Showing posts with label automation. Show all posts
Showing posts with label automation. Show all posts

Monday, November 13, 2023

How Accounts Payable Automation and Agility Drive Long-Term Business Productivity

Transcript of a discussion on why business leaders need to prepare now to optimize and automate accounts payable functions to elevate overall financial situational awareness.

 

Listen to the podcastFind it on iTunesDownload the transcript. Sponsor: Basware.

 

Dana Gardner: Welcome to the next edition of the BriefingsDirect podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator.

 

Gardner

Today’s discussion focuses on how optimizing and automating accounts payable (AP) functions gives businesses the insights and levers to better transform. We’ll examine how improved control and management over cash flow, payables, and related fiduciary functions elevate overall financial situational awareness.

 

Stay with us now as we explore how adoption of intelligent automation joins the expected consolidation and convergence of financial operations and applications in the office of the Chief Financial Officer (CFO).

 

Soon, we may well see more shifts in the required skills and streamlined organization within financial operations at companies. So, leaders need to prepare now.

Here to share his insights as a business operations efficiency veteran and expert is our guest, Jason Kurtz, Chief Executive Officer (CEO) at Basware. Welcome, Jason.

 

Jason Kurtz: Glad to be here. Thanks for having me.

 

Gardner: Jason, before we begin, let’s put some context around our discussion. What are some of the major trends shaping the need for better accounts payable automation, and why is there an imperative to add intelligence and automation to overall back-office business operations?

 

Global change: Taking it all into account

 

Kurtz: The imperative is we’re dealing in truly unchartered waters here for a lot of CFOs. If you think about what’s going on in our world, if you think about the macro-environment, we have potential recessions in some areas of the world. We have higher inflation rates, higher interest rates, and all that affects us in our businesses in various ways. If you think about supply chains, for example, we still -- believe it or not -- haven’t fully recovered from supply-chain disruptions from the pandemic.

 

Kurtz
These trends impact CFOs, and what’s going on in our world. We still have people working in hybrid or remote environments. We still have companies that can’t fill the jobs they have open, including in AP. Then we also have countries such as France, Germany, Poland, and Spain that are adding regulatory requirements for how you should send and receive an invoice.  Countries like Mexico and Brazil are changing their regulations on a regular basis.

Never before have we seen so many things impacting CFOs at the same time. You think about people like me, I’m in my mid-50s, I’ve never worked in an environment where there’s a recession plus high interest rates, plus inflation. You throw that in, and we’ve never seen this before. For many of us in these roles, it’s a unique time in history -- and in our careers -- that we’re dealing with so many challenges at once.

 

Gardner: Because there’s so much that’s unprecedented happening at once, it’s hard to look at the historic record and say, “Okay, I know what’s going to happen next.” There’s very little clear visibility as to what we’re going to be dealing with in terms of our top-line and needed constraints on spending over the next six to 12 months.

 

Kurtz: That’s 100 percent right. We are living with uncertainty right now. Few companies have great data and information to help them navigate such uncertainty. But one of the key documents, key pieces of information and data, is the invoice. If you can get that right, and gather great data from your invoices, man, that makes your job as a CFO a lot easier.

 

Gardner: To get that look at the full record and all of the data, that usually means more intelligence and automation around vital business processes. So, on the micro-level, what are the challenges facing businesses to gain more tactical and strategic control over their finance operations?

 

Kurtz: There are some really interesting challenges that you wouldn’t believe are still challenges. For a lot of businesses, we want to improve profitability in uncertain times. We want to unlock working capital. What’s one of the biggest barriers to that? Over 90 percent of companies say they can’t pay an invoice on time because they don’t have it approved in time.

You need automation and tools that can embed your policies and procedures into your workflow and your processes. You can't do that in a manual world. This is the reality for a lot of the companies we deal with.

Because they have bad data, because they haven’t enabled their suppliers, and because they’re often dealing with scanning and optical character recognition (OCR) documents of poor quality --  and it takes time to manage difficult exceptions – those are all critical hurdles. So, it’s important to solve these to unlock lots of hidden value.

 

Another challenge we talked about; companies don’t have a full staff in AP -- sometimes people are working remotely. How do you make sure those new people are trained, are more efficient, and effective? How do you know they’re following the policies and procedures for your company? How do you quality check the work they’re doing via remote work?

 

Because you want to do more with newer and fewer employees, you need automation and tools that can embed your policies and procedures into your workflow and your processes. You can’t do that in a manual world. So those are just a couple of examples, but this is the reality for a lot of the companies we deal with. From an AP perspective, they need improvements because these really are barriers to their success right now.

 

Gardner: Jason, both you and I have been in this business long enough to have seen wave upon wave of new technologies and approaches. And that was great, to use the best-of-breed solutions as they came online. But it has left many organizations with a scattered and disruptive mix of apps and silos that come from different eras.

 

Invoice intervention imperative

 

Kurtz: Yes, without question. We joke a lot about an earlier era of scanning paper docs using OCR, right? That’s just one example of what you’re talking about. For a lot of companies, scanning and OCR checked the box on adopting electronic invoicing. “We’ve done it.” But you and I know that that’s not really the case, right? You don’t get any good data out of that.

 

You have to have manual intervention. It slows your processes down. It’s like using a pay phone, right? Or a fax machine. And no one uses those anymore. But there are still lots of people who have that as their e-invoicing solution, which is crazy.

Keep up with global compliance requirements using this interactive map.

And, to your point, lots of companies have layered different technologies onto their environment over time. Maybe it was a procurement solution, or a sourcing solution, or their enterprise resource planning (ERP) suites, and they’re trying to figure out, at least in AP, “How do I make all of that work? My invoices come and originate in different places.”

 

They ask, “How do I put something on top of that that is modern, usable, and purpose-built for me in that kind of an environment that’s very fragmented and has lots of different offerings and capabilities?” They need something that sits on top of that to make it all more efficient and effective for the AP department. So, again, you hit the nail on the head. There’s a lot of complexity in the companies that we work with.

 

Gardner: Part of the good news, as you alluded to earlier, is that the modern invoice has a beneficial role to play. When you go fully digital, you can layer into that resource lots of metadata, you can bring added processes to bear, and you can use that asset as a powerful tool to usher in benefits across other applications, data, and processes. When you do this right, and you unlock the superpowers with your invoice workflows, how does that set off cascading benefits?

 

Invoice data insights reap rewards

 

Kurtz: One that we haven’t talked about yet, when you get that invoicing data right and you have good data from across your suppliers, that gives you aggregate insights into what you bought from whom, how much you paid, and what the commerce trends are. That gives you the basis for accurate spend analytics.

 

In the current uncertain macro-economic environment, we’re trying to save money and use that money to fund growth where we can find it, or put it away in the bank for profitability, then spend analytics is a great place to start to optimize, right? But you have to have that invoice data first to fully understand what it is you bought from whom, the pricing, and all the added details. So that’s one.

Two, the other part of the invoice data goodness, comes from unlocking working capital. Many companies now discount payment terms so the buyer receives a two percent discount on the net invoice amount if they pay within 10 days. Otherwise, the full invoice amount is due within 30 days. But, if they can’t pay something in 10 days, they can’t get the benefit.

But imagine if we could unlock literally billions of dollars in potential early-payment discounts or working-capital benefits that we could then use to invest in our growth or direct to areas where our acute business needs are. But, again, you must have a working invoice with good data, well-structured and in a timely manner, to be able to handle that management of working capital optimization. Yet, lots of companies still can’t do that.

 

I think those are a couple of examples where the modern invoice can unlock a lot of economic benefits for companies in these uncertain times.

 

Gardner: It has only gotten more important to best manage cash flow now that we’re up to five percent or more on overnight interest rates. The imperative to get fast and detailed cash flow data, and bring that organizational efficiency and agility to bear in real time, is higher than at any time in at least the last 15 years, right?

 

Kurtz: That’s 100 percent correct, and so intelligence is more valuable for us as an organization, and for our large customers. That’s because, in many cases, they have billions of dollars in spend, so that they can unlock millions – even hundreds of millions -- in working-capital dollars due to those higher interest rates.

Such intelligence is also important for our customers' suppliers because their cost of capital is going up, too. When supply chains are still disrupted, who gets what when and at what terms? 

But that intelligence is also important for their suppliers because their cost of capital is going up as well. In this world, where we still have some limited supply chains, suppliers can’t always deliver 100 percent of what they did three years ago. They may still be at only 85 or 90 percent.

 

Who then gets what when and at what terms? Who gets that 85 or 90 percent instead of the requested 100 percent? I would hypothesize -- and our customers are telling us this -- those good payers, the people who pay on time for timely delivery, become the customers of choice. If there’s a limited supply, they may get more of their fair share. There are a lot of benefits for doing this well, being able to pay when you and your suppliers want to pay for the right reasons.

 

Gardner: You’re teeing up some of the changes needed in CFO-required skills. Whereas due diligence, operational integrity, and process efficiency may have been top of mind when it came to bringing new people into the office of CFO, now you’re talking about more analytical, entrepreneurial, and innovative skills. We need a different kind of person in these strategic thinking and data analysis roles, right?

 

CFO role encompasses more analytics 

 

Kurtz: Yes, absolutely. In almost every role in the finance department now, comfort with data and analytics is becoming more critical. Those are the skills that help with automation and gaining insight into how you best manage your resources and capital. Those two skill sets -- comfort with technology and proficiency with data and analytics -- are probably two of the most important.

The other thing we’re seeing is the office of the CFO is broadening its responsibilities, too. They’re taking on more operational responsibilities and further impacting their organizations. So, that means being consultative and being good influencers and educators. Those are all part of the skill sets that a good finance organization has to have right now.

 

Gardner: There is no closing the door to the back office and then only coming out once a quarter with an audit or report anymore, right?

 

Kurtz: That’s right, you can’t do that. You just can’t do that.

 

Gardner: Let’s put some meat around some of these solutions in practical terms. How are these AP automation solutions paying off in brass tacks?

 

Productivity, processing, profits -- all up

 

Kurtz: We’re seeing incredible benefits. When we see automation in the AP function, you go from a company on average processing maybe 5,000 to 7,000 invoices per full-time annual employee equivalent (FTE) to companies processing, 30,000 to even 50,000 invoices a year per FTE. So, that’s a massive productivity benefit. You see the level of electronic invoices from your suppliers going from, on-average for most companies at 34 percent to some of Basware’s best-in-class customers attaining 99 to nearly 100 percent.

OCR is no longer the answer to processing PDF invoices, but AI-powered solutions are.

So, again, that plays into the benefits of accessing great structured data around an invoice. If, for example, you examine invoice processing time, most companies average around 11 days for AP functions. But Basware’s best-in-class AP customers are looking at hours or minutes, certainly less than a day, for processing. And that’s part of what you need to do to unlock the working-capital benefits. And you see companies with 20 to 30 percent of their invoices being touchless -- meaning you never physically have to manually have an intervention into an invoice from receipt through payment – are up from formerly around 21 percent. But again, Basware best-in-class customers are gaining with more than 90 percent being touchless.

 

These are the kind of metrics and value that AP automation solutions, and in particular Basware, customers are able to achieve.

 

Gardner: Can you apply these tactical metrics to also measure improvement in overall business productivity and financial returns?

 

Kurtz: Sure. Take a look at a customer of ours like Heineken. They implemented Basware’s AP automation solution. It streamlined invoice processing, reduced manual efforts, and improved data accuracy and efficiency. All of that resulted in greater than 40 percent reduction in their cost to process invoices within their function as a whole. So more than 40 percent reduction in overall AP team and organization costs by implementing an AP automation solution.

We can be really impactful. The same kind of thing happened at Toyota Industrial, another customer of ours, where they saw similar benefits from streamlining the invoice processing, reducing manual work, and getting suppliers to send invoices electronically. They attained better data, but also significantly reduced cycle times and earned invoice processing time savings. And that lead to better spend visibility and access for a well more than 50 percent reduction in the cost of processing within accounts payable as a whole.

Those are some of the benefits. I think the order of magnitudes are really incredible and transformational. We’re talking about literally millions of savings in hard dollar savings and then tens of millions of dollars in potentially in working-capital benefits as well.

 

Gardner: You can’t define productivity much better than that, right?

 

Kurtz: I like to think so.

 

Gardner: Okay, we have those direct, hard number AP improvement benefits. But as we alluded to earlier, there are some burgeoning types of benefits that come from having the data analytics and capability to innovate on larger strategies for buying, spending, and paying. Let’s talk a little bit about some of the ancillary benefits that come when you automate, when you go truly digital, and when you explore innovations around how the business itself operates.

 

Tech-savvy, budget-aware people thrive

 

Kurtz: Yes, there are a bunch of benefits. Let’s not underestimate the people benefits, right? So many of us are working in hybrid working patterns and remote working environments. I think one of the real benefits is to be able to onboard our people faster and have better productivity from them that much faster than you can in a non-automated world. So that’s one.

 

Two, you can attract a higher level of quality of candidate, particularly -- not to stereotype -- younger generations who are attracted to the technology that we need to incorporate into finance functions over time. They’re attracted to great technology and purpose-built technology. So, that’s another interesting example of ancillary human capital benefits of modernizing AP operations.

So many of us are working in hybrid working patterns and remote work. A real benefit now is to be able to onboard people faster and gain better productivity from them much faster by being in an automated environment.

Another one is clearly the savings visibility, right? And we have customers who are using that spend data that you get from invoices that we talked about to identify tens of millions of dollars in savings from having better data associated with invoices.

 

Toyota, again, is a good example. If you think about the overall finance function, one of the things they use our AP solution for and can gain from improved invoices data is the capability to rapidly monitor budgets. By improving their budget awareness, and having better conversations sooner in their fiscal quarters, they get a head start on performance metrics to know where they stand relative to budgets -- and being able to then act swiftly. They tell us that’s one of the really big benefits.

 

Again, that fits in with the overall CFO theme of being more consultative, being more of a business partner. That comes in large part from being able to see data, gain insights, track trends – all much earlier in the process. You simply can’t do that if it takes you 11 days to process an invoice, or you retain only 50 percent of the data, or you get garbage for data because it’s scanned, and then you have to go back and manually figure out what it is.

 

All of those are some of the ancillary yet impactful benefits that we’re seeing.

 

Gardner: Given the ongoing tight labor market, it sounds like the role of the finance people can now better help innovate for other parts of the organization, such as human resources. Better tracking payments and processes can help exploit a gig economy of contractors or use different forms of labor while tracking the costs in full.

 

So, is there an elevation that we should expect to see in terms of the status and impact that the finance office can have across the business?

 

CFO: From counter to consultant

 

Kurtz: Without question that’s the case. Here at Basware, our CFO is becoming more of a consultant, business partner, and adviser to other functions within the organization. That is a very common trend and theme we’re seeing as CFOs have broad influence and more operational span of control. They are changing from being the counter to being the financial consultant.

 

These new types of CFOs are bringing the insights from all of that data that we’ve talked about and helping the whole business operate better and deliver on expectations of profitability, growth, or whatever it is that that function is focused on.

Move from manual ways of working to the most automation AP processes possible.

And then, if we want to be really provocative about where this leads, you might have AP organizations that become profit centers. Because of the cost-reduction elements that they can take out, the working-capital benefits that they can unlock, and the ability to attract more supply -- all of those things help with investment, innovation, and growth. We might someday be looking at finance functions that are profit centers instead of cost centers.

 

Gardner: Interesting! Well, that’s a good segue to the last part of our discussion, which is what can we expect next? What’s in the future when we exercise true and pervasive AP automation? When will we be able to further avail ourselves of tools like machine learning (ML), artificial intelligence (AI), and instill an analytics culture within our businesses? What does your crystal ball show you coming for the modern accounts payable impact when we do it right?

 

Kurtz: We’re going to see a world in the not-too-distant future where in 95 percent-plus of the time, an AP person won’t ever have to touch an invoice. We will have better data from an invoice. Using AI, we will gain the capability to match and handle nearly all exceptions. We already have this today, but it’s going to keep getting better and better.

Soon more than 95 percent of the time an AP person won't ever have to touch an invoice. And we will have better data from that invoice. Using AI, we'll handle nearly all exceptions ASAP.

And you’re going to see these AP teams become much less, “How do I manage this exception? How do I go track down who the buyer was; what happened?” and all of that, to more of, “Hey, now I can think about what’s the best way to deploy my working capital. How do I take this data that we’re getting and spot impactful trends in it?”

 

As we become more touchless and automated, it’s going to free up value-added time to enable CFOs to be the business optimization partners, to spot trends, to understand better what’s happening in the business, and to bring ideas, solutions, and creativity to the rest of the organization. That will, in turn, fund the innovation that we want, fund the growth that need, and not just be a cost of doing business that we’ve been in the past.

 

Gardner: Yes, no better way to get a sign-off on something then when you can tell them it’s going to pay for itself, right?

 

Kurtz: That’s right. That’s exactly right.

 

Gardner: Jason, where can people go to learn more about these trends and solutions? Where do you look for good analysis and information about these trends, markets, and solutions?

 

Kurtz: At Basware, we do our best to be educational and share what we see happening in the industry as well as track industry trends and benchmarks. You can go to Basware.com to see that or follow us on LinkedIn. We post a lot of content on our LinkedIn page.

 

I like to read a lot of the industry analyst content that comes out. I think there is some really good stuff. I know recently I’ve done some good reading on benchmarks from Ardent Partners. They’d done some really interesting studies. Forrester has interesting studies that I’ve been reading about as late. So, those are two great examples.

 

Basware is also a founder and innovator around EESPA, one of the leading associations of invoice and AP automation providers across Europe. We’re constantly working together to bring forth ideas and innovation on how to bring more automation to the industry.

See how your organization stacks up on the top AP metrics comparisons.

And then frankly, Dana, most folks joke about me being a Chief LinkedIn Officer, and I’m a LinkedIn addict. I think there’s all kinds of great data that I find around LinkedIn and I’m constantly looking on there and finding interesting articles and information. So, just a few thoughts on where we can find some interesting insights.

 

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect discussion on how optimizing and automating AP functions gives businesses the insights and levers to better transform.

 

And we’ve learned how improved control and management over cash flow, payables, and related functions elevates the overall financial situational awareness and sets the stage for better shaping the office of the CFO for the future.

So, please join me in thanking our guest, Jason Kurtz, CEO at Basware. Thanks so much, Jason.

 

Kurtz: Thank you, Dana.

 

Gardner: I’m Dana Gardner, principal analyst at Interarbor Solutions, your moderator for this ongoing series of BriefingsDirect discussions. A big thank you to our sponsor Basware for supporting these presentations.

 

And a big thank you as well to you, our audience, for joining. Please pass this on to your business communities. LinkedIn is an excellent way to do it, as Jason pointed out, and do come back next time.

 

Listen to the podcastFind it on iTunesDownload the transcript. Sponsor: Basware.

 

Transcript of a discussion on why business leaders need to prepare now to optimize and automate accounts payable functions to elevate overall financial situational awareness. Copyright Interarbor Solutions, LLC, 2005-2023. All rights reserved.


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Wednesday, October 23, 2019

How Unisys and Microsoft Team Up to Ease Complex Cloud Adoption for Governments and Enterprises

https://www.unisys.com/offerings/cloud-and-infrastructure-services

A discussion how public and private sector IT organizations can ease cloud adoption using cloud-native apps, services modernization, automation, and embedded best practices.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Unisys and Microsoft.

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

Gardner
The path to cloud computing adoption appears complex and risky to both government and enterprise IT leaders, recent surveys show. This next BriefingsDirect managed cloud methodologies discussion explores how tackling complexity and security requirements upfront helps ease adoption of cloud architectures.

By combining managed services, security solutions, and hybrid cloud standardization, both public and private sector organizations are now making the cloud journey a steppingstone to larger business transformation success.

Stay with us now as we discover how cloud-native apps and services modernization benefit from prebuilt solutions with embedded best practices and automation.


To learn more, please join me now in welcoming our guests, Raj Raman, Chief Technology Officer (CTO) for Cloud at Unisys. Welcome, Raj.

Raj Raman: Thank you very much, Dana.

Gardner: We’re also here with Jerry Rhoads, Cloud Solutions Architect at Microsoft. Welcome, Jerry.

Jerry Rhoads: Thank you, Dana. My pleasure to be here.

Gardner: Raj, why are we still managing cloud adoption expectations around complexity and security? Why has it taken so long to make the path to cloud more smooth -- and even routine?

Raman: Well, Dana, I spend quite a bit of time with our customers. A common theme we see -- be it a government agency or a commercial customer – is that many of them are driven by organizational mandates and getting those organizational mandates in place often proves challenging, more so than what one thinks.

Cloud adoption challenges 

The other part is that while Amazon Web Services (AWS) or Microsoft Azure may be very easy to get on to, the question then becomes how do you scale up? They have to either figure out how to develop in-house capabilities or they look to a partner like Unisys to help them out.

Raman
Cloud security adoption continues to be a challenge because enterprises still try and wish to apply traditional security practices to the cloud. Having a security and risk posture on AWS or Azure means having a good understanding of the shared security model across user level, application and infrastructure layers of the cloud.

And last, but not least, a very clear mandate such as digital transformation or a specific initiative, where there is a core sponsor around it, oftentimes does ease the whole focus on some of these.

These are some of the reasons we see for cloud complexity. The applications transformation can also be quite arduous for many of our clients.

Gardner: Jerry, what are you seeing for helping organizations get cloud-ready? What best practices make for a smoother on-ramp?

Rhoads: One of the best practices beforehand is to determine what your endgame is going to look like. What is your overall cloud strategy going to look like?

Rhoads
Instead of just lifting and shifting a workload, what is the life cycle of that workload going to look like? It means a lot of in-depth planning -- whether it's a government agency or private enterprise. Once we get into the mandates, it's about, “Okay, I need this application that’s running in my on-premises data center to run in the cloud. How do I make it happen? Do I lift it and shift it or do I re-architect it? If so, how do I re-architect for the cloud?”

That’s a big common theme I’m seeing: “How do I re-architect my application to take better advantage of the cloud?”

Gardner: One of the things I have seen is that a lot of organizations do well with their proof of concepts (POCs). They might have multiple POCs in different parts of the organization. But then, getting to standardized comprehensive cloud adoption is a different beast.

Raj, how do you make that leap from spotty cloud adoption, if you will, to more holistic?

One size doesn’t fit all

Raman: We advise customers to try and [avoid] taking it on as a one-size-fits-all. For example, we have one client who is trying – all at once – to lift and shift thousands of applications.

Now, they did a very detailed POC and they got yield from that POC. But when it came to the actual migration and transformation, they were convinced and felt confident that they could take it on and try it en masse, with thousands of applications.

The thing is, in trying to do that, not all applications are one size. One needs a phased approach for doing application discovery and application assessment. Then, based on that, you can determine which applications are well worth the effort [to move to a cloud].

So we recommend to customers that they think of migrations as a phased approach. Be very clear in terms of what you want to accomplish. Start small, gain the confidence, and then have a milestone-based approach of accomplishing it all.
Learn More About 
Unisys CloudForte
Gardner: These mandates are nonetheless coming down from above. For the US federal government, for example, cloud has become increasingly important. We are expecting somewhere in the vicinity of $3.3 billion to be spent for federal cloud in 2021. Upward of 60 percent of federal IT executives are looking to modernization. They have both the cloud and security issues to face. Private sector companies are also seeing mandates to rapidly become cloud-native and cloud-first.

Jerry, when you have that pressure on an IT organization -- but you have to manage the complexity of many different kinds of apps and platforms -- what do you look for from an alliance partner like Unisys to help make those mandates come to fruition?

Rhoads: In working with partners such as Unisys, they know the customer. They are there on the ground with the customer. They know the applications. They hear the customers. They understand the mandates. We also understand the mandates and we have the cloud technology within Azure. Unisys, however, understands how to take our technology and integrate it in with their end customer’s mission.

Gardner: And security is not something you can just bolt on, or think of, after the fact in such migrations. Raj, are we seeing organizations trying to both tackle cloud adoption and improve their security? How do Unisys and Microsoft come together to accomplish those both as a tag team rather than a sequence, or even worse, a failure?

Secure your security strategy

Raman: We recently conducted a survey of our stakeholders, including some of our customers. And to no surprise security -- be it as part of the migrations or in scaling up their current cloud initiatives – is by far a top area of focus and concern.

We are already partnering with Microsoft and others with our flagship security offering, Unisys Stealth. We are not just in collaboration but leapfrogging in terms of innovation. The Azure cloud team has released a specific API to make products like Stealth available. This now gives customers more choice and it allows Unisys to help meet customers in terms of where they are.

Also, earlier this year we worked very closely with the Microsoft cloud team to release Unisys CloudForte for Azure. These are foundational elements that help both governments as well as commercial customers leverage Azure as a platform for doing their digital transformation.
The Microsoft team has also stepped up and worked very closely with the Unisys team developers and architects to make these services native on Azure.

The Microsoft team has also stepped up and worked very closely with the Unisys team developers and architects to make these services native on Azure, as well as help customers understand how they can better consume Azure services.

Those are very specific examples in which we see the Unisys collaboration with Microsoft scaling really well.

Gardner: Jerry, it is, of course, about more than just the technology. These are, after all, business services. So whether a public or private organization is making the change to an operations model -- paying as you consume and budgeting differently -- financially you need to measure and manage cloud services differently.

How is that working out? Why is this a team sport when it comes to adopting cloud services as well as changing the culture of how cloud-based business services are consumed?

Keep pay-as-you-go under control 

Rhoads: One of the biggest challenges I hear from our customers is around going from a CAPEX model to an OPEX model. They don’t really understand how it works.

CAPEX is a longtime standard -- here is the price and here is how long it is good for until you have to then re-up and buy new piece of hardware or re-up the license, or whatnot. Using cloud, it’s pay-as-you-go.

If I launch 400 servers for an hour, I’m paying for 400 virtual machines running for one hour. So if we don’t have a governance strategy in place to stop something like that, we can wind up going through one year's worth of budget in 30 days -- if it's not governed, if it's not watched.

And that's why, for instance, working with Unisys CloudForte there are built-in controls to where you can go through and ping the Azure cloud backend -- such as Azure Cost Management or our Cloudyn product -- where you can see how much your current charges are, as well as forecast what those charges are going to look like. Then you can get ahead of the eight ball, if you will, to make sure that you are actually burning through your budget correctly -- versus getting a surprise at the end of the month.

Gardner: Raj, how should organizations better manage that cultural shift around cloud consumption governance?

Raman: Adding to Jerry’s point, we see three dimensions to help customers. One is what Unisys calls setting up a clear cloud architecture, the foundations. We actually have an offering geared around this. And, again, we are collaborating with Microsoft on how to codify those best practices.

In going to the cloud, we see five pillars that customers have to contend with: cost, security, performance, availability, and operations. Each of these can be quite complex and very deep.

https://www.unisys.com/offerings/cloud-and-infrastructure-services

Rather than have customers figure these out themselves, we have combined product and framework. We have codified it, saying, “Here are the top 10 best practices you need to be aware of in terms of cost, security, performance, availability, and operations.”

It makes it very easy for the Unisys consultants, architects, and customers to understand at any given point -- be it pre-migration or post-migration -- that they have clear visibility on where they stand for their review on cost in the cloud.

We are also thinking about security and compliance upfront -- not as an afterthought. Oftentimes customers go deep into the journey and they realize they may not have the controls and the security postures, and the next thing you know they start to lose confidence.

So rather than wait for that, the thinking is we arm them early. We give them the governance and the policies on all things security and compliance. And Azure has very good capabilities toward this.


The third bit, and Jerry touched on this, is overall financial governance. The ability to think about -- not just cost as a matter of spinning a few Azure resources up and down – but in a holistic way, in a governance model. That way you can break it up in terms of analyzed or utilized resources. You can do chargebacks and governance and gain the ability to optimize cost on an ongoing basis.

These are distinctive foundational elements that we are trying to arm customers with and make them a lot more comfortable and gain the trust as well as the process with cloud adoption.

Gardner: The good news about cloud offerings like Azure and hybrid cloud offerings like Azure Stack is you gain a standardized approach. Not necessarily one-size-fits-all, but an important methodological and technical consistency. Yet organizations are often coming from a unique legacy, with years and years of everything from mainframes to n-tier architectures, and applications that come and go.

How do Unisys and Microsoft work together to make the best of standardization for cloud, but also recognize specific needs that each organization has?

Different clouds, same experience

Rhoads: We have Azure Stack for on-premise Azure deployments. We also have Azure Commercial Cloud as well as Azure Government Cloud and Department of Defense (DoD) Cloud. The good news is that they use the same portal, same APIs, same tooling, and same products and services across all three clouds.

Now, as services roll out, they roll out in our Commercial Cloud first, and then we will roll them out into Azure Government as well as into Azure Stack. But, again, the good news is these products are available, and you don’t have to do any special configuration or anything in the backend to make it work. It’s the same experience regardless of which product the customer wants to use.
Unisys CloudForte works with Azure Stack, with Commercial, and Azure for Government. For the end customers it's the same cloud services that they expect to use. The difference is just where those cloud services live.

What’s more, Unisys CloudForte works with Azure Stack, with Commercial, and Azure for Government. For the end customer it's the same cloud services that they expect to use. The difference really is just where those cloud services live, whether it's with Azure Stack on-premises, on a cruise ship or in a mine, or if you are going with Azure Commercial Cloud, or if you need a regulated workload such as a FedRAMP high workload or an IC4, IC5 workload, then you would go into Azure Government. But there are no different skills required to use any of those clouds.

Same skill set. You don’t have to do any training, it’s the same products and services. And if the products and services aren't in that region, you can work with Unisys or myself to engage the product teams to put those products in Azure Stack or in Azure for Government.

Gardner: How does Unisys CloudForte managed services complement these multiple Azure cloud environments and deployment models?

Rhoads: CloudForte really further standardizes it. There are different levels of CloudForte, for instance, and the underlying cloud really doesn’t matter, it’s going to be the same experience to roll that out. But more importantly, CloudForte is really an on-ramp. A lot of times I am working with customers and they are like, “Well, gee, how do I get started?”

Whether it’s setting up that subscription in-tenant, getting them on-board with that, as well as how to roll out that POC, how do they do that, and that’s where we leverage Unisys and CloudForte as the on-ramp to roll out that first POC. And that’s whether that POC is a bare-bones Azure virtual network or if they are looking to roll out a complete soup-to-nuts application with application services wrapped around it. CloudForte and Unisys can provide that functionality.

Do it your way, with support 

Raman: Unisys CloudForte has been designed as an offering on top of Azure. There are two key themes. One, meet customers where they are. It's not about what Unisys is trying to do or what Azure is trying to do. It's about, first and foremost, being customer obsessed. We want to help customers do things on their terms and do it the right way.

So CloudForte has been designed to meet those twin objectives. The way we go about doing it is -- imagine, if you will, a flywheel. The flywheel has four parts. One, the whole consumption part, which is the ability to consume Azure workloads at any given point.
Learn More About 
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Next is the ability to run commands, or the operations piece. Then you follow that up with the ability to accelerate transformations, so data migrations or app modernization.

Last, but not least, is to transform the business itself, be it on a new technology, artificial intelligence (AI), machine learning (ML), blockchain, or anything that can wrap on top of Azure cloud services.

The beauty of the model is a customer does not have to buy all of these en masse; they could be fitting into any of this. Some customers come and say, “Hey, we just want to consume the cloud workloads, we really don’t want to do the whole transformation piece.” Or some customers say, “Thank you very much, we already have the basic consumption model outlined. But can you help us accelerate and transform?”

So the ability to provide flexibility on top of Azure helps us to meet customers where they are. That’s the way CloudForte has been envisioned, and a key part of why we are so passionate and bullish in working with Microsoft to help customers meet their goals.

Gardner: We have talked about technology, we have talked about process, but of course people and human capital and resources of talent and skills are super important as well. So Raj, what does the alliance between Unisys and Microsoft do to help usher people from being in traditional IT to be more cloud-native practitioners? What are we doing about the people element here?

Expert assistance available

Raman: In order to be successful, one of the big focus areas with Unisys is to arm and equip our own people, be it at the consulting level, a sales-facing level, either doing cloud architectures or even doing cloud delivery, across the stripe, rank and file. There is an absolute mandate to increase the number of certifications, especially the Azure certifications.

In fact, I can also share that Unisys, as we speak, every month we have a doubling of people who are across the rank of Azure 300 and the 900. These are the two popular certifications, the whole Azure stack of it. We have now north of 300 trained people, and maybe my number is at the lower end. We expect the number to double.

https://www.unisys.com/offerings/cloud-and-infrastructure-services
So we have absolute commitment, because customers look to us to not only come in and solve the problems, but to do it with the level of expertise that we claim. So that’s why our commitment to getting our people trained and certified on Azure is a very important piece of it.

Gardner: One of the things I love to do is to not just tell, but to show. Do we have examples of where the Unisys and Microsoft alliance -- your approach and methodologies to cloud adoption, tackling the complexity, addressing the security, and looking at both the unique aspect of each enterprise and their skills or people issues -- comes all together? Do you have some examples?

Raman: The California State University is a longstanding customer of ours, a good example where they have transformed their own university infrastructure using Unisys CloudForte with a specific focus on all things hybrid cloud. We are pleased to see that not only is the customer happy but they are quite eager to get back to us in terms of making sure that their mandates are met on a consistent basis.

Our federal agencies are usually reluctant to be in the spotlight. That said, what I can share are representative examples. We have some very large defense establishments working with us. We have some state agencies close to the Washington, DC area, agencies responsible for the roll-out of cloud consumption across the mandates.

We are well on our way in not only working with the Microsoft Azure cloud teams, but also with state agencies. Each of these agencies is citywide or region-wide, and within that they have a health agency or an agency focused on education or social services.

In our experience, we are seeing an absolute interest in adopting the public clouds for them to achieve their citizens’ mandates. So those are some very specific examples.

Gardner: Jerry, when we look to both public and private sector organizations, how do you know when you are doing cloud adoption right? Are there certain things you should look to, that you should measure? Obviously you would want to see that your budgets are moving from traditional IT spending to cloud consumption. But what are the metrics that you look to?

The measure of success 

Rhoads: One of the metrics that I look at is cost. You may do a lift and shift and maybe you are a little bullish when you start building out your environments. When you are doing cloud adoption right, you should see your costs start to go down.

https://azure.microsoft.com/en-us/
So your consumption will go up, but your costs will go down, and that’s because you are taking advantage of either platform as a service (PaaS) in the cloud, and being able to auto-scale out, or looking to move to say Kubernetes and start using things like Docker containers and shutting down those big virtual machines (VMs), and clusters of VMs, and then running your Kubernetes services on top of them.

When you see those costs go down and your services going up, that’s usually a good indicator that you are doing it right.

Gardner: Just as a quick aside, Jerry, we have also seen that Microsoft Azure is becoming very container- and Kubernetes-oriented, is that true?

Rhoads: Yes, it is. We actually have Brendan Burns, as a matter of fact, who was one of the co-creators of Kubernetes during his time at Google.

Gardner: Raj, how do you know when you are getting this right? What do you look to as chief metrics from Unisys's perspective when somebody has gone beyond proof of concept and they are really into a maturity model around cloud adoption?

Raman: One of the things we take very seriously is our mandate to customers to do cloud on your terms and do it right. And what we mean by that is something very specific, so I will break it in two.

One is from a customer-led metric perspective. We actually rank ourselves very seriously in terms of Net Promoter Score. We have one of the highest in the industry relative to the rest of our competitions. And that's something that's hard-earned, but we keep striving to raise the bar on how our customers talk to each other and how they feel about us.

The other part is the ability to retain customers, so retention. So those are two very specific customer-focused benchmarks.

Now, building upon some of the examples that Jerry was talking about, from a cloud metric perspective, besides cost and besides cost optimization, we also look at some very specific metrics, such as how many net-net workloads are there under management. What are some of the net new services that are being launched? We especially are quite curious to see if there is a focus in terms of Kubernetes or AI and ML adoption, are there any trends toward that?
We rank ourselves very seriously in terms of Net Promoter Score. We have one of the highest in the industry, but we keep striving to raise the bar on how our customers talk to each other and feel about us.

One of the very interesting ones that I will share, Dana, is that some of our customers are starting to come and ask us, “Can you help set up an Azure Cloud center of excellence within our organization?” So that oftentimes is a good indicator that the customer is looking to transform the business beyond the initial workload movement.

And last, but not the least, is training, and absolute commitment to getting their own organization to become more cloud-native.

Gardner: I will toss another one in, and I know it's hard to get organizations to talk about it, but fewer security breaches, fewer days or instances of downtime because of a ransomware attack. So it's hard to get people to talk about it if you can't always prove when you don’t get attacked, but certainly a better security posture as compared to two years, three years ago would be a high indicator on my map as to whether cloud is being successful for you.

All right, we are almost out of time, so let's look to the future. What comes next when we get to a maturity model, when organizations are comprehensive, standardized around cloud, have skills and culture oriented to the cloud regardless of their past history? We are also of course seeing more use of the data behind the cloud, in operations and using ML and AI to gain AIOps benefits.

Where can we look to even larger improvements when we employ and use all that data that’s now being generated within those cloud services?

Continuous cloud propels the future 

Raman: One of the things that’s very evident to us is, as customers start to come to us and use the cloud at significant scale, is it is very hard for any one organization. Even for Unisys, we see this, which is how do you get scaled up and keep up with the rate of change that the cloud platform vendors such as Azure are bringing to the table; all good innovations, but how do you keep on top of that?

So that’s where a focus on what we are calling as “AI-led operations” is becoming very important for us. It’s about the ability to go and look at the operational data and have these customers go from a reactive, from a hindsight-led model, to a more proactive and a foresight-driven model, which can then guide, not only their cloud operations, but also help them think about where they can now leverage this data and use that Azure infrastructure to then launch more innovation or new business mandates. That’s where the AIOps piece, the AI-led operations piece, of it kicks in.
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There is a reason why cloud is called continuous. You gain the ability to have continuous visibility via compliance or security, to have constant optimization, both in terms of best practices, reviewing the cloud workloads on a constant basis and making sure that their architectures are being assessed for the right way of doing Azure best practices.

And then last, but not the least, one other trend I would surface up, Dana, as a part of this, which is we are starting to see an increase in the level of conversational bots. Many customers are interested in getting to a self-service mode. That’s where we see conversational bots built on Azure or Cortana will become more mainstream.

Gardner: Jerry, how do organizations recognize that the more cloud adoption they have, the more standardization, the more benefits they will get in terms of AIOps and a virtuous adaption pattern kicks in?

Rhoads: To expand on what Raj talked about with AIOps, we actually have built in a lot of AI into our products and services. One of them is with Advanced Threat Protection (ATP) on Azure. Another one is with anti-phishing mechanisms that are deployed in Office 365.

So as more folks move into the cloud, we are seeing a lot of adoption around these products and services, as well as we are also able to bring in a lot of feedback and do a lot of learning off of some of the behaviors that we are seeing to make the products even better.

DevOps integrated in the cloud 

So one of things that I do, in working with my customers is DevOps, how do we employ DevOps in the cloud? So a lot of folks are doing DevOps on-premises and they are doing it from an application point of view. I am rolling out my application on an infrastructure that is either virtualized or physical, sitting in my data center, how do I do that in the cloud, why do I do that in the cloud?

Well, in the cloud everything is software, including infrastructure. Yes, it sits on a server at the end of the day; however, it is software-defined, being it is software-defined, it has an API, I can write code. So therefore if I want to blow out or roll out a suite of VMs or I want to roll out Kubernetes clusters and put my application on top of it, I can create definable, repeatable code, if you will, that I can check into a repository someplace, press the button, and roll out that infrastructure and put my application on top of it.

So now deploying applications, especially with DevOps in the cloud, it's not about I have an operations team and then I have my DevOps team that rolls out the application on top of existing infrastructure. Instead I actually bundle it altogether. I have tighter integration, which means I now have repeatable deployments and I can do my deployments, instead of doing them every quarter or annually, I can do deployments -- I can do 20, 30, 1,000 a day if I like, if I do it right.

Gardner: I’m afraid we will have to leave it there. You have been listening to a sponsored BriefingsDirect discussion on improving the path to rapid and routine cloud computing adoption. And we have learned how an alliance between Unisys and Microsoft combines managed services, security solutions and hybrid cloud standardization to usher both public and private sector organizations to larger business transformation goals.


So please join me in thanking our guests, Raj Raman, CTO for Cloud at Unisys. Thank you, Raj.

Raman: Thank you, Dana.

Gardner: We have also been joined by Jerry Rhoads, Cloud Solutions Architect at Microsoft. Thank you, Jerry

Rhoads: Thank you, Dana.

Gardner: And a big thank you as well to our audience for joining this BriefingsDirect cloud computing adoption methodologies discussion.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Unisys- and Microsoft-sponsored BriefingsDirect discussions.

Thanks again for listening. Please pass this along to your community -- and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Unisys and Microsoft.

A discussion how cloud-native apps and services modernization benefits from prebuilt solutions with embedded best practices and automation to ease cloud adoption. Copyright Interarbor Solutions, LLC, 2005-2019. All rights reserved.

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