are we going to offer different devices?" We're going to pick maybe 10 or 20 different devices, the most common ones that people are bringing in, to support going forward, with the hope that you will be able to satisfy about 80 percent of the employed population.

It does, however, all go to the user experience. You have to keep coming back to that, making sure they have the ability to get to the right data and the right applications, with the correct security rights for their job.

Gardner: It sounds as if some of the basic principles and benefits of VDI come to play here. That is to say, the provisioning, the control, the access management. So there is, I guess, a fortuitous intersection of where VDI was entering into more and more organizations -- particularly those that want to control for security or regulatory purposes or intellectual property (IP) control, that sort of thing -- with this idea of multiple devices, multiple panes of glass, full mobility.

Did that play a role there, too? Were you already going down a VDI track or trajectory and this helped you get to BYOD quicker and better?

Fawcett: We started down the VDI path. In fact, many companies did years ago, when we started to do more with offshore resources. We wanted to have offshore resources, we wanted to give them desktops, but we wanted to make sure they were secure. That was the first introduction of where VDI makes a lot of sense, where you want to secure data, have folks doing coding, but knowing they can’t take code with them. That’s the way it started.
We are a technology company, so some of our policies may be more relaxed than the policies of companies outside our realm.

But then you start to find other use cases for VDI that really start to benefit the rest of the user community. VDI is one of those things that started a while back and now has slowly grown into this BYOD solution.

Gardner: Did you know how much BYOD was going on there? How did you find out and how would it become something you could control?

Fawcett: That’s the question of the hour. I'd love to be able to say that we knew exactly how many people were bringing in what kinds of devices, but the reality is, we are a technology company, so some of our policies may be more relaxed than the policies of companies outside our realm.

For example, in a bank or in the government, you can pretty much lock down an environment, and every employee coming in knows it's going to be locked down because of who they are and who they work for.

Our organization is made up of technologists located around the world. You know some of them are looking for ways around the fences. It’s just built into their nature. It's almost like a competition for them, "Can I figure this out?" Now add in the remote and traveling users and you can see how this expands the challenge as time goes on.

Story of adoption

Gardner: Let’s hear a little bit about the story of adoption. You decided that this Pandora's box was already open, no going back. BYOD is apparently here to stay, and we've had some head start with VDI models and processes. Tell me how this panned out and what were some of the major problems that you found that you needed to solve.

Fawcett: As I mentioned before, for us, it was not about the devices. We tried to turn that around, and it was kind of handy, because the whole consumerization of IT started to come into the industry more and more. So we started to piggyback on that.

Think about it. A device is simply a means of accessing the apps and the data. Our vision instead turned into trying to figure out a way to provide employees with a world-class overall user experience, from beginning to end, encouraging the culture of openness and innovation.

In the end, our goal is to offer our end-users that ability to use a flexible set of tools and toolsets with a familiar interface that allows for secure access anywhere, anytime. We want them to be comfortable with those tools, as this will make them obviously more productive at doing their jobs.

Gardner: Back to that interface issue. There is also this intersection of technology, with HTML5 being prominent. Did you have to make some choices about native support for apps across some of these major platforms and popular devices? Or did you say, "Let’s try to come out with the technological approach that can suit more than going native, try to do write once and deploy anywhere or be consumed anywhere?" How did that kind of pan out?
The good news is that these applications are staying up with the industry and we're serving them up.

Fawcett: We pretty much have a standard set of packaged applications. So it wasn't like we were going to start rewriting any of those applications, or even the front-end. The good news is that these applications are staying up with the industry and we're serving them up, so multiple device types can access the data and still provide that consistent UI to the end-user.

But you still have to go back too and ask what makes sense. What kind of device makes sense, for example, in an AP data entry department? Do you really think you are ever going to see -- and maybe one day, who knows, we will -- but do you ever think you will see a data entry clerk using a tablet to do rapid data entry? Probably not. They're pretty tied to the 10-key. They like the feel of the keyboard itself.

So you kind of sit back. What everyone is beginning to accept is that there are different devices for different types of roles inside an organization. That's pretty much the path that we've continued down as well.

At Quest, we have some wonderful tools that help us understand this environment and help us recognize who is bringing in devices and how they're being used. We're getting a better sense of what's in our environment so that we can start answering these.

Gardner: Let's look at this through the lens of IT. You decided that you're going to support BYOD with the blessing of IT. What does this get for you? Are there some additional benefits other than empowering the end-user or giving them choice? What’s there for you in terms of better support for your centralized operations, applications, data, and then some of those backup and support functions that we all should be doing regularly?

Regular backups

Fawcett: One thing that really helps out IT is the thing you just mentioned, which is making sure that laptops are being backed up on a regular basis. We know today, and I'm sure many of us on this podcast are thinking, "How many of us actually back up our laptops on a regular basis?"

Those who do it are saying, "Well, doesn’t everyone do that?" But you could guess that inside of a large organization, probably the majority are not responsible enough to do it, because it’s just not in the forefront of their minds.

When you talk about VDI and having a desktop in the data center, it's a guaranteed thing, because it's in the data center. Everything in the data center is backed up. That's one real positive -- making sure that the data is secured. Obviously, when it comes to DR, we could quickly recover an environment. So that's a great thing for IT. And I think that, in general, the end-users would love that as well, as they get into this world more often.

Gardner: Looking a little bit to the future, more organizations are adopting software-as-a-service (SaaS) applications for non-core business type applications. We're seeing more interest in cloud, consuming applications from a public cloud environment or the hybrid environment, whether it's public or private. Is there something about your support of applications as centralized to multiple devices that will enable you to exploit SaaS, cloud and hybrid services to a greater extent?

Fawcett: Most definitely. It goes back to the tools that you're using to assess, manage, and govern and then support the end-users. IT has to make sure they have those tools in order to make sure they're supporting the end-users regardless of where their data lives.
It's a given that inside your data center you have virtualized as much as possible.

Certainly, the cloud and the SaaS environments are adding extra buzz in the industry. We're very interested in how to capitalize on that. How do we make sure that we're looking at elastic computing, and where can it benefit us? Everybody is scrambling to understand this new technology trend better and how it can help an IT organization.

But it does go back to the tools that an IT organization has in order to match those three things that we should always be doing, which is assessing what the users and the environment need, managing it, making sure it's secure, and then making sure again that we're able to support those end-users to their fullest and the way they expect to be supported.

Gardner: My thinking just a couple of years ago was that BYOD was going to be the exception, not the rule. You would support some sort of a fringe category or two of your workers with this capability, perhaps those out on the road, more often than not.

But now, as I hear you, it sounds that the direction that most IT is going to go in, hybrid services, delivering and consumption and management, and a more centralized control over data, IP, and management of apps and delivering desktops themselves as services, are all going to be making BYOD, or at least the blocking and tackling that you would need to do anyway, something that comes together in such a way that this might become more the norm than the exception. Do you think that’s what’s happening?

Fawcett: Absolutely. It's like when virtualization was first there. There was a wave of “how much could you virtualize inside your data center?” Fast forward, and now it's a given. It's a given that inside your data center you have virtualized as much as possible, so that you can ensure that your data center is being used the most it can be and the most efficiently.

The way it's going to be

This is the same way this is going to be. Just talk to your kids. Try to find a child walking down the street and isn't texting or who doesn't have a tablet and can probably manage it better than their parents.

I'm not talking about just young children but generations to come. I'm talking about the kids who are coming in now, in their 20s and 30s. it's a given that they want to use whatever device they choose in the corporate world, just like they do at home. It's a right. It's no longer considered a luxury.

From that view, it will be up with the internal IT teams to ensure they have the access to everything they need, with the right security in place to protect them, as well as protect the company. That's why when you think about some of the tools that we've been using here, you really want to make sure you bring in some of those tools, so that you can, in fact, assess, manage and support the end-users to the best of their ability, for not only the end-user, but also for the company.

Gardner: To that point about tools, I assume that you all drink your own champagne.

Fawcett: Absolutely.

Gardner: Was there anything in particular in the Quest Software portfolio that you think gave you an on-ramp, perhaps a better return on investment (ROI), and even overall better control and management, as you move toward this BYOD, support of many panes of glass, centralized IT management direction?

Fawcett: Absolutely. Yes, we are drinking the champagne, and it all goes back to the beginning, where you asked me, how I knew how much BYOD was actually in our environment? That's where we started using one of the first phenomenal tools that we have, which is called MessageStats. This is a great tool that reaches out and helps us track the trending within the organization at a macro and micro level. We know which devices and OS versions are being used, by whom, and at what time.
It provided a critical insight as to which virtual desktop technologies provide the best fit for each user, based on their needs.

In fact, I asked my team just recently, when we first started talking, "Can you pull a list on all the devices that I use, that are registered to me?" So I saw my own list of the devices and I was shocked to see how they actually are tracked, right down to the level of when was the first time I ever connected the device to the network, last successful sync, last policy update, what kind of device was it.

It was so granular, and quite frankly, it was so very Big Brother-like, it kind of scared me. But again, you can't make a solution for what you don't understand. So assessing with MessageStats is the only way to go.

Then once we understood it, we said, "Now that the process is moving, let's figure out what type of device is right for what type of user." And this is where we turned to vWorkspace, which enabled us to determine which of the users and scenarios are best suited for the virtual desktops in the data center.

In addition, it provided a critical insight as to which virtual desktop technologies provide the best fit for each user, based on their needs. So vWorkspace allows us to not only put a desktop in the data center, but it lets us do things like application streaming and publishing. It really enables us to have that broad spectrum of functionality with just that one tool.

Once we were up and running, we stepped into the management and governance aspect of the project. This can probably be one of the most problematic areas, when you think about the pure nature of BYOD. Multiple devices for a given user, each acting very differently, and if not managed, could destroy any governance policy put in place.

Understanding the individual

This is where we truly must raise the issue up from the device to the individual, understanding that role of that person and understanding what security rights, regardless of the device they need to have in place. And this is where Quest’s One Identity Management came into play.

It gave the IT team the ability to rely on one point of control for an individual and all their devices. This is the product we count on to pass the audits, and most importantly, to ensure that our employees have that right level of access needed to get their job done.

The final key point on this is that it takes IT out of the mix and automates that very cumbersome process of provisioning, moving employees amongst departments, and then finally de-provisioning, when that employee leaves.

This is a very powerful product that makes it so that in our environment, once an employee is entered into the HR system, through automation, it automatically provisions them, gives them the rights to applications, sets them up inside of those applications -- all without IT involved in that process. So no more passing help-desk tickets.

One other piece that I wanted to touch on is a product called Webthority that we have been using, not only for our internal users, but also during the M and A process. This is a great product, because it provides a portal for the employees to come into. Once again, it's secured via that same network log-on that they use when they walk in the door in the morning.

This is anywhere, any device. It's simply a portal. They come in, they use their network log on, and bam, they're shown all the applications that they have visibility into and access to. They can go in, without having to log on again, almost like a single sign-on effect, which allows them to access the applications via two-factor authentication as well. It's a great product that helps out in many ways.
Remember, the key to any IT success is through the happiness and satisfaction of the customers.

And then that final aspect of an environment is, of course, the support and monitoring. Remember, the key to any IT success is through the happiness and satisfaction of the customers. We recognize that supporting and monitoring their experience and performance is most important, especially when you talk about VDI, which is what you and I have been talking so much about.

Our job is to ensure that the end-users are getting the same type of performance that they would on a standalone PC or if their desktop was in the data center. Because without that consistently great performance, your end-users will fight giving up their desktops every time.

For this, we turned to monitoring that user experience with Foglight for Virtual Desktops. Being able to quickly determine which users are impacted by performance problems helps us to proactively take action for those users, before the users feel the pain.

Understanding the trends in the virtual environment -- how many people are connecting at any given time, what applications are they using, etc. -- helps us determine when we might need to add additional servers to that server farm, and to meet the load. Or we can even look at a desktop or an end-user and say, "You know what? I don't think these folks should be virtualized at all. Perhaps they should go back to being physical" -- for whatever reason.


Empirical data

You can't correct what you don't know and you need that empirical data to make an educated move. Foglight gives us that data, ensuring we are consistently improving the environment for the end-users. It's a great set of products that touch on all three phases of an environment or a team that's trying to solve this BYOD issue.

Gardner: It really strikes me too that this isn't really about devices, but it's about the data center, the tools, the management, the governance, all of which are probably things that are good IT best practices anyway. It almost sounds as if BYOD is forcing discipline, governance, automation; some of the basics of good, advanced and modern IT. Is that sort of what you are seeing, is BYOD a catalyst to better data-center management?

Fawcett: It can definitely be used that way, because it does all go back to how an individual in a given role gets access to the applications they need to get their job done. It shouldn't matter which device they are using. It's all about which application access they should have to get their job done.

Gardner: Of course when you put in the best practices, when you have the backups and you have the scheduling and the automation, this all will end up being an economic benefit as well, because you won't suffer terrible outages, you won't have issues of discovery for data when you need it and how you need it.

Of course, you can start to look at your total cost for your data center and tweak and manage for energy, facilities, capacity and utilization. It sounds as if not only is BYOD a catalyst for better data center practices, but it could be some significant means of reducing your total cost of operation.
It's all about containing the IT budget through best practices and automation.

Fawcett: Absolutely. We've always looked at containing IT budgets as a means to an end. When you sit back and think about it, the only way to do that is through simplification, standardization and automation.

If you don't have that last piece, that automation piece, and you're simply throwing heads to solve an issue, your IT expenses are going to go through the roof. And you're going to have unhappy customers in the end, because processes are going to be overcomplicated. It's all about containing the IT budget through best practices and automation.

Gardner: Well, great. I'm afraid we are about out of time. You've been listening to a sponsored BriefingsDirect podcast discussion on users’ personal use, ownership and even maintenance of their own computing and mobile devices, and how that's actually making more sense, for more organizations, for more reasons.

We have seen how this has benefits far beyond just the users’ sense of empowerment; we're seeing that there are benefits to IT advancements along the lines of centralized application support, data support, VDI implementations, better DR, data protection and even more.

We've been talking about how BYOD impacts organizations, in particular Quest Software, a Dell company, and we have been learning this from Carol Fawcett, the CIO at Dell Software. Thanks so much.

Fawcett: Thank you.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks also to you, our audience, for joining us. We hope you enjoyed this, and we hope too that you come back next time.


Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Quest Software.

Transcript of a BriefingsDirect podcast on how Quest Software, a Dell company, leverages BYOD and VDI interanally to improve user productivity, application support, and security. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Thomas Duryea’s Journey to the Cloud: Part One

Transcript of a BriefingsDirect podcast on how one Australian IT integrator has escalated cloud infrastructure development to provide a portfolio of new public cloud services.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: VMware.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Dana Gardner
Today, we present a sponsored podcast discussion on how leading Australian IT services provider Thomas Duryea Consulting has made a successful journey to cloud computing. We'll learn why a cloud-of-clouds approach is providing new types of IT services to Thomas Duryea’s many Asia-Pacific region customers.

Our discussion kicks off a three-part series on how Thomas Duryea (TD) designed, built, and commercialized a vast cloud infrastructure. The first part of our series addresses the rationale and business opportunity for TD to create their cloud-services portfolio built on VMware. [Disclosure: VMware is a sponsor of BriefingsDirect podcasts.]

Stay with us now to learn more about implementing the best cloud technology to deliver and commercialize an adaptive and reliable cloud services ecosystem. Here to share their story on this journey, we're joined by Adam Beavis, General Manager of Cloud Services at Thomas Duryea in Melbourne, Australia. Welcome Adam.

Adam Beavis: Thank you. Pleasure to be here.

Gardner: Why cloud services for your consulting and business customers now? Have they been asking for it? Has the market shifted in some way that led you to begin this journey?

Beavis: Certainly, the customers are the big driver while we are moving into cloud services. Being a traditional IT integrator, we've been very successful showing a lot of data-center solutions to our customers, but more and more we're seeing customers finding it harder to get CAPEX and new projects and they are really starting to look at the cloud alternative.

Gardner: Why then have you looked at moving toward cloud services as a commercial offering, rather than going yourself to a public cloud and then availing yourself of their services? Why build it yourself?

Beavis: We reviewed all the possibilities and looked at moving to some of the larger cloud providers, but we've got a strong skill set, a strong heritage, and good relationships with our customers, and they forced our hand in many ways to move down that path.

They were concerned about telcos looking after some of their cloud services. They really wanted to maintain the relationship that they had with us. So we reviewed it and understood that, because of the skill sets we have and the experience in this area, it would work both commercially and then relationship-wise. The best move for us was to leverage the existing relationships we have with the vendors and build out our own cloud.

Gardner: So who are these eager customers? Could you describe them? Do they fall into a particular category, like a small to medium-size business (SMB) type of clientele? Is it a vertical industry? Where is the sweet spot in the market?

No sweet spot

Beavis: That’s probably the one thing that surprised me the most. As we've been out talking to customers and selling the cloud, there really is no sweet spot. Organizations that you talk to will be doing it for different reasons. Some of them might be doing it for environmental insurance reasons, because having their data center in their building is costing them money, and there are now viable opportunity to move it out.

Adam Beavis
But if I were to identify one or two, the first one would be independent software vendors (ISVs). Cloud solutions are bringing to ISVs something they've looked for for a long time, and that’s the ability to run test and development environments. Once they've done that, they can host their applications out of a service provider and not have to worry about the underlying infrastructure, which is something, as a application developer, they're not interested in.

So we're seeing them, and we're working with quite a few. One, an Oracle partner, will actually run their tests in their environments in a cloud, and then be able to deliver those services back to some of their customers. In other cases they'll run up the development in their cloud and then import that to an on-premise cloud afterward.

The other area is with SMBs. We're certainly seeing them, for a financial reasons, want to shift to cloud. It's the same old story of OPEX versus CAPEX, reduced budgets, and trying to do more with less.

The cloud is now in a position where it can offer that to SMB customers. So we're seeing great opportunities appear, where not only are we taking their infrastructure into the cloud, but also adding on top of that managed-service capability, where we will be managing all the way up to the application.
We see us being able to provide it to anyone, from a small reseller to an ISV, someone who develops their own applications.

Gardner: Based on this mixture of different types of uses, it sounds like you're going to be able to grow your offerings right along with what this market demands. Perhaps some of those ISVs might be looking for a platform-as-a-service (PaaS) direction, others more of a managed services, just for specific applications. Was that important for you to have that sort of Swiss Army knife for cloud advancement?

Beavis: Exactly right, Dana. Each one is addressing a different pain point. For example, some of them are coming to us for disaster recovery (DR) as a service, because the cost of renewing their DR site or managing or putting that second site out is too expensive. Others, as you said, are just looking for a platform to develop applications on. So the whole PaaS concept is something near and dear to us on our roadmap.

Each one continues to evolve, and it's usually the customers that start to drive you as a cloud provider to look at your own service catalog. That’s probably something that’s quite exciting -- how quickly you need to evolve as a service provider. Because it's still quite a new area for a lot of people, and customers do ask for varying things that they expect the cloud to be or what a cloud is. We're constantly evolving and looking at new offerings to add into our service catalog.

Gardner: In my introduction I mentioned a cloud-of-clouds ecosystem. Does that make sense? Is that the sort of goal that you are ultimately going to reach with your journey?

Beavis: It definitely is. We see it being more than just one offering in our eyes. We see us being able to provide it to anyone, from a small reseller to an ISV, someone who develops their own applications. Or, it's someone who works specifically with applications and they're not just interested anymore in running their own infrastructure on their site or caring for it. They just want to provide that platform for their developers to be able to work hassle-free.

Gardner: So this means that you've got to come up with an infrastructure that can support many different type of uses, grow, scale, and increase adaptability to the market. What were some of the requirements, when you started looking at the vendors that you were going to partner with to create this cloud offering?

Understanding customers' needs

Beavis: The first thing that was important for us was, as you said, understanding our customers’ needs initially and then matching that to what they required. Once we had that, those words you mentioned, scale and everything, had to come into play. Also the cost to build these things certainly doesn’t come cheap. So we had to make sure we could use the existing resources we had.

We really went in the end with the VMware product, because we have existing skill sets in that area. We knew we would have a lot of support, with their being a tier-1 vendor and us being a tier-1 partner for them. We needed someone that could provide us with that support from both a services perspective, sales, marketing, and really come on the journey with us to build that cloud.

And then obviously our other vendors underneath, like EMC, who are also incredibly supportive of us, integrate very well with those products, and Cisco as well.

It had to be something that we could rapidly build, I won't say out of the box, because it’s a lot that goes around building a cloud, but something that we knew had a strong roadmap and was familiar to all our customers as well.

The move to cloud is something that is new to them, it's stressful, and they're wondering how to do it. In Australia, 99 percent of customers have some sort of VMware in their data center. To be able to move to a platform that they were familiar with and had used in the past makes a big difference, rather than saying, "You're moving to cloud, and here is a whole new platform, interface, and something that you've never seen before."
Needless to say, we're very good partners with some of the other providers as well. We did review them all, but it was a maturity thing and also a vision thing.

The story of the hybrid cloud was something we sat down and saw had a lot of legs: The opportunity for people to stick their toe in the water and get used to being in the cloud environment. And VMware’s hybrid cloud model, connecting your on-premise into the public cloud, was also a big win for us. That’s really a very strong go-to-market for us.

Gardner: As a systems integrator for some time, you're very familiar with the other virtualization offerings in the market. Was there anything in particular that led you away from them and more toward VMware?

Beavis: Not really. It was definitely a maturity thing. We remember when Paul Maritz got on stage four years ago and defined the cloud operating system. The whole industry followed after that. VMware led in this path. So being a market leader certainly helped.

Needless to say, we're very good partners with some of the other providers as well. We did review them all, but it was a maturity thing and also a vision thing. The vision of a software-defined datacenter really came into play as we were building Cloud 2.0 and that was a big winner for us. That vision that they have now around that is certainly something that we believe in as well.

Gardner: Of course, they've announced new and important additions to their vCloud Suite, and a lot of that seems to focus on folks like yourself who need to create clouds as a business to be able to measure, meter, build, manage access, privacy, and security issues. Was there anything about the vCloud Suite that attractive you in terms of being able to run the cloud as a business itself?

Product integration

Beavis: The fact it was packing stuff as a suite was a big one for us. The integration of the products now is something that’s happening a lot more rapidly, and as a provider, that’s what we like to see. The concept of needing different modules for billings, operations, even going back 12 months ago, made it quite difficult.

In the last 12 months with the Suite, it has come a long way. We've used the component around Chargeback, vCenter Operations Management, and Capacity Management. The concept now of software-defined security, firewalls, and networking, has become very, very exciting for us, to be able to all of a sudden manage that through a single console, rather than having many different point solutions doing different things. As a service provider that’s committed to that VMware product, we find it very, very important.

Gardner: Margins can be a little tricky with this business. As you say, you had a lot of investment in this. How do you know when you are succeeding? Is there a benchmark that you set for yourself that would say, "We know we're doing this well when "blank?" Or is this a bit more of a crawl, walk, run approach to this overall cloud business?

Beavis: Obviously that comes with a lot of the backend work we're doing. We take a lot of time. It’s probably the most important part. Before we even go and build the cloud, it’s getting all that right. You know your direction. You know what your forecast needs to be. You know what numbers you need to hit. We certainly have numbers and targets in mind.

That’s from a financial perspective, but also customers are coming into the cloud, because just like physical to virtual, people will come, initially, just with small environment and then they'll continue to grow.
If you provide good service within your cloud, and they see that risk reduced, cost reduced, and it’s more comfortable, they will continue to move workloads into your cloud

If you provide good service within your cloud, and they see that risk reduced, cost reduced, and it’s more comfortable, they will continue to move workloads into your cloud, which obviously increases your bottom line.

Initially it’s not just, "Let’s go out and sell as much as we can to one or two customers, whatever it might be." It’s really getting as many logos into the cloud as we can, and then really work on those relationships, building up that trust, and then over time start to migrate more and more workloads into the cloud.

Gardner: Adam, help us understand for those listening who might want to start exploring your services, when do these become available? When are you announcing them, and is there any roadmap that you might be able to tease us with a little bit about what might be coming in the future?

Beavis: We've got Cloud 1.0 running at the moment, which is a cloud where we provide cloud services to customers. We have the automation level that we are putting in Cloud 2.0. Our backup services, where people no longer have to worry about tapes and things on site, backup as a service where they can just point to our data center and backup files, is available now.

Also DR as a service is probably our biggest number one seller cloud service at the moment, where people who don’t want to run those second sites, can just deploy or move those workloads over into our data center, and we can manage their DR for them.

New cloud suite

But there's a big one we're talking about. We're on stage at vForum next Wednesday, November 14, here in Australia, launching our new cloud suite built on VMware vCloud Director 5.1.

Then on the roadmap, the areas that are starting to pop up now are things like desktop as a service. We're exploring quite heavily with big data on the table, business intelligence as a service, and the ability for us to do something with all that data that we're collecting from our customers. When we talk about IT as a service, that's lifting us up to that next level again.

As I said earlier, it's continuously changing and new ideas evolve, and that’s the great thing working with an innovative company. There are always plenty of people around driving new concepts and new ideas into the cloud business.

Gardner: It's very exciting, and we look forward to learn more. We've been talking about how leading Australian IT services provider Thomas Duryea Consulting has made a successful journey to cloud computing.
It's continuously changing and new ideas evolve, and that’s the great thing working with an innovative company.

Our discussion today kicks off a three-part series on how TD designed, built, and commercialized an adaptive and reliable cloud services ecosystem. The next part of our series will delve more deeply into the how and what, rather than focusing, as we did today, on more of the business rationale for this cloud infrastructure journey.

With that, I'd like to thank our guest for being here on BriefingsDirect today, Adam Beavis, General Manager of Cloud Services at Thomas Duryea Consulting in Melbourne, Australia. Thanks so much, Adam.

Beavis: Thank you, Dana. Absolute pleasure.

Gardner: And I'd like to thank our audience for joining and listening and invite them to come back next time.

This is Dana Gardner, your host and moderator, Principal Analyst at Interarbor Solutions. Thanks so much again for joining. Bye for now.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: VMware.

Transcript of a BriefingsDirect podcast on how one Australian IT integrator has escalated cloud infrastructure development to provide a portfolio of new public cloud services. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

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Wednesday, November 07, 2012

Collaboration-Enhanced Procurement and AP Automation Maximize Productivity and Profit Gains in Networked Economy, Says Ariba's Drew Hofler

Transcript of a BriefingsDirect podcast on how efficiencies of cloud computing in procurement and accounts payable are giving companies better agility and spend management.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Ariba.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Dana Gardner
Today, we present a sponsored podcast discussion on how businesses are exploiting open collaboration advances in procurement and finance to produce new types of productivity benefits.

We'll hear from an executive at Ariba and an industry analyst on how more data integration, and process efficiencies of cloud computing help companies to better manage their finances in tighter collaboration with procurement and supply chain activities.

To learn more about how these new trends are driving innovation into the accounts payable (AP) automation and spend management fields, please join me now in welcoming our guests.

We're here with Drew Hofler, Senior Solutions Marketing Manager of Financial Solutions at Ariba, an SAP company. Welcome, Drew. [Disclosure: Ariba is a sponsor of BriefingsDirect podcasts.]

Drew Hofler: Thank you, Dana.

Gardner: We are also here with Vishal Patel, Research Director and Vice President of Client Services at Ardent Partners in New York. Welcome, Vishal.

Vishal Patel: Thank you.

Gardner: Vishal, let's start with you. Today’s landscape for AP and collaborating across business is driving some new processes, new approaches, and you have some new research. Tell us why you did the research now and what some of your major findings were.

Patel: We completed this E-Payables 2012 research study in June of this year. It was comprised of approximately 220 AP, finance, and procurement professionals. Our intent was to get a sense of the current state of AP operations, the usage of AP solutions, and to capture some of the key strategies, processes, and performances that these organizations are able to achieve. Also, to determine how best-in-class companies are leveraging AP automation.

Gardner: And what's changed? What's new now or different from say two or three years ago?

Patel: Traditionally, we saw AP as having a very tactical focus. We asked the survey participants, "What do you think AP can do for you?" The responses ranged from payroll and reviewing invoices to responding to supplier inquiries. But in 2012, we're beginning to see a little bit of a shift more toward strategic activities and the introduction of automation in the process.

Vishal Patel
If we compare procurement and AP, AP traditionally is lagging behind procurement in terms of transformation and improvement of performance in their groups. AP is currently at the point where it's trying to improve efficiency and trying to focus staff members on more strategic activities, instead of responding to supplier inquiries.

That's the general trend we've been seeing, and also just being able to connect the various processes within the procure-to-pay cycle.

New efficiencies

Gardner: Drew Hofler, we've seen an emphasis over the past several years, particularly in a tough economy, on seeking out new efficiencies. We've seen that in procurement and supply chain. Is this now AP's day in the sun, so speak, to get efficient?

Hofler: I would say that it is. It's probably, the last bastion of paper processing in most organizations right now, typically seen, as Vishal mentioned, in the past as a back office tactical organization. They're seeing now that there are benefits that can be had by automating -- and not just automating the process and getting rid of paper -- but automating that on a network platform.

Drew Hofler
That allows visibility into key strategic data that drive decision-making throughout the organization and across their firewall to their suppliers as well. These are things like visibility into shipments, when they're coming in, visibility into line-item invoice data on the procurement side, so that they can do better analysis of their spend.

It's driving more strategic procurement on the supplier’s visibility into invoice status and payment timing, so they can manage their working capital and even access opportunities for getting paid early in exchange for discounts.

All of this stuff flows out of automation, and I think companies are really seeing how AP can now drive some of these strategic activities. So, I think it is their time in the sun.

Gardner: When we actually have an automation across the spectrum of these different activities, it seems to me that we're not going to be just collecting data and be able to proactively seek out new efficiencies or processes. It allows us to have more of an ad hoc, real-time benefit of being adept and even proactive. How is that important now, when you look at this entire spectrum of economic activity?

Hofler: That’s extremely important. Everybody needs to be nimble right now. The big deal is being able to adjust to the circumstances that are just crazy right now. It's having visibility into where you're spending specifically and when you're getting paid. Also, visibility into automating the invoice cycle and the AP process so that now you can do something with that with an early paid invoice that is approved maybe 45 days before it's due.

This opens up working-capital opportunities, where companies are offering early pay discounts to their suppliers. Suppliers who don't have the same access to cash flow that they had pre-2008 are accessing that, saying thank you, and are willingly giving up a discount so that they are lowering their days sales outstanding (DSO).

Buying organizations are getting something for their cash that they're certainly not getting with that cash sitting in bank accounts earning zero percent right now. Both sides are winning, and all of that's really made possible by automation.

Gardner: Vishal, this notion of being nimble, is that something that came up in your recent research and how important is that for companies to once again push the needle on efficiency?

Impact of AP

Patel: It's very important, especially when you start thinking about the impact that AP can have on other parts of the organization like procurement and finance. When you look at the P2P process, it's one transaction that all of these different stakeholders are connected to. But all the stakeholders are not connected to each other necessarily, and that's where automation comes in. That's when you get the added value of collaboration between the P2P cycle.

Gardner: And to this notion that interest rates are so low -- and we're told that they're going to remain that way for perhaps a couple of years -- making your capital work for you has become quite important. What is this new automation at the AP level bringing in terms of freeing up capital and giving companies just another tool, another arrow in their quiver, to get better productivity?

Patel: If you think about the manual environment where you're receiving paper invoices, paper purchase orders (POs). It's a difficult, really tedious work to get the right level of information at the right time, and then make decisions about how to most appropriately utilize cash.

One of the interesting things we found the research was that when we asked the survey participants what some of the biggest drivers are for the AP groups, the top one was improving processing efficiency, which is as expected, and it's been the same way for the last several years.

But the following two were the ones that were surprising. Number two and number three on the list were improving cash and working capital and improving days payable outstanding (DPO). Previously, we wouldn’t even have seen those on the list, but these are much higher on the list in 2012.
Any organization that can have visibility into their opportunities, into their process, and control over that process benefits from this.

Gardner: Drew, we recognize that large companies that are moving lots of goods that have a lot of capital involved are deeply incentivised to do this, but what about smaller organizations? Is this now something that is attainable by them, and are they starting to see benefits there too?

Hofler: Absolutely. Any organization that can have visibility into their opportunities, into their process, and control over that process benefits from this. Smaller organizations on the buyer side are most definitely seeing the value of this. Lots of smaller organizations on the invoice sending and payment receiving side, what we would traditionally call the supplier side, the seller side, are seeing huge benefits from this.

For example, one of the suppliers on the Ariba network company called Mediafly, invoices with a very large entertainment company. They're a small company, they're a startup, and they're in growth mode. They have a full visibility into when they're paid and their CFO has told us that it's just like gold being able to see that.

So Mediafly has visibility into not only when their invoice is going to get paid, so that they can forecast on that, but also the ability to accelerate that payment on demand. They can literally click a button and get paid when they want.

They have told us that that has allowed them to hire, to accelerate their production of their products by hiring new developers, so that they can actually get a product out the door. They told us an example where they were able to get a new product out the door before they had planned, and they were scheduled to get paid on that original invoice.

Accelerated growth

And so it accelerated their growth. They've been able to avoid using credit lines because they have access to this through this kind of networked economy effect. They're able to see what's going on, and have the capability to make a strategic decision to accelerate cash, and it has really helped them as a small company.

Gardner: So visibility, predictability, understanding each part of the process, knowing scientifically or practically what's going to happen, how does collaboration fit into this Vishal? Where is that now adding another element of benefit?

Patel: In general within organizations, collaboration is a theme nowadays, with the workforce being quite diversified in terms of location. People are relying on collaborative efforts to help improve performance overall across the enterprise. And I think that's no different between procurement, AP, and treasury. Their collaborative efforts are going to improve each of their processes and the visibility they all have into the procure-to-pay process.

For example, procurement because of e-invoicing and supplier networks and just the visibility that AP is providing procurement, can improve their monitoring and measurement of supplier performance with invoice accuracy, how the're doing on payments, this helps them understand the total cost of working with a supplier.

That's one example of how procurement and AP can work together. But with treasury being able to understand what invoices are coming due, when they're coming due, when is the best time to make a payment, AP is able to deliver this kind of information in an accurate and real-time way, and that enhances their collaboration as well.
Their collaborative efforts are going to improve each of their processes and the visibility they all have into the procure-to-pay process.

Gardner: Drew, of course we're seeing lots of advancements in the field around cloud computing, mobile devices, and social networks, where people are becoming more accustomed to having an input and saying what's going on along the way. Technically, how is collaboration being driven into what Ariba is doing specifically around this AP automation?

Hofler: It all revolves around visibility into information, and as you said, access to make decisions based on that from across silos inside of organizations. For example, one of our customers, Maxim Healthcare, had very little visibility into procurement, across AP, and into their suppliers. All three of these stakeholders had very little visibility into what was happening, once a PO went out the door and once an invoice came in. There were spot processes that happened, but they were in a black box.

They had no way to enforce compliance to contracts. So an invoice comes in but it's not connected to the original document which is essentially a contract that enforces, say, volume discounts on widgets or whatever it might be. By automating the P2P process, by bringing all of these things into a kind of a network solution, the various stakeholders are able to see what's going on.

From the procurement side, they can see the line items on the invoice, so they can do better spend management and better analysis on their spend.

From a contract compliance perspective, the AP department can automatically connect the data in the invoice to that contract, to ensure that they're actually paying what they should be paying, and not too much.

Increased visibility

And from a supplier perspective, they benefit both from being able to see their invoice approval status, and when they're planning on getting paid. They're also able to access early payment, as I mentioned. One of the interesting benefits of this to Maxim was actually an increase in their DPO, a working-capital metric.

Procurement and AP typically may not have an impact on working-capital metrics that's usually a treasury and finance function. But when they had full visibility into their invoices and their payment terms, Maxim found that they were actually able to pay suppliers on time, rather than the practice of paying them early, because they just didn't have visibility into when they were supposed to pay them.

For a lot of my customers, we find that when we look at their vendor master, they often will have a lot of immediate terms with suppliers that they didn't realize they had, and their DPO was low as a result. So just getting visibility into all that gives them the ability to enforce the terms that they already have, and the net of that is to increase their DPO as Maxim saw.

Gardner: Now of course, we're in the networked economy. We've been talking about this in the context of an individual enterprise or a small business, but when more visibility data and accessed information along with collaboration is perhaps exploited at an industry or vertical level, there are some other benefits.

So does collaboration go beyond just what we're doing as an internal process? What about getting more data about what's going on in the whole industry and applying that to some of these business activities and decisions?
That's definitely huge and I would agree that it's right over the horizon.

Patel: Absolutely. When you have trading partners on a network and a whole cluster of them in a specific industry, there’s tons and tons of data that can be collected on invoicing, payments, purchase orders, spending habits, spending behaviors, and certain commodities.

There is a whole host of data that's collected, that's maybe the next phase of where the supplier networks go and how they make use of information. To date, I think it's still a matter of getting the scale and getting the network to a size where that information is available and makes sense. That's probably the next phase of it.

Gardner: Drew, a similar question. This notion of taking the data and analysis add another abstraction level into an industry or vertical. This seems to me to be really something that can add lower costs and higher productivity to a much larger set of participants?

Hofler: I would definitely agree with that Dana. It's really the promise of the network, as Vishal pointed too. As you get the network effect and you get the massive amounts of data, there is just a tremendous amount of data flowing through on a daily basis on the Ariba network.

That's one of the things that's very exciting about our recent acquisition by SAP. There’s a big data program called HANA that they're developing and pushing. That's going to blow out the market. The amount of data that we can bring into that, and then slice and dice to the various different uses that's required to get intelligence into some of the things that Vishal was talking about. That's definitely huge and I would agree that it's right over the horizon.

Metrics of success

Gardner: As we start to think about closing out, I'd like to try to identify some more metrics of success. You've talked about Maxim Healthcare. Do you have any other examples of companies that have been doing this and what sort of benefits have they've been able to enjoy and share?

Hofler: Most of the companies that come onto the Ariba network to do invoice automation, we call it Smart Invoicing, are able to set up certain parameters so that by the time an invoice gets to them, it's very clean. The suppliers give an immediate feedback on things that need to be fixed, as the invoice is being submitted, and then they get it very clean.

The result of that is that we have many customers who have 95 percent, 98 percent straight-through processing. Invoice comes through, it goes straight into their back end system and it's scheduled for payment and they're ready to go.

One of our customers, Ecolab Inc., has employed this. They had a couple of big problems, for example, where they had no visibility into their shipment information from the supplier on the front end of the process and their suppliers again had no visibility into payment on the back end of the process.
There are benefits to thinking more long term about the entire process.

A very interesting thing happened. When they weren't able to get visibility into shipment, they couldn't invoice their customer until they knew they had received the shipment that was going to be part of what they are invoicing their customer for from their supplier.

That led to an extended DSO, which is not a positive. By getting visibility into this, they were able to invoice on shipment and lower their DSO. Traditionally procurement and AP would not play in terms of DSO, but now they're able to contribute to the more strategic level of the company by impacting DSO in a positive way.

Additionally, they had risk in their supply chain from their suppliers not knowing when they were going to get paid, and sometimes threatening to and carrying through withholding shipment until they received payment on a particular thing. Now, their suppliers can see exactly when they're going to get paid and that has increased satisfaction and lowered the risk for them as well.

Just by automating the process and approving invoices in time, Ecolab increased their capture of contracted early-pay discounts from somewhere around 25 percent or 30 percent that they were able to capture before, to upwards of 95 percent. So that's a huge benefit to them as well.

Gardner: Vishal, in closing out, how do organizations get started on this? What are some typical steps that they should take in order to avail themselves of some of these benefits that we've been discussing?

Patel: One of the key things is, when looking at an automation initiative in the procure-to-pay process, to think about the process holistically, instead of focusing on automating one part, one process in AP or in procurement. There are benefits to thinking more long term about the entire process, how it's going to integrate, what technologies are going to be used for each part of the process, and whether that's all done at once or over phases.

Best practices

Gardner: Drew any thoughts from your perspective on getting started, best practices, or even where to get more information?

Hofler: Absolutely, for more information, very easily come to ariba.com and look at all of our solution pieces. For getting started, I would agree with Vishal. In the networked economy, it's all about sharing information across silos, across stakeholders, and doing so in an automated fashion.

There are a lot of pieces to that and a lot of steps and processes along the way, where that information can be captured and shared across these parties.
In the networked economy, it's all about sharing information across silos, across stakeholders, and doing so in an automated fashion.

A lot of people take it all at once in P2P process. Other people will automate POs and then invoice automation and then early payment discounting. I say look at where your communication breaks down internally over these processes, and let's target that first with some automation that can bring visibility into that.

Gardner: We've been discussing how businesses are exploiting collaboration and automation advances and procurement and accounts payable to produce new types of productivity benefits. I'd like to thank our guests, Drew Hofler, Senior Solutions Marketing Manager of Financial Solutions for Ariba, now an SAP company. Thank you, Drew.

Hofler: Thank you.

Gardner: And Vishal Patel, Research Director and Vice President of Client Services at Ardent Partners. Thank you, Vishal.

Patel: Thank you, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks to our audience for joining, and don't forget to come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Ariba.

Transcript of a BriefingsDirect podcast on how efficiencies of cloud computing in procurement and accounts payable are giving companies better agility and spend management. Copyright Interarbor Solutions, LLC, 2005-2012. All rights reserved.

You may also be interested in: