By Mark Atterby – Senior Staff Writer

2011 was the year of the cloud. Many organisations adopted a range of cloud solutions and we continued to see the emergence of new providers (new entrants as well as cloud services from established IT vendors). 2012 is the year where Cloud computing matures and grows up. According to Terry Walby from IPsoft, “Critical for 2012 is that cloud services can operate within a hybrid architectural environment, and deliver truly enterprise-class services. To realise this, the outsourcing industry will need to adopt a cloud orchestration approach”.

Cloud orchestration is the ability to manage cloud infrastructure in order to manage services consistently across multiple cloud and physical environments. According to Walby cloud orchestration involves three things:

1. The development of architecture, tools and processes to deliver a specific or defined range of services.
2. Knitting together different software and hardware environments to deliver those services.
3. Connecting and automating of work flows when necessary to deliver a defined service.

The cloud is all about scalability and flexibility, the ability to automate work flows across various technical and business domains is vital to the delivery of robust, scalable and on-demand services and computing resources. Orchestration is about aligning the business needs with the applications, data and infrastructure. It defines the policies and service levels through automated workflows and change management, creating an application-aligned infrastructure that can be scaled up or down based on the needs of each application. Orchestration also provides centralised management of the resource pool, including billing, metering, and chargeback for consumption.

Orchestration reduces the time and effort for deploying multiple instances of a single application. And as the requirement for more resources or a new application is triggered, automated tools perform tasks that before could only be done by multiple administrators operating on their individual pieces of the physical stack. Russell Ives Director of Business Process Outsourcing (BPO), Global Process Services (GPS), IBM, comments,” From a BPO perspective, orchestration is about coordinating all the processes, tasks and underlying IT components that are embedded within the outsourced processes to serve internal or external customers. This includes sub-processes, people, departmental approvals, interactions between companies and BPO providers, and the IT that supports those processes whether it is cloud-based or not”.

“Orchestration can, and must be, executed at multiple levels from servers, software, networks to applications, processes and workflow. As cloud-based BPO becomes more prevalent, the IT orchestration can become more complex, coordinating traditional IT environments with private and public cloud across the company and BPO provider”, adds Ives.

If we need orchestration, who is the orchestrator?

Russell Ives believes that initially the client organisation needs to be the orchestrator, he says, “Different aspects of orchestration; workflow, process, application, network, SW and servers may be devolved to providers but end to end responsibility must rest with the company. Over time, as BPO and cloud maturity progresses, different levels of devolution of orchestration can be adopted depending on the scope of both cloud infrastructure and BPO services employed by the company’.

Providers of cloud orchestration platforms such as GT Nexus and Enstratus have emerged to help organisations manage enterprise-class applications in public, private and hybrid cloud environments. For BPO organisations looking to leverage the emerging power of the cloud, they may decide to collaborate and create partnerships with various cloud providers to acquire the necessary competencies. According to Ives, the key capabilities that BPO organisations will require, in addition to core BPO competencies, include process transformation, IT enablement (the ability to support processes with IT capabilities), and expertise in cloud infrastructure and its’ integration. The ability to deliver outsourced processes is paramount.

In September last year, Gap Gemini and GT nexus announced a global partnership to enable the delivery of BPO supply chain orchestration for Cap Gemini’s global supply chain customers. The partnerships aims to deliver an orchestrated environment where different and complex supply chains interconnect with other complex networks so that processes can be automated across numerous enterprises and promote much greater visibility end to end.

Cloud-enabled BPO will become a critical capability and offering for any BPO provider. Ives believes, “As cloud becomes increasingly prevalent and progresses from being server focused to business outcome focused, clients will increasingly demand BPO providers to deliver a richer set of capabilities leveraging cloud-based platforms.”

“Currently, BPOs are predominantly utilising clients’ applications and IT infrastructure. Cloud-based infrastructure provides an opportunity for these BPOs to deliver bundled process and IT capabilities.

This will deliver greater savings and operational flexibility for clients as well as reducing overall reliance on traditional IT delivery”.

By Chris Luxford
President – Australia / New Zealand | Aegis Services Australia

There is no shortage of reports and forecasts about the uptake of cloud computing. According to a recent IDC survey of the intentions of CIOs in Australia, 20.6% of respondents were using a cloud solution. The same survey says that by 2015 the use of cloud services by Australian companies – from SMBs to enterprise-size organisations – is set to quadruple.

If you needed any further convincing that cloud computing is no longer on a roll but becoming a bullet train, IDC forecasts that the revenue for cloud services in Australia will increase from its 2010 figure of $470 million to just over $2 billion in 2015 – a compound annual growth rate of 34%.

So what does this all mean for organisations such as Aegis and for our clients?

Before answering that, it is worth looking back at technology. Technology has been changing the way we have been doing business for some decades. And keeping on top of that change requires time (and usually a large IT department) to understand the technology and how it can impact a business.

Technology is going to continue to be an ever-increasing enabler of differentiating change. I think this is helped by the fact we no longer fear technology. We now understand what it can do for our business.

The real change that organisations are seeking to drive is differentiation. In today’s increasingly information rich and knowledge worker based environments that differentiation will largely come from an organisation’s ability to change business processes at a speed that is faster than the competition.

Technology as a process change enabler is critical.

I think in the past technology was seen as a necessary evil. We didn’t trust the many large promises that technology sales people made, in part as we can all share a story of a large, company-wide technology investment that turned out to be a dud. The problem was that the organisation became so fatigued by the “technology project” that they never turned their attention to the more important piece of process change (adoption) post the technology implementation, resulting in low, or in many cases, no ROI.

Technology projects used to be long (sometimes years), often blew out budgets and as a result ROI would frequently be at less than desired levels, but you had to do it to stay competitive.

Cloud offerings change all that. Technology can be turned on and off in an instant. The most exciting part is that resources can be invested and assigned in driving the required process change to deliver the ROI and the desired market differentiation.

Technology has long driven differentiation, revenue and cost competitiveness at Aegis. Cloud computing will enable us to continue to do this but in a more client centric customer outcome fashion. This will allow us to become far more proactive in driving genuine business process change.

At the moment we have about 50,000 people globally in call centres around the world, including 2,400 here in Australia.

Until now our own technology platform has required an almost continuous upgrade cycle of hardware to keep pace with changes in software – at significant cost. It can also be hard to move staff around because their login is dedicated to a particular hardware spec for the various client related activities.

At Aegis we are constantly striving to be at the cutting edge of technology. Thus we have recently undertaken a revolutionary technology upgrade with our Citrix Virtual Desktop Infrastructure Project.

Australia is among the first countries in the world to make the transition to the Citrix VDI (Virtual Desktop Infrastructure) along with Aegis offices in India, the Philippines and South Africa.
The investment will enable our employees to ‘hot desk’ meaning our staff can sit at any desk in any location and still have easy and instant access to all the information they need. This technological upgrade will further assist us in managing and enhancing the experience of our partners’ customers.

From our initial cost estimates we believe we will save 50% on our hardware costs. But while the cost improvements are impressive, it’s the speed with which we can drive the aforementioned process change that is really exciting. We believe we can undertake and execute process change in a third of the time we were able to previously, with greater flexibility from cloud-based technology.

Improved business agility, flexibility and efficiency, increased ability to exceed the business outcomes of clients and meet their ever changing needs, desktops being easier to manage, more secure and operated at a lower cost, increased productivity, choice and flexibility for any user, and a faster roll out of contracts are all expected outcomes of this significant technology upgrade.

Some companies have so far chosen to shy away from cloud because of the perceived security issues. My observation is that our technical people are very comfortable with the security of the cloud. They understand how security is managed, what risk mitigation strategies need to be implemented and how to ensure both our client’s data integrity and ours. Security remains one of the most important issues for our clients – we simply would not embark on cloud-based offerings without rock solid confidence.

For me I believe there is an invisible line. Those below the line are those that look at decisions and focus on the risk of change. Then there are those above the line – those who think, “What is the risk of not changing”.

For Aegis, we are above the line. We need innovative business processes and a workforce that can move around from office to office depending on demand. This is not only important for our growth globally, but also for the growth and differentiation of our clients and their businesses.

By Mark Atterby – Senior Staff Writer

Application Outsourcing existed before the birth and rapid growth of the IT outsourcing and BPO industries. For a while it was forgotten as software applications were viewed as something that was bought and implemented rather than rented. The advent of the cloud has redefined the concepts surrounding application outsourcing, and how organisations can source, develop and deploy IT applications.

Essentially, application outsourcing is when one company employs another company to develop IT applications to automate specific processes and functions within the business. This has been happening since the first adoption of computers into businesses. Many providers of these services realised that they were able to package the application software they were developing and sell it as a product. Hence we saw the rise of organisations such as Oracle and SAP.

As organisations grow, the applications required to support the business generally become more complex. And the management of the infrastructure supporting those applications becomes more complex. The aim of Application Outsourcing is to give the organisation access to a comprehensive set of skills and assets essential to the increase of both the technical and business value of their existing software and the supporting infrastructure.

Cloud computing allows the applications and infrastructure developed by the third party provider to be delivered in a way that is scalable, flexible and easily deployed across multiple locations.

According to recent research from Everest, the Banking, Financial Services and Insurance industry are one of the largest adopters of IT application outsourcing services. Catering to this large global market segment, numerous service providers have developed capabilities to deliver AO services to the banking and financial services industry.

Due to increased competitive intensity, the advent of cloud computing, and the rapid changes in regulatory environment, financial institutions face significant pressure to ensure their applications portfolio is aligned to industry best-practices. According to the Everest research, as financial institutions strive to maintain and modernise their applications portfolio, they are consolidating their IT service provider base and are looking to identify strategic partners that can sustain the pace of technological advancement in this rapidly evolving industry.

As a result of this consolidation exercise, financial institutions are signing larger and more strategic AO contracts with a fewer number of service providers, a phenomenon that is expected to meaningfully alter the application outsourcing market. Risk and complexity is impacting most lines of business, and managing trade volatility has become a key front-office priority; while mid- and back-office are more focused on modernisation of the clearing and settlement function.

Other key markets for Application Outsourcing include Telcos and Public utilities, Healthcare and Defence.

The use of cloud computing ranges from 75% of customers in the technology and life sciences sector to 25% for financial institutions and customers in the transport, energy and infrastructure sectors.

All customers consider a security breach to be the biggest risk in cloud computing.

Customers in different industries rate secondary risks differently, with financial services organisations rating compliance as the second biggest risk while other sectors rate loss of data and loss of control over data as theirs.

61% of suppliers, and 66% of customers, believe that due diligence procedures have tightened in the last three years.

Just 8% of suppliers thought that they themselves should manage political / jurisdiction risk, compared to 49% of customers who felt that suppliers should manage this risk.

78% of customers believe that managing the risk of data loss should be a joint effort, up from 13% in 2008.

According to a global survey by international legal practice Norton Rose Group on current outsourcing practices and trends, businesses and their suppliers see the same risks with cloud computing solutions.

Nick Abrahams, technology partner at Norton Rose Australia, commented:
“It seems that customers are still concerned about the risks of cloud computing transactions. Customers’ main concerns are security breaches, loss of control over data and loss of data. For financial institutions, compliance risks are also key.

“The cloud computing industry has grown significantly over the past three years, but suppliers still need to convince customers that their data is safe. Recent well-publicised data breaches have not helped.”

The survey also found that customers are using lengthy due diligence processes prior to entering agreements.

Michael Park, technology partner at Norton Rose Australia, commented:
“Due diligence is particularly relevant for cloud computing. The results show that data security is the key risk driver for all customers. Due diligence processes have improved in the past three years, but customers need to develop a due diligence process that tests and evaluates suppliers against key risks.

“The only way for customers to be sure that a potential supplier is appropriate is to visit the supplier, use their systems and carry out reference checks. The survey shows that the risks for customers in different sectors differ significantly. Customers need to ensure that suppliers have considered the risks that are important to them.”

While companies are increasingly taking on responsibility for risks, such as project delay and data loss, opinion is sharply divided on whether the customer or the supplier should take responsibility for political / jurisdiction risk.

“The survey indicates that customers do not perform due diligence on supplier’s staff, assuming that this has been done by the supplier. Recent security breaches, however, show that it takes only one person to cause a devastating reputational impact,” said Park.

“Where a company puts any element of its business into the cloud, it must ensure that due diligence has been undertaken on the supplier’s staff given that they may have access to data about the company and its clients.”

The survey also reveals a disconnect in the way suppliers and their customers view risk. Customers rate reputational damage as a primary risk but suppliers rank it as a secondary risk, and while service performance failure is seen as primary risk for suppliers, their customers view this as a secondary risk.

“Customers need to realise that not all risks can be outsourced to a cloud provider. The regulators are also very interested in cloud. APRA has informed the banks and financial institutions that they need to do the risk analysis of cloud the same way they analyse any outsourcing,” added Abrahams.

“Australia’s technology sector is as busy as it has ever been, and we expect this to continue for the foreseeable future. Cloud computing is a key element to growth. Customers are looking to the cloud to gain flexibility with their technology solutions.”

The report, entitled Outsourcing in a Brave New World, is the second outsourcing report released by Norton Rose Group and details the views of CIOs, General Counsel and Heads of Procurement from 74 businesses globally including technology and life sciences businesses, retail companies, financial institutions, transport, energy and infrastructure companies and the professional services sector, and suppliers themselves.

Please see the report at Outsourcing in a Brave New World.

Norton Rose Group is a leading international legal practice offering a full business law service to many of the world’s pre-eminent financial institutions and corporations from offices in Europe, Asia Pacific, Canada, Africa and the Middle East, and, from 1 January 2012, Latin America and Central Asia.

By Lisa Banks (CIO)

It is predicted that 2012 will be the year when customer relationship management (CRM) software becomes truly customer centric and based on an open, Cloud orientated model, SugarCRM’s country manager has claimed.

Speaking with CIO Australia, Australian country manager, Tony Hughes, said a second generation of CRM tools is set to emerge next year.

“The thing that’s pretty interesting is that CRM is about making the IT environment truly customer centric,” Hughes said.

“There’s a second generation of CRM and people say integrating social media is important to the enterprise.”

Hughes said SugarCRM, which recently acquired iExtensions; the tool that makes CRM software for IBM Lotus Notes users, and has 600 customers in Australia, is predicting 2012 will be a year defined by CRM systems that don’t cause vendor lock-in.

“I don’t think a CIO wants to be forced into a proprietary environment that locks them in,” he said. “They want the flexibility to move it into a computer room or into another vendor’s Cloud environment.”

Hughes said a shift away from ERP systems will mean the role of the CRM will be expanded in 2012, and will take advantage of mobility and real time data.

“I think CRM is going to be more about a presentation environment for any organisation that wants to be customer centric,” he said.

“The problem with ERP systems is that they are inflexible and not at all customer centric, so I think CRM is going to be increasingly about information and providing real time information for mobile workers.”

Follow Lisa Banks on Twitter: @CapricaStar

Follow CIO Australia on Twitter: @CIO_Australia

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

By Maria Korolov

When I launched my small company in 2004, we needed email, word processing, spreadsheets, and a shared database.

If I had launched my company earlier, I would have had to set up a server to run the database as well as the email and hire a guy to manage it so that my employees would all be able to access it, whether they were in the US, Europe, China, or India.

But this was 2004, and I was able to use Google Apps for the email and document sharing and DabbleDB (since closed) for the database. There was a small monthly fee for the database, and the free version of Google Apps gave us all the email and shared documents we needed.

Anything else we had to do — image editing, for example — we did on our desktops, and we emailed the documents around.

If the Internet went down, we waited it out. If Google went down — it happens — we waited it out. Both kinds of outages were relatively rare and didn’t impede operations.

If a computer crashed, we picked up the phone and paid for a local guy to come out and fix it, usually by reinstalling Windows. Once in a while, we’d buy a new computer for an employee.

Since then, more and more applications have become available on a subscription basis, delivered over the Web: customer relationship management, accounting, photo editing. You can even run a hedge fund out of your house by outsourcing all the back-end services to vendors.

And that’s not even the half of it. If you need some software that’s not available in the cloud — a specialized accounting application, for example, or something you developed in-house — you can hire a hosting company to run it for you.

There are even companies that will run your Windows desktops for you. You can use a tablet, or a cheapo netbook, thin client, or Linux box — pull up your browser, log in, and all your programs and data files are right there.

No worrying about upgrades, viruses, or backups — the hosting company does everything for you. All you pay is a monthly fee. And if a computer breaks, call in the local tech support shop, or just buy a new one.

If you’re a small company, you don’t need an IT department anymore.

In fact, the line at which you’ll have to hire IT staff and buy your own servers keeps moving up and up.
Even the largest corporations are getting into the game to the point where, today, any non-core process can be outsourced. Proctor & Gamble, for example, signed a $650 million deal in 2008 to outsource VoIP, Internet services, audio- and videoconferencing, and firewalls and anti-virus protection to the BT Group. And that was on top of its existing 10-year, $3 billion mega-outsourcing deal with Hewlett-Packard.

After all, how many companies run their own cafeterias, power plants, or janitorial staffs these days?

There may soon come a point where the only companies with information technology divisions are those for whom tech is a key differentiator or a core strength.

A hotel, for example, isn’t likely to outsource maid service if the cleanliness of its rooms and the politeness of its staff is a strength and a differentiator.

Similarly, Amazon and Google aren’t going to turn over their servers to an outside organization.
But if you’re an online merchant and don’t have a hope of matching Amazon’s technology, why not outsource it to Amazon itself?

And if your IT department isn’t the best in your industry, why not outsource it to IBM, Accenture, HP, or another world-class technology vendor?

Instead of having to be proficient in all aspects of technology, your company will need to become proficient in choosing vendors and negotiating contracts.

No, wait — there are firms that will do that for you, as well.

You’ll just have to be good at whatever business you’re in.

Maria Korolov is President of Trombly International, an editorial services company that provides coverage of emerging technologies and markets. She has been a journalist for over 20 years.

Source: Internet Revolution

Asia CEO Awards
See who won the awards for the most accomplished leadership teams and individuals currently operating in Philippines and the region. The awards recognize extraordinary leaders who have demonstrated outstanding achievement for their organizations and contributions to others. 

http://www.asia-ceo.org/awards

Australian company Laithwaites wine people has looked to the Cloud to improve its call centre operations, rolling out a public Cloud offering across its new 35 seat customer service centre in Sydney. The company, which sells premium wine to some 65,000 Australian customers, was looking for a technology driven strategy to interact with its customer base, and decided to deploy IPscape across the business.

Five golden rules for IT

Using a cloud platform to outsource IT operations is a big consideration for many businesses
at present. Cost reductions and a higher degree of flexibility are the primary drivers
behind companies taking the plunge with the new technology.

However, there are growing number of IT departments who are concerned over
its security and service levels.

IT expert Michael Robert of BusinessComputingWorld.co.uk says there are five key points
businesses should look at when deciding whether or not to outsource to the cloud.

Firstly, he wrote on the website, companies need to have an understanding of their IT
infrastructure and how it operates. If the companies runs a lot of file sharing operations or
phone switches then they may not be suitable for the cloud.

He added that some businesses, such as financial institutions, are governed by strict
regulations and as such some of their operations may best kept in house rather than
outsourced.

Secondly, he stated, weighing up current and future costs against the benefits on offer
is important. However, he was keen to note: “I’ve found that, in almost all cases of
outsourcing to the cloud, businesses that reduce their IT estate and centralise servers in
a third-party data centre still have ample processing power and storage to realise these
kinds of ambitions.”

Despite this, his third point is to look beyond the figures. Cloud should not be looked up
on just in terms or cost reduction and day to day operations, it can also work as an effective
back up the event of an unforeseen disaster.

Fourthly, he advised that your companies should optimise their networks for the cloud.
He stated that too often the network is an afterthought when outsourcing projects begin
and can impact on performance. Increasing bandwidth is another thing companies
neglect using a cloud-based platform.

Lastly, he said that a business should get to know its provider. He suggested speaking
to their other clients to find out whether they will be a good fit for your business.

Source: iHotDesk