Herculean Buyers, Lions, And Hydra — Do You Want One Throat To Choke, Or Reps That Understand The Products They’re Selling?

The proposed acquisitions of SuccessFactors by SAP, and of Emptoris by IBM got me thinking about the impact on buyers of market consolidation, in respect of the difference between dealing with independent specialists versus technology giants selling a large portfolio of products and services. Sourcing professionals talk about wanting “one throat to choke,” but personally I’ve never met one with hands big enough to get round the neck of a huge vendor such as IBM or Oracle. Moreover, many of the giants organize their sales teams by product line, to ensure they fully understand the product they are selling, rather than giving customers one account manager for the whole portfolio who may not understand any of it in sufficient depth. Our clients complain about having to deal with just as many reps as before the acquisitions. They all now have the same logo on their business card, but can’t fix problems outside their area, nor negotiate based on the complete relationship. It seems that buyers end up like Hercules, wrestling either with a Nemean lion   or with a Lernaean hydra.

The acquirers' press releases tend to take it for granted that customers will be better off with the one-stop shop. Bill McDermott, co-CEO of SAP, said, “Together, SAP and SuccessFactors will create tremendous business value for customers.” While Lars Dalgaard, founder and CEO of SuccessFactors, talks about “expanding relationships with SAP’s 176,000 customers.” Craig Hayman, general manager of industry solutions at IBM, said, “Adding Emptoris strengthens the comprehensive capabilities we deliver and enables IBM to meet the specific needs of chief procurement officers."

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Why Is Buying An IT Service Management Tool Like Buying A Car?

It sounds like the start of a bad Christmas cracker joke. Maybe the title of this blog should actually be, “Why Should Buying An IT Service Management (ITSM) Tool Be Like Buying A Car?” but let’s see where this goes. I'll deliberately avoid talking about salespeople.

I sometimes talk about new application development in the context of acquiring a car: in that the business often says “we want a green car” to IT rather than saying “we want a means to get from A to B that is aesthetically pleasing.” What I realized responding to a Forrester client inquiry this morning is that the same is true in selecting an ITSM tool.

How should one buy a car?

Let’s look at ITSM tool selection in terms of needing a new means of transport/business support, as you might not actually need a car:

  • Work out what you need it for (is the need for a car, tractor, plane, or pony?)
  • Identify the features you need based on what you need to achieve rather than what is available (will you use 16 cup holders?)
  • Identify what features you need/value most and don’t lose sight of them
  • Work out what you can afford (this might impact the above)
  • Speak to your “personal network” about their experiences with particular models and vendors
  • Look at what is being said on the Internet (the social commentary)
  • Consult aggregators of opinion and experiences (analysts and some consultants)
  • Speak with existing customers (and not just the ones that the car sales person points you at)
  • Ask for what you actually need
  • Always, always have a test drive and kick the tires (that is a test drive by the people who will be driving the vehicle in their job rather than the people who watch them drive). Get a pilot implementation
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Olympics 2012 – Is Your I&O Organization Ready? – Roundtable

The news this week in the UK has been awash with articles in relation to the potential problems that the Olympics 2012 could bring with reports of transport chaos, security rehearsals happening near Forrester’s London office to secret security documents being left on a train which detail policing measures. This is undoubtedly a unique occasion but with many eyes watching the UK this coming summer it’s something the planners simply have to get right. 

At Forrester, we believe that IT functions need to seriously prepare for the Olympic period also and so we will be holding a half day, collaborative event for our FLB members and interested prospects on Wednesday, 22nd February 2012 from 12:45 – 4:30pm at Forrester’s London office to explore strategic and tactical solutions to these risks. This session will be led by Senior Analyst Dave Johnson, a former software executive with 15 years of industry experience focused on client management and related operational processes and tools.

So why does this matter to you?  

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Social IT Support: Didn’t We Do This In The 1990s?

A lot continues to be said about the impact of “social” on IT support and for some it is now “so 2009.” To me, it was inevitable in 2009, and I wonder how far we have moved on in reality. Yes, some IT service management (ITSM) tool vendors have added in shiny new capabilities inspired by the adoption of mainstream social facilities such as Facebook and Twitter; but how many IT infrastructure and operations (I&O) organizations really understand social (and how social will impact IT support)? This, however, is the meat for another blog from the Forrester Community deli – today I only have time to drop a few sourpuss-thoughts in “virtual ink.”

So why am I being such a sourpuss?

Firstly, I am burdened by “the collective history of the ITSM community.” How often have we seen a great ITSM idea murdered in its execution? Consider the word “execution” here – it seems somewhat appropriate methinks:

  • What did we learn with the “knees-up” that was CMDB adoption in the late 2000s? It was an expensive party that many would love to forget.
  • How many I&O organizations are now buying service catalog technology rather than adopting service catalog management best/good practice that is supported by technology?
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It's Time To Expand Social And Analytics In Processes

Most BPM practitioners already know that social networks and analytics play an important role in today’s BPM suites. Here’s how:

  • Social BPM provides an effective way to bring more workers into process discovery. This is true both for the “as-is” phase and, more importantly, for the “to-be” effort. The result? More voices are heard and more knowledge gets captured, providing better insights into process improvement and transformation. This leads to more buy-in from workers. Plus, companies can go to social BPM sites, like IBM Blueworks Live, and share process best practices, frameworks, and code with others outside their company. In short, social BPM helps expand the inputs during process discovery.
  • Analytics provide performance metrics and KPIs during the optimization phase. This gives business and IT leaders more insight into operations. For example, the business can quickly spot bottlenecks and take action, monitor customer service levels, track how top-tier customers are served, and determine if SLAs are met. Using analytics to monitor performance greatly enhances the value of BPMS from the executive perspective.
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Virtualization Security, Better Late Than Never

I am excited to announce my latest research, The CISO's Guide To Virtualization Security. This is the first report in a new series focusing on securing virtual environments.  The reduced costs and flexibility of virtualization have led to widespread adoption of the technology.  Despite this adoption, security and risk professionals haven't given their virtual environments the attention that is required.  Our research interviews revealed several themes:

  • Business as usual is the status quo. IT departments rely upon traditional security solutions (end point and network security) to secure their virtual environments.  Depending on the network architecture, virtualization can create blind spots in your network leaving you blind to intra-virtual-machine (VM) communication. 
  • Many security pros aren't aware of the virtualization aware solutions available on the market. One CISO we spoke with wasn't aware that his organization's current antivirus vendor offered a virtualization aware solution.  This isn't necessarily surprising; many of the virtualization aware security solutions are relatively new to the market.  Virtualization aware solutions afford us the ability to have potentially greater visibility into workloads than we might have in our traditional physical environment.
  • Many security pros have a general discomfort with virtualization. Security pros, especially CISOs and other security leaders who have risen up the technical ranks, aren't as confident in their virtualization knowledge as they would like to be. This is particularly the case when we compare virtualization with more mature security areas, such as network security.
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Collaborative Problem Solving And Robot Design

To pick up the narrative from my last post, we're currently one week into the First Robotics build season for 2012. Team 811 is busy working away on an initial sprint. The goal is to get a minimum viable product (a drivable robot) up by the end of sprint one, which will then be used as a base to move toward a competitive robot that can play this year's game, Rebound Rumble.

So how did Team 811 get from "huh?" to full-speed prototyping in 4 days? How does anyone get 40+ teenagers moving in the same direction when the number of unknowns is significant and the problems to solve look insurmountable? For team 811, the key was starting with a 3-day process called "Collaborative Problem Solving (CPS)." Think of it as a pre-sprint process to build team buy-in and reduce downstream back-biting and second guessing.

So what is CPS? It's a technique that starts with a problem statement and then encourages divergent thinking to brainstorm creative solutions to that problem. Criteria that allow evaluation of those potential solutions are then applied by the entire group. This starts a process of combining divergent ideas into stronger overlapping concepts and identifying those ideas that have the strongest combination of feasibility and ability. The result would be recognizable to many agile teams: a burndown "punch list" of items and strategies to drive early prototyping and the team's first sprint.

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Stormy Weather's Ahead For The IT Services Industry?

Infosys recently published strong fiscal Q3 results as revenue growth and operating margins were boosted by a falling rupee (down a sharp 11% sequentially). For the full year, however, the company revised its forecasts in dollars from 19% to 16% for FY2012 (April 2011 to March 2012) on account of a slowing business in Europe.

Forrester expects marginally slowing growth in the global IT services market, dropping from about 7% growth in 2011 to 6% growth in 2012 (read Andy Bartels’ tech market outlook for 2012 here). Most of the slowdown effect will come from the debt crisis in Europe. Growth in emerging markets like AP should remain strong in 2012 (read my report with Andy Bartels here), although this growth will not be large enough to offset a slowdown in mature markets.

I look forward to having updates from Wipro, TCS, and HCL this week to see if we can “generalize” Infosys’ guidance to the overall IT services industry. Until now, Indian IT companies’ growth and margins have been protected thanks to a weakening rupee. I believe that this situation combined with slower growth in the US and Europe will lead to a price war between vendors as they try to build volume.

What does this mean? As economic uncertainty looms in 2012, I believe IT services companies will have to accelerate their transformation toward software capital intensive models. In my upcoming report (“Solutions Accelerators — A Reality Check” to be published in April 2012), I will look at how far they have gone in this transformation and what the key success factors are going forward. Stay tuned.

Symantec Scoops Up LiveOffice

Symantec today announced that it has purchased LiveOffice, a privately-held cloud-based archiving vendor, for approximately $115 million. With nearly 20,000 customers, LiveOffice has historically marketed to small- and mid-sized financial services firms. Over the past couple of years, however, the vendor has steadily bolstered its archiving and broader information governance functionality, lined up productive partnerships with major technology vendors, and met with success in selling to larger organizations across a wider set of vertical markets.

Buying LiveOffice is a smart move for Symantec. My initial take is that this acquisition will be a positive development for current and prospective enterprise customers. Here’s why:

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Mo' Data, Mo' Problems

Big data is a big topic these days, with companies aggregating consumer data and contracting with third-party marketers to mine it.  However, an unforeseen problem arises around unclear data ownership. This is a problem because companies are packaging your data and selling it.

Take the following case — a client was looking to have a marketing company take its point-of-sale (POS) data to prepare email campaigns. Upon closer review of the contracts, data ownership was ambiguously defined and nested in three separate areas: the Master Services Agreement (MSA), SOW, and an addendum. When you trace the definition through the various documents, the only thing made clear on data ownership was that the campaigns resulting from the ETL (extract, transform, load) process were owned by the client. What about the POS data that was sent over to the marketing services company? 

In a conversation with a data expert at a retail-focused marketing services company, they package your POS information and sell it to other buyers, thus creating an additional revenue stream. Disturbingly, clients are unaware this is happening and don't share in any of the profits.

Here's what to do to mitigate the issue:

  1. Ask the company if it is packaging up your data and selling it. If it is, is there an opportunity for your company to collaborate? What's your company's internal position on this? Identifying intent and understanding your options will help you define the data protection or partnership language you want to think about before contract negotiations begin.
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