Tuesday, August 16, 2011

Interview: Ariba's Jason Kurtz on How IT Financial Trends Are Maturing Technology Procurement and Management Needs

Transcript of a BriefingsDirect Podcast on how trends in IT are reshaping how IT organizations procure, govern and manage their technology and services.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Ariba.

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

Today we present a sponsored podcast discussion on how the priorities and functions of enterprise IT are changing -- and rapidly. A number of trends and advancements are changing the game for IT leaders, especially in terms of how they themselves operate like a business. There's a heightened emphasis on measuring cost, service management, hybrid computing, and outsourcing that leverage software-as-a-service (SaaS) and cloud models.

There's also a recognition that collaboration and coordinated business processes need to expand to far outside the four walls of the company. IT needs then to increasingly support ecosystems and better apply extended enterprise process governance.

This is being required even as costs are still being squeezed and automation applied more deeply across IT operations. The past several years have certainly spurred a changing set of expectations for IT leadership to adjust to.

So how can IT adjust? What must they do differently? We're here now with an executive from Ariba to learn how CIOs are seeing the world anew, and how they can develop better strategies for making IT more central to helping businesses innovate.

Please join me now in welcoming Jason Kurtz, Vice President of Network and Financial Solutions at Ariba. Welcome to the show, Jason.

Jason Kurtz: Thanks, Dana. Great to be here.

Gardner: As I mentioned, there's a shift here that's happening fast. It seems that there's a difference between running IT now and just two or three years ago. Why is that, and what has changed from your perspective?

Kurtz: We've certainly seen several big changes. One is in the resource-constrained world. There are bandwidth constraints to support business innovations.

When I talk to CIOs, one of the biggest issues on their minds is, how do I make sure I am allocating more of my time and efforts in technology that supports business growth and innovation, versus the maintenance of existing systems? That's very different than the focus that you would have had in years past in terms of driving internal automation. That's one big change we've seen.

Two is clearly the adoption of SaaS technologies and the impact that's having on IT organizations. We see it completely changing the way companies think about IT investment, not just capital expenditures versus operating expenditures, but the roles and responsibilities that an IT organization has and how it interacts with its internal customers within the functional parts of the organization.

Three, I think you referenced it a little bit earlier, is not just a maniacal focus on managing costs, but also the adoption and return on investment (ROI) that is generated from IT investments. There's always been a focus on getting a good ROI, but I think it’s a much more significant focus across the organization on doing that, and particularly from an IT organization in terms of making sure that they have the ability to measure that.

Inter-enterprise collaboration

Four was just a focus on inter-enterprise collaboration. Rather than focusing on the internal process efficiency and effectiveness within the four walls of a company, CIOs are starting to realize that the next wave of productivity will be outside their four walls, what some refer to as inter-enterprise collaboration, meaning how an enterprise automates the processes and the way it collaborates with its customers and suppliers throughout the supply chain.

Gardner: I'm really interested about this notion about how IT needs to operate more like a business. It seems as if, in the past, IT had a bit more leverage or freedom to say, "Listen, this is new and fresh and it’s not exactly a science, so tell us what you want, give us some time, and we'll come back."

Now, they're being asked to behave more like logistics or human resources, sort of a mature business function. How do you see that manifesting itself? What is it that IT needs to do in terms of becoming more like some of the other business units, divisions, or functions?

Kurtz: It starts with a really well-defined set of goals and objectives. Why are we going to undertake something, what are we hoping to accomplish with that, and how are we going to measure that? What are the key performance indicators (KPIs) that we'll be able to track success with.

To your point, there were certainly times in the past when everyone was buying into the latest and greatest technology, or something that was new and cutting edge, and wanted to try and experiment with it. Given the economic times over the last several years, the willingness of companies to just experiment and see what happens is dramatically less, and you see IT organizations taking on a much more ROI-driven approach.

Given the economic times over the last several years, the willingness of companies to just experiment and see what happens is dramatically less.



So it's having a very well-defined business case for investments or initiatives that they're taking on, and making sure not only they understand what that business case is, but their internal stakeholders understand what that business case is and are committed to signing off on delivering those resources.

And it's not just an IT approval, but it's a CFO approval in many cases, and they're really holding their internal customers and stakeholders' feet to the fire and measuring on a regular basis what the ROI is for that specific initiative. We've seen a dramatic shift in the governance around that kind of ROI and adoption process with all of the initiatives that we see our customers undertaking, much more so than we would have seen two, three, or five years ago.

Gardner: I've seen where the way that IT is able to cut cost, but also actually increase their influence and impact within the organization, is to identify core-versus-context types of IT activities, and for those non-core ones, look to increasingly outsource or partner.

There's this sort of dual-track where you make yourself more important by being integral to the business success, elevating your role, but at the same time, identifying things that aren't something that you can differentiate from third parties -- more like commodities -- and then looking to get those outside. How do you see that shaping up?

Non-core activities

Kurtz: Again, a trend that fits exactly in line with that is that we see customers taking advantage of the cloud or SaaS, particularly for non-core activities.

Take, for example, integration. Integration is required in today's world, whether you're integrating within your four walls or outside your four walls, but is that really a core competence that you want to have as an organization. Or, do you want to rely on third-party integration as the service solution providers who can usually do the integration work faster, cheaper, and more flexibly? We're seeing that's just one example of ways customers are taking advantage of that.

Also, of course, the solutions that Ariba provides in the spend management space, we're seeing where customers want to focus on the core enterprise resource planning (ERP) capabilities around finance and operations and leverage tools like Ariba's Spend Management Suite to help their organizations buy better and connect with their ERP, but do it in a cloud-type of way.

Gardner: You and I first started chatting about this almost a year ago, when we were in Boston at a conference. We were talking about how the IT function now has to get more into that nuts and bolts of ERP, procurement, and spend management, because it's not just an internal operations function. It's mixing and matching services, deciding what's core and what’s context, doing the upfront analysis, and cost benefits, and deciding what you can outsource, what works better, faster, cheaper, and so forth.

For the benefit of our audience, an IT audience, tell us about Ariba. They might not be that familiar. You guys are very familiar to the folks who are doing procurement and supply chain management functions. Give us the elevator pitch. How does Ariba take what it does and then apply to IT?

That community includes our network that connect buyers and sellers, whether they're collaborating with suppliers, looking for new business opportunities, or helping to manage their working capital.



Kurtz: Ariba, at the highest level, helps companies buy better, sell better, and manage their cash better, and we do that in a couple of ways.

One, by providing technology or applications that have capabilities across each of those functions around buying, selling, and managing cash. Then, we have a community that is part of our Commerce Cloud, as we refer to it. That community includes our network that connect buyers and sellers, whether they're collaborating with suppliers, looking for new business opportunities, or helping to manage their working capital. It's a network that facilitates documents, information, and financial supply chains.

Then, we have a variety of capabilities to help our customers adopt and be successful. Some of that’s delivered by us and some of it by partners who plug into the cloud. At the highest level, that’s a little bit of what we do.

How our IT organization is taking advantage of that I think was your next question. We see a proliferation of organizations taking advantage of the ability to plug into the Ariba Commerce Cloud in different areas.

Some organizations start with our legacy, which is spend management and helping customers buy better, whether that’s identifying savings opportunities, identifying new sources of supply, negotiating better agreements, managing the contracting process, all the way through, procuring solutions, collaborating with your suppliers and receiving invoices back from your suppliers to managing cash, including payment term optimization, invoice reconciliation, and even working-capital management solutions.

Finally, for sellers, it helps create a marketing channel, new business opportunities, improved efficiencies, and collaborating with and transacting with your customers and prospects.

Modular basis

The nice thing about the way Ariba works is that you can plug in and use any of those pieces on a very modular basis as you need them. That’s been particularly attractive to IT organizations for the exact reasons we talked about before, which is looking for very specific ROI and very specific initiatives around their pain and needs within an organization. We've got the flexibility to help solve those on an individual or holistic need.

Gardner: Just to be clear, you guys offer a lot of these services as SaaS or cloud services?

Kurtz: One hundred percent of what we do is offered by the cloud, correct.

Gardner: One of the interesting things about IT that we mentioned is that they're looking to do more with less. They're looking to automate. They're looking to divide core and context and make some good choices on that.

One of the things that I keep coming up against when I talk to folks in IT is that there’s still the manual paperwork at the spreadsheet level, when it comes to managing contracts and licenses and keeping track of use-pattern licensing, and how to charge back for that. It’s a nightmare for them.

Is there anything you guys bring to the table that also gets at this issue about licensing software, managing the lifecycle chargeback, that sort of thing? If not, is that something you plan to do?

Kurtz: We have many customers who use our spend management solutions to manage their IT spend. I think this is really what you are getting at, whether that’s the sourcing and negotiating of hardware or infrastructure or contract labor or software licenses, managing the contracting process and the ongoing contracting lifecycle of that, all the way through the procurement of it and then the relationship management aspects of it. We absolutely support those processes that IT organizations need to manage their cost within their organization.

We see 80 percent of business-to-business transaction still completed completely manually. We see 85 plus percent of invoices and payments still being paper based or people cutting checks.



Gardner: So this is again an instance where IT is sort of catching up to other more mature business units, functions that have been around for decades, if not longer. Having a set of established processes, methodologies, and the system of record to back that up is sort of a no-brainer, but do you still encounter organizations who are doing this with spreadsheets and more manual processing? Is IT really a laggard when it comes to automation at this level?

Kurtz: You would be really surprised how much we see in terms of the world continuing to be a very manual set of processes and capabilities. If you look at it not just within IT, but if you take a step back and look at it on a broader basis, across the market, we see 80 percent of business-to-business transactions still completed completely manually. We see 85-plus percent of invoices and payments still being paper based or people cutting checks.

We see the vast majority of early payment discounts are completely missed. Some estimates indicate that 70-plus percent of all early payment discount opportunities, which procurement and other organizations work so hard to negotiate, get missed. The estimate on what this cost companies around the world is $650 billion in economic impact annually.

The very core of this problem is how an IT organization connects their internal systems, most likely ERP, within an organization to the systems and ERPs of their customers and suppliers to automate that supply chain. That’s where the big automation opportunity, efficiency, and effective gains are, or will be, next is just because the proliferation of all the combinations of systems within your organization, your suppliers, your customers.

Just think about the number of combinations that can be and how it can be very, very challenging and difficult to connect those systems into the optimal or most efficient supply chain.

Supply chain activity

Gardner: We've been describing IT and its relationship to a provider like Ariba through primarily a consumption framework. But it seems to me that there is also the opportunity for IT to take something like the services you offer with your Ariba Discovery and your ability to use the cloud and ecosystem of providers to initiate a process, and then to manage it as a procurement or a supply chain activity.

Couldn’t IT extend that as a service of the services they provide? They had to do this for ERP internally, so why wouldn’t IT want to get involved with partnering in service providers like yourself, and then embedding that more into the organization or extending it across your inter-enterprise and extra-enterprise activities?

Kurtz: It makes all the sense and is really the next evolution of where companies are going for automation benefits. It's what we think about as extending the ERP into inter-enterprise collaboration. That’s where companies like Ariba can really help IT organizations.

There are some great examples of customers out there who are doing that. If you think about it on the buying side of the world, take a company like Nalco, which is the largest sustainability company in the world. They had really struggled with lack of automation around purchase orders with their customers and then the purchase orders being delivered to their suppliers from Nalco.

They were literally losing five percent of their orders that they just couldn’t track being delivered from their organizations to their suppliers. These lost and delayed orders meant that they couldn’t bill customers in a timely manner. It meant lost sales. It meant extending "days sales outstanding" and significant customer satisfaction issues.

By leveraging Ariba Solution and the Ariba Network they were able to collaborate with suppliers and customers to significantly improve their customer satisfaction.



A team of people were having to call and check on order status and invoice processing payments and payment status, a completely inefficient processes between Nalco's customers, and its supplier partners.

By leveraging Ariba Solution and the Ariba Network they were able to collaborate with suppliers and customers to significantly improve their customer satisfaction, reduce "days sales outstanding," and cut headcount that were very involved in working on things that could be easily automated.

Gardner: It seems that IT can have a role as a service broker or service manager increasingly into procurement supply chain extended enterprise commerce activities by supporting an outsourced or hybrid approach, melding in a sense their past practices with new ones and then segueing over time into more of a cloud approach. It seems like that’s sort of a no-brainer from my perspective.

Do you have any examples of organizations that are doing that, specifically IT organizations? I know sometimes you can name companies and many times you can't, but at least can you point some examples of a use case scenario where IT is not only taking something like the Ariba Network and their processes and services, applying it to how they do IT procurement, but also extending their value as a service broker to other aspects of the business?

Kurtz: Let’s take an example from the side of the business everyone gets most excited about, the revenue growth or sell side of the house. Fastenal is a great example, where an IT organization helps extend the services it provides internally to its customers externally to Fastenal’s customers by leveraging eCommerce and the Ariba Network to connect and collaborate with its customers.

Real-time acknowledgments

O
ne of the benefits of the extension that Fastenal has done is the ability to collaborate with its customers to provide real-time purchase order and delivery acknowledgements, which have greatly improved customer satisfaction. It has reduced their purchase order error rates by over 80 percent, and it reduced "days sales outstanding" by over 70 percent, a significant working capital improvement.

Other companies are doing the same kind of thing as Fastenal and receiving really good revenue growth or new business opportunities as well. It is not uncommon to see companies like Fastenal finding 50 percent-plus increases in product line cross-sells and up-sells, and seeing even 20 percent plus year-over-year sales growth within existing customers. Then, we have solutions like Ariba Discovery even finding new business in customers that they have never done any business with before.

That’s just an example on the sell side of the house of how IT organizations are extending and can extend the service that they are providing.

Gardner: I think we can expect to see more organizations looking to cloud and SaaS services for these types of procurement, extended supply chain, and commerce activities. This is bound to be coming into IT more and more. IT might as well get out in front of it.

From where I'm sitting, it also helps them with some of these larger issues we talked about, which is to help them run more like a business, reduce their costs, and focus more on the areas where innovation is going to be part and parcel of their relationship at the high level with their business leaders. It makes a great deal of sense.

About 50-60 percent of companies who are moving to a SaaS environment or the cloud are doing it because of the cost reduction opportunities inherent in not having to deploy, manage, and support applications.



How about looking at IT transformation? When we think about solidifying data centers, reducing the number of applications, this also gets at the heart of that. They don’t have to be building applications, supporting the infrastructure for these types of apps that are internal. Any thoughts about another layer, another dimension, of cost reduction, because we're taking a whole set of applications out of IT's responsibility?

Kurtz: Absolutely. We're seeing all customers take advantage of this opportunity, and particularly they look to the cloud or SaaS solutions like Ariba. About 50-60 percent of companies who are moving to a SaaS environment or the cloud are doing it because of the cost reduction opportunities inherent in not having to deploy, manage, and support applications.

Not only do they get the cost benefits of that, but they typically have time-to-deployment benefits and less time-to-realize-value and flexibility benefits that they didn’t have due to resource constraints within an organization. That's a very common trend in the market, and specifically within Ariba’s customers, and we expect to see that trend continue.

Gardner: I'm afraid we are about out of time. We've been discussing how CIOs can develop new strategies for making IT even more central to how businesses thrive and innovate and leveraging SaaS and cloud models and looking to have a better handle on measuring costs, service management, and then looking at how Ariba can bring the whole supply chain procurement and spend management, process management to that problem set as well.

Any last thoughts, Jason, on how your set of values have a relationship to IT? I think it’s kind of perhaps an eye opener for folks to think this way, but to me it makes a lot of sense.

Kurtz: A couple of thoughts. One, the most important thing to keep in mind is that at Ariba we really view our goal, our mission in life, is to help extend or complement the ERP investments that many IT organizations have made. We help extend those outside the enterprise and the enterprise collaboration, whether that’s buying, selling, or managing their cash.

You mentioned a few examples of spend management, but also it’s about helping companies sell better, drive revenue growth, and manage their cash better by automating functions like accounts payable and providing benefits to accounts receivable on the sell side.

If you look at it in those terms, we help companies free up their limited IT resources to focus on innovation, not supporting applications or integration or customization, and focus on driving business adoption and leveraging the core internal capabilities of ERP.

Gardner: I would like to thank our guest for his time. We've been here with Jason Kurtz, Vice President of Network and Financial Solutions at Ariba. Thanks Jason.

Kurtz: Thank you, Dana. I appreciate the time.

Gardner: And thanks to our listeners for joining this sponsored podcast discussion. This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Ariba.

Transcript of a BriefingsDirect Podcast on how trends in IT are reshaping how IT organizations procure, govern and manage their technology and services. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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Friday, August 05, 2011

Architect Certification Increasingly Impacts Professionalization of IT in Cloud Era

Transcript of a BriefingsDirect podcast from The Open Group Conference in Austin on how certification programs are aiding IT professionals as well as companies.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.

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

Today, we present a sponsored podcast discussion in conjunction with The Open Group Conference in Austin, Texas, the week of July 18, 2011.

We've assembled a panel to update us on the impact and role of certifications for IT professionals. We'll examine how certification for enterprise architects, business architects, and such industry initiatives as ArchiMate are proving instrumental as IT organizations seek to reinvent themselves.

There are now a lot of shifts in skills and a lot of movement about how organizations should properly staff themselves. There have been cost pressures and certification issues for regulation and the adoption of new technologies. We're going to look at how all these are impacting the role of certification out in the field.

Here to help us better understand how an organization like The Open Group is alleviating the impact and importance of finding IT skills -- and heightened role of certification amid churning change in IT organizations -- is Steve Philp, Marketing Director for Professional Certification at The Open Group. Welcome, Steve.

Steve Philp: Thank you.

Gardner: We are also here with Andrew Josey, Director of Standards at The Open Group. Welcome, Andrew.

The primary driver here that we're hearing from members and customers is that they need to get more out of the investments that they're making.



Andrew Josey: Thank you, Dana.

Gardner: And we're here with James de Raeve, Vice President of Certification at The Open Group. Hello, James.

James de Raeve: Thanks, Dana.

Gardner: Let’s start with you, James. As I said, we're seeing a lot of change about many things in IT, but certainly how to properly staff, especially as you start to consider outsourcing options and cloud and software-as-a-service (SaaS) options. Organizations are also looking at consolidation around their applications and infrastructure. So there's quite a bit of change. Naturally, the people in the "people, processes, and technology" spectrum need to be addressed.

From your perspective, why is there the need for more professionalization, and what are the trends that are driving the need to reexamine IT leadership staffing?

de Raeve: The primary driver here that we're hearing from members and customers is that they need to get more out of the investments that they're making -- their payroll for their IT staff. They need to get more productivity. And that has a number of consequences.

Realizing talent

They want to ensure that the people they are employing and that they're staffing their teams with are effective. They want to be sure that they're not bringing in external experts when they don’t need to. So there is a need to realize the talent that they've actually got in their internal IT community and to develop that talent, nurture it, and exploit it for the benefit of the organization.

And professionalism, professionalization, and profession frameworks are all tools that can be used in identifying, measuring, and developing the talents and capabilities of your people. That seems to be the major driver.

Gardner: Steve, any further thoughts on the trends that are driving certification and professionalization issues?

Philp: Something I have noticed since joining The Open Group is that we’ve got some skills and experience-based certifications. They seem to be the things that people are particularly interested in, because it’s not just a test of your knowledge about a particular vendor or product, but how you have applied your skills and experience out there in the marketplace. They have proven to be very successful in helping people assess where they are and in working towards developing a career path.

That’s one of the areas of certification that things are going to move more towards -- more skills and experience-based certification programs in organizations.

Gardner: Where are we seeing this most in demand? Are there particular types of technology certification or professional role certification that are in the most demand? Where is this the most hot or impactful right now?

Philp: Looking at certification in general, you still have areas like Microsoft MCSE, Microsoft technical specialist, application development, and project management that are in demand, and things like CCNA from Cisco. But I've also noticed a lot more in the security field. CISSP and CCSA seem to be the ones that are always getting a lot of attention. In terms of security, the trends in mobile computing, cloud computing, means that security certification is a big growth area.

There is a need for people too in the building of teams and in the delivering of results to nurture and grow their people to be team players and team participants.



We're just about to put a security track into our Certified IT Specialist Program at The Open Group, so there will be a skills and experience-based track for security practitioners soon.

Gardner: James, of course we should point out for our listeners that we're not just talking about certification from vendors and suppliers about the specific products and/or platforms, but we're really looking at a skill and roles based approach. Maybe you could help us distinguish between the two and why it’s important to do so?

de Raeve: The difference, as Steve alluded to, is that there is a whole world out there of technology and product-related certifications that are fulfilling a very important function in helping people establish and demonstrate their knowledge of those particular products and technologies.

But there is a need for people too in the building of teams and in the delivering of results to nurture and grow their people to be team players and team participants and to be able to work with them to function within the organization as, for want of a better term, "t-shaped people," where there are a number of soft and people-related skills and potentially architecture related skills for the IT specialists, and skills and capabilities enable people to be rounded professionals within an organization.

T-shaped people

It’s that aspect that differentiates the professionalization and the profession-oriented certification programs that we're operating here at The Open Group -- The Open Certified Architect, The Open Certified IT Specialist. Those are t-shaped people and we think that makes a huge difference. It’s what’s going to enable organizations to be more effective by developing their people to have that more rounded t-shaped capability.

Gardner: Andrew, with the emphasis on standards and your role there, how does the impact of certification on the ability to adhere to and exploit standards come together? What’s the relationship between making sure you have standardization around your people and their skill sets, but also being able to exploit standardization and even more automation across your organization?

Josey: We see the certification as being the ultimate drive in the uptake of the standards, and so we're able to go from not just having a standard on the shelf to actually seeing it being deployed in the field and used. We've actually got some people certification programs, such as TOGAF, and we've got some over 20,000 practitioners now.

We've gone through the certification program and we've been using and evangelizing, TOGAF as a standard in the field and then feeding that back to our members and, through the association, the feedback improvements to the standards. So it’s very much part of the end-to-end ecosystem -- developing a standard for deploying it, and getting people on it, and then getting the feedback in the right way.

Gardner: I suppose that as organizations want to create a level playing field, we're starting to see calls for this type of certification in requests for proposal (RFPs) around projects. For folks on the buy side who are seeking either people or the suppliers themselves, a supply chain and ecosystem of providers, how much is certification playing a role and how they can pick and choose among each other with some sense of trust and reliability?

You find that things like TOGAF will appear in most recruitment ads for architects.



Philp: It’s very much an important part of the process now. TOGAF and IT Architect Certification (ITAC) have appeared in a number of RFPs for government and for major manufacturing organizations. So it’s important that the suppliers and the buyers recognize these programs.

Similarly with recruitment, you find that things like TOGAF will appear in most recruitment ads for architects. Certainly, people want knowledge of it, but more and more you’ll see TOGAF certification is required as well.

ITAC, which is now Open CA, has also appeared in a number of recruitment ads for members like Logica, Capgemini, Shell. More recently, organizations like the CBS, EADS, ADGA Group, Direct Energy have requested it. And the list goes on. It’s a measure of how important the awareness is for these certifications and that’s something we will continue to drive at The Open Group.

Gardner: All right, Steve, thanks for that. As you mentioned, there have been some changes in terms of the branding around some of these. Let’s take a quick review if we could around what’s being happening at the Austin Conference, but also what’s new and what’s been going on with the branding. Let’s look at the TOGAF, ArchiMate, and business architecture certifications. What's new and interesting there?

In development

Josey: I am speaking up on what we are doing in ArchiMate first, before I talk about TOGAF, and then Steve will tell us what the Business Forum is up to. ArchiMate certification is something new that we’re developing right now. We haven’t deployed a certification program as yet. The previous certification program was under the ArchiMate Foundation, which was the body that developed ArchiMate, before it transferred into The Open Group.

We’re currently working on the new program which will be similar to some aspects of our TOGAF program, and it’ll be knowledge base certification with an assessment by exam and a practical assessment in which the candidate can actually do modeling. So this will be people certification and there will also be accredited training course certification.

And then also what we're going to do there is actually to provide certification for tools. There will be certifications there.

That’s pretty much what we’re doing in ArchiMate, so we don’t have a firm timeline. So it will not be available it looks like, probably towards the end of the year would be the earliest, but possibly early next year.

Gardner: Knowing that we reach a wide audience, could you give a quick overview of what ArchiMate is for those who might not be familiar.

We’ve gone through 8,000 certifications. We've seen that two-thirds of those were at the higher level.



Josey: ArchiMate is a modeling language for enterprise architecture (EA) in general and specifically it’s a good fit for TOGAF. It’s a way of communicating and developing models for TOGAF EA. Originally it was developed by the Telematica Instituut and funded, I think, by the EU and a number of commercial companies in the Netherlands. It was actually brought into The Open Group in 2008 by the ArchiMate Foundation and is now managed by the ArchiMate Forum within The Open Group.

Gardner: Now we’re going to hear an update on TOGAF.

Josey: The latest version of TOGAF is TOGAF 9 for certification. As we mentioned earlier, there are two types of certification programs, skills and knowledge based. TOGAF falls into the knowledge based camp. We have two levels. TOGAF 9 Foundation, which is our level one, is for individuals to assess that they know the terminology and basic concepts of EA in TOGAF.

Level two, which is a superset of level one, in addition assesses analysis and comprehension. The idea is that some people who are interested in just getting familiar with TOGAF and those people who work around enterprise architects can go into TOGAF Foundation. And these enterprise architects themselves should initially start with the TOGAF Certified, the level two, and then perhaps move on later to Open CA. That will be helpful.

For TOGAF 9 Certification, we introduced that by midyear 2009. We launched TOGAF 9 in February, and it took a couple of months to just roll out all these certifications through all the exam channels.

Since then, we’ve gone through 8,000 certifications. We've seen that two-thirds of those were at the higher level, level two, for EA practitioners and one-third of those are currently at the foundation level.

Gardner: And lastly, business architecture?

A new area

Philp: Business architecture, is a new area that we've been working on. Let me just to go back to what we did on the branding, because it ties in with that. We launched The Open Group’s new website recently and we used that as the opportunity to re-brand ITAC as The Open Group Certified Architect (Open CA) program. The IT Specialist Certification (ITSC) has now become The Open Group Certified IT Specialist or Open CITS Program.

We did the rebranding at that time, because we wanted to be it associated with the word “open.” We wanted to give the skills and experience-based certification a closer linkage to The Open Group. That’s why we changed from ITAC to Open CA. But, we’ve not changed the actual program itself. Candidates still have to create a certification package and be interviewed by three board members, and there are still three levels of certification: Certified, Master, and Distinguished.

However, what we’re intending to do is have some core requirements that architects need to meet, and then add some specific specializations for different types of architects. The one that we’ve been working on the most recently is the Business Architecture Certification. This came about from an initiative about 18 months ago.

We formed something called the Business Forum with a number of platinum members who got involved with it --companies like IBM, HP, SAP, Oracle and Capgemini. We’ve been defining the conformance requirements for the business architecture certification. It's going through the development process and hopefully will be launched sometime later this year or early next year.

Gardner: I'm interested in how this is making a difference in the field. There's a lot of change going on this consolidation. There's re-factoring of what's core and what's context in what IT department should focus on and, therefore, what their skill sets need to be. They’re adopting new technologies. I wonder if you have any examples of where we’ve seen certification come to play when an organization is looking to change its workforce. Any thoughts about some organizations and what the impact has been?

“For the first time we feel like management is paying attention to us.”



de Raeve: There's a very good example of an organization that had exactly that problem, and they’ve done a presentation about this in one of our conferences. It's Philips, and they used to have an IT workforce that was divided among the business units. The different businesses had their own IT function.

They changed that and went to a single IT function across the organization, providing services to the businesses. In doing so, they needed to rationalize things like grades, titles, job descriptions, and they were looking around for a framework within which they could do this and they evaluated a number of them.

They were working with a partner who wass helping them do this. The partner was an Open Group member and suggested they look at the Open Group’s IT Specialist Certification, the CITS Certification Program, as it provides a set of definitions for the capabilities and skills required for IT professionals. They picked it up and used it, because it covered the areas they were interested in.

This was sufficient and complete enough to be useful to them, and it was vendor neutral, and an industry best practice. So they could pick this up and use it with confidence. And that has been very successful. They initially benchmarked their entire 900 strong IT workforce against The Open Group definition, so they could get to calibrate themselves, where their people were on their journey through development as professionals.

It’s had a very significant impact in terms of not only enabling them to get a handle upon their people, but also in terms of their employee engagement.



They’ve started to embrace the certification programs as a method of not only measuring their people, but also rewarding them. It’s had a very significant impact in terms of not only enabling them to get a handle upon their people, but also in terms of their employee engagement. In the engagement surveys that they do with their staff, some of the comments they got back after they started doing this process were, “For the first time we feel like management is paying attention to us.”

It was very positive feedback, and the net result is that they are well on their way to meeting their goal of no longer having automatically to bring in an external service provider whenever they were dealing with a new project or a new topic. They know that they’ve got people with sufficient expertise in-house on their own payroll now. They've been able to recognize that capability, and the use of it has had a very positive effect. So it’s a very strong good story.

I think that the slides will be available to our members in the conference’s proceedings from the London conference in April. That will be worth something to look at.

Gardner: Where would you go for more information, if you were a practitioner, a budding enterprise architect and you wanted to certify yourself and/or if you were in an organization trying to determine more precisely what certification would mean to you as you're trying to reengineer, modernize and right-size your organization? Where do you go for more information?

Philp: If you go to the Open Group website, www.opengroup.org/certifications, all of the people based certifications are there, along with the benefits for individuals, benefits for organizations and various links to the appropriate literature. There’s also a lot of other useful things, like self-assessment tests, previous webinars, sample packages, etc. That will give you more of an idea of what’s required for certification along with the conformance requirements and other program documentation. There’s a lot of useful information on the website.

Gardner: Very good. We’ve been discussing how the role and impact of IT Certification is growing and some of the reasons for that. We’ve also looked at how organizations like The Open Group are elevating the role of certification and providing means to attain it and measure it the standard.

I’d like to thank our guests for delivering this sponsored podcast discussion in conjunction with The Open Group Conference in Austin, Texas, the week of July 18, 2011 We’ve been joined by our panel, Steve Philp, he is the Marketing Director for Professional Certification at the Open Group. Thank you, Steve.

Philp: Thank you, Dana.

Gardner: And we are also have been joined by by Andrew Josey, Director of Standards at The Open Group. Thank you, Andrew.

Josey: Thank you, Dana.

Gardner: And lastly, James de Raeve, he is the Vice President of Certification, once again at The Open Group. Thanks James.

de Raeve: Thank you, Dana, and thanks to everyone who has listened.

Gardner: Right. This is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks for listening and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: The Open Group.

Transcript of a BriefingsDirect podcast from The Open Group Conference in Austin on how certification programs are aiding IT professionals as well as companies. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

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Wednesday, August 03, 2011

Case Study: MSP InTechnology Improves Network Services Via Automation and Consolidation of Management Systems

Transcript of a BriefingsDirect podcast discussion on how InTechnology uses network management automation to improve delivery and service performance for network and communications services.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.

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

Today, we present a sponsored podcast discussion on a UK-based managed service provider’s journey to provide better information and services for its network, voice, VoIP, data, and storage customers. Their benefits have come from an alignment of many service management products into an automated lifecycle approach to overall network operations.

We'll hear how InTechnology has implemented a coordinated, end-to-end solution using HP solutions that actually determine the health of its networks by aligning their tools to ITIL methods. And, by using their system-of-record approach with a configuration management database, InTechnology is better serving its customers with lean resources by leveraging systems over manual processes. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

We're here with an operations manager from InTechnology to learn about their choices and outcomes when it comes to better operations and better service for their hundreds of enterprise customers.

Please join me now in welcoming Ed Jackson, Operational System Support Manager at InTechnology. Welcome, Ed.

Ed Jackson: Thanks. Hi.

Gardner: Your organization is a managed service provider (MSP) for both large enterprises and small to medium-sized companies, and you've been facing an awful lot of growth over the past several years. But you have also been dealing with heterogeneity in terms of many different products in place for network operations. It sounds like you've tried to tackle two major things at once: growth and complexity. How has that worked out?

Jackson: In terms of our network growth, we've basically been growing exponentially year over year. In the past four years, we've grown our network about 75 percent. In terms of our product set, we've basically tripled that in size, which obviously leads to major complexity on both our network and how we manage the product lifecycle.

Previously, we didn’t have anything that could scale as well as the systems that we have in place now. We couldn’t hope to manage 8,000 or 9,000 network devices, plus being able to deliver a product lifecycle, from provisioning to decommission, which is what we have now.

Gardner: So our audience better understands the hurdles and challenges you've faced, you're providing voice, both VoIP and traditional telephone, and telephony services. You have data, managed Microsoft Exchange, managed servers, and virtual hosting. You're providing storage, backup and restore, and of course a variety of network services. So this is a really full set of different services and a whole lot of infrastructure to support that.

Jackson: Yeah. It's pretty massive in terms of the technologies involved. A lot of them are cutting-edge. We have many partners. And you are right, our suite of cloud services is very diverse and comprises what we believe is the UK’s most complete and "joined-up"set of pay-monthly voice and data services.

Their own pace

In practice what we aim to do is help our customers engage with the cloud at a pace that works for them. First, we provide connectivity to our nationwide network ring – our cloud. Once their estate is connected they can then cherry pick services from our broad pay-as-you-go (PAYG) menu.

For example, they might be considering replacing their traditional "tin" PBXs with hosted IP telephony. We can do that and demonstrate massive savings. Next we might overlay our hosted unified communications (UC) suite providing benefits such as "screen sharing," "video calling," and "click-to-dial." Again, we can demonstrate huge savings on planes, trains and automobiles.

Next we might overlay our exciting new hosted call recording package -- Unity Call Recording (UC) -- which is perfect if they are in a regulated industry and have a legal requirement to record calls. It’s got some really neat features including the ability to tag and bookmark calls to help easy searching and playback.

While we're doing this, we might also explore the data path. For example our new FlexiStor service provides what we think is the UK’s most straightforward PAYG service designed to manage data by its business "value" and not just as one big homogenous lump of data.

It treats data as critical, important or legacy and applies an appropriate storage process to each ... saving up to 40 percent against traditional data management methods. There’s much more of course, but that gives you a flavor, I hope.

Due to the HP product set that we have, we've been able to utilize all the integrations and have a fully managed, end-to-end lifecycle of the service.



Imagine trying to manage this disparate set of systems. It would be pretty impossible. But due to the HP product set that we have, we've been able to utilize all the integrations and have a fully managed, end-to-end lifecycle of the service, the devices, and the product sets that we have as a company.

Gardner: I have to imagine too that customer service and support is a huge part of what you do, day in and day out. You also have had to manage the help desk and provide automated alerts, fixes, and notifications, so that the manual help desk, which is of course quite costly, doesn’t overwhelm you. Can you address what you've attempted to do and what you have managed to do when it comes to automated support?

Jackson: In terms of our service and support, we've basically grown the network massively, but we haven’t increased any headcount for managing the network. Our 24/7 guys are the same as they were four or five years ago in terms of headcount.

We get on average around 5,000 incidents a month automatically generated from our systems and network devices. Of these incidents, only about 560 are linked to customer facing Interactions using our Service Desk Module in the Service Manager application.

Approximately 80 percent of our total incidents are generated automatically. They are either proactively raised, based on things like CPU and memory of network devices or virtual devices or even physical servers in our data centers, or reactively raised based on for example device or interface downs.

Massive burden

When you've got like 80 percent of all incidents raised automatically, it takes a massive burden off the 24/7 teams and the customer support guys, who are not spending the majority of their time creating incidents but actually working to resolve them.

Gardner: Let's back it up. Five years ago, when you didn't have any integrated systems and you were dealing with lots of data, perhaps spurious data, what did you think? I know that you're an ITIL shop and so you had to bring in that service management mindset, but what did you do in order to bring these products together or even add more products, but without them being also unwieldy in terms of management?

Jackson: It was spurred by really bad data that we had in the systems. We couldn't effectively go forward. We couldn't scale anymore. So, we got the guys at HP to come in and design us a solution based on products that we already had, but with full integration, and add in additional products such as HP Asset Manager and device Discovery and Dependency Mapping Inventory (DDMI).

With the systems that we already had in place, we utilized mainly HP Service Desk. So we decided to take the bold leap to go to Service Manager, which then gave us the ability to integrate it fully into the Operations Manager product and our Network Node Manager product.

Since we had the initial integrations, we've added extra integrations like Universal Configuration Management Database (UCMDB), which gives us a massive overview on how the network is progressing and how it's developing. Coupled with this, we've got Release Control, and we've just upgraded to the latest version of Service Manager 9.2.

For any auditor that comes in, we have a documented set of reports that we can give them. That will hopefully help us get this compliance and maintain it.



So it has given us a huge benefit in terms of process control, how ITIL is related. More importantly, one of the main things that we are going for at the moment is payment card industry (PCI) and ISO 27001 compliance.

For any auditor that comes in, we have a documented set of reports that we can give them. That will hopefully help us get this compliance and maintain it. One of the things as an MSP is that we can be compliant for the customer. The customer can have the infrastructure outsourced to us with the compliance policy in that. We can take the headache of compliance away from our customers.

Gardner: Having that full view and the ability to manage also discreetly is not only good business, but it sounds like it's an essential ingredient for the way in which you go to market?

Jackson: More and more these days, we have a lot of solicitors and law firms on our books, and we're getting "are you compliant" as a request before they place business with us. We're finding all across the industry that compliance is a must before any contract is won. So to keep one step ahead of the game, this is something that we're going to have to achieve and maintain, and the HP product set that we have is key in that.

Gardner: I suppose too that a data flow application like Connect-It 4.1 provides an opportunity to not only pull together disparate products and give that holistic view, but also provides that validation for any audits or compliance issues?

Recently upgraded

Jackson: We recently upgraded Connect-It from 4.1 to 9.3, and with that, we upgraded Asset Manager System to 9.3. Connect-It is the glue that holds everything together. It's a fantastic application that you can throw pretty much any data at, from a CSV file, to another database, to web services, to emails, and it will formulate it for you. You can do some complex integrations in that. It will give you the data that you want on the other side and it cleanses and parses, so that you can pass it on to other systems.

From our DDMI system, right through to our Service Manager, then into our Network Node Manager, we now have a full set of solutions that are held together by Connect-It.

We can discover the device on the network. We can then propagate it into Service Manager. We can add lots of financial details to it from other financial systems outside of the HP product set, but which are easy to integrate. We can therefore provision the circuit and provision the device and add to monitoring automatically, without any human intervention, just by the fact that the device gets shipped to the site.

It gets loaded up with the configuration, and then it's good to go. It's automatically managed right through to the decommissioning stage, or the upgrade stage, where it's replaced by another device. HP systems give us that capability.

Gardner: So these capabilities really do allow you to take on a whole new level of business and service. It sounds like the maintenance of the network, the integrity, and then the automation really helps you go to market in a whole new way than you could have just several years ago.

I don’t know of many other MSPs that have such an automated set of technology tools to help them manage the service that they provide to their customers.



Jackson: Definitely. One of the key benefits is it gives us a unique calling card for our potential customers. I don’t know of many other MSPs that have such an automated set of technology tools to help them manage the service that they provide to their customers.

Five years ago, this wasn't possible. We had disparate systems and duplicate data held in multiple areas So it wasn’t possible to have the integration and the level of support that we give our customers now for the new systems and services that we provide.

Gardner: Of course, HP has been engineering more integration into its product and you have been aggressive in adopting some of the newer versions, which is an important element of that, but I have to imagine that there is also a systems integrations function here or professional services. Have you employed any professional services or relied on HP for that?

Jackson: When we originally decided to take the step to upgrade from Service Desk to Service Manager and to get the network discovery product set in, we used HP’s Professional Services to effectively design the solution and help us implement it.

Within six months, we had Service Desk upgraded to Service Manager. We had an asset manager system that was fully integrated with our financials, our stock control. And we also had a Network Discovery toolset that was inventorying our estate. So we had a fully end-to-end solution.

Automatic incidents

I
nto that, we have helped to develop the Network Operations Management Solution into being able to generate automatic incidents. HP PS services provided a pivotal role in providing us with the kind of solutions that we have now.

Since then, we took that further, because we have very good in-house knowledgeable guys that really understand the HP systems and services. So we've taken it bit of a step further, and most of the stuff that we do now in terms of upgrades and things are done in-house.

Gardner: It's a very compelling story. I wonder if we have more than just the show-and-tell here. Do we have any metrics of success? Have you been able to point to faster time to resolution, maintaining service-level agreements (SLAs), or something along those lines, that we could help people appreciate what this does, not only functionally in terms of bringing new services to your customers, but also in terms of how you operate and some important metrics that affect your bottom line?

Jackson: Mean time to restore has come down significantly, by way over 15 percent. As I said, there has been zero increase in headcount over our systems and services. We started off with a few thousand network devices and only three or four different products, in data, storage, networks and voice. Now we've got 16 different kinds of product sets, with about 8,000, 9,000 network devices.

In terms of cost saving, and increased productivity, this has been huge. Our 24/7 teams and customer support teams are more proactive in using knowledge bases and Level 1 triage. Resolution of incidents has gone up by 25 percent by customer support teams and level 1 engineers; this enables the level 3 engineers to concentrate on more complex issues.


In terms of SLAs, we manage the availability of network devices. It gives us a lot more flexibility in how we give these availability metrics to the customers.



If you take a Priority 3, Priority 4 incident70 percent of those are now fixed by Level 1 engineers, which was unheard of five or six years ago. Also, we now have a very good knowledge base in the Service Manager tool that we can use for our Level 1 engineers.

In terms of SLAs, we manage the availability of network devices. It gives us a lot more flexibility in how we give these availability metrics to the customers. Because we're business driven by other third party suppliers, we can maintain and get service credits from them. We've also got a fully documented incident lifecycle. We can tell when the downtime has been on these services, and give our suppliers a bit of an ear bashing about it, because we have this information to hand them. We didn’t have that five or six years ago.

Gardner: So, by having event correlation and data to back up your assertions there's much less finger pointing. You know exactly who had dropped the ball.

Jackson: Exactly. With event correlation, we reduced our operations browsers down to just meaningful incidents, we filtered our events from over 100,000 a month to less than 20,000 many of these are duplicated and are correlated together. Most events are associated with knowledge base articles in Service Manager and contain instructions to escalate or how to resolve the event, increasingly by a level 1 engineer.

We can also run automatic actions from these events, and we can send the information to the relevant parties, and also raise an incident and send it directly to the correct assignment groups or teams that are involved in looking after that.

Internal SLA

For Priority 1 incidents, which by an internal SLA we have 15 minutes to communicate to the customer, we can do that now within two minutes, because the group that’s been assigned the incident are on the ball straight away and they can contact the customer and let them know of the potential or actual problem.

Contacting customers within agreed SLAs and how we can drive our suppliers to provide better service is fantastic because of the information that is available in the systems now. It gives us a lot more heads up on what’s happening around the network.

Gardner: And now that you have had this in place, this integrated lifecycle, end-to-end approach, you've got your UCMDB, is there now, in hindsight, an opportunity to do some analytics, perhaps even refine what you requirements are, and therefore cut your total cost at some level?

Jackson: We're building a lot of information, taken from our financial systems and placing it into our UCMDB and CMDB databases to give us the breakdown of cost per device, cost per month, because now this information is available.

We have a couple of data centers. One of our biggest costs is power usage. Now, we can break down by use of collecting the power information, using NNMi -- how much our power is costing per rack by terms of how many amps have been used over a set period of time, say a week or a month. where previously we had no way of determining how our power usage was being spent or how much was actually costing us per rack or per unit.

From this performance information, we can also give our customers extra value reports and statistics that we can charge as a value added managed solution for them.



It's given us a massive information boost, and we can really utilize the information, especially in UCMDB, and because it’s so flexible, we can tailor it to do pretty much whatever we want. From this performance information, we can also give our customers extra value reports and statistics that we can charge as a value added managed solution for them.

Gardner: For the benefit of our listeners, now that you've gone through this process, are there any lessons learned, anything you could relay in terms of, "If I had to do this again, I might do blank?" What would you offer to those who would now be testing the waters and embarking on such a journey?

Jackson: One of the main things is to have a clear goal in mind before you start. Plan everything, get it all written down, and have the processes looked at before you start implementing this, because it’s fairly hard to re-engineer if you decided that one of the actual solutions or one of the processes that you have implemented isn’t going to work. Because of the integration of all the systems, you might tend to find that reverse engineering them is a difficult task.

As a company, we decided to go for a clean start and basically said we'd filter all the data, take the data that we actually really required, and start off from scratch. We found that doing it that way, we didn’t get any bad data in there. All the data that we have now is pretty much been cleansed and enriched by the information that we can get from our automated systems, but also by utilizing the extra data that people have put in.

Gardner: Thanks so much. You've been listening now to a sponsored podcast discussion on a UK-based managed service provider, InTechnology, and their journey to provide better information and services for their voice, data, and storage customers. They've employed an automated lifecycle approach and it has benefited them in a number of levels.

Thanks to Ed Jackson, the Operational System Support Manager at InTechnology. Ed, we really appreciated your input.

Jackson: Okay. No problem.

Gardner: And this is Dana Gardner, Principal Analyst at Interarbor Solutions. Thanks to our audience, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect podcast discussion on how InTechnology uses network management automation to improve delivery and service performance for network and communications services. Copyright Interarbor Solutions, LLC, 2005-2011. All rights reserved.

You may also be interested in: