What is the true price of BYOD?

Posted on : 29-10-2013 | By : jo.rose | In : Innovation

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“Nature is a mutable cloud which is always and never the same.”  Ralph Waldo Emerson

Our failure to enter into good commercial agreements in the past has hampered our chances of attaining the full value offered by new systems and technologies. The mutable clouds that stream towards us at increasing speeds offer greater potential; yet the commercial challenges are always the same. What are some of these commercial challenges posed by newer technologies? What can you do about them?

Let us consider an example: the trend for CIOs to adopt a Bring Your Own Device [BYOD] policy. Once the concerns about security, data privacy and access have been addressed, a BYOD policy is very attractive to both the user community and the CIO. However, a BYOD policy also starts the timer ticking on a cluster of time bombs: what software suppliers will do about business use of personal software.

Managing software audits properly has always been a difficult task. Many organisations over-deployed software within their environments or allowed software to be used in ways that were not covered by licences or enterprise agreements. How much more difficult does this become where business work is delivered using personal devices? How can the organisation track and report the use of personal devices? Will there be a single personal device used per employee or is business looking at individual instances for desktop, laptop and mobile devices?

One possible approach is for the business to tell the software supplier to pursue staff directly for inappropriately using their home edition software. Staff attitude surveys towards IT might well dip after such an event and the liability will likely return to the business corporation because that is where the benefit lies.

A second solution would be to let the issue drift until the software provider initiates an audit and then cut a deal. Most organisations took this approach to past software compliance liabilities. Given the difficulty of proving the right usage statistics from a BYOD policy, there needs to be plenty of space for a bigger number in the ‘Amount’ box of the settlement cheque.

The best approach is to review software agreements pro-actively. Pay particular attention to applications and data. You may be lucky and find that some of your agreements are based on headcount. Never, ever surrender a headcount clause. Where you do not have a headcount agreement with a software supplier then you can try asking for one, although a new headcount agreement is now likely to be prohibitively expensive with an incumbent supplier.

Assuming you do not have headcount clauses, when you review your software agreements the thought process should be something like this….

  • Can the supplier demonstrate that employees have used personal software to deliver business needs?
  • If the supplier can demonstrate this, we may have a liability.
  • Can we provide accurate statistics for how many instances/devices/employees are involved?
  • If we cannot provide accurate inventory then the liability might end up being a multiple of the number of employees, contractors, consultants and suppliers that work on our behalf.
  • We should be able to reduce the liability if we formulate a commercial stratagem that the supplier will accept.

So is this just scare mongering? US President Obama set up the Office of the Intellectual Property Enforcement Coordinator [IPEC] in 2010 and has significantly expanded enforcement powers in the US. Through negotiations with the European Union, G8 members and G20 members, the US continues to extend its Copyright and Intellectual Property models to the UK and other developed countries as part of a campaign to ‘Fight Worldwide Counterfeiting’, IP Theft and Copyright Infringement. Software suppliers coordinated their common interests through a trade body called the Business Software Alliance [BSA], founded in 1988. Since 2008, software suppliers have seen major reductions in their income because businesses cut back spend on new development projects. Suppliers replaced their lost development income with penalties for non-compliance gathered through more widespread software audits. Most of these are gathered in out of court settlements that are not widely reported.

There is some good news. The BSA and software suppliers focus much of their energy on countries where they see high levels of piracy and the UK is not one of those. The suppliers themselves are also generally amenable to working with businesses to find solutions where software costs remain reasonable. Once you have spotted a problem, work with your commercial or legal teams to formulate a stratagem and bring this in good faith to the supplier.

Do not take too long. Pressures on software firms’ revenues increase as their old products lose market share to new platforms like Android, new applications like Prezi and new productivity tools. The commercial solutions remain the same but the new clouds roll in faster.

 

Many thanks to Sean Pepper for contributing to this article – Sean is an interim manager and consultant with experience of leading Vendor Management and Procurement activities at major banks.

For any questions or more information, please contact: jo.rose@broadgateconsultants.com


Too big to fail…or too big to succeed?

Posted on : 30-11-2012 | By : jo.rose | In : Finance

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In a recent blog we touched on what the future might hold for retail banking and some of the challenges facing them that have been played out in the open around brand and reputation, plus how potential new entrants could disrupt their traditional business model.

This month we thought we’d explore a little more the “legacy” that is inherent within the larger financial services organisations, specifically from the angle of the infrastructure cost burden that banks carry with them.

Most firms realised a while ago that their ratio of back-office to front-office expenses had become imbalanced or needed to be addressed. Years of growth, increases in business applications, product complexity and acquisition have added layers of cost elements. Of course, application and infrastructure consolidation is mooted along the way, but is often not executed.

Consequently, cost savings initiatives and operational efficiency have been part of the objectives of technology departments for many years (10 plus for some). Operating models have been modified, organisations have been de-layered, contracts consolidated, software and hardware standardised, development work best-shored, operations departments moved to Eastern Europe, infrastructure outsourced, contingent workforce rates reduced etc…

This is all good stuff, but one question remains (particularly if you’ve been a front office, revenue generating, observer during this period)…Are we going to run out of time?

It’s a serious question and one which we think is valid to ask against the new technology landscape. Let’s explore a few (maybe uncomfortable) points.

  • Could (or should) more have been done at a faster pace over the years? Financial services technology departments have always been a cost centre/enabler and therefore demonstrating tangible benefits through driving operating efficiencies has been a good way (sometimes the only way) to demonstrate value. So with technology leaders building careers around this, it’s good to “hold some cards in the hand” for next years’ bonus, right?
  • A second point is around the size and scale of the infrastructures within the big banks. With this complexity building up over many years is it just too big to fix or make competitive? Technology leaders will measure against their peers in terms of delivery and efficiency, but is that actually the problem? The oil tanker analogy is often used and yes, there’s a lot of hull to turn, but should we not be issuing the abandon ship order in favour of a more nimble vessel?
  • Lastly, what about the operational resourcing. Whilst sourcing models have changed and target ratios of perm to contract tinkered with, how often is the question of really matching demand to supply looked into? Or measure productivity and shift unused resource capacity based on peaks in demand? It’s not easy, but perhaps more could be done. Indeed, whilst pointing to reductions in workforce in a measure of driving down costs it often detracts from the still substantial size of the remaining organisation.

Again, it’s a difficult problem solve but the risk is that there is a positive answer to the question of running out of time. Are we simply been delaying the inevitable…a death by a thousand cuts?

Part of the problem is that for a large percentage of retail customers what they need now in terms of banking has changed significantly. We know that online/digital is where most customers want to transact and the more complex branch based services and advice is declining.

Some banks are adjusting their services portfolios to address this, such as Swedbank who recently announced completely hiving off its digital banking operations into a separate business entity. A recent Telegraph article also talked about the importance of improving online services in order to retain customers, with a third citing frustration with the current offerings. And then there’s the new generation who most likely will have a completely fresh set of banking needs.

So there’s a lot that needs to be done in order to retain customers, stay competitive and at the same time tackle the legacy and at the same time keep an eye out for new entrants, with more lean online services and no “baggage”.

But its not all doom and gloom. Ironically, it could be that the ability to absorb the infrastructure requirements of increased banking regulation might actually deter competition…

No-win/No-fee: Cost Takeout Services

Posted on : 31-08-2012 | By : jo.rose | In : Finance

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Enterprises are always under pressure to deliver IT value and cost reduction; even more so in today’s climate. Recognising that both resources are scarce and there is no budget to “spend money to save money”, we have developed a model of cost takeout and recovery services that works on risk and reward basis (no win-no fee).

Our partners are currently delivering multi-millions in recovery or avoidance in the four key areas of Fixed Line Telecom, Mobile Tariffs, Software Licensing and IT Assets and Infrastructure.

Some characteristics of the offering;

  • The service is a “light touch” approach. We do not require significant client resources but access and authority to artefacts and contracts which underpin the associated focus area.
  • We have developed this service through years of experience in driving efficiencies and is underpinned by expert staff in financial and contractual management.
  • We agree the success criteria and shared reward targets upfront with our clients.
  • In some areas, such as mobile phone tariffs, costs can be reclaimed retrospectively for up to six years.
  • The only risk to the client is doing nothing!

 

If this is something that may be of interest please contact Jo Rose to discuss how our approach could help your organisation.

 

 

 

 

Are you suffering from Complexity Drag?

Posted on : 24-06-2011 | By : jo.rose | In : Innovation

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You have bought in the different software you need to run your business processes. Your system experts have pushed them to their limits as you have expanded.

To protect your critical production systems, you sensibly now have a series of environments (system integration testing, pre-prod, prod, etc.) which allow software upgrades to be fully tested and accepted before hitting your production environment.

However the various systems you now have are complicated with many inter-dependencies and your many environments have varied topologies. Even stopping or starting a small element or whole environment required specialist knowledge of the underlying systems.

When a required upgrade for some of your third party software comes in, it is a major event and the decision to deploy it through the environment chain is a big one. The system experts are now heavily involved throughout the deployment process. Even after their initial configuration work, their knowledge of the different configurations and dependencies within each environment is still required at each stage.

Instead of improving your systems or developing the next big thing, your system experts are now stuck in a constant cycle of pushing out software updates through the whole chain.

Stuck in a constant cycle

Stuck in a constant cycle

You are suffering from complexity drag. The effect when the greater complexity of your systems puts an increasing drag on future work. Further improvements or developments are slowed or stalled as your team is increasingly tied up with maintaining your current systems rather than driving forward necessary change.

Would it not be nice if your system experts could wrap up their systems knowledge and the necessary control along with a software update into a ball and then then just pass that ball up the chain with minimal further involvement?

Liberated experts and empowered users

Liberated experts and empowered users

The challenge is to move from the old model with its substantial knowledge silos to a more devolved system where knowledge is shared out and control delegated out to those that need it. This would empower gate-keeper users to maintain their own domains and push out any expert-approved updates themselves.

This can be achieved through use of a holistic system which encapsulates a repository of system knowledge including a store of all software and their updates. Each user can then receive customised views and control of the systems they require (as defined by the system experts), all of their actions can be centrally audited and the experts can be alerted in real-time to any problems.

Now that a lot of the support and maintenance work has been delegated to the relevant gate-keeper users and safe in the knowledge that they maintain close control of the entire system, the system experts are finally liberated to get on with those business-enhancing things that they were always meaning to do.

Contributor: Andrew Porrer – Technical Director – Heathwest Systems (www.heathwest.com)
For a demo of our application management software, please feel free to contact me at andrew.porrer@heathwest.com