March 2014 Archives

OFT's thinly veiled report to Tories that capitalism doesn't work

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Milton Friedman will be turning in his grave as a report published this week seems to imply that his laissez-faire economic stance doesn't work.

The OFT's report into government procurement of IT says little more than the plethora of similar reports published in the last couple of years.

However what did strike me is how the reference to suppliers co-ordinating tacitly to fix prices. The report suggests that although there is no evidence suppliers could be dampening competition through "implicit understanding of each others' future actions, rather than through arrangements." In other words they know what each other will do so they deliberately and covertly keep prices at a level that suits them.

If the suppliers are left alone and prices are related to supply and demand then surely the price will reach the right level. Unless the private companies have it in their collective interest to prevent this from happening. So capitalism doesn't work then?

Here are a couple of articles I wrote about the report.

TechUK criticises OFT's reporting of IT cartel accusations

OFT tells government how to improve IT procurement

Could Switzerland's IT services sector banish its Cuckoo Clock Image?

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As Orson Welles in the Third Man said: "In Switzerland they had brotherly love - they had 500 years of democracy and peace, and what did that produce? The cuckoo clock."

Continuing the film theme, this time Monty Python, we could ask the question what have the Swiss every done for us? The answer might well include the Cuckoo clock, banking, cheese and chocolate.

But according to a press release we received this week, IT services accounts for six times more export value to Switzerland than cheese and chocolate put together.

In fact exports of Swiss IT products and services were worth 8,814 billion CHF (over £6bn in 2011) compared to a mere 1,335 billion CHF (just under £1bn) worth of cheese and chocolate.

A report, from ICT Switzerland, lists IT among the top ten main export groups, according to foreign trade statistics from the Swiss Customs Administration.

According to one supplier IT services such as data storage in Switzerland are becoming increasingly popular, as global companies are choosing to take advantage of the country's strict privacy laws.

The NSA scandal is only going ton increase interest in storage in Switzerland said Mateo Meier, director of Swiss data storage company, Artmotion. "Switzerland has previously been associated with luxury food and jewellery exports, but now we are receiving international recognition for IT services as well. The country has traditionally acted as a hub for multinational corporations' financial needs, and we're using the same experience and expertise to become a big player in the IT industry.

"Within the IT industry, private data storage using dedicated servers has become highly sought after. No longer happy with cloud computing and US data storage companies, firms are turning to so-called 'Silicon Switzerland' to entrust important data and business secrets. In light of the NSA scandal, we've seen more interest from companies across the oil and gas, financial and retail sectors."

Freedom of Information laws to extend to IT outsourcers

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It looks like the government will soon extend the Freedom of Information Act to private companies including IT suppliers to government.

A recent Public Accounts Committee (PAC) report into government procurement reported that suppliers "were content that Freedom of Information provisions should apply to public sector contracts with their companies."

Liberal Democrat Simon Hughes said the change would be written into the contracts of companies after the publication of a new code of practice, which should be in place by the end of this year.

"We intend to publish a revised code of practice to make sure that those private companies that carry out public functions have freedom of information requirements in their contracts, and go further than that, and we hope that will be in place by the end of this year."

This will improve the transparency of suppliers and address concerns that they are not open about the details of contracts.

The PAC report said: "Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered," said the report.

"Government needs a far more professional and skilled approach to managing contracts and contractors, and contractors need to demonstrate the high standards of ethics expected in the conduct of public business, and be more transparent about their performance and costs."

It would make a change if a report into government procurement actually results in changes, rather than just pages and pages in report after report coming to the same conclusions with nothing actually done.

Let me know what you think? Are you tired of endless reams of paper being wasted on reports into government IT procurement?

Ukrainian IT industry calls on new government to invest time and money in it, despite troubles

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With all that is happening in the Ukraine it is easy to forget that the country has international businesses that need some of the government's attention.

A contact of mine, Sam Kingston, is heading out to Kiev to become COO at IT services firm Ciklum.

He told me that Ciklum CEO, Torben Majgaard, has written an open letter to the new government based in Kiev on behalf of the country's indigenous IT companies, to ask for it to continue to invest in the UT sector despite the political turmoil.

I am waiting to receive the full letter and will go into more detail when I do.

The Ukraine offers highly skilled IT specialists at a low cost for companies looking to develop projects within Europe. But while the honesty of its people appears to be a key selling point, problems of corruption and the social unrest remain. Read this written in 2011: Outsourcing in the Ukraine: benefits and drawbacks

Also read: Report on Central and Eastern European nearshoring.

Investigating outsourcing gives birth to its first book - Why do large IT project fail question inspires writer

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A couple of years ago I did a series of blog posts featuring the views of experts on why large IT projects fail. I had 27 experts ranging from academics to IT services experts.

I enjoyed the series as did readers. Well it seems some were inspired.

Here are links to the series in full: Part 1 Brian Randell, part 2 Anthony Finkelstein, part 3 Yann L'Huillier, part 4 James Martin, part 5 Philip Virgo , part 6 Tony Collins, part 7 ILan Oshri, part 8, Robert Morgan part 9 Sam Kingston, part 10 Peter Brudenal, part 11 Mark Lewis,  part 12  John Worthy, part 13 Stuart Drew, part 14 Milan Gupta, part 15 from a reader known as Matt, part 16 Fotis Karonis, part 17 Fergus Cloughley, part 18  Steve Haines, part 19 David Holling, part 20  Bryan Cruickshank, part 21  Rob Lee, part 22 Tony Prestedge, part 23 BG Srinivas, part 24 Craig Beddis, part 25 Stuart Mitchenall, part 26 Colin Beveridge and part 27 from Trevor Christie-Taylor 

Inspired by the question, Mark Seneschall starting working on my challenge of summing up in a few hundred words why large IT projects fail? He ended up writing 100,000 words and has published a book. The anatomy of IT projects: why they're hard, and why they fail, can be found here.  And here is a website about it.

This is what Mark said about how a question posed in this blog inspired him to write a book.

"I suppose I'm something of an IT projects 'nerd' - I'm not an IT technician at all, my background is commercial, finance and control, but as I describe in the book I got sucked into these sorts of initiatives from the business side of things, and found them the most difficult, frustrating, horrendous - but also the most challenging, stimulating and ultimately rewarding - things I got to do in my entire career.   From about 2002 onwards - at the same time as NPfIT was going on - I was working on some very big projects, and I knew how hard these were proving.  While NPfIT was another order of magnitude bigger than what we were attempting, given my experience I felt I could understand and identify with some of the challenges it was struggling with. As a regular reader of Computer Weekly, when you posed the question in your blog, I thought I had something to contribute, and I started trying to draft my 200 words.

But at that time, although I'd begun work on the book, my focus had been more on the question 'why are IT projects hard?', principally because (as I describe in the introduction to the book) I'd been struggling to explain this to a company who I was then working with, who had kicked off a project to install a new end to end system to handle most of their activities, but had little concept of what this entailed.  So my initial answer to the question 'Why do these things fail?' was 'Because they are hard'.  But then I thought about it some more.  Being hard obviously raises the bar, but as long as you acknowledge that they're hard, and respond accordingly to the difficulty, then you should still be able to succeed.  For example, while it might be hard, say, for me to run a marathon in 3 hours, if I prepare properly for it, train hard, eat properly etc etc, ultimately I ought to be able to do it.  So it isn't actually the fact that these things are hard that causes them to fail (even though they are hard), it must be because the response is inadequate.  This realisation, which arose from the thinking I did in response to the question you'd asked, and when combined with this other question of 'why are these things hard', led me particularly to come up with the 'opposing forces' concept I discuss in chapter 2 (ie that the complexity inherent in any project - IT or of any other type - needs to be met by a sufficient response in order for the complexity to be addressed and the project to succeed), prompted the discussion in chapter 6 around the factors that cause the response to be insufficient to address the complexity), and resulted in what is probably my most important conclusion - that the key to success in these sorts of initiatives is understanding as comprehensively as possible the complexity that you are likely to encounter when undertaking any such project before you start, and ensuring you are as well positioned as possible to address it.  Perhaps this seems obvious - but on the other hand, as the discussion in Chapter 6 highlights, there are lots of reasons why organisations in practice very often do not do this - and the evidence from NPfIT and any number of other projects (and my own experience) supports this.

Ultimately, therefore, the question you posed really helped take my thinking to another level, and made the book a much more powerful and distinctive analysis than it might well otherwise have been..."

Preferred Supplier Lists (PSLs) are archaic and hold businesses back

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I met up with tier-two Indian IT services firm ITC Infotech for a catch-up on its progress in Europe. Back in June Hardeep Garewal, who is the head of Europe, told me some of the company's plans.

ITC Infotech has an interesting history. It was previously the internal IT department at Indian conglomerate ITC Ltd (originally Indian Tobacco Company), which has revenues of $7bn and is focused on fast moving consumer goods, hotels, paperboards, paper & packaging and agri-business.

ITC Ltd still owns ITC Infotech and is a major customer but spun it out in 2000 to serve other clients.

Although the company has big name customers Garewal told me as a tier two supplier ITC Infotech is challenged winning business in large companies even if the IT leaders there want their services. This is because many of the big companies have Preferred Supplier Lists (PSLs) and they can only buy from companies on these lists for a set period of time.

Garewall believes in today's IT and business environment where businesses want to be quick to market with new products, need to be innovative, or need to adopt new technologies this model doesn't work.

"We often speak to CIOs about our services and they tell us they want the service but can't even consider it for a year because of the PSL," he says. He said a system should be created where a CIO can buy certain services that are not on the list if it meets a business need.

Obviously this is good for companies like ITC Infotech, but it is a valid comment. New technologies from new suppliers that have the potential to change business come out regularly these days. Business need to update their procurement rules to allow them to benefit from rapid IT changes.

Smaller suppliers are innovative and can offer services that might not be available at bigger players on preferred supplier lists.

Garewall told me about a service ITC Infotech offers to customers, which I found interesting. It involves creating appstores for businesses.

For one of its customers in Holland, a large corporate, the company has introduced an app that means IT departments don't even have to get involved in setting new starters up

A new employee joins the company and has a job profile assigned to them. When they log in they are automatically presented with all the software they need and are approved to use. They simple check boxes and are given access to cloud based software such as SAP.
This sounds good particularly with the increasing take-up of BYOD schemes, which threaten to put pressure on busy IT departments.

This makes me think that appstores will replace PSLs.

Every IT services firm wants to be Amazon's friend

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When the name Amazon comes up in a conversation with an IT services firm there is never a bad word said about the company. Amazon has become the go to company for raw cloud computing resources.

Most suppliers will have a dig at a competitor when you mention them but Amazon is not seen as a competitor. It just provides the raw materials for the IT services firms to build services around.

I was meeting a cloud supplier recently and its UK head said if a customer can benefit from a public cloud service it will recommend Amazon. But he said customers need a supplier to manage their cloud environments and help them understand when choosing between things like public cloud, private cloud or hybrid cloud.

Raw cloud computing power from Amazon has seen huge falls in cost as a result of economies of scale.

It is another industrial revolution with the cloud powering it rather than coal. But just buying coal does not guarantee success if the machinery is wrong.

So you would think that enterprises would be taking up cloud computing services by the pipeload, but not so. One of my colleagues Jim Mortleman wrote an interesting article about the Cloud Expo Europe conference in London.

The article, which you can read here, states that: "IT departments are failing to implement cloud in the way businesses want, and providers are selling solutions in the wrong way."

In the article he said HSBC's global head of innovation, Barry Childe, is calling on suppliers to package their solutions and services in a way that was more relevant and understandable to business users of cloud services.

Don't let restrictive policies hold back your BYOD plan

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With BYOD promising so much I don't think any companies I have spoken to in the last year don't have a BYOD plan. The concept of BYOD and its benefits is easy to grasp, but putting it in place and making it work for the business and the employee is not so simple.

IT services firm Bluesource  provides managed services for businesses around things like Microsoft Exchange. It is increasingly having to help customers with BYOD programmes.

I met up with Gavin Camilleri, managing director at the company, recently and he agreed to give his thoughts in a blog post.

Here it is.

BYOD is here to stay - manage the risk and optimise it

By Gavin Camilleri

"What is the trend?

With growth statistics suggesting that 40% of workers are using their personal devices to access business applications and resources, BYOD is a trend businesses can't ignore.
Although there is growing pressure on IT to manage the risk posed by BYOD, there is a real opportunity to turn BYOD to a business advantage by driving improvements in employee productivity, performance and adding extra support for the growing numbers of remote and mobile workers.

Businesses benefit from employee expectations as they no longer see "work time" and "personal time" as separate categories. This is because a growing number of employees prefer to use a single tablet for work and personal use - with access to corporate email and other business applications, outside business hours.

However, there is a growing pressure on IT to manage the risk posed by BYOD. Gartner predicts that by 2016, 20% of enterprise BYOD programmes will fail due to deployment of mobile device management measures that are too restrictive. The key is the introduction of appropriate BYOD strategies that manage the risk and optimise the business benefit.

What do businesses need to think about?

Mention BYOD and the discussion automatically turns to Mobile Device Management (MDM) and this is a major challenge area for IT. To achieve success, the most appropriate MDM technology for the business units must be established. If running multiple MDM's - Active Sync, BES, Good, Mobile Iron etc - an organisation must manage these and migrate users and policies too. 

But for successful BYOD and mobile implementations businesses also need to consider:

-The suitability (compatible and user friendly)  of  key business applications for  mobile devices and the delivery of content in a consistent manner to the user device of choice

-Define what business processes are required by mobile users, ensure that vendors support these workflows satisfactorily on mobile 

-Establish which upgrades are required for key business applications, as more recent versions of the software provide a richer mobile experience

-Identify if the same applications can help businesses to enforce a mobile management strategy, if permissions can be allocated for specific work groups, including mobile users/remote workers

-Examine if this will prompt the need for an overhaul of permission levels for all key business applications, the impact of mobile users and single sign on policies

-Ensure that vendors understand the importance of mobile compatibility in a business and can they provide an independent and expert opinion for the applications they offer

It is also crucial to review security policies and governance requirements. Governance can be considered a blocker to BYOD as businesses, as it's perceived that all data needs encryption and all business related calls need recording. A review of governance requirements may however reveal that although this may be true for some users\data, it does not apply to everyone, and a more standard approach for the majority maybe acceptable. This will lower the TCO and ultimately make it a more viable solution."

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About this Archive

This page is an archive of entries from March 2014 listed from newest to oldest.

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