4 ICT Procurement in the Enterprise Enterprise storage is increasing, about 45% per year or doubling every 18 months. Demand Mgt, & active storage management required.The worldwide enterprise Cloud-based services market will grow from $US18.3 billion in 2012 to $US21.9bn in Cloud is destabilising purchasing models.80% of Australian Enterprise clients choosing the Apple iPhone for corporate use with increasing MDM take-up rates.
5 ICT IS ‘CORE’ To ALL BUSINESS Strong Case For ICT Category ManagementGovernment MandatesReduced ICT costs – a move from provider to broker and managerM&A / Diverstiture ActivityConsolidation, review of ICT balance sheetAustralia & AsiaEverything as a ServiceDemand ManagementMobile Data explosion, decline in fixed line servicesTechnology & Business Model ChangesDisruptive CloudFixed AccessICT Competence, core to every business – Commercial cleverness, demand management, flexibility in ICT sourcing and contractual approaches are needed as ICT local & global market is moving at record pace
6 ICT Procurement Challenges & Opportunities Every day 2.5 quintillion (2.5×1018) bytes of data created.Cloud market is expected to grow from $77B in 2010 to $210B in This growth relies on stable networks.Consumerisation of IT – employees using devices and applications for both business and personal use.iPhone 5S Remodelled Hardware Hints at Fingerprint-Scanning Technology. Increasing focus on data security in purchasing decisions.
7 SOURCING APPROACHES Typical Process Request For Solution based approach with suppliers, focused on business outcomes, steps below circa 3-5 months before establishing to ongoing category managementTypical ProcessDiscoverySolutions & SourcingTransition & TransformationStrategic Vendor ManagementBusiness Requirements & Supplier Response FrameworksICT Strategy & ArchitectureSourcing to A StrategyObjectives, outcomes, KPI datesStrategic alignmentEnterprise Architecture, Current, Future States & Gap-MappingCategory Management – Telco & ITService requirements and scorecardPerformance management frameworkContinual Improvement – remove reliance on benchmarkMove from product – to total spend regimeConfirm market instrumentsProbity & go-to-marketTarget desired outcome targetsMarket BenchmarksOptions & SensitivityFTE, Infrastructure $ per seatTelco Carriage & AccessManaged services, voice etcEvaluation on agreed TCO baselineRisk Models – Supplier/Technology AssessmentsDeliverablesInputsKeyCurrent State AssessmentFuture State ArchitecturesBusiness Case & RoadmapRFx/RFSSupplier Solution Briefing DocsIT Strategic PlanIT Services CatalogueIT Services Cost Baselines
8 ENTERPRISE MOBILITY MANAGEMENT DefinitionEnterprise Mobility Management (EMM) is the collection of people, processes and technologies for managing mobile and tablet devices and related services to enable use of mobile computing for the business.Where Are We Today?EMM is an emerging discipline within the enterprise that has become increasingly important over the past few years as more workers are using and have brought smartphone and tablet computing devices and have sought support for using these devices in the workplace.The original software for Mobile Device Management (MDM) has evolved from a simple software solution to control a mobile device into a sophisticated platform for enabling the enterprise to deliver applications and mobile tools to their workforce.EMM is being delivered either as SaaS or as a traditional on-premise solutionTrendsBYOD is becoming more prevalent as a strategy, butEmployees are becoming more resistant to installing an MDM agent on their personal devicesThere is no clear market leader in the software arena, and service providers are immatureIndependence from Telco carriers is an important decision, adopt independence or not ?
9 TELECOM EXPENSE MANAGEMENT (TEM) DefinitionTelecom Expense management refers to the systems deployed by a business to process, pay, and audit employee-initiated expenses. Expense management includes the policies and procedures which govern such spending, as well as the technologies and services utilized to process and analyse the data associated with it.Many research organizations like Gartner, Forrester and Aberdeen have mentioned in their reports that Telecommunications is the second largest non operating expense for most enterprises. But Telecom Expense Management is often overlooked, if followed diligently it can benefit organisations with more than 30% cost savings. Statistical analysis have often pointed out that telecommunications companies have more than 25% error on monthly bills which they send to their customers. Where Are We Today?TEM software is mainly being used for expense allocations, but not for expense managementTEM software is maturing and allows customised reporting, but must be fully integrated into the complete lifecycle of telecommunications to be effectiveAll the carriers are offering “partners” to provide TEM solutions, however, these partners do not have an incentive to decrease telecommunications costs and instead provide more of a reporting toolTrends?Many companies are implementing TEM software with the mistaken belief that it is a panacea for controlling run-away costs in the telecommunications category.TEM and MDM solutions are starting to overlap, with TEM solutions beginning to offer real-time tracking of mobile usage & costs. This real-time tracking offers facilities such as controlling roaming usage, end-user alerts, real-time tracking of device.
10 CASE STUDY: CDRU delivering its promise to APA Group Challenge:APA Group (APA) is Australia’s largest natural gas infrastructure business, owning and/or operating approximately $12 billion of energy infrastructure assets.To support APA’s business a strategic ICT initiative was undertaken to begin a path of understanding expenditure levels in Telecommunications and looking at optimisation of this core category.Solution:Using CDRU’s UPS process (Understanding, Solutioning, Proposing) sourcing process APA mapped out the practical steps to be performed over a 6 month periodAn additional 3 months to finalise contracts and initiate vendor transition was required.“We appointed CDRU as our strategic sourcing partner across Information Technology and Telecommunications, with an APA ‘option’ to move into supplier transition, should sourcing meet its stated outcomes. Their fees were aligned to agreed timeframes and generating real savings, whilst building new strategic networks for us”APA’s General Manager Group IT Bill Fazl.
11 CASE STUDY: CDRU delivering its promise to APA Group Results/BenefitsSignificant network improvements, with single points of failure removedImproved Quality of Service, better quality and increased bandwidth across key sitesDouble Digit operational cost reduction, year one and beyondAchievement of 160% of the savings target set at the initiation of the engagementAdditional funds are now available for future strategic enablement projects,Re-investment in increased mobility initiatives and video conferencing underway .“We appointed CDRU as our strategic sourcing partner across Information Technology and Telecommunications, with an APA ‘option’ to move into supplier transition, should sourcing meet its stated outcomes. Their fees were aligned to agreed timeframes and generating real savings, whilst building new strategic networks for us”APA’s General Manager Group IT Bill Fazl.
12 CASE STUDY: CDRU’s Strategic Sourcing Partnership with InvoCare Challenge:As the APAC market-leading funeral services provider, InvoCare has taken the lead in introducing a new way of interacting with it’s customers and the friends and family of the deceased by implementing a customer-centric ‘Digital Business’ strategy and capabilities.Traditionally, technology expenditure is not a core business function and is generally viewed as a business cost. They required a Strategic Sourcing initiative aimed at realising tangible cost savings to support the implementation of its Digital Business strategy.Solution:Using CDRU’s UPS process (Understanding, Solutioning, Proposing) process mapped out the practical steps to be achieved. Three (3) core areas were identified , IT infrastructure, Telecommunications and Print/Copy were immediate savings could be achieved.“We appointed CDRU as our Strategic Sourcing partner across our telecommunications, infrastructure maintenance and printing supply arrangements as they had a track record of aligning their fees against tangible savings delivered.. We are all very pleased with what the CDRU and InvoCare ‘One Team’ has achieved. We had no appetite for an ICT-centric engagement. What we wanted was to deliver a great result for our business as a whole, and the results speak for themselves.”InvoCare’s Chief Information Officer Andi Luiskandl
13 CASE STUDY: CDRU’s Strategic Sourcing Partnership with InvoCare Results/BenefitsRenewed supplier arrangement that deliver an overall reduction in ICT operating expenditure of over 20+% with the bulk of the cost savings (and supplier loyalty funds) flowing straight through to line of business P&L.This made a real difference to the overall profitability of individual funeral homes, cemeteries and crematoria, and to the InvoCare business as a whole, rather than being confined to ICTThe CDRU and InvoCare team achieved 152% of the saving target, within agreed timeframes set at the initiation of the engagementDelivered cost savings that are not contingent on transitioning to new products and services and was performed with existing incumbent suppliers only“We appointed CDRU as our Strategic Sourcing partner across our telecommunications, infrastructure maintenance and printing supply arrangements as they had a track record of aligning their fees against tangible savings delivered.. We are all very pleased with what the CDRU and InvoCare ‘One Team’ has achieved. We had no appetite for an ICT-centric engagement. What we wanted was to deliver a great result for our business as a whole, and the results speak for themselves.”InvoCare’s Chief Information Officer Andi Luiskandl
14 13% - 20% Contract LEAKAGE IMPROVEMENT Case Study – Typical ICT Supplier AssessmentReview of key ICT supply contracts ; typical spend ~$100 million in annual expenditure ; expected outcomes from, financial, commercial, and supplier strategy and relationship analysis. Discovery 3-4 months ; Implementation 12+ months
15 MARKET ICT LEARNINGCloud services & vendor selling practices target business units, not centralised ICT functions – 60/40%. Effective supplier categorisation/consolidation following the spend visibility analytics baselineTEM & SAM Software available , need significant ongoing interpretation of reports to make senseSoftware just a tool, Asset Lifecycle Management Process and People resources needed.Know what the actual software usage across your business is, as ‘over or under’ licence a problemConstant liability/threat of supplier audit teams in the ‘tough’ times, beware hidden claimsLack of Spend Baseline VisibilityCLOUD actually delivering value when using TCO :Use TCO : 30-50%+ savings resulting from IPTEL/ PABX ( in cloud ), rather than Traditional on-premise ownedCapital avoidance and general move to Opex for many organisations is occurringIaaS / PaaS still immature as a market in AustraliaResults/BenefitsWatch out for punitive complex contracts, allocate greater proportion to legal costs than normal20% + above in savings if a sourcing and category management process implementedTelecommunications a constant provider of savings opportunities, as services evolve so rapidlyA Category Mgt KPI – % increase needed in suppliers that are performance managed, very low base today.“ICT as a market is undergoing massive global and unprecedented change, the old rules are not working and enterprises are having to re-think ICT category Management”