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Monthly Research Update

• Long-Range Network Design
• Vendor Relationship 2010 Prediction
• Social Networking – Should Companies Ban or Allow it?
• ROV instead of ROI for Project Justifications

Dr. Kenn Walters

Experton Group believes that ICT executives need to find ways to make their network infrastructure more adaptable to change, while at the same time keeping it safe from external hackers in an economical manner. There are several developments that will directly impact network designs: NGN/IP Network centric technologies and methods (TMF), scalability of IP enterprise networks into MANs, legacy network re-use, data center consolidation, voice/data consolidation, and service-oriented architectures, especially leading to service delivery platforms and download centre for on-net customers and “pay per use, or pay per download clients”. The key issue to address in developing adaptable networks is to understand the business requirements driving infrastructure changes, so that appropriate network requirements can be developed to support them. Often, ICT executives will find that changes in process and internal communication are at least as, or more, important than investments in next-generation networking technology.

• Understanding business-driven requirements is the most important task in effective long-range network design. Since networks can be designed with less latency, higher bandwidth, and different quality of service (QoS) requirements to support different types of traffic, network planners need to understand what the current limitations to the business are and what changes the business is planning in order to consider the right network design alternatives. Each network change has its own benefits as well as costs. Aligning these with the forces driving business will optimize network design for the least investment and least risk.
• ICT executives should spend as much time looking at people and process as they do network design. This is because Experton Group finds that one of the biggest limitations in network effectiveness continues to be internal communication between network personnel and the groups they support. ICT executives should develop measurable metrics and review frequently, since feedback is the food to drive effective infrastructure changes.
• When designing next-generation networks, network planners should start with the core of the network, working out to the network edge. This will give most improvements for least money, and will allow managers to make improvements in a phased approach. Most companies will benefit from the virtual mesh and QoS controls present in multi-protocol label switching (MPLS) networks, but recognize this may involve adding external service provider management (and cost). Network managers should implement QoS enhancements after network design changes. This will allow the right governance controls to be implemented one time, which will save time and effort, while reducing risks of implementing controls on a still changing network.

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Alex Hemzal

Now that vendor management proved to be a valuable process for most companies last year Experton Group foresees it making further gain in mid-size to large enterprises this year. However, Experton Group believes little significant forward progress will be made in the advancement of procurement skills, as most efforts will consist of on the job training. This is unfortunate in that better skilled procurement professionals produce better deals and having the right benchmark data produces the best deals. Nonetheless, companies will make gains in their deal making due to the willingness of vendors to negotiate. Gains will mostly be on the tactical transactional side and not with strategic relationships or vendor life cycle management, except at those organizations that already have these skills in place. IT executives and procurement staff will experiment with new delivery and consumption models such as discrete pricing and pay-as-you-go.

Experton Group expects to see vendors financing arms and major independent hardware financing companies drive new pricing offerings that take advantage of new consumption models, stimulus packages and structured solutions with very low interest rates. Because of the rate of change of technology and energy conservation advances, more IT executives will lease equipment, as the value of holding IT assets will be deemed a poor use of capital.

This will drive more enterprises to better manage their IT assets. More enterprises will leverage well-timed asset swaps and upgrades to cut costs, conserve energy and maintain technically currency. IBM Corp. through its IBM Global Finance (IGF) unit, Hewlett-Packard Co. using its HP Financial Services (HPFS) arm and Macquarie Equipment Finance will be three of the leaders in these activities.

IT executives will see a myriad of new entrants in the cloud computing space, which will have a ripple effect on the license and maintenance fees of traditional providers. IT executives can expect both categories of players to be more flexible in their dealings; however, some companies like CA Inc.'s Wiley software, SAP AG and Sterling Commerce will not lower fees without a fight.

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Dr. Carlo Velten

In an age of "always on" and always connected, the boundaries between workplace and home space, social and professional, public and private, etc. have blurred considerably. Social networking, whether via Facebook, Twitter, LinkedIn, Plaxo, or through wikis and the blogosphere is pervasive and has changed how, where, when, and the way in which people communicate. And while many companies do not condone employee social networking on company time, it is happening all the same.

Many enterprises employ a stunning array of monitoring and filtering software to ban social media sites along with Internet sites that are deemed (mostly by the monitoring software) inappropriate. Restrictions are imposed on file uploads; opening attachments over a certain size and downloading pictures are also prohibited in some instances.

50% of CIOs do not view social networking as a productivity booster, but rather as a waste of employee time and about 54% say their company policy prohibits employees from using social networking sites such as Facebook, MySpace and Twitter during working hours. Another 19% say their company policy permits employees to social network for business purposes;

But 81% of the CEOs stated social networking can be a boon for business because it enhances relationships with customers/clients and builds a company’s brand recognition and 73% indicated plans to increase social networking. Now those executives are well aware that social networking is an enterprise security risk (81%); can reduce employee productivity (51%); and expressed concern regarding the reputation of the company (49%).

Experture believes whether an enterprise decides to ban social networking, embrace it, or allow its use sparingly, consideration will need to be given to understanding social networking and the burdens and benefits it may bring to the enterprise. In addition, enterprise executives will need to analyze business application profiles (BAPs) and user application profiles (UAPs) to determine who may benefit from social networking and who may in fact bring harm to themselves and/or the enterprise. Developing social networking policy is a complex and deliberate act. It is also a balancing act, which seeks to protect the integrity and privacy of business information, while leveraging the value of the Internet and social media so as to remain competitive, build relationships, and differentiate from competitors.

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Luis Praxmarer

While certain key indicators suggest the country is beginning to emerge from the recession, Wall Street, though past the 10,000 point mark, continues to be volatile and Main Street continues its struggle to recover from double digit unemployment.

Industry pundit predictions – both various and contradictory – abound for the New Year, but enterprise executives remain cautious. Projects, which have been on hold or cancelled, are making their way back to executive radar. But savvy executives know (some from painful experience) that reliance on traditional return on investment (ROI) algorithms to communicate the business value of proposed projects to upper management have resulted in failed promises, subsequent punitive measures, and increased scrutiny.

Experton Group believes executives should develop a comprehensive ROV (Return on Value) for specific projects using the nine components that are discussed below. While none stand alone, executives must ascertain the logical relationships among two or more of these components to thoroughly communicate the ROV of a specific project. Nine Components of ROV:

1. Competitive
2. Strategic
3. Relationship
4. Financial
5. Functional
6. Usage
7. Process
8. Technical
9. Compliance

ROV enables executives to develop more meaningful metrics to measure success and value. Future thinking executives will also begin to look beyond ROV to return on quality (ROQ). Ruthless competition among players in every industry sector – private or public - is de rigueur. One competitive differentiator will be quality.

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