Posts Tagged ‘Cost Reduction’

Is a hybrid model an answer for helping with the “40%”?

Monday, July 5th, 2010

This is a piece originally published by Reuters as part of their Great Debate series, given all that’s happening right now around “finding the 40%”, I thought it might be worth resurfacing…

The British economy may technically be out of recession, but it is still not creating the jobs and growth needed to turn back the clock to the upbeat days of the past. And with a looming fiscal crisis, it’s not hard to see why some commentators are predicting the terminal decline of the British economy. I don’t think the situation for Britain is dire — yet. But if businesses want to regenerate economic engines in the future they do need to change.

PlanABAstute business leaders know that dramatic social, economic and political changes — in addition to changing workforce demographics, globalisation and rapid developments in social and business technologies — are now fusing together. Ultimately, they will affect every aspect of UK private enterprise – and competitiveness.

Having spoken to prominent industry figures and the Institute of Directors, I am more convinced than ever that the solution to this change is a move to a “hybrid” business model. That means UK businesses need to change their thinking, structures and operations and adopt a more flexible approach or lose out to more nimble competitors in the future.

A looser hybrid model has many benefits, although it isn’t without challenges. In the hybrid business, fixed office space is rejected in favour of giving staff access to shared space in bureaus. Such structural changes have huge benefits, including increased profitability (reduced rental overheads), greater responsiveness to shifting demand and more intense collaboration between workers – not to mention improved agility as businesses quickly spot and exploit market opportunities.

It’s not all sweetness and light though: less fixed office space can put off employees and create a sense of insecurity. But it’s become clear over the last few years that the notion of the office is changing and employees want a flexible approach to work. There is a noticeable move towards sharing in cities such as London, Manchester and Birmingham where office space — as well as coffee, light and power — are shared.

A hybrid approach to business is far more employee orientated. In my view, it recognises the blurring demarcation between work and home life. That involves recognition from businesses that as part of expecting staff to be on call 24/7, they must also be able to access modern communication tools — such as social networks and online shopping tools — in the office at all times.

This is liberating for workers, and it makes easier for employers to retain them amid a highly competitive global pool of talent. Company loyalty — not to mention control over the various workers operating from multiple locations — will remain an important aspect of business. There is a danger that an overemphasis on flexibility could actually lead to chaos, lack of creativity, miscommunication and ultimately poor service.

An overemphasis on flexibility is a real danger – one that all companies seeking to implement a hybrid model should be keenly aware off. But it is a risk worth taking because the harsh reality is that whether you like it or not, our foreign competitors are already implementing aspects of the hybrid model. From Shanghai to Seattle, workers are increasingly diffused, IT systems are being accessed via the cloud for a fraction of the cost, and businesses are moving quicker than ever before to exploit new opportunities.

In short, determined foreign competition means that unless we change with the world, the overall competitiveness and agility of UK plc will suffer. I don’t want to see Britain relegated to global economic irrelevance, which is why I passionately believe a move in this direction is a good move for our businesses, economy and society.

The Efficient Enterprise in 2010

Tuesday, February 23rd, 2010

I’ve just come from a really fascinating roundtable discussion (sponsored by Dell and hosted by Bryan Glick from Computer Weekly) about the "Efficient Enterprise in 2010". The meeting was well attended by a bunch of Enterprise customers and Partners, with the context for the discussion being a presentation from Robin Johnson, Dell’s Global CIO.

There were a number of really compelling things that came out from both the presentation and the ensuing discussion:

  1. Opportunity Cost of IT Savings Understand the Opportunity Cost of any savings you make.
    OK, so you lot know I already get that one, but wow, Dell apparently are able to plough around 50% of their savings back into strategic IT (and when you’re making a $160m saving p/a, that’s a big deal). Read on to find out how they get away with that -especially at a time when most CFO’s want every penny they can get – and then some.
  2. Use the Time:Cost ratio as the pivotal argument, not simply Cost savings alone.
    Robin (and the group) talked about the difference in motivating the "business" when you factor in the time to market for IT solutions rather than simply talking about cost savings alone. It sounds simple when you say it like that, but it’s a hard won position with many CFO’s/Steering Boards. If people understand the difference in time to market that more complex IT makes, it makes it easier for them to support you in making it simpler.
  3. Pursue "Ruthless Standardisation"
    Driving a standards based architecture is a pretty tall challenge, no point in doing it then if you’re only going to go halfway. It’s tough, but if you’ve done the above, you can make it happen. Dell have only _2_ images for their 22,000 server estate. That’s pretty ruthless, but it enables them to do a lot more.
  4. Create a path of least resistance
    The Dell guys talk about the "Happy Path" vs the "Unhappy Path" when it comes to IT Architecture and solutions design. Follow the "happy path" (i.e. use standard tools/architecture etc) and you will get your solution in place more quickly and more cost effectively. It is possible to walk the "unhappy path" but it’s hard work so only those that are committed take it.
  5. "Good enough" is good enough
    It was in fact, the great Dash (from Disney’s Incredibles – see how I spare you no cultural expense on this blog 😉 that said (and I paraphrase) "When everyone is special, it actually means no-one is". Nowhere is this more true than in the internal IT vs Business debate. The more special we allow different groups/departments to be unique and special the more expensive their IT solution. This recession will force organisations and departments to come to terms with this (I hope)
  6. Rigidly define flexibility
    Oxymoronic at first blush, but it simply means, leave a little wiggle room, so people still feel empowered and part of the solution. Avoid "doing things" to people, collaborate with them instead.
  7. The Consumerisation of IT Finally (and another of my favourite topics) be cognisant of the effects of "Consumerisation"
    Robin talked about the "Sunday Night/Monday Morning" concept, whereby people have a great IT experience on Sunday night as they catch up on personal tasks on-line, then go into work the following morning to receive a comparatively poorer experience. This isn’t about embracing the millenials, but about providing a range of service that suits a range of generational stereotypes.

Although the discussion was mostly business focussed, there were a couple of key technological points that I felt we worth calling out:

  1. Power consumption is the new gold
    Based on the granularity of their server provisioning approach (smallest unit of MIP "currency" is a 2U box), Dell reckon that it is now power consumption that drives their hardware refresh cycle. Robin currently reckons that a 3 year refresh cycle will provide sufficient financial savings in power consumption alone to pay for the refresh.
  2. Virtualisation alone is not enough
    Although it took a record breaking 60 minutes into the discussion before anyone mentioned the "c" word (Cloud, that is), what was clear that a big part of Dell’s success in the rationalisation of their data centres was the automation of the server provisioning. This is a topic that we’re beginning to see again and again, a virtual server is still a server, it still needs to be provisioned and patched. You only get the big savings, when you can automate that process sufficiently (and model it so you know what you’re doing is right).

6 Themes for IT’s Future

Friday, August 14th, 2009

Wow, time flies.  It’s been a busy and slightly ugly Summer, but enough of that, it’s finally time for us to bring you the presentation I made at this year’s Architect Insight Conference back in May of 2009.   A particularly important event for me as it marked the first public release of the 6 key themes we’ve been working on for the last 12 months or so.

This presentation walks you through the 6 key themes that are the foundation of all of the challenges (and opportunities) we face in helping move the value of technology in our society even further forward and why, in some cases, our initial perceptions of them are not always correct.

Sit back (remind yourself what Summers _used_ to be like) and enjoy…

You can download the webcast here (right click and “save as”) or click here to subscribe to the Envisioners podcasts on iTunes.

The Cost Reduction Movie

Friday, March 6th, 2009

costreductionWe’ve collectively been reducing IT costs in organisations for years, and it is the obvious default state for most organisations, regardless of the current prevailing economic climate.

The easiest thing to do when looking to reduce costs is to spend less, trying to maintain current service levels. In my experience, this rarely works. At best, you maintain your current service levels, but slowly, the organisation begins to asphyxiate as it is unable to keep up with changes in conditions, demand and technology.

The challenge of course is that, as Bill Gates once wrote, “… if you’re too focused on your current business, it’s hard to look ahead and even harder to make the changes you need to …”

The real opportunity of course, is to think about the potential of tomorrow whilst being realistic about the savings of today.

Increasingly, (and because we’ve seen the “Cost Saving” movie more times than the Wizard of Oz) significant savings are becoming incredibly hard to identify and achieve and this, coupled with the increasing pressure for us to do more to change the way in which we do business is leading us to the _only_ way forward – Transformation.

Transformation is the cornerstone of the current CIO’s dilemma, get it right and you can have your cake _and_ eat it. Get it wrong and your organisation will begin to lose effectiveness and in your case, relevance as you struggle to keep up.

The good news however, is that the gateway to Transformation are controlled by attributes that are really strong cultural values in your organisation that you have great pedigree in exhibiting. I’ll cover these in more detail later, but ultimately it’s about your ability (both as an individual and an organisation) to be innovative and agile.

6 Themes for Comtemplation

Tuesday, March 3rd, 2009

The catalyst for the birth of “The Envisioners” was the emergence of 6 key themes that seem to be effecting everything we do with IT today (and why mostly, our understanding of these issues is not as it should be).  What better a way to start this blog than with an overview of these themes as they form the foundation of the work The Envisioners do, and will be core areas of focus as we continue along this journey of discovery, helping us all reach a better understanding of the true value of IT in a modern society.

We’ll be coming back to each of these in much greater detail over the coming weeks, but for now let’s get to meet them:

Cost Reduction
costreductionMore than just today’s bandwagon, the current state of the global economy offers a real force for change. It is absolutely vital we understand how to harness this to our advantage rather than treating it as a constraint to progress. Being respectful that the current economic crisis has a devastating effect on many people’s lives, we need to be bold enough to avoid the mistakes that “easy” answers for cost reduction will bring – we’ll be looking at examples that help to unpick how we can make the biggest difference without sacrificing our future.


Yesterday’s news? No, I thought not, but as with Cost Reduction, this is a considerable force for change that we need to understand properly before we can figure out the best way for us have the biggest impact. Please, this is _not_ a discussion about bottled water and virtualised data centres, this is about how we identify and embrace the systemic change that is required if we are to make a real difference in our own lifetimes.

Security & PrivacySecurity & Privacy
No broad discussion about technology would be complete without a conversation around security and privacy, this one however, is focused on how we need to understand more about the evolving boundaries of privacy and the changing way in which we need to think and apply security principles in all that we do. Like it or not, this is going to require some really difficult conversations about our definition of “risk”, but these are conversations we can no longer choose to ignore.

Like it or not, the world is changing around us. Technology is (or has) become a pervasive part of most peoples lives and is no longer the “special” thing it was when I was a lad. This is big, treat IT as something special and “complicated” and you will fail. Why? Because no-one really cares anymore – it just has to work and we as individuals just have to get on with making it work. Don’t believe me? Ask your kids.

As individuals, we are incredibly resilient, we cope with significant change every day and mostly without blinking. There’s something about the work environment that changes this and we need to understand why. Why is it that we resist change so much at work when at home we just suck it up and move on. Ultimately, the more agile we are (as individuals and organisations) the greater our chances of success.

Innovation ManagementInnovation
All of the other themes point towards the need and drivers for transformation in both our personal and professional lives and innovation is the only way we can make that transition happen. But most people will tell you that having the ideas is actually the easy thing, it’s doing something with them that’s the difficult bit. Above all things managing Innovation effectively is the most critical thing for your success in the future, we’ll be looking into how other organisations approach this problem and offering ideas (and asking for yours!) on how it can be done to best effect in any given situation.