CIO-Reinvented Blog - By Prashanth Rai

Application management services - Outsourcing / Interesting stats - Forrester

Saw this really interesting chart at a Forrester report

Couple of points that stood out:

The significant interest in Managed hosting services, it will be interesting to see how the Cloud computing trend impacts these stats.

• Currently outsourcing - 6%
• Will outsource to a 3rd part in the next 12 months - 17%
• People Interested & considering it - 44%

Another surprising insight is the low % of adoption of outsourcing in low value addition / undifferentiated heaving lifting type tasks / Summarized in Chart below:

This just emphasizes the opportunity size for outsourcing services.

Tags: outsourcing - appsupport - forrester

Prashanth Rai

In conversation with Zia Yusuf - SAP TechEd 09

Yesterday we had a great conversation with Zia Yusuf. Zia  is the Executive Vice President, responsible for Global Ecosystem & Partner Group at SAP AG. It was an interesting conversation touching upon various dimensions of community, partners, SI's and social media. Zia & his team have a really tough job moving forward trying to change the perception and or reality of SAP in many areas like

1. the lack of trained quality consultants,
2. of being seen as a "innovation" laggard,
3. changes required in the services partners to deliver to the SME and deliver around solutions like BBD.
4. it being "white elephant" to implement & support,
5. ....etc

What was promising to see was that they seem to be moving slowly but steadily in that direction but they have a lot of work in front of them and they are open to collaborating and discussing on ways to achieve these results. Below are the key / interesting points or thoughts from the discussion that came up during this conversation:

• The community initiatives are thriving, it has reached 2 million now. And its also evident with the growing popularity of the SAP mentors and the initiatives they seem to be taking. The "Blue Jerseys" are great guys.
• The inclusion of SI (System integrators) into the Eco hub. This is a big move. . I think there seems to be a broad set of initiatives that SAP is taking to make the system integrators play nice. They seem to be taking small but progressive steps towards reducing that 1:7 (license cost :implementation cost) ratio, without ruffling too many feathers at the SI's end. Strangely I think a lot of enabling of this will be dependent on the customers and how much they are willing to adopt these changes & enforce some of these things with their SI's & service providers. On the question of SAP Ecohub or SDN becoming a services market place its an interesting discussion for sometime in the future.
• Enabling the Smaller partners - As a part of the ecosystem organization , there seem to be a set of Partner service advisor's that are looking at enabling partners particularly the small / mid sized ones by providing them access to the SAP product technology road map etc etc. This seems to be the only side of the SAP organization that has grown in headcount.
• Factoid - There seems to be a total of 400k SAP consultants globally with 250K of them being in large or in the organized sector the other 150k are typically independent contractors.
• Zia's thoughts on characteristics of great SAP SI firms:
  • Deeply involved with the evolution of the SAP Roadmap
  • Training & certification,
  • Dynamic in models offered,
  • customer service-value driven,
  • Ability to have a longer term relationship.
• A chance to collaborate - Zia is asking for "Use cases" that we can think of where "Social Media" will connect or interact with "Core business processes" that are a part of the Enterprise business processes. Specifically around crowdsourcing etc - Which will change the way business is done! Ideas welcome
• Community contribution into the product, the SDN / communities framework that was created for communities (SDN/BPX) is now a product called Collaborative Workspace and now has 1400 installations.
• SAP Safegaurding - Recently it has been communicated to all the SI's that they need to include / push safegaurding as a part of their implementations etc
• Job board has now been included in SAP Communities / SDN. First couple of days 180 jobs posted on it

Zia is now on twitter and you can follow him @ZiaYusuf

Tags: communities - sap - sapteched09 - zia+yusuf - sdn - bpx - partner

Prashanth Rai

Update: Looks like this would be the last event for Zia with SAP, All the very best to him for all his future ventures.

Disclosure: SAP paid T&E to TechEd.

Henning Kaggerman to join Wipro's Board

Dr. Henning Kaggerman is joining Wipro's board as of Oct 27th. I think this is great news for Wipro. It was always a great experience meeting with him at the SAP events. Henning is a big believer / proponent of the consulting or value added approach to IT services & in reducing the implementation / services costs in SAP / Packaged implementations i.e. reducing the ratio between the licenses to services fees. Will be interesting to see how his thinking influences Wipro. Some comments / excerpts:

Commenting on his appointment, Dr. Kagermann said, "I have for long admired Wipro as a company as much for its innovative approach to business as for its strong commitment to values. I am excited at the prospect of guiding the company as it prepares for its next phase of growth"

Azim Premji, Chairman, Wipro Limited said, "We are delighted to welcome Dr Kagermann to our Board. He brings in a unique combination of academic perspective, technical expertise and leadership experience. I am sure that Wipro will benefit from his rich knowledge, insights and wisdom."

Source: 1

Prashanth Rai

TCS - Change of Guard

TCS change of the guard , Check out an interview of Ramdurai & N Chandrasekaran at Moneycontrol. Ramdurai took over 13 years back at 160 million / 6000 people and now Chandrasekaran takes over at 6 Billion / 140k. These will be interesting times.

Video Interview

Some interesting reading...

Notes from blog posts read today:

• Ratios of new license to maintenance revenues shift from 1:2 to 1:4 and in some cases 1:5.  Enterprise software vendors now in a better position to convert perpetual business models to subscription business models.  Do they have the guts and board approval?
• Indian System Integrators competiting for market share in Europe, Middle East, and Africa as they shift away from the North American market.
• Japanese CIO’s finally realizing that they need to break free from their existing ERP software vendor relationships.  SaaS options now in consideration.  Recent advancements by NTT to host Zoho, Siemens’ 420K employee move to Success Factors, and Flextronics 240k employee deal with Workday have shifted perception that SaaS can’t solve large enterprise requirements.
• Cloud computing - Broad acceptance that enterprises are interested - There's absolutely no question that cloud computing has moved into the mainstream of enterprise technology. Everyone from Microsoft to Accenture to HP to IBM to SAP admitted as much. With the worsening economic conditions and the maturation of cloud computing services, enterprises are actively investigating cloud computing. The main differences of opinion between the legacy vendors and companies like Salesforce and Amazon lie in how quickly and broadly companies will adopt cloud computing.
• Too much discussion of clouds at the infrastructure rather than platform layers - The entire cloud conversation at Structure was very focused on infrastructure. As Daryl Plummer of Gartner has noted, Cloud computing is not about infrastructure. It's about a new delivery and consumption model for IT services that are elastic, metered and abstract away the SW stack. The conference was mostly focused on the lowest layer of the stack and didn't really talk about how the cloud enables transformation at the business process level.

Source: 1, 2

Tags: cloud - saas - maintenance - cio - maintenance+revenue

Prashanth Rai

IT Spending 2009 / 10 - Gartner

Gartner says expenditure on IT is expected to decline 3.7% in 2009. Spending on IT hardware including client computing, servers, storage & printing systems will decline 14.9%. However, it forecasts overall IT spending to rebound with 2.4% growth in 2010 although IT hardware spending will continue to lag next year growing just 0.8%.

Source: Gartner

Prashanth Rai

Leo's Key Note - Takeaways - Sapphire09

Central Theme - How SAP enables clarity?

Business Suite 7 provides the solid foundation. (Integrated processes - no fragmentation , SOA - Completed roadmap in 2007 - 2800 solutions) Thanks to Henning Kaggerman

Enables to build some of your custom process - Flexibility - SAP Business process management tools - Consume innovation in cheapest, fastest way possible.

Suite Support goes on till 2015

Enabling Clarity of decision making - Clarity anticipates risk

• Business suite + Business Objects portfolio, Closed loop - Strategy to Execution.
• Not limited to the large companies only, SAP Best practices for BI - Integrated with All in One.
• How this impacts Risk Management? - Takes a dig at banks who brought together mathematicians + technology, the problem was the lack of holistic view. One survivor managed relatively better - Goldman Sachs - Risk focus / Global Risk Committee - Right information, at the right time for the right people.
• Risk is part of every industry - it is our responsibility to manage risk.

Value of SAP enterprise support services - Comprehensive support to reduce the overall TCO. 2 Weeks ago along with SUGEN will provide KPI's - KPI index - Business Continuity, Business Process process performance, Protection of Investment & TCO. Committed to a 30% improvement by 2012

Ian Kimble - Insurance Company Example - Pretty neat mobile application used.

Sustainability - Perceived unlimited resources ended, Sustainability strategy - Economic, Social, Environmental risks management. Maximize your "Triple bottom line" - Don't have to wait for Better Place. IT industry cause 2% of the Global Green house gases. Industries first ever Comprehensive sustainability Map - every relevant business process sustainable. Talks a little bit about smart grids on the utility industry site. Sustainability Performance management -reporting / benchmarking - Acquisition - CLEAR STANDARDS.

Ian Kimble - Clear Standards Demo.

Fundamental Change in Customer expectation both from a user point of view and from a buyer POV. Paradigms shifts in Technology cost & Availability - Virtualization, Cloud (Private Clouds) - Coming to us. Flexible deployment models - On premise / On demand combination of the two. Another big trend - Mobile / Miniaturization of transactions. Moving to a digital enterprise from IT enable organization. So huger amount of data - In memory DB's and Real time analytics.

Launch of SAP Business Objects Explorer Software. - With explorer, executives could get answers in milliseconds...brand profitability, customer buying patterns...this could change the way decisions are made" Steve Merry, Sara Lee CIO.

Demo by Ian Kimble - Insurance Company
Natural language search - Polestar + BIA

One Demand Offerings is a key element of the over all SAP strategy - that is a welcome change
Currently Available:

1. CRM
2. Strategic sourcing
3. BI
4. Carbon management

Soon to be launched

1. HCM
2. Expense management

SME - BBD  Business By Design - Clear rumors - Is on display on the show - Live by Design system - Well that's it.

Back to the Timeless software theme - ready for the future. Demo of Timeless software - Collaborative decision making.

Key components of SAP's Clear Strategy

1. Stable Core
2. Best foundation for intelligence platform
3. business process management
4. on premise on demand
5. web20
6. timeless software
7. sustainable ways

Tags: sapphire09 - sap - leo+apotheker - keynote - Orlando

Prashanth Rai

Enterprise Cloud Adoption

I was thinking of something appropriate to write for my first blog back, so I thought I will start with something that has been top of mind for some time now. "how will enterprises adopt cloud computing? " . And I am sure there is no simple or there isn't one correct answer to it.But I figured there are a set of factors that impact the choices / path that an enterprise ends up taking. So what are these factors? Below is an initial list of things that I could think of, I am sure there are many more, please add.

1. Maturity of IT department in the enterprise - Architecture,Structure,Process etc
2. The management's view of the IT department / CIO's place in the Management team / Political will/clout of the IT Department
3. Current state of investment in inhouse IT Resources/ infrastructure & investment payback period
4. IT Resources,Utilization levels / monitoring
5. Understanding of core / context IT systems - Standardization of systems / processes
6. IT Internal Staff Numbers/ Volume / Types of activities / roles they play
7. Existing Outsourcing / Offshoring operations/Contracts
8. Pressure to reduce cost / need to avoid capital expenditures
9. Willingness of the Management team to be innovators

These factors in varying degree's impact the decisions organizations take in adopting the "Cloud" or not. So I was wondering what could be a typical road map that organizations will adopt as they move towards the cloud, so below is a graphic with the first stab at it. In this approach I haven't factored in the private cloud option, that I will cover later.

This is only indicative, different organizations are probably going to adopt it very differently or some leading vendors will help them leapfrog further up the value chain. Please share your thoughts on this.

Tags: cloud - cloud+computing - enterprise - aws+amazon

Prashanth Rai

(Cross posted at the bti.typepad.com)

Daily Reading - 1st Jan 2009

When your laptop is a pain in the neck

If you use a laptop for hours at a stretch, you’re setting yourself up for muscle problems that can make your entire upper body hurt. Simple ways to make a laptop more ergonomic

Supporters of Satyam launch website,blame media for Satyam crisis

In a damage control initiative, the supporters hosted a dedicated website here on Thursday, which has received good number of messages across the world. With a tag line of "Satyameva Jayate", the website solicits public support

25 Years of Mac: From Boxy Beige to Silver Sleek

It's the 25th anniversary of the Apple Macintosh, but Steve Jobs' eyes are dry. At the company headquarters in Silicon Valley, where he was presenting a set of new laptops to the press last October, I mentioned the birthday to him. Jobs recoiled at any suggestion of nostalgia. "I don't think about that," he said. "When I got back here in 1997, I was looking for more room, and I found an archive of old Macs and other stuff. I said, 'Get it away!' and I shipped all that shit off to Stanford. If you look backward in this business, you'll be crushed. You have to look forward."

Web 2.0 Summit Presentation and Talk

An important part of our future is being invented out in the world. And it is from that world that I want to share stories about two companies I am involved in. Between them, they cover the two most important screens of our interactive lives - the computer and the mobile. The two companies are Novatium and NetCore.

Prashanth Rai

Weekend Reading

A Software Secretary That Takes Charge

The concept of a software personal assistant has long captured the imagination of a generation of science fiction writers and computer scientists. Oliver G. Selfridge, the artificial-intelligence pioneer who died this month, is credited with coining the term “intelligent agent,” as well as the idea of a computer software “demon” — a simple software program that could monitor its environment and make appropriate responses when changes occur.

Forget Whims — Use Statistical Analysis to Buy Presents

Spotfire, a division of the software maker Tibco, has used its statistics expertise to come up with a tool for sorting potential presents. With the Spotfire Holiday Gift Finder, you can churn through thousands of products, including apparel, electronics, jewelry and tools. The software lets people narrow down their choices based on price and reviews and then points to the appropriate spot on Amazon.com where the product can be purchased.

WebNotes Offers a Virtual Highlighter for Web Research

I see WebNotes as the online equivalent of that highlighter and sticky note solution but updated for the way we work on the web, with the bonus functionality of being able to organize, search, find, and aggregate all of those notes together in one place.

Clearing The Cache - OneNote

Like many of us, I spend quite a lot of time on the web and come across a staggering number of interesting things. In Clearing The Cache I pull out some of my favorites and share them with you here.

Outsourcing: Not Immune to the Downturn, But Holding Up

The value of the outsourcing deals signed in the third quarter of 2008—when the downturn was apparent, but before things got really bad—was the lowest of any quarter in six years, according to TPI

Indian-based companies are preparing for a slowdown in growth. Infosys, one of India’s largest outsourcing companies, says that it has frozen recruitment for all but a few specific jobs. Nasscom, a trade association for Indian-based outsourcing companies, said recently that the rate at which its members would hire new employees would slow for the first time, as would salary increases. (The new numbers would still be the envy of most industries: New hires will dip from 280,000 last year to 200,000 this year; salaries will be up between 7.5% and 9%, down from 13% growth last year, according to Nasscom.)

Fifty-four percent of businesses have cut staff or instituted a hiring freeze, according to a Hackett Group survey of 200 multinational corporations. However, these same businesses report that the percentage of tech jobs that are outsourced will grow from 15.4% in 2008 to 25.1% in 2010.

Instead of long contracts for sophisticated services, businesses are signing shorter deals for simpler projects—a small call center dedicated to one product instead of a 100-person shop that services multiple products

Tags: weekend+reading - onenote - gtd - outsourcing - offshoring - analytics

Prashanth Rai