Cloud bound: Advice from organizations in outsourcing relationships

© 2014 IBM Corporation

October 2014

Cloud bound Advice from organizations in outsourcing relationships

© 2014 IBM Corporation 2 © 2014 IBM Corporation

Companies that outsource infrastructure and applications are increasingly incorporating cloud into their IT services mix


But the journey to cloud is different when you’re “in a relationship”…

Source: http://www.computerweekly.com/opinion/Forrester-The-impact-of-cloud-on-outsourcing-contracts


Those already traveling this path can offer important insights to their peers


Wherever you are in the journey, expect some twists in the road

5 © 2014 IBM Corporation


Know your traveling partners well

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Don’t underestimate the time and effort required to get informed about alternatives

Explore your options “Talk to cloud firms about their development process, how they source data centers, and how they manage code and do releases. Really understand these new techniques.”

– CIO, Manufacturing

Educate stakeholders “You have to break it down, explain it multiple times. The business hears appealing buzzwords. But they want assurance from IT.”

– Senior IT Director, Pharma

Get to the technical experts fast “You really have to get past the sales guys, to the people who are actually doing the cloud work, so that your technical team can begin to understand what might be possible in your context.”

– CIO, Manufacturing


Protect your passengers

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There are new risks to think about – enlist your partner in building confidence

Acknowledge concerns “Our old-school security folks didn’t want anything to go to the cloud. But we said, ‘Cloud isn’t going away – so how do we make sure we’re protected?’ Rather than putting up walls, be part of the solution.”

– Senior IT Director, Pharma Get your providers’ help “Once you’re comfortable that a vendor has broad experience with public and private cloud, you can trust them to explain the key security architectures and parameters.”

– CIO, Healthcare

Require assurances “We require formal external security audits – ones explicitly designed to test cloud delivery models. This data is so sensitive to our business that we want to be sure providers are continuously on top of it.”

– Head of Procurement, Consumer Goods


Chart the itinerary together

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Stretch the limits of existing engagements and tap providers’ expertise

Engage incumbents “Rather than asking ‘Where do you want to go?’ we want providers to bring us turnkey solutions, show the business case, stage workshops. We’ll get the right folks in the room.”

– Senior IT Director, Pharma Keep expectations high “It’s important for vendors to bring innovation, not just deliver what you’ve signed up for. We require biannual meetings with the provider’s senior technical architects to brainstorm technology and platform improvements.”


Influence vendor platform “We found things the vendor’s platform couldn’t do that you would have thought obvious. For instance, you could expand capacity but couldn’t back it down. But they’ve been pretty good at working with us and shaping their roadmap.”

– Services Delivery Director, Healthcare


Keep everyone on course

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Cloud comes with a ripple – help the business adjust

Revamp processes “The way we consume IT services has changed. Procurement and legal organizations must understand that. You need to retool, or lose the advantages of cloud because related processes will be too slow.”

– CIO, Manufacturing Keep stakeholders engaged “We won’t do anything without close interaction with our senior clinical officers. They have to know and support the effort. A CIO housed on his or her lone branch is doomed to failure. We have regular meetings to update the President and senior LOBs on where we are.”

– CIO, Healthcare

Prepare for transitions “We’re working with the business to negotiate outages. We keep reminding them that once we migrate to the cloud, their service costs will drop.”



Plan for arrival

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Be mindful of the need for integration plans for both platforms and vendors

Mind the gaps “We've noticed some integration barriers that still exist, especially in integrating not only data flows but also users coming in from remote sites.”

– CIO, Healthcare

Appoint an integrator “I want my current service desk to be the first port of call for cloud options being considered. The key benefit is that I end up with a single, integrated model. I don’t have multiple integration points and multiple places to go.”

– CIO, Engineering and Business Services

Have a plan “In the future, we’re not going to see one gigantic cloud player. We’re not going to put everything in a single basket somewhere in the cloud. I honestly believe it will be a combination, a portfolio of partners.”

– CIO, Consumer Goods


Case study: Measured steps into the cloud, aiming for rapid transformation

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Started with low risk areas

Looked for ways to leapfrog

Positioned cloud strategically

Got the key stakeholders involved early

Aligned with the business

Manufacturer renegotiated two outsourcing contracts

eCommerce Backup and recovery

• Create a roadmap to move aggressively into the cloud

• Evaluate other providers for future cloud solutions

• Address privacy and security concerns methodically


Case study: Relying on experience to put critical capabilities on the cloud

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Looked for an experienced vendor, and asked for proof

Took an incremental approach to moving workloads

Addressed security concerns head on

Analytics applications, HR, CRM

• Place newly developed applications on the cloud

• Move more workloads to the cloud

• Enlist the right resources from the provider

Pharmaceutical company split outsourcing contracts to get to the next level


Case study: Leveraging contract flexibility to move critical systems to cloud

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Sought an experienced vendor with global reach

Took a “crawl before you walk” approach

Pursued flexible contracting

Consulted with counterparts (in other orgs) to build confidence

~10% of their outsourced activity

• Aim for the low hanging fruit and gradually build

• Evaluate migration of business intelligence and data analysis Consumer goods company

extended outsourcing to new geographies


As you navigate your journey…

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How will you progress your cloud road map with your provider? And where do you jump in today? What will it take to get your security and compliance teams comfortable with cloud? How will you collaborate with your provider on innovative solutions? What is the best way to keep key stakeholders and business leaders informed and part of the cloud decision process? Who will be responsible for integrating your multi-vendor, hybrid IT environment?


Start small – but don’t stop there


Appendix



In-depth interviews with companies in transition

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Respondents were remarkably candid about what organizations should expect when making this kind of transition. They shared important advice, based on what’s worked well and what hasn’t.

Double-blind qualitative study 10 in-depth interviews with IT outsourcing decision makers from large enterprises ($1B+) in the US, UK, and Canada Industries included pharma, insurance, manufacturing, healthcare, consumer goods, and engineering and business services

The majority of respondents were CIOs or IT Directors Respondents had an IT outsourcing contract with an existing vendor within which cloud was being adopted or evaluated. They also were using a host of outsourcing vendors.


Explore your options

Acknowledge concerns

Engage incumbents Revamp processes Mind the gaps

Educate stakeholders

Get your providers’ help

Keep expectations high

Keep stakeholders engaged

Have a plan

Get to the technical experts fast

Require assurances

Influence vendor platform

Prepare for transitions

Appoint an integrator

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Here’s what executives said to expect along the way – and their advice on addressing each challenge


Wherever you are in the journey, expect some twists in the road



To learn more about the study, please visit

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ibm.com/ibmcai/cloudbound

Source: IBM Center for Applied Insights Cloud bound: advice from organizations in outsourcing relationships For more info, visit: ibm.com/ibmcai/cloudbound

http://www.ibm.com/ibmcai/cloudbound

Cloud bound: Advice from organizations in outsourcing relationships

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