Veronica Rahneberg leads Fujitsu Ireland’s consulting practice.
What themes are you seeing coming up in discussions with CIOs?
What our customers are saying to us is they need to keep the lights on and manage with a reduced budget, but they also need to be able to demonstrate value add to the business, so that’s kind of a theme for our customers: they have to innovate.
Obviously, they’re using virtualisation to keep costs down, and they’re also seeking efficiencies through the cloud. And they’re investigating shared services and what it means for them, especially in government. We’re seeing quite a lot of PIN notices coming out in relation to shared services, where they have an intention to investigate that and see what it means for them.
And that’s primarily in the public sector?
They’re investigating it at the moment about how best to use a shared services model. In the UK, some of our customers have been doing this already for quite a number of years. Cambridgeshire has a number of county councils using an ERP backbone, and we’re supporting the ERP system in partnership with them.
What services tend to get shared, and do organisations adopt it in a big bang approach or take it one service at a time to check that the model works?
The lower-end services like infrastructure and servers tend to get tackled first, just to see how it would work. And as it proves to be successful or as lessons are learned from that, they tend to add more on if the partnership arrangements are working well.
What we’re seeing, as well, is that business process as a service is starting to become quite popular in the UK. Now here, people are looking at cloud or shared service and CIOs’ jobs have really changed. Not only are they looking at reduced cost, they’re also looking at better ways of using the resources that they have, and driving increased efficiency out of their current setup and their current spend.
A lot of government organisations have adopted some of the methodologies; our customers are using more of industry-standard and world-class methodologies to make their services more streamlined.
Is that a first step towards moving to shared services – get it right in-house?
In terms of getting it right in-house, a lot of customers have adopted the best-in-the-world methodologies, such as ITIL for providing the IT service. They’re also starting to look at Sense & Respond, which is a methodology for looking at what problems come into IT, what are the root causes of these issues and is there something that needs to be done in a different way to resolve the issue before it becomes an issue. Fixing the root cause means the volume of lower-end requests goes down and people can focus more on adding value to the business.
What kinds of savings do organisations get from moving to shared services, and by standardising and rationalising IT?
That is certainly adding to the capacity of organisations to look at better and more efficient ways of doing things. So it can free people up to look at things like open source. Clients are investigating other avenues of potential cost saving and adding more value to the business.
In terms of shared services in Ireland, there are a number of them out there already. Increased adaptation of that, I would say, will come in line with the Programme for Government. It has a number of initiatives around shared services and around IT, in general.
In what way can CIOs be helped to do their jobs better so IT isn’t simply seen as a cost centre that gets cut back every year?
The CIOs that we would engage with have leapfrogged over this ‘IT as a cost’ issue. It used to be seen that IT was a cost centre but CIOs that we’ve been dealing with have been adding value to the business and increased their standing. We’re seeing that a lot of them don’t report to the CFO anymore; they report directly at board level to the CEO.
Can you give an example of a project that proves how IT can do so much more?
What we would generally do is look at a programme called benefits realisation. At the outset of any IT transformation programme, you look at all of the costs and what is it going to take to get the cost saving that’s being looked for. You look at the business case and the drivers, involve the business at the outset or a project and you look at all of the costs and all of the benefits, and you plan it in a very well rounded way.
Because you’ve involved the business from the beginning, programmes should be run as business enablement programmes. You have all the governance structures that would be in line with Prince2 and all of the other methodologies. You would have steering committee meetings where the business would be involved, and the ownership of the delivery of the benefits should be shared between IT and the business.
So it’s not about IT delivering to the business, it’s more of a partnership approach between the business and IT, where the benefits are owned by the business and by IT and there’s clear accountability and measurement.
There should be gateways and staging posts all along the way to make sure you’re still on track to deliver the original benefits, or if things have changed, that is fed back into the governance structure. If something is going to cost more, will the benefit still be there? What we see is that people who do that are much more successful in proving that IT is valuable to the business.
There are still going to be things that you have to do for compliance reasons and there are mandatory projects that are also required in terms of infrastructure upgrades and things like that, that wouldn’t follow along that same value path, but what we would see is that the customers who are most successful are the ones with a variety of programmes on the go at one time. It’s a portfolio approach.
What is your take on cloud computing – are your customers going for it?
I’ve seen quite a number of private-sector customers take up the cloud computing challenge and the issues for them are around how to get back their data if they decide to terminate agreements, how do they make that contractually easy to do. (Another question is) what length of time they should trial a service for, before going to full-scale adoption of the technology. The private sector has definitely gone ahead, and the small to medium-enterprise sector has outsourced things like CRM to Salesforce.com.
The public sector is quite different, in that security, quality and resilience and performance are concerns. Data protection is of particular interest to them because they have a number of obligations in that regard, and the location of the data is an important consideration for public-sector customers.
Are they right to be cautious and concerned? Don’t the cloud’s supporters say this information is completely transparent, and you have things like the Safe Harbour agreement?
I think it’s not right for everyone, and it has to be a means to an end, with that end being creation of business value of some kind. It has to be appropriate to the type of data that is being outsourced into the cloud. There was a recent Oracle UK user group study which was interesting: 93pc of respondents said they would use cloud services – across public and private sector – but 44pc were working out how best to leverage the cloud. A lot of people have been looking at it and considering it.
It’s not new: Hotmail has been around for a number of years and the internet is now at a point where it is completely stable and robust and it’s at the stage where you can put things in the cloud, but it has to be for one of two business reasons: that you want to reduce costs without standing still. You want to have a more elastic and scalable model of pay-per-use. Obviously, the op-ex rather than cap-ex model is quite appealing to private-sector customers, in particular.
Or you want to get to market sooner, and do it by configuring but not building and you want to auto provision services like hardware. It’s an incredible solution for companies now, but it isn’t right for everyone, and it isn’t at a stage of development that everyone should just hop on the bandwagon. People need to assess whether it’s right for them.
You mentioned open source before – is that becoming more popular than it was two or three years ago, and is it being driven by the need to reduce software licensing costs?
Open source is an interesting one because there’s definitely a trend for that in government. It’s being used more and more. Some products have paid-for support, so open source doesn’t necessarily mean free. As well as that, organisations and public sector need to assess whether the skill sets are out there for these products.