Demand for Lean, Green Business Technology

According to a recent market study by Datamonitor, the current global economic recession may also prove to be a significant driver for Green Computing. Their market assessment raises lots of questions -- including, is it better for the world, and overall business profitability, if executives cut-back on their IT investments?

"The global economic recession has spurred a paradigm shift in the way organizations evaluate, budget for and deploy green IT," says Rhonda Ascierto, senior analyst at Datamonitor. "The downturn has also resulted in green IT trends for datacenters, client devices and asset lifecycle management, as well as re-shaped return on investment (ROI) models."

Datamonitor believes green IT that's intended to eliminate the need for capital expenditure -- such as datacenter virtualization, facility design and asset lifecycle management -- has become very important, especially as IT budgets are trimmed.

Lean and Green in 2009
Their research uncovered that lean IT budgets will likely be the norm in 2009, and that organizations will predominately seek green IT solutions because they're cost-effective. This represents a significant market trend, in their opinion.

Green ROI models are becoming compulsory and shorter. In order for green IT vendors to satisfy these new ROI requirements, they're being forced to develop more efficient solutions. However, when it comes to new IT equipment investments, if "less" is more, then "none" can be even better.

Business technology budget constraints force CIOs and IT managers to think beyond legacy approaches to a current problem. As a result, organizations that face critical datacenter limitations are already considering alternatives to building new datacenters or upgrading existing facilities.

Alternatives to IT Capital Investment
Those alternatives include IT leasing, managed services, virtualization software, cloud computing and software-as-a-service (SaaS). Datamonitor believes datacenter resources will increasingly be hosted in a cloud-based environment, which should -- at least theoretically, they say -- fall under the green IT banner.

Clearly, it really doesn't matter what you call your own concerted plan to reduce and contain operating expenses -- in contrast, what matters most is that you take appropriate action now.

Perhaps you're still wondering if the selective out-tasking of business technology is something that your executive team should act upon. If so, you might consider also reading the recent editorial in a mainstream business magazine entitled "The IT Companies Shouldn't Buy" and then ask yourself some of the same fundamental questions about your own business strategy.

Managed IT Services Buyer's Guide - part 3

Here are the final three questions from our ten-point Q&A that's designed to help guide your procurement process. Part 1 included the first three managed and hosting service buyer's guide questions and Part 2 had the next four questions.

8. What are the type and scope of management capabilities that you routinely offer?

• Request a list of capabilities and associated benefits, relative to your needs.
• Historical reporting is essential, forward-looking insight is valuable.
  

Examples of typical basic management tools include a service desk and management of various activities including assets, configuration, fault, change, release/update, performance, capacity reporting and planning, and trend reporting with recommendations.

9. If required, how will you support existing or acquired IT/networking infrastructure?

• Service providers may have policies that limit the device types they support.
• In addition, some providers only support devices they install and configure.
  

If you are like many managed service users, then you have an environment where a combination of self-managed and out-tasked infrastructure will need to coexist -- at some point in time. Service providers should be able to delineate how their role and responsibilities start and end in a multifaceted scenario. Likewise, they should explain their role in the event that they are asked to operate in a multi-vendor or multi-service provider environment.

10. How do you price and deliver professional services, beyond the scope of the managed service?

• Examples of advice, support, and guidance should be included as standard.
• Ask for non-standard consultation examples, and associated fee structure.
  

There will likely come a time when you will ask your service provider to perform an activity that is beyond the scope of your managed service agreement. You should anticipate this event by asking the service provider what constitutes routine (non-billed) information and guidance, and in contrast what is the fee structure for time and materials work -- or other billable activity.

In Summary
Managed services have a long and successful history of helping businesses like yours to reap the full benefits of IT and networking technology capabilities -- without the drudgery and distraction of the ongoing equipment operation, management, maintenance, and perpetual updates or enhancements.

You can download the complete checklist "How to Select a Best-Fit Managed Service Provider" as a .pdf document.

Also, the "Managed versus In-House Service Comparison Calculator" may help you build an internal business case. This build vs. buy expense comparison tool should only be used for basic estimates. We recommend that you consult a managed service provider to obtain an accurate comparison, based upon your actual requirements.

Managed Service Buyer Checklist – part 2

The following are questions four through seven of a ten-point Q&A designed to help guide your managed or hosted service procurement process. Here are the first three buyer questions and service provider answers.

4. What is the depth and breadth of your current managed service portfolio?

• A service migration path provides the means to adapt to your growth needs.
• Service providers that are specialists may offer services through their partners.
  

It helps to have a forward-looking view of your needs when selecting a service provider. Sometimes a specialist is preferable to a multi-service provider. Otherwise, try to anticipate future service requirements, and consider giving preference to a provider with those combined skills.

5. How can I be sure you will apply the best people, processes, and tools? Is your company certified by a leading vendor, and are your offerings delivered using industry-leading technologies to meet the highest quality of service?

• Service providers have data on how they've qualified to meet standards.
• Providers are often required to attain a "qualification level" that is tiered.
  

The good service providers will achieve basic industry-standard technical certifications. The better service providers will comply with the ITIL foundation practices. The best will have passed the stringent qualifications of a service designation process that requires an independent third-party audit of their performance. They must pass rigorous annual assessments of their network operations center. Technical design and operations staff must also complete advanced training.

6. Where are your network management facilities located, and what are the hours of operation? Describe your escalation process, in the event of an outage.

• Service providers typically have both primary and backup facilities.
• Find out whom to contact when your primary support contact is not available.
  

Depending on your needs, service support during regular business hours may be enough. However, some businesses have requirements for 24-hour operation. Help desk coverage, staffing levels, and backup planning are important aspects to consider in this scenario.

7. What are the assurances for levels of availability, serviceability, performance, and operation? What is the process for remedy if and when levels aren't maintained?

• All service providers establish and maintain benchmark measurements.
• Service contracts detail the metrics, and references have results data.
  

It is now common for service providers to offer service-level agreements (SLAs) as an integral part of a service contract, where the "level of service" is formally defined. The SLA can include the common understanding about services, priorities, responsibilities, and guarantees -- sometimes specifying financial remedies as a result of failure to comply with SLAs.

Next step: The remaining Q&A will be featured in part 3. We'll also provide a link to a complete list, and an ROI calculator to help you start to build a business case.

Non-Profit Gains Budget Relief for Telecom Needs

Non-profit organizations share many of the same communication challenges as other businesses. Their budgetary pressures can also create some unique situations, especially when you consider the scale of their ongoing outreach.

The Greater Illinois Chapter is one of over seventy Alzheimer's Association chapters serving communities across the United States. Currently, the Illinois chapter serves over half a million residents affected by the disease.

They're active in more than 60 counties in Illinois. Since 1980, the non-profit organization has provided information and support, as well as family services, for those affected by the disease. Staying connected to their numerous constituents, and the overall community, is essential.

Streamlining Communication Processes
As the chapter grew, they needed big business telecom functionality -- only on a non-profit budget. In the preparation to move into a new facility, the decision was made to replace their phone system. Managing six office sites, they needed a solution that would lessen the work load on their already strained small technical staff.

After evaluating several options for a voice and data network, the Alzheimer's Association selected Geckotech's SimpleVoIP phone service for its proven ability to deliver a reliable and highly flexible solution.

By utilizing a fully hosted service, the organization has gained additional functionality and operational efficiencies not available with their prior, and less capable, telephone system.

Communication Simplicity, by Design
By connecting all office locations over a common network, employees can use simplified four-digit dialing between locations. This inherent feature of the hosted solution has greatly reduced operating costs, by eliminating the expense of intra-company toll charges.

Geckotech's VoIP phones can be configured for hoteling (shared use), which is especially beneficial for volunteers who work in the office on a flexible schedule. Other features have enhanced ease of use -- such as an Automated Attendant that directs incoming callers to the correct department, call forwarding to mobile phones, and voicemail notification via email.

Resulting benefits from the changeover include a dedicated number and voicemail for the Special Events group, improved routing of incoming calls, free adds/moves/changes and access to a 24x7 technical support team at Geckotech.

Savvy Budgeting in a Tight Economy
These are trying times for non-profit organizations. However, meaningful budget relief -- and improved operational efficiency -- is possible for those organizations that make informed business technology decisions that are based upon a complete financial analysis of the alternatives.

The Alzheimer’s Association recognized a great return on investment with Geckotech's Hosted VoIP Phone service and their IT department has since enjoyed time spent on more pertinent projects, rather than babysitting the phone system.

Best MSP Procurement Checklist - part 1

The process of researching, reviewing and selecting a managed or hosted service provider can be a daunting task for those business and technology decision makers that have never performed this task before. Like any other process, there are some best practices.

The following candid questions will help you determine if a provider of managed services can meet and exceed your expectations. Also included are examples of specific details that you should seek.

How do you select a best-fit service provider? Ask all the right questions. Where do you start the selection process? Focus primarily on how the service offered will help to solve problems or create new opportunities -- not merely what it does (its features and functions).

1. Are you prepared to offer only the features and functions that my business needs, instead of the ones that you include in your one-size-fits-all service bundle?

• Ask for a list of all the "standard" items included in the base bundle.
• Request details of all optional items that can be added and/or subtracted.
  

According to recent market research, decision makers at companies of all sizes now prefer that service offerings only include essential features as mandatory elements in a bundle. All other features may then be selected from a menu of options.

2. Can you describe the services that you offer -- and their business benefits -- in terms that I, and the other members of my executive team, will understand?

• The salesperson or sales support person should address your specific needs.
• Ask the service provider to explain any terms that you don't understand.
  

If you can't determine how the managed services will directly benefit your business, then you'll be unable to make an informed decision. Qualified service providers should be able to describe their offerings within the context of your specific business requirements.

3. Will you provide case study materials to demonstrate how you delivered a managed service solution that solved a business challenge similar to mine?

• Documented customer success stories provide useful insight.
• Reference checks should include details on the business impact.
  

While a service provider with limited experience may be able to meet your application needs, those that can clearly articulate the methodology they use to meet their existing customer needs will likely provide a better fit. Moreover, a basic knowledge of how your industry operates will help to avoid misunderstandings.

Note: these are the first three questions from a list of ten. The remaining Q&A will be featured in part 2 and part 3. We'll also provide a link to a complete list that you can download, and a useful ROI calculator to help you build a business case.

How Managed Service Provider Accreditation Helps Buyers

In today's changing volatile economy, companies find the predictable monthly service charges of a managed service provider (MSP) highly attractive. They can deploy technology, confident that they're not pouring money down a black hole. The problem is, scads of technology providers are now trying to recast themselves as MSPs.

How can you tell which ones are qualified?

That's Charles Weaver’s job. He's CEO of the 8,000-member International Association of Managed Service Providers. His nine-year-old group offers an accreditation program for managed service providers, and it's closer to a bar exam than a pro forma blessing. No MSP has ever received a perfect score, and it can take as many as three tries before a company passes. (For more on MSP accreditation, see When Selecting Qualified MSPs, Assume Nothing.)

Part Technology, All Business
The Managed Services Accreditation Program (MSAP) has two parts: a written exam and a physical inspection. The written exam is only about one-fourth weighted toward technology, says Weaver. The other 75 percent relates to the business. "It's not a technology certification. We look at everything from their financials to their facilities. We make sure they're a healthy stable company. We ask questions about disaster recovery and security, but a lot of the exam is designed to determine their financial stability."

The physical inspection follows, during which Weaver or one of the 15 IAMSP board members visits the facility. They check for physical security and process documentation, among other issues. "Documentation is a big problem at the small and midsize service providers," says Weaver. "They fail to write things down, and that puts their business at risk." If they fail the test, the IAMSP shows them how to improve, and they can take the test again (at a cost of $1500).

Dealing with Growth
The accreditation program has been so successful that Weaver is hoping to set up partnerships with consulting firms to help MSPs prepare. The IAMSP has already added sub-categories relating to accreditation for green IT facilities and master MSPs (those who lease services to smaller MSPs).

But keeping up with the growth in the industry is keeping Weaver busy. "Companies are demanding managed services because they're trying to cut costs. But they're finding very green, very immature vendors who say they're an MSP because they went to a seminar," he says.

If you're entrusting your company's technology to an MSP, then invest the time to determine whether your MSP is accredited, and what that accreditation process involved.

Exploring Managed Services - Key Performance Indicators

All business has become global. Companies of any size can now market products and services worldwide over the Internet. At the same time, competition has intensified because customers can investigate global competitors with ease.

To compete effectively in the global networked economy, companies need new capabilities:

• Global procurement and sales 24 hours a day.
• Integrated internal and external business processes.
• Up-to-the-minute access to sales, order processing, production, and other business critical information required for informed decision making.
• Flexible processes that can adapt dynamically to changes in the business climate.
  

The application of Business Technology is now a primary enabler of strategic advantage. However, chief executives have become impatient, as their companies have failed to keep pace with these advances. There are alternatives, for those who choose to act. The managed services model can be applied to accelerate this much needed change.

Review the following common business needs to decide if managed services can provide benefits to your business. If you answer yes to these key performance indicators, then perhaps there are areas where out-tasking could help drive change.

Are you a candidate for managed services? Consider these scenarios.

Our business is facing challenges:

• Staffing IT professionals.
• Staying up-to-date with evolving technologies and IT skill sets.
• Managing and maintaining current infrastructure, hardware, and software.
• Securing data, transactions, and communications.
• Responding quickly to time-to-market demands.
• Remaining flexible enough to maintain competitive position.
• Reducing network overhead costs.
• Operating in real time in order to meet 24-hour demand.
• Delivering services to branch offices and remote workers.
  

Our business is in transition:

• We need to upgrade, refurbish, move, or relocate existing infrastructure.
• The scope or scale of current business operations is changing.
• A merger, partnership, or acquisition is altering operations.
• We need to increase the range and level of service.
• Our growth targets depend on implementing new technologies.
• We are expanding into new markets.
  

Our business must increase profitability:

• We prefer to dedicate resources to our core competencies and mission critical processes rather than network support activities.
• We view managed services as a good strategy for gaining efficiencies and reducing costs.
• We need to implement a global network service but lack internal global resources.
• We are concerned with our ability to keep up with the latest security threats and to meet privacy or security regulations.
• We are experiencing dynamic business growth while undergoing downsizing and hiring freezes.
  

Initiate a dialog with a managed service provider, and you can begin to explore the possibilities of how to effectively adopt Business Technology as a Service.

Making Sure The Numbers Favor Managed Services

As industry analyst forecasts mount predicting the rapid growth of managed services, an increasing proportion of IT and business decision-makers are taking a closer look at how these alternatives can impact their operations.

The challenge is effectively measuring the costs and benefits of these options.

Gartner kicked off 2008 predicting, "By 2011, early technology adopters will forgo capital expenditures and instead purchase 40 per cent of their IT infrastructure as a service." And with today's unprecedented economy crisis, THINKstrategies believes the shift to managed services will be faster and more pronounced than predicted.

As a consequence, every responsible IT and business decision-maker is obligated to carefully reassess their current operations and thoroughly evaluate all of the available alternatives to better manage their IT environments so they can better support their business objectives.

Substantive Cost Comparisons
However, many of the current methods for evaluating the financial impact of today's managed services fall short because they don't effectively measure the full cost implications and additional business benefits of these services.

For instance, many managed service providers (MSPs) utilize web-based total cost of ownership (TCO) or return on investment (ROI) calculators to help potential customers understand the cost-savings they can generate using managed services.

Yet, these calculators often include generic cost comparisons which are irrelevant or of little value to specific companies. Or, they suggest that managed services can eliminate valuable staff positions which raises fears among potential customers that they will lose their jobs by hiring a MSP.

Comprehensive Assessments
What thoughtful IT and business decision-makers need instead are interactive tools which enable them to work with MSPs to more thoroughly measure the real cost-savings and additional business benefits -- both tangible and intangible -- that managed services can produce for their organization.

This requires more sophisticated calculators and skilled salespeople who can work with customers in utilizing these tools effectively.

Is Cash Flow Holding Your Technology Back?

At first glance, some small businesses are caught in a technology paradox: They need modern technologies to drive revenue higher. But they don't have enough cash to acquire that technology.

A recent American Express survey found that more than half of today's U.S. small business owners are experiencing cash flow problems, reports StartupSpark.com. As a result, the top priority for most small businesses is maintaining current sources of revenue -- rather than building new ones.

Have Your Cake and Eat it Too
I say: Why not pursue both goals? Fact is, you don't need very deep pockets to leverage modern technology. What you really need is a predictable cost structure -- a way to know exactly how you're going to continue innovating without suffering from surprise IT costs.

By now, you likely know where I'm heading: Predictable managed services contracts can help many of those worried small business owners get a handle on their IT costs.

Our company, for instance, pays a flat monthly fee for e-newsletter marketing services from StreamSend.com. We use that service to launch new products, promote news or evangelize special offers to new target customers.

We're also learning to cut the hidden costs of business travel. One prime example: We used to pay hotel WiFi fees, which varied greatly from region to region. But now we're paying a flat monthly fee for Starbucks WiFi service, which is readily available in all the cities we visit. Also, we're thinking of shifting again, this time to a cellular Internet connections for our laptops.

Cash Flow Management Solutions
Those are pretty basic steps. But don't stop there. Look at every piece of your IT infrastructure -- applications, hardware, systems, etc., and determine if there's a managed alternative available for a predictable monthly fee.

Then communicate and innovate with minimal impact on your monthly cash flow.

Managed Services Reality Check for Small Business Owners

Somewhere between the economic panic and the managed services craze their resides a simple truth: Now is the time for all small businesses to carefully consider their IT strategies for 2009.

I'm tired of reading wild statements that say managed services and Software as a Service (SaaS) are immune to the economic turmoil. It's far more accurate to say we've reached an inflection point of sorts, where small businesses need to review what they spent on IT in 2007 and 2008 to help their planning in 2009.

Traditionally, many small businesses acquired IT assets -- PCs, servers, networks, applications and other infrastructure that they ran internally. But those acquisitions required big lump-sum capital investments.

During the current economic turmoil, we're seeing a shift in the market. Smart small businesses increasingly depend on IT services.

Much in the same way that they pay flat monthly fees for broadband and cellular services, small businesses are embracing managed services to gain far more predictable -- and far more reliable -- IT options.

Look Back to Get Ahead
If you're a small business owner or manager, take a look at your 2008 and 2007 IT expenses. Be sure to underline purchases involving storage, security and application infrastructure.

Going forward, investigate how those big-ticket items could be shifted (partially or entirely) into the cloud.

Hundreds -- perhaps thousands -- of IT solutions providers now offer managed firewall and managed endpoint security services. And new cloud storage services -- such as Amazon's Simple Storage Service -- can bolster your own on-site storage area networks with key disaster recovery capabilities.

The trend certainly includes any applications you're seeking to license or "purchase." I am not suggesting that all on-premise applications will shift to the cloud. But before you build -- or buy -- your next business application, check to see if it already exists on the Web. Chances are, it does.

IT Financial Management - Now is the Time

I've heard many excuses, during my years as an ITIL consultant, as to why a client did not want to start IT Financial Management -- the business is not ready, we don't have the tools, we don't know where to start, etc.

However, in these troubling economic times, it is imperative that IT adopts IT Financial Management in order to respond to the increasing pressure to reduce costs.

IT can reduce costs through service-based cost transparency and charge-backs. This method does not mean IT is a profit-center; it just means that IT is educating the business on the cost to provide the services.

With this knowledge, the business can adjust their consumption to better manage their budget and ensure spending is aligned with the value of the service they are receiving. Contrast this with a nebulous IT overhead charge which does not incent the business to use scarce IT resources wisely.

A Roadmap to IT Financial Management
The secret to successfully starting IT Financial Management is to develop a roadmap with increasing levels of maturity.

For example, in Phase 1, pick four to five key services for consumption based costing, e.g. number of servers, storage consumed, network bandwidth consumed, etc., then allocate the remaining costs (i.e. Service Desk, data center operations, etc) as a surcharge against this base price. In Phase 2 and subsequent phases, continue to expand the number of services covered by consumption-based charge-backs.

Another dimension of maturity is the approach to charge-backs. In Phase 1, you may want to just publish costs (i.e. cost transparency with no dollars changing hands). In Phase 2, you may want to provide invoices that show consumption and a hypothetical charge-back amount but stop short of consummating the transaction.

Finally, in Phase 3, implement the actual charge-backs. This gradual approach will allow the business to adapt and prepare for a new way of interacting with IT.

By establishing and communicating a roadmap, you can start IT Financial Management today and be better positioned to manage the IT budget.

About the author: Reg Lo is the VP of Technology Solutions at Third Sky Inc. He has over 14 years of IT consulting experience in ITSM/ITIL consulting, research compliance and healthcare, and custom solutions. He is a frequent speaker at itSMF and HDI events and a contributor to "The Forum", the offical newsletter of itSMF USA.

Getting Down to Basics About SaaS

I was interviewed today by a journalist from one of the CIO-oriented pubs who surprised me by asking a series of questions which came back to many of the same fundamental misconceptions about Software-as-a-Service (SaaS) which I thought I had dispelled in a BusinessWeek commentary I published in 2006.

The first misconception the journalist had was that SaaS solutions are not robust enough to satisfy large-scale enterprises, as well as small- and mid-size businesses (SMBs). I pointed out to him that large-scale enterprises have been leveraging SaaS solutions for a long time, but have only recently begun to talk about their successful experiences.

One of the most recent announcements of a major deployment of SaaS by a large-scale enterprises was by Flextronics who is adopting Workday's on-demand human resource management (HRM) solution to support its 200,000 employees.

Real Total Cost of Ownership
The second misconception the journalist revealed was the old "buy vs. lease" argument against subscribing to a SaaS solution. This argument suggests that after 2-3 years it doesn't pay to subscribe to a SaaS solution because it costs more than it would to simply purchase a perpetual software license.

This argument doesn't hold because the cost comparisons are flawed. In order to do a more accurate side-by-side comparison, IT and business decision-makers must calculate the full cost of deploying and maintaining a software application, and also calculate the risks associated with these processes.

Some research firms have suggested that it can cost as much as ten times the original software license fee to install and maintain the application. They have also found that over a third of enterprise software deployment projects fail to be completed and of those which are fully deployed many are under-utilized.

Avoiding the Old Software Trap
In addition, many organizations do not implement software updates and upgrades because they are afraid they will disrupt their operations. As a result, they are not taking advantage of the vendor's latest software enhancements.

SaaS eliminates the upfront software costs, and additional deployment and maintenance costs. It also eliminates the implementation and utilization risks. SaaS also ensures that every customer benefits from the vendors' latest updates and upgrades.

Finally, this journalist asked why a organization of any size should subscribe to a SaaS solution if they have an inhouse IT team that is talented enough to deploy and maintain software applications themselves.

My response was to ask why should today's overworked IT people waste their time simply deploying and maintaining software applications when they can be performing more valuable tasks supporting their organizations' strategic initiatives or enabling new business innovations?

If you are an IT or business decision-maker, you should be asking yourself the same question in these increasingly challenging economic times.