Tag Archives: procurement

Cloud And Big Data Drive BPO Benefits

1 Reply

Cloud computing and business analytics are set to inject new life into the business process outsourcing (BPO) sector through reduced upfront costs and better use of the data.

IT-enabled BPO is big business, but IT’s role is largely as an enabler of efficiencies. The IT infrastructures that support BPO can be fine-tuned to cut costs, but the best-performing BPO deals are using IT to innovate.

Recent research from Accenture revealed that only 20% of BPO projects “are delivering sufficient business value to be classified as high performance”. The findings from the research, which was completed in conjunction with the Everest Group and the London School of Economics, also revealed the changing role of technology in BPO.

The survey questioned 263 buyers of a range of BPO services such as finance and accounting, procurement, human resources, and supply chain.

The report also validates eight best-in-class practices that are strongly correlated with high-performing engagements. These include using technology as a tool for innovation rather than just the infrastructure.

Anoop Sagoo, products industry BPO lead at Accenture, said cloud computing and data analytics are two technology areas that are currently offering businesses the opportunity to get more out of BPO.

He said software-as-a-service (SaaS) means businesses can introduce the applications used in BPO agreements without the need for large upfront payments: “Best-of-breed technology is now readily available and easy to apply.”

Sagoo added that the early parts of BPO agreements are usually loaded with costs associated with technology.

In the past, a business would have to buy licenses and install heavy-duty business applications as part of a BPO deal, but today they can sign up to cloud-based services and easily scale up and down the number of users. “It allows you to set up and run technology with a different total cost of ownership [TCO] model.”

Technology is also providing increased value from BPO relationships. The use of the latest business analytics software enables businesses to get more from the data being handled within BPO relationships. “Analytics is the big focus on technology in BPO at the moment,” said Sagoo.

Mark Lewis, head of outsourcing at law firm Berwin Leighton Paisner, said if the cloud is to offer massive BPO savings through platform-as-a-service (PaaS), BPO suppliers need to invest in cloud platforms.

“Otherwise it is the public cloud route you have to go down. If you use a private cloud, with visualization behind your firewall, you still need to buy licenses,” he said. “It would be interesting to see how many Fortune 500 companies are willing to move all or some of their processes to the public cloud.”

The Accenture research also revealed:

  • 85% of high-performing BPO engagements consider the service provider to be a strategic partner, compared with 41% of typical engagements;
  • 75% of high-performance BPO engagements involve senior leaders from both parties spending time to understand each other’s objectives and strategies, compared with 33% of typical engagements;
  • 90% of the high performers reported that the client and provider were able to productively resolve conflicts – this was true only with 44% of typical performers;
  • 77% of high-performing BPO engagements have successfully executed change management plans, compared with just 34% of typical engagements;
  • 85% of high-performing engagements proactively refine their objectives as the relationship matures, compared with just 40% of typical engagements;
  • 67% of high-performing engagements include business benefits beyond cost in the business case, compared with 26% of typical engagements;
  • 58% of high performers will consider service options with greater value, even at higher costs, compared with 31% of typical performers;
  • 56% of high performers seek competitive advantage through BPO, while only 28% of typical performers aim for that goal;
  • 64% of high-performing engagements place more focus on capturing other benefits as they achieve cost reduction, compared with 40% of typical engagements;
  • 54% have contract performance incentives in place, compared with only 24% of typical performers.

Author: Karl Flinders
Source

Cloud Sprawl

Leave a reply

The cloud computing industry rolls along at a staggering pace. So much so that one of the biggest issues currently affecting adoptees is the speed at which it expands.

It may sound like a badly made ’90s sci-fi flick, but ‘Cloud Sprawl’ is causing many a headache for IT directors across the globe. And while the term may have been first coined over two years ago, it appears it’s only now that we’re coming to understand the kind of issues it presents.

The sprawl is something that occurs as a result of business applications being used by employees of big organisations “in the cloud” and via remote access, without the consent or sign-off by company IT departments.

It may sound innocuous, but imagine the scenario – a global corporation with say, 10,000 connected employees, suddenly finds a sharp rise in unauthorised costs and relays it back to the IT department. The IT department then discovers that hundreds of new applications are being remotely connected to and used by employees without their permission, on a pay-as-you-go basis. It’s easy for the problem to spiral (or rather, sprawl) out of control. It’s the ultimate outsourcing problem.

What does the IT department do? It can’t simply put a lid on the situation. The whole point of that organisation’s connection with cloud-based software-as-a-service is to streamline IT; make it more mobile and easier to upgrade to new services in order to be able to efficiently react to market changes, and new requirements that require new software.

As an example, many businesses in the US are now connected to Salesforce’s AppExchange. Employees can dip in and out of business applications depending on what they need to get certain jobs done. It’s services like this that make the concept of cloud computing so revolutionary, but so challenging at the same time.

Cost isn’t the only issue, either. We were luckily enough to talk about the problem to an IT provider, Avanade, last month through Business Cloud News, and they made it clear how problematic cloud sprawl was becoming:

“The danger in staff accessing and using multiple unmonitored services from the cloud in the workplace is that it can lead to cloud sprawl, which in turn can leave important or confidential company and customer data vulnerable, unsecured – or lost altogether,” said Nick Merriman, the company’s Head of Cloud in the UK.

“Furthermore, cloud sprawl can prevent companies from fully leveraging many of the advantages and cost savings associated with cloud computing. Without careful management and a defined strategy in place, an organisation risks undoing many of the benefits that cloud computing offers.”

IT Directors in the UK are concerned by the spread of cloud services in the UK – 67 per cent of them, according to a recent survey conducted by another computing provider, Opsview. If fact, 54 per cent of those surveyed were unsure of how many cloud-based services their employees were even using – underlining the lack of visibility cloud computing can create.

“Ultimately unless the IT department has visibility into the cloud services being used by employees it is very difficult to keep track of what is being spent at any one time, since users are not going through traditional IT procurement channels,” said the company’s Product Manager, James Peel.

And this is evidently the biggest issue. Cloud computing isn’t a traditional procurement channel, even though many IT organisations say they’ve been doing software-as-a-service for years.

So while security continues to remain the cloud’s top topic for debate in many IT expos and among many column inches, perhaps cloud sprawl deserves more attention. It could be the difference between the cloud proving to be a genuinely cost-effective way for businesses to do IT, and a subscription-based nightmare with blockbuster-flop-sized repercussions.

Author: Chris Ward
Source

How To Buy The Cloud

1 Reply

Next month – all being well – the UK Cabinet Office will lift the lid on what form the UK public sector Cloud Computing strategy will take.

Notably absent from the national ICT strategy announced back in April, Cloud has not been forgotten, but the grandiose plans for an over-arching G-Cloud that were being formulated under the New Labour administration have been scaled down.
Exactly what form the revised Cloud thinking will take remains to be seen, but the broad sweep commitment to Cloud as a cost-effective, scalable delivery mechanism has been articulated by both Government CIO Joe Harley and his deputy Bill McCluggage as well as being cited by Prime Minister David Cameron and other members of the political establishment. So a continued identification of Cloud as the way ahead seems like a safe bet.

In the US, the Obama administration – when not having to wrestle with keeping the bailiffs from the door – has been an enthusiastic supporter of Cloud Computing – even if some of the more died-in=the-wool Federal CIOs were not quite as keen. But the Obama ‘Cloud First’ policy has put the US federal government sector on a clear path to mass adoption of Cloud technologies, hand-in-hand with data centre closures on a mass scale.

Such is the inevitably of the Cloud advance in the US that the TechAmerica Foundation, made up of Cloud providers and academics, has now issued a Cloud First Buyers Guide for Government to provide easy, best practice steps for procurement officers in the government community to purchase and deploy Cloud services and technologies.

In its preface to the Guide, the Foundation notes: “To spur government agencies to take advantage of the benefits that Cloud Computing enables, the Obama Administration has issued a Cloud First policy. This Buyer’s Guide is designed to assist government agencies as they evaluate and purchase Cloud services and solutions in response to that policy.”

While the specifics of the Buyers Guide are inevitably highly geared to US government structures. the basic principles at their heart are eminently replicable across other nations, including the UK.

Step One: Business case

The report begins by recommending the creation of a business case – which may seem unusual given the mandated nature of the Cloud First policy, but the business case is needed to establish priorities. The report notes:

“Defaulting to a particular Cloud deployment or service model rather than using agency performance objectives to define the approach will result in missed opportunities to benefit from available Cloud services. In making the transition to the Cloud…first focus on workloads and Cloud services and solutions that have already been widely deployed in the Cloud in the private sector and government.”

In other words, don’t stick the tried and tested (and failed) practice of reinventing the wheel at every given opportunity. The Foundation identifies three main categories of Cloud offering that have proven track records already:

  • Infrastructure as a Service e.g.: storage web hosting, and backup.
  • Platform as a Service e.g. database services, identity management services, security services, geospatial information systems and customised application in areas of IT management.
  • Software as a Service e.g. email, CRM, collaboration, payment processing, and service centres.

Step Two: Establish priorities

Next, map your priorities and map them against the technology solutions on offer. Everyone will have a different set of priorities that matters, but among the most common aspects to take into consideration are:

  • Automatic upgrades and patches
  • Collaboration
  • Compliance requirements
  • In-house development and customisation capabilities
  • Ease of use
  • Sustainability and energy considerations
  • Integration with existing systems
  • Interoperability and open source
  • Portability
  • Pricing
  • Scalability
  • Security
  • Transparency of provider performance


Step Three: Think about security

The inevitable objection raised in both private and public sectors is the bug bear of security. The Buyers Guide notes: “Cloud services are not inherently more or less secure than in-house IT implementations. In both cases, security depends on technology, policies, and practices. A robust implementation of Cloud services is capable of meeting a variety of security requirements.”

But it observes that what does change is the question of responsibility: “One of the differences between cloud and in-house IT implementations is the degree of control for who manages and controls the security processes. Agencies should focus on managing the agreements between the agency and provider to ensure that a consistent security posture is maintained independent of who is responsible for the various layers of the system.”

Step Four: Implementation considerations

These are essential if the essential principle of sharing resources is to be adopted successfully. To that end, procurement officers need to ask:

  • Is the Cloud service easy to configure?
  • Does the Cloud service exist elsewhere within government and can that service be shared elsewhere within government?
  • Does the Cloud service provider enable portability of user data through an effective combination of documents, tools, and support for agreed-upon industry standards and best practices?
  • Are there third-party solutions to provide access to the data in the Cloud service?
  • Will the Cloud service provider, the government body, or third party integrate Cloud applications with in-house applications to ensure seamless end-to-end processes?

Step Five: the RFP

The topics and sections of the traditional RFP still largely apply, including background descriptions about the provider, client references, startup and ongoing cost models, and required certifications, but it is important to streamline the RFP process to reflect the rapid deployment of Cloud services.

Step Six: Take advantage of government’s scale

Are there government-wide initiatives that can help on price or best practice?

Step Seven: Don’t forget the people aspect

The Guide warns: “Cloud technology will not deliver the desired return on investment without addressing the people and process issues that are needed to manage effective systems.”

Step Eight: Look for a common approach to supplier evaluation

The Guide urges: “Use a data- driven approach to evaluate Cloud offerings.”

Step Nine: It’s all in the timing

Consider various factors to determine when is right for you to make a move to the Cloud. Factors can include:

  • Need for legacy system replacement
  • New systems upgrades that will require additional ICT investment
  • A need for testing platforms to support new development
  • A desire to run a pilot project for a programme or initiative

Purchasing Cloud services is all too often approached as a difficult new practice, but the Buyers Guide concludes: “Although the shift to Cloud Computing raises new issues that must be considered, existing Federal government procurement practices are flexible enough to enable acquisition of the new capabilities.”

Source

Cloud Computing Contracts and Services: What’s Really Happening?

Leave a reply

There is no shortage of hype about cloud services, both positive and negative, but it is often difficult for potential customers to do an objective cost / benefit analysis. In addition to promising productivity and business process benefits, cloud computing can be very attractive to cut rapidly both capital and operating expenditure.

There may, however, be unanticipated costs and risks in a move to online hosting of key data and applications. Perhaps surprisingly, and despite widespread concerns regarding security and privacy, there is little comparative information available regarding cloud contract terms and conditions and the associated legal risks of entrusting data to cloud providers.

A recent analysis of 31 cloud computing contracts from 27 different providers has at last shed light on industry practices and highlighted key issues for both suppliers and customers.

The survey formed part of the Cloud Legal Project at the Centre for Commercial Law Studies, Queen Mary, University of London. Funded by a grant from Microsoft, but academically independent, this ongoing project is examining a range of legal and regulatory issues associated with cloud computing.

Most cloud contracts, whether for infrastructure, platform or software as a service, can be set up in minutes via an online sign-up process. Compare this to a conventional IT outsourcing, which is typically negotiated and subject to commercial and legal scrutiny.

The simplicity and apparent lack of formality of cloud procurement can lull customers, whether consumers, corporate or public sector organisations, into treating cloud contracting as just another ‘click-through’ exercise to which very little attention is paid.

In fact, some of these standard-form agreements for cloud services contain clauses disclaiming responsibility for keeping the customer’s data confidential, secure or even intact.

Other clauses reserve the right to terminate accounts for a variety of reasons including apparent lack of use of the service or simply because the provider has decided to discontinue the service. This may be critical for long-term backup or disaster recovery arrangements. Also common are clauses purporting to exclude, or at least limit drastically, liability for loss or corruption of data.

The more draconian provisions in cloud contracts may not stand up in court, for example where EU consumer protection laws apply. Achieving redress for data losses or privacy breaches may still, however, be difficult in practice, especially where the cloud service provider is thousands of miles away. Indeed, most of the contracts surveyed specify that they are subject to the laws of the place where the service provider is based, often a US state, and that disputes must be heard in the provider’s local courts.

So what can users, especially businesses and public sector customers, do to manage cloud-related risks? For a start, they should read the contract, including any terms of service, terms and conditions, service level agreement and policies relating to privacy and acceptable use.

Questions should also be asked about service delivery and reliability, especially where the service provider is dependent on unrelated infrastructure providers. Although it may seem remote at the start, an exit from the cloud deal should be anticipated and care should be taken to ensure data portability (including metadata).

It is early days in the cloud market and the forecast is uncertain. Contracts may evolve rapidly in response to competitive positioning, customer demands and interventions by regulators and courts.

Source