Archive for November, 2011

Measuring the ROI for Social Networks

Business use of social networks, also referred to as social media or just plain social business, refers to the use of the Internet in myriad forms to interact with the organization’s various stakeholders. These typically are employees, suppliers, partners, or customers.

IBM describes a social business as one that “embraces networks of people to create business value.” It involves sharing, transparency, innovation, and two-way interaction. The objective is improved communications and collaboration that should lead to higher productivity, improved products and services, better decision making, and ultimately greater revenue, market share, and profits. Social business is a key component of IBM’s 2011 Tech Trends Report, here.

A recent University of Massachusetts survey, here, on Fortune 500 companies found that they already were engaged in social networking: 23% had an active public-facing corporate blog, 62% had active corporate Twitter accounts, and 58% had Facebook pages. In addition, companies have been deploying social networking tools like Yammer or IBM Connections in house. All this social networking raises the question: What’s the ROI?

The IBM Trends study suggested that the majority of organizations turned to social networking mainly to benefit from increased efficiency and to streamline collaboration. Often the companies began by deploying social networking internally (behind the corporate firewall). Even if they have outward facing Facebook, Twitter, or corporate blogs, the serious experimenting with social business was happening safely inside the company.

These initial deployments had three primary uses: 1) employee collaboration, 2) efficiency in locating people and resources, and 3) idea generation and sharing. The technologies they mainly used were file sharing, blogs, and online (intranet) forums. Nothing unusual or complicated or costly. Many of the social networking products like Yammer even are free for individuals, which is why workers may sign up on their own. (The enterprise versions entail charges but deliver more capabilities.)

Figuring out the ROI for social networking is challenging. People have always collaborated. If you collaborate a little bit faster or a little bit more easily than before what is the incremental value gained? To understand the ROI of social networking you need to look at it as a business process, not as an IT project.

Rather than try to calculate a technology ROI, you need to look at the return on collaboration and the value of knowledge access and skill sharing. If a streamlined collaboration process enables employees to work more efficiently or more productively, there is value that should be measurable. Similarly, if social media enables the organization to more efficiently find and tap the knowledge and skills of its workers and share that widely and more quickly, again there should be something that can be measured and given a value.

What is the value of a better interaction with a customer or with a valued partner or supplier?  These are areas where social networking can help. Or, what is the value of learning what people think of you or your products, good or bad? Again, this where social networking can help.

At a recent social media gathering a manager from Lowe’s, the home improvement store, described its use of IBM Connections. Mainly employees use it to locate other employees who have specific knowledge about a product or problem. The value came from the ease and speed by which an employee could find the information needed to satisfy a customer. In some cases, it might save a sale. In other cases, Lowe’s would have gotten the sale anyway. But overall, the interaction process with the customer improved.  Social media, he insisted, simply requires a different way of looking at ROI.

In an upcoming piece BottomlineIT will look at guidelines and practices for getting the most out of social media.


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IBM and VMware Team Up on Storage

IBM has been virtualizing its systems for decades. VMware dominates virtualization in the x86 systems environment and made it a strategic force there. Now these two virtualization industry leaders are teaming up and putting it to work for storage systems. Virtualized storage is essential for optimizing virtualized environments and backing up virtualized systems.

To date, virtualization has tended to focus on servers, providing the foundation for large scale server consolidation. Storage virtualization, however, has seemed at best to be an afterthought.  That is until the advent of cloud computing. In his newest book Cloud, Virtualization, and Data Storage Networking (CRC Press, 2012) author and storage industry analyst Greg Schulz restores storage virtualization to its rightful spot alongside server virtualization. “The importance of main or processor (server) memory and external storage is that virtual machines need memory to exist when active and a place on disk to reside when not in memory,” he writes. In short, server and storage virtualization go hand in hand.

This becomes most obvious when trying to take advantage of the mobility of VMs, which is one of the most powerful capabilities of the virtualized environment.  Effective VM mobility requires the associated storage move too, and do so non-disruptively.  This requires close cooperation between the storage and the hypervisor.

The teaming up of IBM and VMware bring together the broadest portfolio of proven virtualization solutions for maximum choice to meet most organization’s needs. As this IBM Red Book shows, IBM storage and VMware have been working together for a while. They also are forging deep integration between their products for enhanced features and usability. Another more recent IBM Red Book on storage and VMware ESX is here. Finally, they promise to deliver the comprehensive service and support needed to simplify changes. For technology users, the partnership promises to dramatically reduce the complexity of IT virtualization and, in the process, significantly lower IT costs while increasing IT flexibility and business agility.

This is not just a sales or marketing alliance. IBM and VMware have joined together to complete real technical work with tangible implications in terms of features and capabilities. Specifically, IBM has 40 products certified on the VMware Compatibility Guide for vSphere 5.0. Also, IBM has taken advantage of all of VMware’s storage APIs. For example, integrating with VMware’s Site Recovery Manager (SRM) for backup to the cloud, VMware’s VAAI for array integration, its VADP for data protection, VMware VASA for storage tiering and allocation, VMware management plug-in APIs for IBM-specific storage management in vSphere.

This teamwork is continuing. They should be formally certifying metro storage clustering through the vVMC API, are engaging in active development of virtual volumes using VVOL, and using the VASA API in conjunction with VVOL for next generation storage awareness.

IBM also is leveraging vMotion with SVC to create stretched clusters up to 300 km apart. This will allow virtual servers and their storage to be transparently moved across data centers while SVC enables support for virtually all heterogeneous vendor storage.

The two companies also are using VMware’s SRM with IBM’s XIV to consolidate, ensure availability, and simplify disaster recovery of SAP deployments. They also have combined VMware View with IBM Storwize v7000 to enable VDI while using VMware View Composer to reduce storage capacity requirements by over 60%

To date, IBM reports more than 20,000 joint VMware customers. More importantly, given that storage and server virtualization are still evolving, the companies have collected over 800 VMware-IBM storage configurations in a reference database, which will prove invaluable as organizations look for what really works.

And IBM doesn’t expect to limit the experience it has gained with VMware to just that hypervisor. The storage requirements for virtual servers are not very different from one hypervisor to another. Expect to see similar things with IBM storage and virtualized servers running KVM or Hyper-V or maybe even Ubuntu.

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Disaster Recovery vs. Business Resilience

For over two decades IT has been fine tuning the disaster recovery (DR) process as storage technology has advanced from tape to virtual tape to low cost disk. In the process, organizations have been able to meet increasingly tight recovery point objectives (RPO) and  recovery time objectives (RTO). The addition of deduplication and asynchronous replication among other technologies has contributed to the effort. Today, any organization can have a reliable and efficient data protection and DR process at a reasonable cost.

Now, it turns out, DR alone may not be enough. Organizations face myriad kinds of risks that should drive them to adopt an integrated, or holistic, risk management strategy that encompasses not only DR and data protection but a business resilience strategy. Business resilience encompasses all facets of risk management from identification through to mitigation and more.

The more refers to new opportunities. Based on its 2011 Global Business Resilience and Risk Study IBM is suggesting a more proactive and forward thinking approach to DR is needed, one that encompasses business opportunities as well as risks. The study is available here.

To ensure business resilience, companies are moving toward a risk management process that addresses the myriad types of risk that organizations face by adopting, according to IBM, a more holistic approach to risk management as they deal with growing uncertainty and the increasing inter-connectedness of the varied risks they face. At this point, only a minority (37%) of companies has implemented an organization-wide business resilience strategy, but 42% say they are likely to do so within the next three years. Almost two-thirds (64%) say they already have a business conti­nuity plan of some sort, and a robust 58% have dedicated contingency plans for dealing with a variety of risks.

Furthermore, the study found that organizations are diversifying their strategies to build business resilience, while keeping continuity, IT, and compliance risks in the forefront. They are not abandoning DR but augmenting it through business resilience strategies that may include cloud computing as a key risk and opportunity management tool.

The study makes it clear that DR and business resilience are evolving into enterprise-wide risk management. Such risk management, the study notes, should involve everyone in the organization and imbue responsibility for risk management at every level if companies are to respond effectively to changes and unexpected events.

For example, a majority of respondents (60%) say that business resilience is considered a joint responsibility of all C-level executives although CIOs and IT professionals remain key players. Similarly, a significant majority of survey respondents (85%) say that data and application security, data protection (79%), infrastructure security (77%), security governance (75%), identity and access management (74%), and compliance management (69%) now are part of their organization’s broader risk management strategy.

The focus of the IBM study is business resilience, not DR or business continuity or even risk management. Business resilience, according to IBM, refers to the ability of enterprises to adapt to a continuously changing business environment, not just to restore operations after a disaster or to continue to function despite operational problems.

Of course business resilience helps organizations maintain continuous operations in the face of disruptions and disasters. But IBM envisions it as something more. IBM distinguishes business resilience planning from enterprise risk management (ERM) in that it resilience planning is more likely to build the organizational capacity to seize opportunities created by unexpected events. As such, it requires the engagement of everyone in the organization and often means a change in corporate culture to instill awareness not only of risk but of potential opportunities.

The addition of opportunities to the risk management calculus adds a new dimension to the challenge. Now it is not just about restoring servers in response to a sudden disaster but to bring back the right capabilities and capacity to take advantage of new opportunities that may emerge from the unexpected events.

A focus on this kind of business resilience will require new investments and the involvement of new players across the company. For example, 58% of the respondents reported investing in new risk-related IT strategies. As noted above, cloud computing with its ability to rapidly deploy new resources and capabilities is emerging as a preferred option.

Business resilience, of course, continues to involve the CIO and IT because, in the end, it is still about the protection of and accessibility to the organization’s applications, systems, and data assets. However, 62% of respondents also noted they brought onboard other C-level executives and 44% even include Board Members.

Nobody is advising organizations to abandon their DR strategies. Instead, the study suggests companies augment DR with business resilience and opportunity identification strategies. Suddenly DR becomes strategic.

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Avoiding IT and Cloud Failures

IT failures are common and cloud computing doesn’t do much to change that if companies continue to make the same IT deployment process mistakes they have made in the past. The industry is awash in failure stats from various sources going back a decade.

From the 2009 Standish Group Chaos Survey: the researchers found a decrease in IT project success rates and an increase in failure rates during the preceding two years. Just 32% of IT projects were considered successful, having been completed on time, at budget, and with the required features and functions. Almost one quarter of the IT projects were considered failures, having been cancelled before they were completed or having been delivered but never used. The remainder was considered problematic; either they were finished late, over budget, or with fewer than the required features and functions.

In his 2009 paper titled The IT Complexity Crisis: Danger and Opportunity Roger Sessions calculated that worldwide the IT industry was losing over  $500 billion per month on IT failure. The number seems extreme but Sessions rationalizes it in his paper although BottomlineIT is not completely convinced. But say the real number is closer to one-tenth or $50 billion worldwide. We’re still talking about an enormous amount of wasted IT resources.

How many organizations need to waste $5 million, $10 million, even $25 million on projects that don’t achieve their objectives before the number reaches $50 billion. And large organizations have dozens or even hundreds of projects in the pipeline. If a quarter of them fail, the math gets very ugly very fast.

Extend this kind of thinking to cloud projects and it gets interesting. Many cloud proponents have started to sound like the first generation dotcom executives who thought that they didn’t need to generate revenue; capturing eyeballs was enough. Well, as it turned out, just capturing eyeballs was not enough. We learned that the normal laws of economics still apply.

Today cloud proponents stand up at conferences and declare that cloud information technology enables new ways of doing business, as if that somehow frees cloud projects from the need to achieve their objectives or generate an acceptable ROI. Sorry, cloud IT project failures are as ugly as any others. BottomlineIT believes cloud projects can and should generate a positive ROI and will post a piece on cloud ROI soon.

The mistakes that lead to cloud IT project failures are strikingly similar to the mistakes that lead to any IT project failure. Kevin Jackson, writing for Forbes, focused on eight cloud mistakes. Jackson called them cloud transition failures:

  • Lack of formal planning
  • Missing or poor IT governance
  • Poor or missing responsibility matrix
  • Neglecting the human resource management challenges
  • No program management office
  • Failure to fully inventory of assets
  • Lack of oversight
  • Inappropriate or lack of a service level agreement (especially with multiple cloud providers)

BottomlineIT could add a few more: lack of effective change management, ignoring security until the end, failure to document, lack of a contingency plan for when things go wrong, and more.

In short, there is nothing surprising here; companies have been making these IT mistakes for decades, long before cloud computing. It cost them dearly in the past and will cost them in the cloud future if they continue to make the same mistakes. These are just the basic blocking and tackling of IT. What’s surprising is how often they are ignored.

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