IAITAM 2012- Improve Uptake of Core Technology

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Signe Marie Stenseth presented this slideshow at the International Association of IT Asset Managers conference and Exhibition on October 19th, 2012.

Signe Marie Stenseth presented this slideshow at the International Association of IT Asset Managers conference and Exhibition on October 19th, 2012.

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  • This might seem obvious, but as an IT asset manager you have probably discovered many wasted resources lying idle, hidden from scrutiny. Most CIOs are always on the lookout for better ways to show that IT adds clear and measurable business value.How can you help business leaders produce more value for your company through cost optimization and improved technology uptake? By metering how resources are used, providing a tool for analyzing usage, and finally, by providing the expertise for cost optimization and better uptake of new technology. A survey from Gartner showed the majority of ITAM programs that measure savings deliver benefits of more than 5% in the first year, with 42% of respondents saving 10% or more. (From the report: Gartner Survey Shows IT Asset Management Is Becoming More Important to IT Organizations, 27. September 2011.)Why optimize IT resources? It is too expensive not to!
  • Open iT started with a group of IT consultants in 1992, who recognized that the system management problems they were addressing with large utility clients would be characteristic of almost any large, IT-reliant company, regardless of industry focus.With that, the consulting group changed its focus from Consulting to Software, and was reborn as a software company in 1999. (Read the slide bullets 2,3 and 4)
  • Here is a picture of OpeniT’s Product Architecture:The data is collected by an Open iT client. You may have a client on every system or laptop, or just on the servers, depending on what you want to achieve.For Oracle, on the other hand, you may only have a few clients for the entire network. Note that the client can work offline, as well as online. If it is working offline, it will transfer the data to the server once it gets online. The server structures the data in such a way so that you do not have to search through billions of records in order to get the big picture. From your favorite browser, you can access various reports on the server.All of Open iT’s modules have a common data store or data warehouse, and a Web-based GUI.
  • So what are some of the processes that you must have in place in IT today? IT must be able to demonstrate value to the business. IT must improve the organization’s awareness of costs. IT must be able to reduce costs and create scalability in a responsible, ethical way, and document compliance. IT must be able to evaluate investments and see if they contribute towards the future of your business... 
  • IT leaders are focused on improving efficiency, but how can they translate their aspirations into reality? From this survey of 2,803 IT executives and technology decision-makers from companies worldwide with 100 or more employees, we can see the importance of improving the efficiency of IT (which is different than just cutting IT costs) . But this needs to be done in an informed way, which IT asset metering and analysis provides.
  • Harvest low-hanging fruit! This is always important – even more important now in the economic climate that we are currently in. There is fruit to be had out there – go and get it. Where do I look? Not just by focusing on cutting costs. You want to focus on IT Optimization. How can you do that? By tracking usage and by evaluating how you use your resources every single day or week… Step 1: Track as much as possible - Don’t expect to optimize what you are not metering. Step 2 and 3: Analyze, communicate and then Optimize. Harvest the ROI – reinvest. You will find candidates for savings or improvements in user or asset efficiency everywhere.
  • How can you know how to cost optimize when you don’t know what you have? Slice and Dice — Prepare for Multiple Views of BudgetsIT application spending can be broken down and represented in many ways. Business leaders need to break down their cost structures in different ways to provide for multiple views of the business; IT leaders should be able to do the same thing. These breakdowns are typically snapshots in time; however, this should be the basis for cost trending. Some examples of this include: Budget by business unit or location — IT organizations should be able to communicate how much of the IT budget is dedicated to supporting a particular business unit or a location. This does not mean that every organization should go to the extreme of allocating every last cost to a particular part of the business. Shared resources that support applications that everyone uses can be represented in a "corporate" or "enterprise" category. However, IT spending that is dedicated to a particular part of the business, such as business-unit-specific projects or functional applications (and the dedicated infrastructure to support them — such as servers, storage or databases), should be tracked and represented.Budget by application or application suites — Understanding the overall spending with portfolios of projects, is critical for the application planning processBudget by users or user-group helps clarify what is really going on in the IT organizationBy fixed vs. variable costs – you want to track those add-on licenses that you are leasing or have as a pay-per-use agreement with your vendorsBy vendor – group applications or products together to give an overall picture of usage from a vendor Budget top projects — Organizations must be able to communicate overall project spending and the allocation of money across top projects. This can be a little tricky because projects do not all start and end at the same time, and may have radically different mixes of capital investments vs. expenses. The key is highlighting the big picture and noting these additional details
  • How can you benefit from using ITAM tools, in regards to cost optimization? Execution of various types of cost optimization will involve different parts of the organization and varying levels of involvement by IT.The first step is the easiest one – and involves fewer players. Usage Metering can provideinvaluable data both for the right-sizing of contracts, but also in deciding what terms would be beneficial for the company. Step 2 is to optimize within IT operations. With good access to usage data you are able to plan, prioitize and document the various steps towards optimized operations – support all your cost cutting projects within standardization, consolidation, automation and virtualization. Usingtools for metering and reporting also reduces the time you spend on reporting and collecting data, as well as automating some of the analysis and optimization. Advanced tools have access controls for various stakeholders and easy folder structure or reports delivered directly to their inbox or to their intranet. Step 3: Any cost savings Optimization that has to be done together with business where business users are supported with technology so they can be more efficient in their work. Using LicenseOptimizer you can easily cut software costs – but can also support the users of it – so they can get more work done in less time – since they do not need to go in and out of applications – even if the license is made accessible for other users.Step 4: This has to do with making the right choices! Working smarter, not necessarily harder! With the right mix of software, you can support the optimal workflow. If you have succeeded in one location – or on one project – you want to document best practices and implement this across the organization. Usage data can capture best practices – document – help decide who needs more support and training to get up to speed on new products and workflows. We will talk more about how to increase technology uptake successfully without losing productivity in a moment.
  • Let me share some success stories of companies who reaped rewards from using ITAM tools:Logos on this page show companies who use Open iT’s usage data to support decisions for cost optimization, user efficiency and better management.They have cut costs where it did not hurt users – by focusing on documenting shortages – avoiding denials – and focusing training where it has greatest effect. (click)One of our customers at Murphy Oil said: ‘I saved 1.35 million after one year of using Open iT.’ The Director of Upstream IT Business Systems at Murphy Oil Corporation, made the savings public in his presentation at a Data Management conference. Another customer said: ‘I saved $250,000 when I generated my first report!’Avio Aerospace saved 47% per year on their expensive engineering software by using OpeniT LicenseAnalyzer and LicenseOptimizer.Yet another customer, Nissan,said: ‘After 5 years with Open iT as the global hub for our application usage data, we have saved $10 million.’
  • Metering software applications during an implementation is an extremely effective way to monitor the program’s effectiveness. It can be used to measure program KPIs and most importantly, to reduce the loss of productivity when switching core business technologies by giving the implementation team a real-time window to manage the program.
  • Companies that switch to new core business technologies often consider only IT and data management requirements. When making the decision to switch, companies consider factors such as data conversion, license costs, features/functionality, usability, required infrastructure change, and support costs. However, the decision to implement new technology that is core to business performance usually ignores or underestimates the cost of loss of productivity caused by switching. Too little emphasis is placed on the work needed to motivate the organization to change, and to move users from a level of incompetency with a new tool to competence, and some to the expert level. This lack of emphasis results in low adoption rates, low usage, and higher organizational costs from productivity loss. An effective program will continuously monitor software license usage, both to document overall program success metrics and to optimize uptake by making any necessary deployment/adoption program changes along the way.
  • The least effective implementation strategy is to address only IT and data management requirements, leaving users to organically adopt the new technology with minimal training. Putting in place a holistic implementation program will improve the odds that the technology will be effectively implemented. A holistic implementation program is one in which infrastructure, data management, organizational, and behavioral aspects of technology change management are consciously designed, implemented and program-managed. The program has stage-gates and clearly defined metrics for each stage, as well as for the overall program. A focus of this type of program is on building a user community with application champions to promote and mentor others. A strong user community will minimize productivity loss and improve business performance through the effective use of the new core business technology.
  • Deployment – Require the target user base to use the new technology by a set date. Deployment is most effective in organizations with a strong command and control culture and centralized IT functions. Adoption – Each user or organizational unit has the option to use the new technology or not. There may be recommendations from top management to use it, however there is a choice to use the new technology or continue with their current tool. Adoption programs are very common in less autocratic organizations or those with decentralized IT functions. There are some technology implementations that must be deployed and not simply adopted because of their enterprise-wide effects on the organization. Examples of these are a new finance system or a new HR management program.  
  • Whether the implementation is achieved through deployment or adoption, each strategy can be successful. In both scenarios, the perceived value of the necessary functionality added must be identified and communicated throughout the affected organization. Typically, adoption programs have slower user adoption rates because of the nature of organic growth; however, an effective, well-managed adoption program can have user adoption rates approaching typical deployment programs. One key component to success for both strategies is in how the user community network is built and managed. License User Metrics can help you see how your users are doing so you can mange them, and the technology uptake program, more effectively, by measuring Key Performance Indicators.
  • Before any core business implementation begins, top management must decide which implementation approach best fits the organization’s culture and the requirements of the technology. Management must also agree upon the success criteria not only for the implementation of the new technology (program performance), but also for its impact on the organization (business performance). These key performance indicators (KPIs) will need to be measured throughout the implementation process. License and application usage metrics are critical to support program performance KPIs and may include measures such as: Total License Usage per Product, Feature Version, Location, Total Active Time (Elapsed time) and Number of Unique Users Concurrent License Usage (Maximum, Minimum or Average) per Product, Feature Versions, Feature Name, as well as Available Licenses at any one timeTrend License Usage per Application (target growth rate per product, feature etc.)Compare Active vs. Inactive Usage per Application
  • This graph describes a specific scenario of a typical, effectively managed adoption program. The company identified a new core business technology and targeted 70 global concurrent users. Since the company’s corporate culture is one that discouraged mandating new technology from a central unit, the sponsoring senior manager chose to pursue an adoption program, giving each business unit permission to use the new technology while at the same time communicating its preference to make the switch to the new tool. An adoption implementation team put together a holistic plan to inform the organization about the benefits and capabilities of the tool, and included training, mentoring, IT infrastructure changes. At Point ‘A’ in the program, the pilot project concluded and the first group of users was trained to use the new software application. Included in this first group were a couple of “power users” of the old technology who indicated a willingness to move to the new application quickly. Prior to the first training session, all data from the first group’s active projects were migrated to the new application so the new users could come back from training and immediately begin working on their own datasets in the new application. Application specialists were present, ready to support and mentor the new users when they returned from training. The user group began to develop and license usage began to grow. At Point ‘B’, the growth rate in usage slowed because the first champion transferred out of the organization and new champions had to be developed. The upward trajectory of the graph shows the overall effectiveness of the adoption team. At Point ‘C’, there was a required infrastructure upgrade, but the user community quickly recovered from the change. Ten months after the initial pilot program began the organization hit its targeted number of licenses.
  • Monitoring license usage to build a strong user community: Developing a strong user community helped “spread the word” about the new tool. A strong user community lead by champions helps reduce productivity loss during the technology switch.
  • The deployment team identified user champions by graphing total hours of usage per user and made resources available to them to further develop their skills. The team also monitored usage of the old and new applications to identify users that were reverting to the old system to get their job done or that needed additional mentoring. The deployment team sought out those users to understand what difficulties they may be having and then worked to address them. Without monitoring license usage, the team might not know if someone is having trouble with the transition to the new technology. By proactively working with those users, productivity loss during the switch was dramatically reduced.
  • Identify the power users and potential champions of the new version. This graph of the top users of the old version of software was produced when the implementation program was being designed. It helped to identify which users the implementation team should focus on first to ensure their success using the new version, so that they would be active champions during the rollout. By monitoring the usage of the new version per user, the implementation team can find out quickly if “power users” of the old version accept the new version or if they experience difficulty with the new version. Actions can then be taken to address any issues, including technical and behavioral, that might arise. The result is a much more responsive implementation to the user community.
  • Organizational Communication Another adoption/deployment program success factor is ensuring abundant communication throughout the organization, both upward to management and laterally to the newly developing user community as well as to the organization as a whole. Behavioral changes that accompany the technology switch are cascaded through the organization when clear expectations are articulated and then actively modeled by senior management. As the deployment or adoption program continues, consistent updates about the program's progress maintain organizational consciousness about the switch. Continuous license monitoring of usage data and using dashboards allows for real-time reporting customized to fit the needs and interests of the various parts of the organization. This graph represents a sample report that can be used on a weekly basis to document progress and set new targets for training and support. Here, the uptake of technology is measured by geographic distribution. In this case, the rollout began the week of February 12th in the corporate group, but quickly moved to other regions through April. By mid-summer, the adoption of the technology had reached its goal of 70 global concurrent licenses. Notice that the sum of licenses used in each region was higher, close to 80 licenses (bar charts), since peak usage in each region did not happen at the same time. It is important that the metering tool can calculate true global concurrency, even if the licenses are served locally, to get a correct picture of your true global license needs.
  • The bar chart shows the conversion of the company’s users from the old version to the new version throughout the year. It is a clear visual display of the success of the implementation program. Adoption rate: By the end of Q3 the company has nearly fully embraced the new application.
  • The histogram shows the number of hours of license usage, e.g. each bar shows how long the user community has checked out particular numbers of licenses. This graph gives the implementation team a forewarning about when the company would begin to run out of licenses and would need to purchase more. In this case, the company has used up to 70 global concurrent licenses, but the last few licenses were used very little. To further refine their understanding of their license needs, a company can also monitor active and inactive license usage, i.e. when licenses are checked out, but are not actively engaged by the user. This type of monitoring can help the company re-adjust their license counts and enable them to invest in more technology and/or additional training resources from their vendors. These kinds of further analyses are not covered in this paper, but are offered by additional modules of the metering software. Software application metering is commonly used in post-implementation environments as a way to manage a company’s technology portfolio, but this tool is also effective when used as part of an actively managed implementation program. Implementation programs vary significantly in their effectiveness and success. Often, a new technology is offered to the organization, but with little or no process in place to ensure it is incorporated into the workflow. The lack of process will likely doom uptake of the technology. In other organizations, an adoption program (voluntary uptake) or a deployment program (required uptake) is used to implement new technology, but even these programs need to be actively managed, with processes that facilitate the necessary changes in behavior, workflow, infrastructure, and information management. Without a well-organized and managed implementation program, significant loss of organizational productivity will likely occur. 
  • Continuously monitoring license usage throughout the program, not just at the beginning and the end, will give the implementation team a real-time dashboard on which to see how well the program is progressing. Using a dashboard, the implementation team will be able to see if there are problems with uptake and will be able to address them immediately. The dashboard becomes a way to monitor the health of the program. To illustrate this: A dashboard should profile both the targeted application (e.g. trends in usage over time, maximum and average usage compared to what is available) and the user-community that is deploying/adopting this new application (e.g. user name sorted by total hours active on the application). This information will give insight into who are the product champions and late adopters. More graphs can be added to give additional understanding of how an application is being used by location or business unit and the total distribution of usage: how often licenses are checked out at the same time (illustrated by a histogram). Through integration with the company’s HR database, the user name, location, email and phone number is available with the usage data, for easy communication with the user-community.
  • As an IT asset manager you have to make the best possible decisions about the assets you steward, while considering key business drivers affecting your work. There are tools available to make it easier to get an overview of the assets you are managing, to be able to get control of them, to provide increased value through cost optimization and improved productivity.ITAM information is increasingly being used to make more strategic decisions, says a survey from Gartner. As much as 28% of organizations use ITAM data to support financial management and IT strategies.
  • Burlington Resources saved $5 million on software costs in two years – 36% reduction the first year and an additional 19% the second year.In addition, they received an improved mix of software to better support their business. They measured the business value to be 20 times higher than the cost savings. Cutting costs is just the tip of the iceberg—by using IT in a smarter way companies can increase their revenues through increased efficiency and productivity.IT Asset Managers can help business leaders produce more value for the company by utilizing the best technologies available. Sometimes this may require the uptake of a new core business technology, a process that can initially damage productivity if not managed well.

Transcript

  • 1. Cost Optimization & Technology Uptake – Help business leaders produce more value for your company Click to edit Master subtitle style By: Signe Marie Stenseth
  • 2. Meter Usage - Optimize Value!2
  • 3. • Independent software vendor• Meters usage of software applications and licenses, with globally deployed, dynamic use models including concurrent licensing and pay-per-use agreements.• Meters hardware usage to support optimization and usage-based chargeback models. . 3
  • 4. Global Hub for Collection & Distribution of Usage Data4
  • 5. Key Business Drivers Financial • Cut Costs • Improve Cost Awareness • Create Scalability and Simplicity Risk • Document Compliance Productivity • Improve Asset Efficiency/User Productivity • Document Business Value of IT5
  • 6. Top priority: Improving IT Efficiency “Which of the following initiatives are likely to be your IT organization’s top IT management priorities over the next 12 months?” High priority Critical priority Improve the efficiency of IT 50% 31% Improve or streamline business processes 48% 29% Improve our customer management capabilities 49% 27% Increase IT capacity/resources to drive business 48% 27% innovations Increase the scope of ITs centralized or shared 47% 23% services Improve the measurement of ITs impact on 47% 22% business performance Define strategy for risk and compliance 47% 21% Expand eBusiness or Internet initiatives 38% 23% Improve the sustainability and energy efficiency of 40% 15% IT operations and infrastructure Market the IT department within the firm 38% 13% Improve IT performance by adopting processes like 36% 13% CMM or ITIL6
  • 7. Market Research Facts – ITAM/SAM Waste According to an independent survey of over 500 IT managers and CIOs in the U.K. (IAITAM & FASTIiS, 2011) 92% of managers had unused shelfware. 77% of organizations have never reclaimed any unused software licenses. “Proactive IT Asset Management can recover over 25% of the existing IT budget.” -- IAITAM “Executive Briefing Overview”7
  • 8. Slice and Dice – Prepare for Multiple Views Multiple views provide critical insights: • By business unit/ location • By application/ application suites • By users/User-group • By fixed vs. variable costs • By vendor • By project8
  • 9. Software Usage Support Cost Optimization IT Procurement: • Sizing & best terms Cost Savings within IT • Identify opportunities to reduce costs within your current IT Budget Joint Business and IT Cost Savings • Implement cost-saving technologies that also help the business be more productive Enable Innovation & Business Restructuring • Get the right mix of software to support the business • Implement process improvements/technology uptake9 9
  • 10. What customers say… “$ 1.35 Million in documented first year savings.” “47% annual savings on our engineering applications.” “10 % cost reduction on overall software licenses.”10 4
  • 11. Meter Usage During Technology Uptake • Monitor programs effectiveness. • Measure key performance indicators (KPIs). • Reduce the loss of productivity during the switch.11
  • 12. Issues Considered Adopting New Technology: • Data Conversion • License Costs • Features/Functionality • Usability • Required Infrastructure Change • Support Costs12
  • 13. Holistic Implementation Program Focus:• Building a user community with application champions to promote and mentor others.• Minimizing productivity loss.• Improving business performance through the effective use of the new core business technology.13
  • 14. Strategies for Holistic ImplementationPrograms: • Deployment - Require the target user base to use the new technology by a set date. • Adoption - Each user or organizational unit has the option to use the new technology or not.14
  • 15. License User Metrics • Needed to support Key Performance Indicators (KPIs), measuring the success of both program performance and business performance throughout implementation.15
  • 16. Sample Usage Metrics to Support KPI• Total Unique Users – Named Users• Concurrent License Usage• Trend License Usage per Application (target growth rate per product, feature etc.)• Compare Active vs. Inactive Usage per Application16
  • 17. Support the Different Stages17
  • 18. Monitor License Usage to: • Identify Power Users • Build a strong user community • Identify users that are reverting to the old system to get their job done • Reduce productivity loss during the switch.18
  • 19. Identify Power Users19
  • 20. Identify Power Users – Customer Case20
  • 21. Document Weekly Progress New Version Usage By Region 90 80 70 60Max. Lienses In Use West 50 East 40 South North 30 Corporate 20 Combined 10
  • 22. Conversion of Old-Version Users to New-Version Users Percentage of Total Usage Over Time - Old Versus New 100% 90% 80% 70% 60% 50% New Version 40% Old Version 30% 20% 10% 0% Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 201122
  • 23. Total Usage over Time for each License Usage Duration Versus Used Licenses - New Version 1,200.00 h 100.00% 90.00% 1,000.00 h 80.00% 70.00% 800.00 h 60.00% 600.00 h 50.00% Elapsed Time Cumulative Percentage 40.00% 400.00 h 30.00% 20.00% 200.00 h 10.00% 0.00 h 0.00% 0 10 20 30 40 50 6023
  • 24. Create Real-time Dashboard24
  • 25. Improve Decisions w/ Objective Usage Data Financial/ Cost Optimization • Reduce spending on underutilized SW and HW • Standardize versions and tools • Improve technology acquisition • Lower the costs of reporting and administration Risk/ Compliance • Mitigate license compliance risk Productivity/User Efficiency • Identify power users and product champions to support technology uptake programs • Uncover training needs • More effective communication between and within units25
  • 26. Burlington Resources – Business Goals • Improve team synergies and global sharing of information • Shortened project cycle time • Drill fewer dry holes • Find more reserves per well drilled and find more total reserves • Preserve analysis results • Continue reducing annual software costs Summary: Improve the quality of the work being done. Standards Training Independent Technology Enhancement Team budget Operations management “Raised the Bar”26
  • 27. Burlington Resources – Cost Optimization Cost of Savings over $5 Million -36% software maintenance cost (Year 1) -19% software maintenance cost (Year 2) -3% software maintenance cost (Year 3) Y0 Actual Y1 Actual Y2 Actual Y3 Actual Maintenance New Software Usage metering tool used: OpeniT27 .
  • 28. Business Value to Burlington Resources 255% 253% Goal: Add reserves Productivity 10X SW Finding costs savings 92% % holes dry SW savings Business Case 2002 Actual 2003 Actual 2004 Actual Computed June 2005 + savings in management time + opportunities for better long-range planning + opportunity to do even better28
  • 29. Q/A29
  • 30. Open iT, Inc. Two Park Ten Place Thank You! 16300 Katy Freeway OpeniT solves IT resource Houston TX 77094 monitoring, reporting and +1 281 599 3400 optimization challenges to reduce the cost and Karoline Kristensens v. 5 complexity of managing N-0661 Oslo, Norway assets in distributed and +47 22 20 40 50 complex environments. Quellenstr. 20 71229 Stuttgart, Germany +49 7152 3070900 Email me at: PO Box 265 Forus sms@openit.com N-4066 Stavanger, Norway Signe Marie Stenseth +47 51 64 09 80 3rd Floor Insular Life Bldg. If you can measure IT, you M.L Tagarao cor Granja St. Lucena City 4301 can optimize IT! Philippines +63 42 710 8566 www.openit.com30
  • 31. About the Speaker • Signe Marie Stenseth has worked for OpeniT since early 2000, first for two years in Europe, then in Houston, TX. Before starting full time for the company, she was Board member for OpeniT. Signe also has many years of experience working as an advisor for the Norwegian Government, EU Commission in Brussels, and Statoil. • Signe holds an MBA from the Norwegian School of Economics and Business Administration, with additional studies in economics from the University of Mannheim in Germany, and the College of Europe in Belgium. • Contact info: Signe Marie Stenseth, OpeniT, Inc., Two Park Ten Place, 16300 Katy Freeway, Houston, TX 77094. Email: sms@openit.com.31
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