Greetings to all who find these words ... I am restarting my blog.
When I joined CSC in 2009, I sustained the blog for a few months but ultimately elected to place it in hibernation. The reason was simple: as an officer of a Fortune 150 company, it was just too risky to express the sort of opinions for which I had become known.
Time has passed and circumstances are changed.
Over the coming weeks I will be re-framing the orientation of this blog. I am inclined to share the process of considering new opportunities while I simultaneously outline the thesis I am developing around our services-based economy.
More to follow. Thanks for visiting.
Peter
Wednesday, May 8, 2013
Monday, February 15, 2010
If you believe ---
So, here's the skeleton of my thesis on why the IT Services market has entered a phase of truly different growth/innovation characteristics.
If you believe ...
Then, you require ...
If you believe ...
- Virtualization of computing/storage/communications resources is real. Enabling ...
- capital expense avoidance
- higher levels of operational efficiency
- greater resilience of infrastructure services
- material improvements in enterprise flexibility
- Business functionality is increasingly able to be fulfilled via off-premise, built-for-purpose platform offerings. Such as ...
- Software-as-a-Service delivered via public cloud architectures (e.g., salesforce.com)
- Ecosystems of specialized managed services providers (e.g., ADP for payroll)
- Modular extensions to ERP foundations (e.g., SAP and Oracle)
- Interfaced with proprietary business process applications
- The requirements for confidence & integrity in business operations are dominant. To encompass ...
- Resilience of services in response to threats to availability and continuity
- Confidentiality of information
- Assurance of correctness in business transactions
- And, that successful enterprises will achieve optimal leverage in its allocation of investments. To wit ...
- Make-vs-Buy tradeoffs for non-core aspects of the business
- Industry partnerships/ventures
Then, you require ...
- Vertical Integration among infrastructure, applications and operations. Ensuring ...
- Efficiency and accountability for distinct business services
- Alignment between business strategies and enabling services
- Service Integration among the ecosystem of internal and external service participants. To include ...
- Operational linkages among and between service elements
- Congruency for Enterprise Data used by all parties
- Trust-enablement of business services
Sunday, February 14, 2010
Deliberations ...
Many have asked: "What's up with the lack of content, Peter?"
So, the long gap in postings has not been for lack of thoughts, opinions, perspectives, or ideas. Rather, I am debating the merits of continuing to host this personal blog.
Friends such as Phil Fersht have shown that one can represent a company and still maintain a personal line-of-banter with industry colleagues. I admire him for that. As for me ... I'm not yet sure.
In the interim, while I wrestle with this question, please know that I am more engrossed in the machinations of the IT Services industry than ever before. I spent this past week in India - Delhi and Mumbai - with colleagues and industry acquaintances. The annual NASSCOM conference in Mumbai was bigger than ever, and full of the customary bravado about growth of outsourcing and offshoring.
I gave a speech as part of a panel on "non-linear business models." The essence of my opinion/perspective was that we're entering a period that has the potential to equal that of the dot-com era in terms of innovation and value-creating business models. And, I think there are better chances for sustainability of growth today than we saw in the 2000-era.
Why am I so optimistic? I see a confluence of events/trends that seem to be coming together at just the right time - if the recession is truly over.
I guess I ought to explain, huh? OK ... I'll post that logic thesis tomorrow.
Tally ho.
So, the long gap in postings has not been for lack of thoughts, opinions, perspectives, or ideas. Rather, I am debating the merits of continuing to host this personal blog.
Friends such as Phil Fersht have shown that one can represent a company and still maintain a personal line-of-banter with industry colleagues. I admire him for that. As for me ... I'm not yet sure.
In the interim, while I wrestle with this question, please know that I am more engrossed in the machinations of the IT Services industry than ever before. I spent this past week in India - Delhi and Mumbai - with colleagues and industry acquaintances. The annual NASSCOM conference in Mumbai was bigger than ever, and full of the customary bravado about growth of outsourcing and offshoring.
I gave a speech as part of a panel on "non-linear business models." The essence of my opinion/perspective was that we're entering a period that has the potential to equal that of the dot-com era in terms of innovation and value-creating business models. And, I think there are better chances for sustainability of growth today than we saw in the 2000-era.
Why am I so optimistic? I see a confluence of events/trends that seem to be coming together at just the right time - if the recession is truly over.
I guess I ought to explain, huh? OK ... I'll post that logic thesis tomorrow.
Tally ho.
Tuesday, December 29, 2009
For the Weary Travelers ... The Year in Twelve Posts
This from The Economist ...
THE YEAR IN 12 POSTS
It may not have been the worst year ever for business travellers, but 2009 had its unpalatable moments. These 12 episodes make us wonder whether we shouldn't just stay at home in 2010.
Read more:
http://news.economist.com/cgi-bin1/DM/y/eB6cS0bxhbJ0Mo0GJLC0Eh
THE YEAR IN 12 POSTS
It may not have been the worst year ever for business travellers, but 2009 had its unpalatable moments. These 12 episodes make us wonder whether we shouldn't just stay at home in 2010.
Read more:
http://news.economist.com/cgi-bin1/DM/y/eB6cS0bxhbJ0Mo0GJLC0Eh
Monday, December 21, 2009
Seeing Through the Cloud
Doesn't it seem that every dozen years or so, some "revolution" changes the way we use information? The convergence of computing and communications services, the availability of "appliance"-like devices, the proliferation of online services ... these are just manifestations of the latest wave of capability.
In the 1960s (not that I am old enough to remember) there was the advent of monolithic mainframe computers. The 1970s was the era of the minicomputers. The 1980s saw personal computers and the introduction of wide-spread communications services. And, the 1990s can generally be called the first era of true internet services.
So, what of the first decade in the 21st century? What did 2000-2009 bring to us?
Well, the iPod (arguably one of the more significant game-changers of recent time) was a product of this era, as was salesforce.com and countless other enabling services. I tend to think of the past ten years as being more transitional than definitive, but then again weren't each of the decades in the information era merely a segue to the next?
The decade ahead is setting up to start out with an emphasis on things relating to "The Cloud." I have no idea who coined that phrase, but it's been around for a few years now - at least among the smart folks developing network-enabled services.
The Cloud is the idea of computing on demand. And, it's changing the possibilities for computing by giving individuals and businesses alike access to an array of powerful applications and services. All of these will be available "over the net."
In The Cloud, applications are accessible anywhere, anytime, and storage becomes, for all intents, infinite.
Enough about that - there are many better-informed sources of technican jargon about The Cloud than me. What I can tell you is this: The Cloud is introducing material changes to the sourcing strategies of companies - small and large.
Despite the predecessor "false starts" around "enterprise computing" and "utility computing" ... this Cloud thing has legs. I am seeing CIO after CIO take very aggressive positions around the need for capital to build ones own computing and communications services. Intend, they are looking to the industry to show that the asset-light virtues of Cloud computing are real.
While I don't know whether this will play out at the dominant theme of the 2010s, I can tell you that the new decade is starting with The Cloud as the top big idea.
In the 1960s (not that I am old enough to remember) there was the advent of monolithic mainframe computers. The 1970s was the era of the minicomputers. The 1980s saw personal computers and the introduction of wide-spread communications services. And, the 1990s can generally be called the first era of true internet services.
So, what of the first decade in the 21st century? What did 2000-2009 bring to us?
Well, the iPod (arguably one of the more significant game-changers of recent time) was a product of this era, as was salesforce.com and countless other enabling services. I tend to think of the past ten years as being more transitional than definitive, but then again weren't each of the decades in the information era merely a segue to the next?
The decade ahead is setting up to start out with an emphasis on things relating to "The Cloud." I have no idea who coined that phrase, but it's been around for a few years now - at least among the smart folks developing network-enabled services.
The Cloud is the idea of computing on demand. And, it's changing the possibilities for computing by giving individuals and businesses alike access to an array of powerful applications and services. All of these will be available "over the net."
In The Cloud, applications are accessible anywhere, anytime, and storage becomes, for all intents, infinite.
Enough about that - there are many better-informed sources of technican jargon about The Cloud than me. What I can tell you is this: The Cloud is introducing material changes to the sourcing strategies of companies - small and large.
Despite the predecessor "false starts" around "enterprise computing" and "utility computing" ... this Cloud thing has legs. I am seeing CIO after CIO take very aggressive positions around the need for capital to build ones own computing and communications services. Intend, they are looking to the industry to show that the asset-light virtues of Cloud computing are real.
While I don't know whether this will play out at the dominant theme of the 2010s, I can tell you that the new decade is starting with The Cloud as the top big idea.
Monday, December 7, 2009
The Third Leg: Component-oriented Sourcing
It's been a meandering journey, but we've arrived at the final dimension of today's IT Services and Outsourcing marketplace. This is the aspect of the industry for which I sense the greatest level of energy and activity among the CIO community and the service provider universe. I call it component-oriented sourcing.
- There continues to be a tempo of larger integration-oriented sourcing strategies coming to market by CIOs that are looking for holistic change of their operating models.
- We also see a moderating pace around wage-oriented sourcing. This was the rage over the past few years, but the runway of improvements is limited by virtue of the form of relationships conceived around the lower-cost delivery models.
- Things brings us to the current hotbed of sourcing - CIOs looking to leverage discrete solutions to achieve the benefits of consumption-based costing for commodity-like services.
Perhaps the task at hand is email services, or server administration. Perhaps it's network - ubiquitous, mobile, secure connectivity. And, what about storage? Of course, there's also the poster child of cost/quality improvement targets: desktop support.
Along comes the various tools to enable virtualization - of computing, communications, storage, and even some business applications - and CIOs look to reap the benefits through the IT Services industry.
Just as the promise of wage-based cost improvements gave rise to offshoring (and it's use as an avoidance mechanism for more holistic outsourcing), I sense that component-oriented sourcing is today's way to drive near-term cost improvements without the burden of a "traditional" outsourcing initiative.
What's different? No transfer of staff when you're buying a standardized/industrialized service and little/no outlay of precious capital.
In my view, it's this third leg of the sourcing stool that has prompted some of the recent M&A activity and which is causing great concern among the wage-oriented providers in the industry. Generally speaking, they don't have a dog in this fight.
Today's IT Services market is leaning decidedly towards component-oriented sourcing. It's relatively quick to implement, discrete in scope, leveraging delivery models that have been "built for purpose", and bringing the promise of complete variability. What's not to like?
Well ... history has proven that what a CIO buys today may not be what s/he needs in 3-4 years' time. That's why so many of those wage-based contracts are dead-ends as the CIO tries to achieve broad transformation or even tap into component-oriented solutions. The wage-oriented providers can't sing those songs.
The recipe for winning as a provider in the emerging IT Services & Outsourcing market is to bring a transformational spectrum to the CIO - one that can deliver component-oriented benefits with confidence, can leverage lower-cost sources of labor when needed, and can step up to the broad transformation agenda that is surely a matter of time.
CIOs today are looking at the industry and seeing these three very different camps of eager providers. Very few are positioned as a leader in all three.
Source on.
Tuesday, November 24, 2009
For Some CIOs: Access to Less Expensive Capacity
My prior posting laid out the premise that CIOs look at the IT Services & Outsourcing industry today in three different ways. Part 1 of the 3-part story wasn't particularly revolutionary. It assessed the appetite for transformation-oriented, integration-heavy, services.
In that posting I said that there were really only five service providers that are considered "up to the challenge" of implementing a holistic transformation for a client. (Actually, I initially wrote that there were four, but I revised my assessment!) In my opinion, these are: Accenture, CapGemini, CSC, HP, and IBM.
Those five companies can marshal the technological, business process, financial, and domain expertise required to bite off a big change program. That's how I think CIOs look at the market.
Classification #2 is what I call the wage-oriented segment of the IT Services & Outsourcing market. I can count over a dozen high-credible service provider who go-to-market as a provider of lower-cost expertise provided via remote delivery models. Of interest, I think that only CSC and Accenture are among the "Transformational Five" that also serve the wage-oriented demands.
I've come to learn (and appreciate) that the companies in the business of wage-oriented services are quite capable organizations. They typically excel at knowledge transfer, process standardization, and automation. Simply said, these providers can industrialize a repeatable task. Don't ask for break-through improvements or holistic reengineering, but the benefits of high-quality production can be considerable.
For many CIOs who aren't looking for transformation, the existence of a healthy ecosystem of wage-oriented providers has been a blessing. Much of the cost-management that occurred over the past 5 years was achieved through effective use of offshoring - via Captive Centers and outsourcing.
In fact, to many traditional ITO providers it seemed that the ability to leverage wages was the CIO's alternative to outsourcing. Why go through a long and cumbersome contracting process when you could get the benefit of wage arbitrage relatively quickly and with less disruption?
Well, just as the market for big transformational sourcing initiatives has been challenged by the economy and the capacity for large change programs, the market for wage-oriented sourcing has experienced its own stress. Considered by many CIOs as being more variable than domestic employees, some offshore initiatives saw contraction during the recession. Certainly, we saw a reduction in discretionary project work.
Some analysts are asking if the runway for wage-oriented sourcing is exhausted. I think no, but I think the maneuvering space is much smaller. Offshore sourcing is here to stay as a tool for the CIO, and the universe of providers in this segment will remain rich in numbers. Their profit margins might not remain as healthy as the past, but the business model is proven and the economic flow is considerable.
If you buy into my premise that a CIO looks into the industry through a different lens for transformational services than he/she does for wage-oriented services, then you might be asking what's driving some of the M&A we've seen recently. Where to Dell and Xeros fit in this profile?
That question is answered through the third dimension of the industry landscape. For, as we enter 2010 and hear the incessant buzz from the clouds of innovation (pun intended), the CIO has an entirely different set of Providers from which to choose when it come sot managed services.
Up next: component-oriented sourcing.
In that posting I said that there were really only five service providers that are considered "up to the challenge" of implementing a holistic transformation for a client. (Actually, I initially wrote that there were four, but I revised my assessment!) In my opinion, these are: Accenture, CapGemini, CSC, HP, and IBM.
Those five companies can marshal the technological, business process, financial, and domain expertise required to bite off a big change program. That's how I think CIOs look at the market.
Classification #2 is what I call the wage-oriented segment of the IT Services & Outsourcing market. I can count over a dozen high-credible service provider who go-to-market as a provider of lower-cost expertise provided via remote delivery models. Of interest, I think that only CSC and Accenture are among the "Transformational Five" that also serve the wage-oriented demands.
I've come to learn (and appreciate) that the companies in the business of wage-oriented services are quite capable organizations. They typically excel at knowledge transfer, process standardization, and automation. Simply said, these providers can industrialize a repeatable task. Don't ask for break-through improvements or holistic reengineering, but the benefits of high-quality production can be considerable.
For many CIOs who aren't looking for transformation, the existence of a healthy ecosystem of wage-oriented providers has been a blessing. Much of the cost-management that occurred over the past 5 years was achieved through effective use of offshoring - via Captive Centers and outsourcing.
In fact, to many traditional ITO providers it seemed that the ability to leverage wages was the CIO's alternative to outsourcing. Why go through a long and cumbersome contracting process when you could get the benefit of wage arbitrage relatively quickly and with less disruption?
Well, just as the market for big transformational sourcing initiatives has been challenged by the economy and the capacity for large change programs, the market for wage-oriented sourcing has experienced its own stress. Considered by many CIOs as being more variable than domestic employees, some offshore initiatives saw contraction during the recession. Certainly, we saw a reduction in discretionary project work.
Some analysts are asking if the runway for wage-oriented sourcing is exhausted. I think no, but I think the maneuvering space is much smaller. Offshore sourcing is here to stay as a tool for the CIO, and the universe of providers in this segment will remain rich in numbers. Their profit margins might not remain as healthy as the past, but the business model is proven and the economic flow is considerable.
If you buy into my premise that a CIO looks into the industry through a different lens for transformational services than he/she does for wage-oriented services, then you might be asking what's driving some of the M&A we've seen recently. Where to Dell and Xeros fit in this profile?
That question is answered through the third dimension of the industry landscape. For, as we enter 2010 and hear the incessant buzz from the clouds of innovation (pun intended), the CIO has an entirely different set of Providers from which to choose when it come sot managed services.
Up next: component-oriented sourcing.
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