Thriving in the Competitive Vortex


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To thrive in this competitive environment, IT organizations must transform into highly agile and efficient service brokers -- continuously optimizing both "chore" IT tasks such as infrastructure management and "core" imperatives such as customer experience and business model innovation. As enterprises tap into the expertise and skills available via the cloud, IT becomes the orchestrator of collaboration between service providers and internal service owners in real time.

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Thriving in the Competitive Vortex

  1. 1. WHITE PAPERSeptember 2012thriving in thecompetitivevortexThe end of IT as we know it agility made possible™
  2. 2. Thriving in the Competitive Vortex table of contents executive summary 3 Beyond the innovator’s dilemma: 3 Welcome to the competitive vortex The implications: A new order for IT 4 Introducing ITMaaS solutions 6 The new IT model: A case study 7 Conclusion 10 2
  3. 3. Thriving in the Competitive Vortex executive summary Today’s enterprises are entering a competitive vortex, a market climate in which fortunes can change in days. In this environment, it is increasingly incumbent upon IT teams to help organizations compete with disruptive new offerings, and to deliver the innovations that foster market leadership. This white paper looks at these changing market dynamics, and it outlines the key requirements these new competitive paradigms create for enterprise IT. Finally, the paper describes how CA Nimsoft solutions offer an unparalleled mix of capabilities that enable IT organizations to fulfill their core charters: optimizing service levels of their increasingly diverse business services, IT delivery models, and technologies. Beyond the innovator’s dilemma: Welcome to the competitive vortexWhile the In 1997, Clayton Christensen’s groundbreaking book, “The Innovator’s Dilemma” was published1.principles In it, Christensen outlined a model for understanding why many strong, well-established firms failedChristensen because of their inability to respond to a competitive threat. As Christensen reveals, every largeoutlined remain corporation encounters a disruptive business model or technology at some point. When thesevalid, what’s competitive, differentiated offerings start to gain momentum, the established corporations havechanged since to react; if they don’t, long term growth and viability can be threatened.1997 is the rate at While the principles Christensen outlined remain valid, what’s changed since 1997 is the rate at whichwhich these these transitions occur. Today, we’ve moved from the innovator’s dilemma into a competitive vortex,transitions occur. where an organization’s fortunes can change in months, and even days.Today, we’vemoved from the In the competitive vortex:innovator’s • Business models are disruptive. New offerings and competitors are entering virtually every market,dilemma into a introducing new products and services that completely change the competitive landscape.competitivevortex, where an • Organizational execution must get faster. New cloud-based infrastructures, agile development, andorganization’s a host of other innovations are dramatically increasing the rate of change within enterprises.fortunes can • Competitive advantage is highly volatile. Without continued innovation and operational excellence,change in months, even dominant market leaders can see their fortunes decline.and even days. Following are some recent and relevant examples of what the competitive vortex means in different markets. 3
  4. 4. Thriving in the Competitive Vortex Case #1: Disruptive delivery Blockbuster is an example of a major incumbent, an organization that at one point had thousands of stores across the U.S., and that encountered a disruptive innovator: Netflix. Blockbuster ended up declaring bankruptcy in 2010. With its mail order DVD business, Netflix was able to establish a leadership position. With its online streaming offering, the company was able to deliver an effective online experience for users, which has helped Netflix sustain its market share. Netflix was also a pioneer in many operational respects, including its early adoption of infrastructure as a service (IaaS) to support spikes in the online viewing demands of customers. At its peak, Netflix reached a market cap of 16 billion2. Now, however, things have turned, with cable companies, media firms, and other vendors like Amazon offering video on demand. To counter, Netflix announced plans to split into two organizations, but, in the wake of a social media-fueled consumer backlash, the company reversed course. Just a few months after Netflix reached its peak, these other companies started introducing market disruption, and it remains to be seen whether Netflix will retain its lead or meet the fate of Blockbuster. Case #2: Disruptive device When Apple introduced the iPhone in 2007, it created an innovator’s dilemma for all the dominant mobile device manufacturers, including Motorola, Blackberry, and Nokia—changing these companies and their prospects irrevocably. In years past, these established vendors were competing in a market where technical functionality was the focus. The iPhone completely redefined customer expectations for content and design. Further, the open application model Apple introduced also marked a fundamental market shift. In just a few years, the number of applications available for the iPhone grew to over 500,000—and the old model of mobile device manufacturers dictating which applications were available for phones went away. Apple delivered disruptive technologies and business models that completely changed the market landscape. The implications: A new order for IT As CEOs survey their markets, they now see the implications of the competitive vortex. They see newIn essence, IT dynamics, and a feverish market pace, one in which businesses can quickly win or lose a leadershipis becoming a position. Now they don’t look at IT as a line item, but as a means to either gain the agility needed tocritical means react to a disruptive competitor—or to be the disruptive force in their which New technologies and computing models are instrumental in compressing the time it takes to changeorganizations market dynamics and to support new business models. In essence, IT is becoming a critical meanscan maintain by which organizations can maintain competitive advantage. This isn’t an aspiration for IT, it’s ancompetitive absolute necessity.advantage. Thisisn’t an aspiration Thus, CIOs have a clear agenda: help the business win in the competitive vortex. Moving forward, CIOsfor IT, it’s an need to look at IT in a fundamentally different way. Consider a few examples of the changes these newabsolute necessity. market dynamics demand. 4
  5. 5. Thriving in the Competitive VortexFor enterprise Focus on competitive advantageIT, sluggish For IT, investments and efforts need to be based on an unwavering focus on competing in the market.adaptation and Part of this comes down to a “core versus chore” decision-making framework:responsiveness • Core efforts are those that bring competitive differentiation or advantage, factors that make thecan be attributed company’s offerings different or a single factor:complexity • Chores represent efforts that, while they may be necessary operationally, don’t further competitiveoverload. These advantage. IT needs to increase investment in core activities to build competitive advantage, andinternal teams offload chores to external service providers.have been stifled In making this core versus chore determination, CIOs need to be brutally honest in their assessment,by complicated, starting with a blank slate and looking objectively at key questions: What makes the biggest differenceburdensome, and to the business? What’s most important? Which internal or external resource can help deliver thelabor-intensive IT service most cost effectively and efficiently?infrastructures.Consequently, The mix of internal versus externally based services will vary for each organization. For some smallerthere’s simply no businesses, it may make sense to hand off virtually all IT functions to an external provider. For mostway for IT groups larger businesses, there will most likely be a diverse mix of service delivery models employed. Overto keep pace with time, the list of core services will typically grow increasingly narrow, and will tend to be largelycloud providers industry specific in nature.and MSPs. It’s important to realize, that in deciding on what is the core and chore, there are things IT can’t abdicate, such as governance, security, tracking and ensuring appropriate service levels, and establishing sound disaster recovery procedures. Today, IT organizations have a broad array of options when it comes to offloading chore efforts. The demand for efficiency and agility is helping fuel explosive growth in demand for cloud offerings, and in the number of cloud providers and delivery models available. In addition, managed service providers (MSPs) continue to evolve and deliver high-value services that are often more cost effective and reliable than what an enterprise IT team could deliver internally. Need for velocity Today, business performance is all about speed. Over the years, however, IT has often been the subject of criticism for not getting things done fast enough. For enterprise IT, sluggish adaptation and responsiveness can be attributed to a single factor: complexity overload. These internal teams have been stifled by complicated, burdensome, and labor-intensive IT infrastructures. Consequently, there’s simply no way for IT groups to keep pace with cloud providers and MSPs. To combat this challenge, enterprise IT teams are re-architecting their environments, leveraging private cloud and virtualization technologies in order to realize elegant simplicity. In addition, many are emulating the approaches of leading MSPs, organizations that have been developing and refining processes for managing IT for many clients over a number of years. 5
  6. 6. Thriving in the Competitive VortexFor enterprise Skills on demandIT, sluggish As the Netflix example outlined above illustrates, change happens quickly, and it’s difficult if notadaptation and impossible to predict the type of expertise that will be needed in the future. This is creating the needresponsiveness to begin getting the skills required on demand. Today, IT teams need to be able to find the right skillscan be attributed to address a particular business need, regardless of whether appropriate expertise is located in ato a single factor: different department within the same organization or at an external vendor. By leveraging socialcomplexity networks, organizations are able to much more efficiently map the right resources to critical problems,overload. These helping ensure the business is doing what’s needed to compete in the marketplace.internal teamshave been stifledby complicated,burdensome, and Introducing ITMaaS solutionslabor-intensive IT Today, CA Nimsoft offers a set of solutions that help IT organizations meet their core charter:infrastructures. sustaining optimal service levels of critical business functions. CA Nimsoft delivers IT ManagementConsequently, as-a-Service—offerings that provide comprehensive monitoring, service management, and cloud userthere’s simply no experience measurement capabilities. With these unified solutions, IT teams can optimize theirway for IT groups business services and speed problem keep pace withcloud providers CA Nimsoft ITMaaS solutions support today’s hybrid IT organizations, giving them the visibility theyand MSPs. need to understand, track, and optimize performance of all business services—whether they are core or chore, whether they run in the data center or in the cloud, and whether they are managed by internal IT or external service providers. CA Nimsoft ITMaaS solutions deliver: • Agility to respond. With their comprehensive infrastructure coverage, robust capabilities, and ease of use, CA Nimsoft ITMaaS offerings equip IT organizations with the agility they need to respond— whether to changing technological environments, cloud services, or business models. • Elegant simplicity. CA Nimsoft is simple to configure, deploy, and use. By delivering comprehensive, unified IT management capabilities in an on-demand cloud service, CA Nimsoft solutions eliminate the cost and effort required to host and manage on- premise software. • Intelligent collaboration. CA Nimsoft solutions leverage ITIL best practices in order to make it fast, easy, secure, and efficient to share performance data with all the teams that need it. Through this intelligent information sharing, CA Nimsoft enables organizations to more effectively collaborate across the diverse ecosystems that are being used to support IT services today. 6
  7. 7. Thriving in the Competitive VortexFigure A.Nimsoft deliversintuitive, flexiblereporting capabilities,including via iPhone,ensuring administratorsget the timelyinsights they need. The new IT model: A case study“As we sought to Business background better support PreserveSoft is an example of a company in the competitive vortex: an organization that’s creating our business, we disruption in its markets. PreserveSoft offers a software as a service (SaaS) solution that helps had to make streamline the information sharing that’s associated with preserving bank-owned properties. The some core versus company was formed in response to the housing and mortgage crisis that arose in recent years, and chore decisions. represents a unique and differentiated offering. In just a few years, the company delivered innovative For our business, solutions that larger financial institutions and vendors couldn’t match. it was clear Challenges that software In the past, PreserveSoft had a software development team that also did double duty as IT support development was administrators, handling issues with databases and networks when they arose. This support model a core charter— led to unpredictable workloads and service levels, and was an increasing distraction for the business. virtually Further as the company grew, the infrastructure and existing processes started to be strained, so everything else gaining the scalability required grew increasingly problematic. represented a chore.” “As we sought to better support our business, we had to make some core versus chore decisions,” – Andrew Rowlands, explained Andrew Rowlands, CIO at PreserveSoft. “For our business, it was clear that software CIO, PreserveSoft development was a core charter—virtually everything else represented a chore. Having our software developers frequently distracted from their core responsibilities while they did troubleshooting and remediation was increasingly problematic for the business. 7
  8. 8. Thriving in the Competitive Vortex PreserveSoft’s innovative IT model Rather than hiring the internal staff needed to support the IT infrastructure, PreserveSoft turned to IT Authorities to effectively create a virtual IT organization. IT Authorities is a service provider that specializes in IT monitoring and management. In addition, just as infrastructure monitoring and administration weren’t core to PreserveSoft’s objectives, neither was database tuning and troubleshooting a core service for IT Authorities. Consequently, IT Authorities relies on another leading service provider, Soaring Eagle, for those capabilities. Now, if IT Authorities detects an issue or problematic trend associated with PreserveSoft databases, alerts are automatically forwarded to the appropriate staff at Soaring Eagle for troubleshooting and remediation. “It’s hard to be an expert at something if you don’t do it every day,” stated Jeffrey Garbus, CEO at Soaring Eagle Consulting. “That’s one reason it works well for IT Authorities and PreserveSoft to rely on a specialized database performance consulting firm like ours. If a database issue arises, they can immediately get the expertise they need to address it. However, after the issue is addressed, they don’t need to keep that expertise on hand, waiting for the next issue to arise. They get the timely help they need, whenever they need it, 24x7x365.”Figure B.No matter whetherservices are core orchore, or hosted onpremise or in thecloud, Nimsoft ITMaaSsolutions give youthe capabilities youneed to optimizeperformance andavailability. 8
  9. 9. Thriving in the Competitive Vortex“With its effective Leveraging ITMaaS solutions information IT Authorities relies on CA Nimsoft ITMaaS solutions to manage its clients’ infrastructures, conducting sharing end user response monitoring and end-to-end tracking of PreserveSoft’s SaaS infrastructure. CA Nimsoft capabilities, solutions provide IT Authorities with a common platform for all monitoring, communications, and Nimsoft functions collaboration with customers and partners. as the binding “CA Nimsoft is a key piece of how we deliver value to PreserveSoft and our other clients,” explained agent with Tom Beckman, CTO of IT Authorities. “With CA Nimsoft solutions, we can do automated testing and PreserveSoft, measurement of each step of important user transactions on the PreserveSoft site, and we can also Soaring Eagle, track the performance of the entire backend infrastructure. If any performance metric isn’t what it and our should be, we can quickly spot the issue and forward to the appropriate person for remediation.” organization. If we tried to do With CA Nimsoft, IT Authorities can leverage the following capabilities: this with 12 • Unified views. CA Nimsoft ITMaaS solutions equip IT Authorities with unified, correlated views of different tools, it entire infrastructures, both across and within specific client organizations. With CA Nimsoft solutions, simply wouldn’t IT Authorities can monitor network devices, applications, databases, and more—all through a work very well.” central platform. – Tom Beckman, CTO, IT Authorities • User response monitoring. With the solution’s synthetic end user transaction monitoring, IT Authorities and PreserveSoft can measure what a customer’s experience is at any given time. IT Authorities can set up automated execution of various interactions in the PreserveSoft SaaS platform, run these tests on a virtually continuous basis, and then set up automated alerts if the performance metrics measured exceed pre-defined thresholds. • Flexible reporting. With CA Nimsoft, IT Authorities can efficiently and securely deliver the visibility its administrators, clients, and partners need—when they need it. CA Nimsoft enables IT Authorities to set up on- demand portals, automated reports, and sophisticated alerts, equipping everyone with the intuitive, timely insights required. “With its effective information sharing capabilities, CA Nimsoft functions as the binding agent with PreserveSoft, Soaring Eagle, and our organization,” Beckman said. “If we had tried to do this with 12 different tools, it simply wouldn’t have worked very well. With CA Nimsoft, we get a central, unified solution for all our service management, which makes it extremely efficient to ensure everyone is getting the information they need.” Benefits With its innovative IT delivery model, expert partners, and CA Nimsoft ITMaaS solutions, PreserveSoft has realized a range of significant benefits: • Improved service levels. Armed with cohesive coverage and intuitive insights, administrators get the information they need to optimize the service levels that end users and customers experience. For example, the database experts at Soaring Eagle were able to identify and address an I/O issue in the database. Once the issue was addressed, response times for a critical transaction were reduced from 30 seconds to 2 seconds. Plus, with faster identification and resolution of issues, outage duration is reduced. 9
  10. 10. Thriving in the Competitive Vortex“By relying on • Improved focus and efficiency. Now, internal development resources can focus on their core experts to responsibilities, rather than fighting fires. Further, when issues arise, there’s no finger pointing or offload chore time consuming manual inspections needed to identify the source. Issues and potential issues are responsibilities, identified quickly, and immediately sent to the right expert to address we can focus • Improved visibility. Administrators at IT Authorities and Soaring Eagle can leverage timely, unified more squarely on insights to track and optimize performance. The team at PreserveSoft gets ongoing, flexible visibility what is core to into service levels, and can track how their service providers are performing against SLAs. our business. However, whether “Even in the largest enterprises, internal IT organizations can’t do everything and can’t be the best at you work with everything,” Rowlands declared. “By relying on experts to offload chore responsibilities, we can focus external providers more squarely on what is core to our business. However, whether you work with external providers or or not, you can’t not, you can’t afford to compromise visibility or service levels, and with CA Nimsoft solutions and our afford to partners, we don’t have to.” compromise visibility or service levels, and with Nimsoft Conclusion solutions and our To thrive in the competitive vortex, today’s enterprises need their IT teams to focus squarely on partners, we competitive advantage, grow increasingly agile, and leverage expertise on demand. With their don’t have to.” unparalleled blend of capabilities, CA Nimsoft ITMaaS solutions support IT organizations across all –Andrew Rowlands, these key areas. Whether services are core or chore, in the cloud or on premise, or managed by internal CIO, PreserveSoft or external teams, CA Nimsoft solutions help ensure service levels are always optimized. For more information, please visit CA Technologies (NASDAQ: CA) provides IT management solutions that help customers manage and secure complex IT environments to support agile business services. Organizations leverage CA Technologies software and SaaS solutions to accelerate innovation, transform infrastructure and secure data and identities, from the data center to the cloud. Learn more about CA Technologies at 1 “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail”, Clayton M. Christensen, Harvard Business Press, May 1, 1997 2 “After Dismal Earnings Outlook, Netflix Loses $2.3 Billion In Market Cap”, Erick Shonfeld, TechCrunch, October 25, 2011 Copyright © 2012 CA. All Rights Reserved. One CA Plaza, Islandia, N.Y. 11749. Nimsoft is a trademark or registered trademark of CA. All other trademarks, trade names, service marks, and logos referenced herein belong to their respective companies. CS2887_0912