A Guide to Planning your IT investment in 2012-15

By Dexter Duncan

In a previous article on Australia’s National Broadband Network (NBN), we gave a brief update on roll-out and initial applications being trialed.  This article explores some of the broad trends so you can plan your IT investment over the next few years.   The NBN will accelerate the adoption of some key technologies which will reduce costs and increase efficiency for those that plan for it.

Whether you outsource or keep elements of an IT department in-house, the role of IT services is changing.  The speed of these changes is likely to increase over the next three years with the roll-out of higher broadband connections like Australia’s NBN.

Quote from Michael Harte, CIO of CBA

“Storage, for example, should be cheap, whereas the management of critical applications should be expensive.  You pay a premium for stuff that adds value close to the customer.”

The above quote from a global leader in using technology to grow revenue and profits outlines a crude division of two types of IT services that has emerged:

1)      Commodity services

2)      Value or “premium” Services.

Commodity Services

Over the next three years you’ll find it more cost effective to outsource many areas since outside vendors will do a better job than you.   Some of the services (like Managed Services) are already widely available at a fraction of the cost of delivering the service internally.  Many of the commodity services are available “on-demand” where payment is arranged based on usage and Service Level Agreements (SLA’s).    Examples on-demand specialty services are:

  • Servers (CPU power and RAM) as a service
  • Data Storage as a service
  • E-mail as a service
  • Testing as a service
  • Software as a service (hosted “pay as you go” services like CRM)
  • IT support as a service (Managed Services)

Although the above have been available in one form or another, the new era of “cloud computing” is grouping them into a competitive shopping list due to lower cost in delivering computer resources over the internet.    You can thank large organisations for the proliferation of new commodity services.    The aim is to use the savings in the commodity area to invest and develop new premium service areas like mobility.

Value (Premium) Services

Adding value to customers or automating some of your routine processes are competitive advantages instrumental in delivering business strategy.   Sample premium services to invest in:

1)      Human-to-human tasks are automated into “work-flows”.   The most common human-to-human task is sales and the things to track and automate are documents, e-mails, meetings and conversations.    Customer Relationship Management (CRM) tools such as one from SalesForce or Microsoft Dynamics CRM are example productivity tools that are customized around your business.

2)      Cross functional tasks are automated involving more complex business processes.   In addition to above, these include machine to human and machine to machine automation.   Examples are contract management, asset management, risk management and others that touch HR, finance, sales and operations with common delivery using a combination of CRM back-end with a Microsoft SharePoint front-end.

3)      Mobility – smart phones and touch screen “pads” like iPad.   These tools change the relationships with employees, clients and vendors.     On-site services are becoming more prevalent with transactions and reports being done on spot.

4)      Big Data – cheap storage, legislation, marketing/sales pressure is driving us to store more data on our customers, vendors, partners and staff.   We need to be able to quickly find “needles in haystacks” every day.   Examples of services in this area include document management using Microsoft SharePoint, but also mining and transforming your data to become “business intelligence”.

IT compresses the value chain resulting in the elimination of waste and freeing up cash and people.    This starts with replacing human to human tasks, but increasingly means the automation of end-to-end processes across multiple business functions.     Wringing savings out of the commodity services and investing in strategic or premium services is your next plan.

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About the author: Dexter Duncan is a Division Manager at Empower IT Solutions. Contact Dexter at dd@EmpowerIT.com.au

1)      “CBA banks on savings in the cloud”, 08 Nov 2011, Australian Financial Review.

2)      Want to know more information on NBN roll-out?:   www.nbnco.gov.au

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