Cloud Not So Much a Technology as an Opportunity to Provide Business Agility and Responsiveness
Cloud Not So Much a Technology as an Opportunity toProvide Business Agility and ResponsivenessTranscript of a sponsored BrieﬁngsDirect podcast on how IT service delivery company Steriastandardizes processes in the cloud for improved delivery.Listen to the podcast. Find it on iTunes/iPod. Sponsor: HPDana Gardner: Hello, and welcome to the next edition of the HP Discover Performance podcast series. Im Dana Gardner, Principal Analyst at Interarbor Solutions, your co- host and moderator for this ongoing discussing of IT innovation and how its making an impact on people’s life. Once again, were focusing on how IT leaders are improving performance of their services to deliver better experiences and payoffs for businesses and end users alike. [Disclosure: HP is a sponsor of BrieﬁngsDirect podcasts.]Now, were joined by our co-host for this sponsored podcast series, Chief Evangelist at HP, PaulMuller. Welcome, Paul. Where are you coming from today?Paul Muller: Hi Dana. Today, Im in a fortunate position. Ive been at home now for nearly twoweeks running, which is something of a record. Im down here in, I was about to say, sunnyMelbourne, Australia. Actually, its turning through the fall, and just getting a little cold rightnow.Gardner: I am glad you can join us from home. We have a fascinating show today, because weare going to learn about how a prominent European IT-enabled business services provider, Steria,is leveraging cloud services to manage complexity and better services to customers. Gettingmore from cloud services seems to be a huge part of the IT landscape these days.Paul, is that what you are ﬁnding -- that the cloud model is starting to impact this whole notion ofeffective performance across services in total?Muller: This is a conversation Ive been having a lot lately. The word cloud gets thrown around a lot, but when I drill into the topic, I ﬁnd that customers are really talking about services and integrating different services, whether they are on- premises, in the public cloud arena, or even that gray land, which is called outsourcing. Its the ability to integrate those different supply models -- internal, external, publicly sourced cloud services -- that really differentiate some of the more forward-leaning organizations from those who are still trying to come to grips with what it means to adopt a cloud service.
Gardner: Maybe a year or two ago, we were focused on the "how" with cloud, and now weseem to be moving beyond that to the "what," what you get regardless of how you do it. Doesthat sound about right?Muller: You couldn’t have put it better. The way I had it described to me recently is that it’smoving away from talking about the plumbing to talking about what youre trying to produce.That that’s really the fundamental change that has occurred in the last 18 months.Business opportunityWeve all come to realize that cloud isn’t so much a technology issue, as it is a business opportunity. It’s an opportunity to improve agility and responsiveness, while also increasing ﬂexibility of cost models, which is incredibly important, especially given the uncertain economic outlook that not only different countries have, but even different segments within different countries. Take something like the minerals and resources areas within my own country, which are booming right now. Whereas, if you look at other areas of business, perhaps media, or particularly print media, right now, theyre going through theopposite type of revolution. Theyre trying to work out how to adjust their cost to decliningdemand.Gardner: With that, let’s get to our guest. Hes been a leading edge adopter for improving ITservice delivery for many years, most recently as the IT Service Management (ITSM) SolutionManager at Steria, based near Paris.Please join me in welcoming Jean-Michel Gatelais. Welcome to BrieﬁngsDirect, Jean-Michel.Jean-Michel Gatelais: Thank you very much. Yes, at Steria, Im in charge of the Central ITSM Solution we provide for our customers, and I am in-charge of the Global ITSM Program Roadmap, including the ongoing integration from ServiceCenter 6 to Service Manager 9. Im also responsible for the quality of service that we deliver with this solution, and of the transition of new customers on this platform. Gardner: Let’s start at a high level, Jean-Michel. Because youve been doing this for quite some time with a focus on IT service delivery andITSM, has this changed quite a bit in just the past few years? If so, what’s different now aboutIT service delivery than just say few years ago?Gatelais: It has changed a lot. In fact, few years ago it was something that was very atomic, withdifferent processes and with people running the service with different tools. About three to ﬁveyears ago, people began to homogenize the processes to run the service, and we saw that inSteria.
In Steria, we bought some companies and we grew. We needed to establish common processes toproceed by a common platform, and that what’s what we did with Service Manager. Now, theway we deliver service is much more mature for all the processes and for the ITSM processes.Gardner: Paul Muller, how does that jibe with what youre seeing? It sounds like hes veryrepresentative of the market in total.Muller: The desire to standardize processes is a really big driver for organizations as they lookto improve efﬁciency and effectiveness. So its very similar what were seeing. In fact, I wasgoing to ask Jean-Michel a question. When you talk about homogenizing processes or improvingconsistently, how does that help the organization? How does that help Steria and its customersperform better?IT providerGatelais: This allows us to deliver the service, whatever the location or organization, becausewere an IT provider. We provide services for our customers that can be offshore, nearshore, inSteria local premises, and even in the plant premises. All the common processes and the solutionallow us to do to this independently of the customer. Today with this process, were able to runservices for more than 200 customers.Gardner: I suppose we should learn a bit more about Steria. You are primarily in Europe and theUK. Tell us a bit about your business, who your customers are, and perhaps some of the high-level goals and strategies that youre pursuing.Gatelais: Steria is an IT service provider. We are about a little more than 40 years old. Ourbusiness is mainly in system integration, application management, business process outsourcing,and infrastructure management services.We have big customers in all sectors of industry and services, such as public sector, banking,industry, telecom, and so on. We have customers both in France and UK mainly, but in the wholeof Europe also. For example, we have British Telecom, Orange, and the public sector in the UK,with police etc.Gardner: I see among your services that you are delivering cloud Workplace on Command, forexample, Infrastructure On Command. Is this a bigger part of your business now? Do you ﬁndthat servicing your cloud customers is dominating some of your strategic thinking?Gatelais: Yes. Actually, it’s growing day after day. We launched our cloud offering about 18months ago. Now we can say that we have an industrialized solution, allowing our customers toorder infrastructure in a couple of minutes. And this is really integrated with the whole servicemanagement solution and the underlying infrastructure.
Gardner: I suppose this gets to this self-service mentality that we are seeing, Paul. End users areseeking a self-service type of approach. They know that they can get services quite easilythrough a variety of consumer-based means. Theyre looking for similar choice and enablementin their business dealings.It seems that an organization like Steria is at the forefront of attracting that sense of enablementand empowerment and then delivering it through a cloud infrastructure. Theyre interesting ontwo levels: one, theyre delivering cloud and enablement, but they are also using cloud to powertheir own ability to do so.Muller: I’s not common. I don’t know if Jean-Michel has seen this, but we see almost acontradiction within enterprise users of cloud. We see groups that will quite readily go out andadopt cloud services. The so-called consumerization trend is quite prevalent, especially withwhat I would describe as simple services. For example, ofﬁce automation tools, collaborationtools, etcetera.Yet, simultaneously, we see reluctance sometimes, particularly for the IT organization, to let goand cloud source services and applications. I sometimes refer to them as "application huggers" or"server huggers."Relinquish controlIn other words, if they can’t see it or touch it, theyre reluctant to relinquish control. The mostfascinating part for me is that you can often ﬁnd those two behaviors inside the very sameorganization. Sometimes, the same person can have diametrically opposed views about therespective merits of those two approaches. Does that make sense?Gardner: We should put the question directly to Jean-Michel. Are you selling and deliveringcloud services to the IT department or others. Maybe we could call that shadow IT.Gatelais: We do both. In fact, the cloud today is used both for internal organizations and also forour customers. Then, the cloud offering set-up asks to study a business model to study the waywe will sell such service. For us, at the central level at Steria, there is no difference betweeninternal delivery and delivery for our customers.Gardner: That’s pretty interesting. Do you ﬁnd that youve had to tailor your services for thosenon-IT users? Is there something about billing, invoicing, or self-serve that youve put in place inorder to better accommodate the non-IT part of the market?Gatelais: No. In fact, what were trying to do is to standardize, as much as possible, the basicoffering we propose. On top of that, we have additional requests from our customers. Then, wetry to adapt our offering to the speciﬁc request.Providing infrastructure services is not so difﬁcult, but providing platform-as-a-service (PaaS)features can be. Even software as a service (SaaS) can be simpler than PaaS, because you
provide some package services, startup services, instead for platform services. It’s very consumerspeciﬁc.Gardner: So you have the opportunity to go with a fairly standardized approach, but then youcan customize on top of that. Id like to hear some more about your different services. Iunderstand that there’s something called Steria Advanced Remote Services or STARS. How doesthat ﬁt into the mix, Jean-Michel?Gatelais: STARS is the ITSM platform Steria rolled out about ﬁve years ago, and today this is aframework. Its mainly based on HP products, because its running on HP Service Manageronline, Business Service Manager (BSM), and Operations Orchestration.We see this platform as a service enabler, both service support platform and the service enabler,because we use it to manage and activate the services we propose to our customer, includingcloud services, security services, and our new offering, Workplace On Command services.STARS is the solution to manage value-added services Steria is offering to its customers.Muller: I have a question for Jean-Michel. When a customer thinks about taking services thatmaybe they used to run internally and moving those services to Steria, how important is it forthem to maintain visibility and control, as they are thinking about moving to cloud?Depends on the customersGatelais: It depends on the customers. You have some customers that are ready to use theservices you provide on a common environment, but you also have customers requiring morespeciﬁc solutions that we can give to them. Steria is developing some facilities to roll out and toinstantiate the platforms for dedicated environments.For example, the STARS solution, with Service Manager in the solution, we can deploy it,instantiate it, when the customer requires it.Muller: Just following on from that, theres a perception that when you move to cloud services,people don’t really care about visibility, metrics, and service-level reports, because that’s all partof the service-level agreement (SLA). Do you ﬁnd that customers actually want to see, how theirservice is performing -- whats the availability and level of security? Do they look for that levelof reporting from you?Gatelais: It depends on the customers. Some are really outsourcing the services. They wouldonly complain if they met some problems on the services.But other customers want to have the visibility on the quality of service that is delivered bySteria. That means that we need to be able to publish the SLA we have for our offering, but alsoto publish monthly, for example, the key performance indicators (KPIs) of this platform.
Muller: And that is certainly a perfect question, because, Dana, it’s the KPI discussion that is ofsuch great interest to enterprises today.Gardner: Right, and Im impressed that Steria can manage this variety and be able to provide toeach of these customers what they want on their own terms, which is, as you point out, is reallywhat theyre calling for.For you as a provider, that must really amount to quite a bit of complexity. How do you get ahandle on that ability to maintain your own proﬁtability while dealing with this level ofvariability and the different KPIs and giving the visibility to them?Gatelais: One of the advantages of the cloud structure is that you have to ask these questions inadvance. That means that when Steria is designing a new offering, we ﬁrst design the businessmodel. In fact, that will allow us either to propose some shared services, or for the client that hasrequested it, some visibility to the services, but based on standard platforms. We try to remainstandard in what we propose, and the ﬂexibility is in the conﬁguration of what we propose.Gardner: How about providing the visibility so that the sense of conﬁdence, which is also soimportant in these early years of cloud adoption, is maintained? Do you provide speciﬁc views,insights, dashboards? What is it that you can provide to your customers so that they feelthemselves in control even though they are no longer in a sense running these systems?Gatelais: We provide the KPIs that are published for the service offering. This will include suchinformation as service availability rates, outage problems, change management, and also activityreporting.Strategic decisionsGardner: Let’s look at this for a moment through the eyes of some of your customers, Jean-Michel. Theyre able to make their own strategic decisions better, knowing what they can do on-premises and what they can do to outsourcing models. They can make determinations about whatis core and what’s context for their own capabilities and differentiation. What has that meant forthem?Do you have any anecdotes or insights into some of the beneﬁts to their overall business thatthey have been able to make, because they can look to an organization like Steria and say, "Here,you do it. Were going to focus on something else?"Gatelais: Yes. The example I can give is the ﬂexibility the service offering can give to thecustomers in the software development area.For example, it allows you to set up some development platforms for a limited period of time,allowing product development. With the service we offer, when the project is ﬁnished and youenter into the application management mode, the plant is able to say, "I stopped the server." Its
backed up, and if six months later the customer wants to develop a new release of this software,then we would restore his environment. In the meantime, he wont have the use of the platform,but hell be able to continue his development. This is very ﬂexible.Gardner: Paul, you must be seeing a lot of this that for many adopters with the test dev, qualityassurance, the need for elasticity for those builds and environments around the test anddevelopment lifecycle. This sort of provides the killer use case for cloud.Muller: Yes, but on and off-premises. The interesting part is that the development and testprocess is such a resource-intensive process, while you are in the middle of that process. But theminute you are done with it, you go from being almost 100 percent busy and consuming 100percent of the resources, to, in some cases, doing nothing, as Jean-Michel said, for months,possibly, even years, depending on the nature of the project.The notion of tying all of that capital equipment up and leaving it idle for that period of time issimply not tenable. The idea of moving all of that into a ﬂex up-ﬂex down model is probably oneof the single most commonly pursued use cases for both public and private cloud today.The other one, as Jean-Michel has already spoken to, is that the idea of more discrete services,particularly that of helpdesk, is just going crazy in terms of adoption by customers.Gardner: Jean-Michel, how about some of the different sectors of the market? Do governmentclients of yours in Europe and the UK approach this any differently than the private sector? And,do small-to-medium-size businesses (SMBs) seem to be approaching your services or havedifferent requirements than the larger enterprises?Gatelais: The main difference between government and the private sector is the security issue.Most of governments ask for more conﬁdentiality. Theyre very often reluctant to share their dataor their business, with others. For such clients, we need to have a dedicated offering.Dedicated offeringFor example, in the UK, a customer from government didn’t want to run their services on sharedplatforms and asked for a dedicated environment. Because the whole ITSM offering from Steriais running on just one environment, we were able to instantiate such services only for their use.Muller: That’s an interesting topic right there, Dana. I don’t know whether youre seeing this alot in your interactions with clients, but the whole idea that cloud is a shared resource pool worksbrilliantly on paper.But as Jean-Michel said, practically speaking, for reasons of data sovereignty, for reasons ofsecurity, and in some cases for regulatory reasons, the customer will insist that the service beeffectively a hosted solution. It’s not that different from almost a traditional outsourcingsituation, would you say, Jean-Michel?
Gatelais: Yes.Gardner: One of the things I am seeing is some of the vision in terms of cloud a few years agowas that one size would ﬁt all, or that it’s cookie cutter, and that there won’t be a need for highvariability. But I think what we are actually seeing in practice, and Jean-Michel is certainlyhighlighting this, is that the KPIs are going to be different for organizations.There are going to be different requirements for public and private, large and small, jurisdictionby jurisdiction, regulation and compliance. You really need to be able to have the ﬂexibility, notjust at the level of infrastructure, but at the level of the types of services, the way that theyrebuilt, invoiced, and measured and delivered.Gatelais: The way we propose the services is theyre interesting for small organizations, becausethey don’t have to heavily invest in solutions, and were able to propose shared solutions. This isSaaS, this is cloud, and for them it’s very interesting, because it is much more cheaper.Gardner: Well, we are going to be coming close to the end of our time. Jean-Michel, I wonder ifyou have any thoughts for those who might be embarking on something like a STARS capability.They will be thinking about what they should put in place in order to accommodate thecomplexity, the security, being able to have granular services that they can deliver regardless oflocation to the variety of different types of clients. What do you advise others who would bepursuing a similar objective?Gatelais: With such offerings you have to design and think much more than before, to thinkbefore running out your solution. You need to be clear on what you want to propose to what kindof customers, where is the market, and then to design your offering according to this. Then, buildyour business model according to those assumptions.Gardner: In North America, we might say that that’s skating to where the hockey puck is goingto be, rather than where it is.Gatelais: Yes.KPIs that matterMuller: A question from me, Dana, for Jean-Miche. Right now, Ive got a couple of metrics, acouple of KPIs, that matter to me really deeply. From your perspective, are there one or two KPIsthat youre looking at at the moment that either make you really happy or that are a cause forconcern for you, as you think about business and delivering your services. What are the KPIs thatmatter to you?
Gatelais: What is very difﬁcult for new services is to evaluate the actual return on investment(ROI). You can establish a business model, a business plan to see if what you will do, you willmake some proﬁt with it, but its much more difﬁcult is to evaluate the ROI.If I don’t buy this service, it would cost me an amount; if I buy this service, okay, it will cost theservice fee, but what would I spend next to that. This is very difﬁcult to measure.Muller: And its probably one of the most important KPIs in business, wouldn’t you say, Dana?Gardner: Absolutely, yes.Gatelais: It may be basic, but you should take the conﬁguration management process. That isvery important, even in cloud offerings. Its very difﬁcult to make evident that if you do someconﬁguration management, you will have higher a ROI than if you don’t do it.Muller: The cost justiﬁcation of the investment is the challenge?Gatelais: Exactly. Today, even internally in Steria, its much more difﬁcult to get approval todevelop and to improve conﬁguration management, because people don’t see the interest, as youdon’t sell it directly. Its just a medium to improve your service.Muller: That’s such a good point. And Dana, its one of the great beneﬁts. This is going to sounda little bit like an infomercial, but its worth stating. One of the reasons weve been moving somuch of our own management software to the cloud is because its behind the scenes. Its oftenseen as plumbing, and people are reluctant to invest often in infrastructure and plumbing, until ithas proven its beneﬁt.Its one of the reasons weve moved to a more variable cost model, or at least have made itavailable for organizations who might want to dip their toe in the water and show some beneﬁtsbefore they invest more heavily over time.Distinct lineGardner: Historically, Paul, its been difﬁcult to draw a distinct line between technologyinvestments and business payoffs and paybacks, even though we have general productivitynumbers to support it.But now, with that greater insight into the management capabilities along the way, when you doeverything as a service, you can meter, you can measure, and you can pay as you go. Yourereally starting to put in place the mechanisms for determining quite distinctly what the payoffsare from investments in IT at that critical business payoff level. So I think that’s a veryinteresting development in the market.
Muller: The transparency improves, and because you have a variable cost model, it lowers thepain threshold in terms of people being willing to experiment with an idea, see if it works, see ifit has that payoff, that ROI. If it doesn’t, stop doing it, and if it does, do more of it. Its really,really very simple.Gardner: Right, much less of an art and a bit more of a science, but in a good way.Muller: Absolutely.Gardner: Im afraid we are going to have to leave it there. Id like to thank you all for joiningour discussion, and of course, Id like to thank our supporter for this series, HP Software, andremind our audience to carry on this dialogue with Paul Muller and Jean-Michel through theDiscover Performance Group on LinkedIn.You can also gain more insights and gather more information on the best of IT performancemanagement at www.hp.com/go/discoverperformance.Remember, you can also access this and other episodes in our HP Discover Performance podcastseries at www.brieﬁngsdirect.com, and on iTunes, under BrieﬁngsDirect.And with that, please join me in thanking todays guests, our co-host, Chief Evangelist at HP,Paul Muller. Thanks so much, Paul.Muller: Good talking to you again, Dana.Gardner: Where are you off to next?Muller: Ive got Sydney next week. London the week after that. San Antonio, Texas, thefollowing week, and then I will be back home for a little while before HP Discover in Las Vegas.Gardner: All right. We will be interested in hearing about your travels.And also a huge thanks to Jean-Michel Gatelais, IT Service Management Solution Manager atSteria, based near Paris. Thanks so much, Jean-Michel.Gatelais: Youre welcome. It was a pleasure.Gardner: Im Dana Gardner, Principal Analyst at Interarbor Solutions, your co-host, andmoderator for this ongoing discussion of IT innovation and how its making an impact onpeople’s lives. Thanks again for listening, and come back next time.Listen to the podcast. Find it on iTunes/iPod. Sponsor: HPTranscript of a sponsored BrieﬁngsDirect podcast on how IT service delivery company Steriastandardizes processes in the cloud for improved delivery. Copyright Interarbor Solutions, LLC,2005-2012. All rights reserved.
You may also be interested in: • Investing Well in IT With Emphasis on KPIs Separates Business Leaders from Business Laggards, Survey Results Show • HP Discover 2012 conference promises insights, information and user networking as businesses face a crossroads in IT delivery • Expert Chat with HP on How Better Understanding Security Makes it an Enabler, Rather than Inhibitor, of Cloud Adoption • Expert Chat with HP on How IT Can Enable Cloud While Maintaining Control and Governance • Expert Chat on How HP Ecosystem Provides Holistic Support for VMware Virtualized IT Environments • Continuous Improvement and Flexibility Are Keys to Successful Data Center Transformation, Say HP Experts • HPs Liz Roche on Why Enterprise Technology Strategy Must Move Beyond the Professional and Consumer Split