Norman Dee – InFocus Blog | Dell EMC Services https://infocus.dellemc.com DELL EMC Global Services Blog Thu, 13 Dec 2018 11:38:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.7 Moving to Multi-cloud: Spotlight on the Business Case https://infocus.dellemc.com/norman-dee/moving-to-multi-cloud-spotlight-on-the-business-case/ https://infocus.dellemc.com/norman-dee/moving-to-multi-cloud-spotlight-on-the-business-case/#respond Wed, 05 Dec 2018 10:00:08 +0000 https://infocus.dellemc.com/?p=36967 This blog is part of the Moving to Multi-Cloud series, which gives practical advice on how to move your multi-cloud strategy forward. The Case for the Business Case Moving to multi-cloud is not free, it requires funding. However, in choosing the right cloud scenarios, the cloud transformation savings will fund itself. To do this, you need […]

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This blog is part of the Moving to Multi-Cloud series, which gives practical advice on how to move your multi-cloud strategy forward.

The Case for the Business Case

Moving to multi-cloud is not free, it requires funding. However, in choosing the right cloud scenarios, the cloud transformation savings will fund itself. To do this, you need to be able to show the value of the solution to IT and the business.This includes the financial impact of the transformation, such as cost savings and ROI over time, as well as non-financial impact, such as higher customer satisfaction and improved perception of IT. Developing the business case for the transformation gives you a tool for advocating and ensuring that the investment is justified. It provides the context, costs and benefits for key decision makers and funders. It can also be a tool for evaluating alternative cloud scenarios to help make and validate decisions.

Measure, Measure, Measure

Determine current state costs

Key to understanding the savings and ROI is to understand and compare the total cost of ownership (TCO) of the current environment, the projected total cost of ownership of the target state as well as what the transitions costs will be, over time and overlapping resources, to get there.

TCO is made up of the following in-scope items:

  • Hardware and software that is used to provision the applications.
  • The embedded network that the services use. Almost everything today has a network component such as in the fabric that connects us to storage, the LAN components in every server, the connections to the WAN and Internet that connects the services to users and other related systems.
  • The current costs to maintain the applications in the current and projected environments. You will find this varies due to the level of automation and application modernization.
  • The FTEs needed to support the infrastructure will also vary due to automation and modernization.
  • Facilities costs which include the more variable power and cooling as opposed to the fixed, less variable real estate costs. Power and cooling will decrease especially when migrating to converged more efficient, right-sized environments.
  • External, outsourced workloads are the services we might employ for operations, service management, help desk, remote hands, etc. These will be impacted also by automation and modernization. However, they might increase if the strategy is to reduce less reliance on internal resources.
  • Overhead costs which includes whatever management, corporate and executive costs are attributed to the in-scope P&L.

Determine target state costs

The analysis of the target state costs involves the same components as the current state TCO. In essence, you compare (as a cost-benefits analysis) your current costs to what they would be in the future state.

Don’t Forget About Transition Costs

You also need to understand the costs to get to your target state. These transition costs pretty much parallel the TCO components of the current and future states. They include:

  • Swing hardware, which is the additional or overlapping hardware that will be needed during the transformation/migration.
  • Additional software, which refers to the costs associated with running parallel licenses.
  • Additional network connections that may be needed.
  • Staff time, both internal and external, for executing the transition. This is an interesting factor in terms of the time impact for executing the transition. We have found that relying totally on internal resources, who also have their “day job,” will result in longer transition deliveries. Often, employing outside resources will result in faster execution and at less cost.
  • Additional education and training. This comes at a cost both in terms of costs and staff time.
  • Additional support needed in the form of transition services which will facilitate and guarantee success.

Run the Numbers

Once you have the current, future and transformation costs tabulated, you can do a cost-benefit analysis. It is important that when doing the analysis you include the timing and schedules of the transformation to understand the actual impact.For example, a slow transformation will require longer sustaining of the current state costs reducing the potential savings over a set period – typically 5 years.  A more rapid transformation will achieve savings sooner but may require a larger investment up front for external services to aid in the transformation.

5 year run rates

Performing a 5-year analysis is best. Most technologies experience total changes within this lifecycle obsoleting the proposed target state. The transformations themselves should be complete within 2 years with the ability to recoup investments and savings over the remaining period.

Net savings, NPV, ROI, payback period

There are various components of the savings and the lens in which we examine them. Net savings, the resulting savings after costs, is straightforward. Because we are dealing with time factors and the cost of funds, CFOs will want to understand that what the net present value (NPV) of those costs actually are.  This requires an agreement on the corporate standard rate for the calculation. The ROI is the result of dividing the net savings by the total investment. For example – if there is a projected savings of $47MM over 5 years, but a cost of $23MM to transform, the ROI is 200%.

The payback period is the point in which the level of investment has been passed by the resulting savings. These values are ideal for tracking in a transformation dashboard.

It’s All About Communication

By sharing the business case and associated benefits with key decision makers and funders, you can maintain the level of excitement and commitment from these stakeholders. Developing a transformation dashboard – one that shows actual vs future costs and savings on a monthly basis – ensures this. The transparency helps you to understand what is working well and what might need more attention.

Summary

Transforming to multi-cloud, when executed appropriately, can result in sizable savings and ROI over time. Defining, measuring, tracking and communicating those results will ensure commitment and enable better decision making.

Blogs in the Series

Moving to Multi-Cloud: How to Get Stakeholders Aligned (Part I)

Moving to Multi-Cloud: Roadmap Considerations (Part II)

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Multi-Cloud: It’s a Major League Game https://infocus.dellemc.com/norman-dee/multi-cloud-its-a-major-league-game/ https://infocus.dellemc.com/norman-dee/multi-cloud-its-a-major-league-game/#respond Tue, 23 Oct 2018 09:00:06 +0000 https://infocus.dellemc.com/?p=36681 Multi-cloud strategies can be complex and may require you to transform IT. What do you need to do? Where do you start? How can you justify the investment needed? First, get your stakeholders aligned to achieve consensus on your strategic vision, define your high-level future state, and identify near-term priorities. Next, create a holistic roadmap […]

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Multi-cloud strategies can be complex and may require you to transform IT. What do you need to do? Where do you start? How can you justify the investment needed?

First, get your stakeholders aligned to achieve consensus on your strategic vision, define your high-level future state, and identify near-term priorities. Next, create a holistic roadmap that spans infrastructure, operating model and applications. Establish metrics and identify outcomes at each stage. And determine the cost savings and benefits to build the business case to justify the transformation.

View the infographic below to learn more about how to move your multi-cloud transformation forward.

Multi-Cloud Strategy Infographic

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Moving to Multi-cloud: Roadmap Considerations https://infocus.dellemc.com/norman-dee/moving-to-multi-cloud-roadmap-considerations/ https://infocus.dellemc.com/norman-dee/moving-to-multi-cloud-roadmap-considerations/#respond Mon, 24 Sep 2018 09:00:09 +0000 https://infocus.dellemc.com/?p=36247 This blog is part of the Moving to Multi-Cloud series, which gives practical advice on how to move your multi-cloud strategy forward. Not All Roadmaps Are Equal Many organizations are busy working on the move to multi-cloud, but all too often their initiatives are disconnected and scattered, with application developers building in one set of […]

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This blog is part of the Moving to Multi-Cloud series, which gives practical advice on how to move your multi-cloud strategy forward.

Not All Roadmaps Are Equal

Many organizations are busy working on the move to multi-cloud, but all too often their initiatives are disconnected and scattered, with application developers building in one set of clouds and infrastructure teams building up their multi-cloud capabilities without sufficient alignment with the application teams.

These organizations typically start with an infrastructure roadmap focused on getting their new technology in place. The impact to the operating model and service delivery is often an afterthought. When it comes to applications, many organizations have a “cloud first” approach looking to build or update their applications in public clouds without regard to data compliance, inter-dependencies or real cost. They have expectations of increased availability, scalability, speed and flexibility at lower costs.

To build an effective roadmap, you need to understand and integrate infrastructure, operating model and application activities. There are major dependencies between these areas that impact the success of the transformation.

Infrastructure Considerations

The first step in determining infrastructure roadmap initiatives is to understand your current state. Key dimensions to consider include:

  • Services: Is there a service catalog? Are the services standardized? Is there a self-service capability? Do you offer both infrastructure and cloud-native services?
  • Inventory: How accurate is the CMDB? Is it aligned with the services IT provides?
  • Asset alignment: Is asset information (for example costs, contracts, service lifecycle) linked to the CMDB?
  • Stack: What software components (e.g., VMware, container-based, OpenStack) and approaches are being used to deliver services?
  • Security: What kind of ID access management and data protection is there? Are the rules and processes sufficient and consistent for a multi-cloud scenario?
  • Funding model: Is the budget project-based or IT-owned? Is there a showback/ chargeback capability? How will it be impacted by a multi-cloud implementation?  Will the rates be platform or service specific?
  • Physical environment: How many data centers to you have? What are the sizings? Actual peak utilization? What are the various technologies? Is there virtualization? What is the current public cloud usage?
  • Monitoring/Performance: What kind of monitoring is there? Real-time monitoring, alert management, business alignment, or escalation management? How is performance measured and reported? Is there a performance database, dashboards, or SLA reports? Will there be a single pane of glass for both internal and external systems?

You also need to define your target state, which will drive your data center strategy. Depending on the application strategy, the target data center will not to be as big if you’re moving some applications to the cloud. Think about the effects of increased virtualization, software defined infrastructure (SDDI), flash, and converged/hyper-converged infrastructure. Also consider services-based architectures (IaaS, PaaS), and resiliency strategies. Think about having a service catalog that offers self-service provisioning of these services.

Operating Model Considerations

As you build out the roadmap, current roles and processes will need to evolve to be more in line with the services and development methodologies. Is there a true service management operating model? Is the IT operations team integrated with the application operations teams? There may need to be new IT service-based roles and processes, as well as new DevOps roles and processes.

How closely is IT working with the business units and with developers to understand and manage both IT and cloud-native service demand? Business Relationship Managers (for aligning business needs with IT services), Service Portfolio Managers (for managing the catalog and services life cycle), and Demand Managers (for structuring the demand) roles may have to be created.

Do you have a capacity management process? Is it siloed, integrated, or federated? Is it linked to demand, organic and new business trending? Are there dashboards indicating effective capacity utilization, predictive needs? What do you need to do to be able to right-size your operations to ensure resources for current and future services?

Consider a financial management strategy for transparent service-based pricing and billing. This will allow you to recover costs for services based on usage as well as demonstrate market-competitive pricing.

Application Considerations

Your applications and infrastructure strategies need to be coordinated between the Application Development teams and IT. Rather than just shifting virtual machines to the new infrastructure, think about determining disposition of current applications:  determine which should be migrated to the new environment, which should be moved to public cloud, which should be replaced with SaaS applications, and which should be retired.  Prioritize applications moving to the new infrastructure, making sure that the progress of infrastructure capabilities closely matches the technical needs and business priority of particular applications.

In addition to applications, there are many, many development tool stacks available; typically every application development group has different combinations of tools and integration environments.  These often require infrastructure resource APIs for the rapid provisioning and decommissioning of developer needs.  A partnership between the app dev teams and IT where both agree on the development stack, or a standard API that IT will provide, is essential. This will enable the application teams to simply request the environment they need, freeing them to focus on their real work – developing applications. This may mean reviewing the current portfolio of tools, understanding where there are opportunities for rationalization, or building a standard API for infrastructure resources. All of this is dependent on the size, culture and diversity of the lines of business IT supports.

Focus on Outcomes

Rather than trying to address many requirements and features with a large, long-term development project, developers often focus on an agile approach, quickly delivering just a functional piece of what’s needed, or a minimally viable product (MVP). They then adjust development of the next MVP based on feedback from the first MVP.

This is an effective strategy for transformation roadmaps as well. Align activities and deliverables across infrastructure, operating model and applications. Think about overall transformation outcomes, not just those of each transformation area. For example, think about the minimum infrastructure services that are needed by application owners and software developers which can be built in a few months, versus trying to create the perfect set of services that may take 1-2 years. Similarly, for operating model, focus on a small set of processes and roles that can quickly be aligned to a more agile cloud operating model instead of trying to overhaul all processes at once.

Set a short timeframe for the first MVP milestone, ideally at 4-6 months.  Each MVP milestone should have metrics and deliverables for specific outcomes. The idea is that you’re trying to get beyond programs that go for years before they deliver value, you want to be able to show value at each stage of the transformation. The outcomes for each MVP stage should be carefully monitored, and the following roadmap stages modified based on the feedback.

Don’t Forget About Governance!

Successful transformations include a dedicated governance track, with regular reviews of program progress. Consider including a Transformation Program Office (TPO) integrated within your IT organization to provide overall transformation oversight. The TPO, often composed of a high level project manager and enterprise architect, operates as the single point of accountability for, and management of, schedule, resources, scope, budget, issues, and risks.

Consider incorporating a steering committee of key stakeholders and decision makers whose input and support will ensure business alignment and executive sponsorship. Think about integrating a change management program to ensure smooth business operations during the transformation.

A communications program to promote success at various stages of the transformation, including metrics where you can, is critical. This helps everyone understand what’s going on while building confidence and support in the program.

Summary

By integrating infrastructure, operating model and application activities, establishing metrics and identifying outcomes, as well as defining the overall governance needed to successfully manage the transformation, you will be able to build a highly prescriptive and effective transformation roadmap.

Blog in the Series

Moving to Multi-cloud: How to Get Stakeholders Aligned (Part I)

Moving to Multi-cloud: Spotlight on the Business Case (Part III)

 

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Moving to Multi-cloud: How to Get Stakeholders Aligned https://infocus.dellemc.com/norman-dee/moving-to-multi-cloud-how-to-get-stakeholders-aligned/ https://infocus.dellemc.com/norman-dee/moving-to-multi-cloud-how-to-get-stakeholders-aligned/#respond Mon, 10 Sep 2018 08:55:06 +0000 https://infocus.dellemc.com/?p=36131 This blog is part of the Moving to Multi-Cloud series, which gives practical advice on how to move your multi-cloud strategy forward. It All Starts with the Stakeholders Top performing CIOs enlist full executive and line-of-business support for their IT transformation initiatives. However, building consensus across stakeholders, including IT leaders and executives, can be challenging. […]

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This blog is part of the Moving to Multi-Cloud series, which gives practical advice on how to move your multi-cloud strategy forward.

It All Starts with the Stakeholders

Top performing CIOs enlist full executive and line-of-business support for their IT transformation initiatives. However, building consensus across stakeholders, including IT leaders and executives, can be challenging. You need to get upfront agreement around your organization’s strategic goals, guiding principles, issues and near-term priorities. It’s important to make sure everyone is on the same page; however, that’s easier said than done. Here’s some advice on how to gain the alignment you need to accelerate your transformation.

Bring Everyone to the Table

Identify key IT and executive stakeholders for your transformation. This may include executives from operations, applications, and infrastructure teams. Depending on the issues and IT strategy concerns, team leads from IT finance, security, business relationship management, and enterprise architecture groups may need to be involved.

Plan, guide and manage a group meeting consisting of all key stakeholders. Topics to consider including are IT trends and strategy, multi-cloud operating model, application portfolio, financial transparency, and infrastructure service delivery platforms and technologies.

Agree on the Need for Transformation

Moving to multi-cloud is an ambitious undertaking, and you need to really understand why the transformation is needed. What business outcomes are you looking for? What are the issues and pain points that are keeping you from realizing those outcomes today? What metrics do you have, and what metrics will you need to determine the success of the change? Think about things like agility, business drivers, usage and capacity, equipment lifecycles, contractual obligations, workforce trends and demands, and alignment with organizational goals and priorities. What are the gaps between where you are now and where you need to be? What does success look like? All of this should be discussed, agreed to, and documented.

Develop a Strategic Vision and High-Level Future State

Clarify the strategic vision. For example, you may want to make IT investments more predictable, shift resources away from maintenance and towards innovation, establish cloud service delivery and consumption models, progressively reduce technical debt, reduce IT footprints, or employ more best-of-breed SaaS services. Identify your guiding principles. This may include placement of applications in private and public clouds, including migration efforts to the target environment. It may include simplifying operations to provide more efficient scaling up/down. It may also involve rethinking CapEx vs. OpEx and variable spending models.

Define the high-level future state to realize this vision, following the guiding principles. Document how the future state is different from the current state with regard to infrastructure, consumption model, operating model, and applications.

Identify Near-Term Priorities

Identify near-term priorities that can be planned, sustained and measured when placed at a later stage into a roadmap. Near-term priorities should be shown in terms of governance, operating model, applications and infrastructure concerns.

Define the Value and Benefits

Defining the benefits of the transformation program can provide proof of positive impact, validating its value.  Consider the impact to operating costs, operating process cycle time, availability, time to provision, resource optimization, businesses’ service costs, % of the catalog which is self-service, customer satisfaction, and compliance. Stakeholders will understand the benefits but also appreciate the need for sustained engagement to achieve them.  Establishing a transformation dashboard will sustain the enthusiasm as well as determine where the plan needs to be adjusted.

Get an Outside Perspective

Getting stakeholder alignment to define a common vision, determine priorities, resolve conflicts and make decisions can be challenging. Consider running a facilitated workshop designed to achieve consensus and get you moving to multi-cloud faster.

Summary

Transforming to a business and services focused multi-cloud environment requires the coordination of IT’s governance, infrastructure, service management, security, applications and business partners.  The benefits are best achieved through a shared vision and support.  Establishing that vision needs all stakeholders to be at the table to agree upon the goals, guidelines, timeline, priorities and the metrics of determining success.  This can be accelerated though a facilitated workshop in which a guided dialogue produces the results and answers needed to move forward.

Continue your reading with a few other relevant posts:

Moving to Multi-cloud: Roadmap Considerations (Part II)

Moving to Multi-cloud: Spotlight on the Business Case (Part III)

IT Transformation: CIO’s Priorities and Successes

4 Steps for a Successful Transition to a Multi-cloud Model

Why Multi-cloud Can Bridge the Gap Between Public and Private Clouds

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Multi-Cloud: What’s Your ROI? https://infocus.dellemc.com/norman-dee/multi-cloud-whats-roi/ https://infocus.dellemc.com/norman-dee/multi-cloud-whats-roi/#respond Thu, 12 Apr 2018 09:01:13 +0000 https://infocus.dellemc.com/?p=34716 Organizations are looking to move to a multi-cloud environment to realize the benefits of self service, scalability, accountability, standardization and automation. However, many are finding it difficult to get started. They are struggling with how to get corporate commitment, how to justify funding for the transformation, and where to start. Projecting the ROI of the […]

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Organizations are looking to move to a multi-cloud environment to realize the benefits of self service, scalability, accountability, standardization and automation. However, many are finding it difficult to get started. They are struggling with how to get corporate commitment, how to justify funding for the transformation, and where to start.

Projecting the ROI of the transformation gives you the information you need to build the business case to justify the transformation, and to help secure stakeholder and corporate buy-in.

How to Determine Multi-cloud ROI

Key to determining the ROI is understanding and comparing the total cost of ownership (TCO) of the current environment, the projected TCO of the target state, as well as what the transitions costs will be.

Establish Current and Target State Costs

Measure your current state TCO, and project your target state TCO. Both current and target state costs of all of the in-scope:

  • Hardware and software that is used to provision the applications.
  • The embedded network that the services use. Almost everything today has a network component such as in the fabric that connects us to storage, the LAN components in every server, the connections to the WAN and Internet that connects the services to users and other related systems.
  • The current costs of maintain the applications in the current and projected environments. You will find this varies due to the level of automation and application modernization.
  • The FTEs needed to support the infrastructure will also vary due to automation and modernization.
  • Facilities costs which include the more variable power and cooling as opposed to the fixed, less variable real estate costs. Power and cooling will decrease especially when migrating to converged more efficient, right sized environments.
  • External, outsourced workloads are the services we might employ for operations, service management, help desk, remote hands, etc. These will be impacted also by automation and modernization.  However, they might increase if the strategy is to reduce less reliance on internal resources.
  • Overhead includes whatever management, corporate and executive costs are attributed to the in-scope P&L.

Project Transition Costs

The transition costs pretty much parallel the same TCO of the current and future states.

They include:

  • Swing hardware refers to the additional or overlapping hardware that will be needed during the transformation / migration.
  • Additional Software, as with the H/W, identifies the costs associated with running parallel licenses.
  • There may be additional network connections needed that will need to be accounted for in determining transition costs.
  • Staff time refers to the internal or external costs for executing the transition. This is an interesting factor in terms of the time impact for executing the transition.  We have found that relying totally on internal resources, who also have their “Day Job”, will result in longer transition deliveries.  Often, employing outside resources will result in faster execution and at less cost.
  • As with many transformations, additional education and training is needed. This comes at a cost both in terms of costs and staff time.
  • There may be additional support needed in the form of transition services which will facilitate and guarantee success.

Run the Numbers

Input the current state, target state and transition costs into a cost-benefit analysis. Calculate current and target state IT run rates, and develop an investment profile based on the transformation roadmap. From this, the net IT costs, net savings, and ROI can be calculated.

The analysis should also take into account the time value of money by calculating the net present value (NPV) of the investments and savings. This will show the potential investment returns in current dollars. All of the analysis should be multi-year, typically covering a five year investment period.

By doing a payback or breakeven analysis you can determine how much time, usually expressed in years, it will take to recover the total cost of the investment (including both capital and services costs) and therefore, when the real savings from the transformation takes effect.

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How to Drive Adoption of Converged and Hyper-Converged Infrastructure https://infocus.dellemc.com/norman-dee/drive-adoption-converged-hyper-converged-infrastructure/ https://infocus.dellemc.com/norman-dee/drive-adoption-converged-hyper-converged-infrastructure/#comments Mon, 22 Jan 2018 10:00:08 +0000 https://infocus.dellemc.com/?p=33765 Converged and hyper-converged infrastructures simplify and streamline the delivery of IT services and operations. But the challenge has been in driving adoption and consumption of these infrastructures to accelerate business outcomes. It’s all about the IT operating model – the people and processes that support the converged services. A new approach is needed, one that […]

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Converged and hyper-converged infrastructures simplify and streamline the delivery of IT services and operations. But the challenge has been in driving adoption and consumption of these infrastructures to accelerate business outcomes.

It’s all about the IT operating model – the people and processes that support the converged services. A new approach is needed, one that focuses on end-to-end service delivery providing a first-rate experience for your end users.

How it’s Done

Start with an initial set of service-focused IT processes that span the service management lifecycle: from service strategy, to service design, to service construction and transition, to service operation.

Key processes that need to be considered include Service Portfolio Management, Service Catalog Management, Service Asset & Configuration Management, Request Fulfillment and Incident Management.

Then implement the processes in an automation tool to streamline operations, automate approvals, improve service quality, and enforce compliance policies.

In terms of the people, the team will need to adopt new roles and skills. Start with a set of service management roles that align to IT processes. For example, roles like Service Portfolio Manager, Service Catalog Manager, and Request Fulfillment Manager. There also may be a need of a set of infrastructure roles that align to the converged platforms. Roles like Converged Platform Architect, Converged Platform Engineer, and Converged Platform Administrator.

Just to clarify, a role is not a person. A role is a set of responsibilities and activities, and a single person can take on multiple roles. So existing IT staff can be leveraged for the new roles, staff that’s been freed-up because of the simpler IT.

Watch this video to learn about the processes and roles you need to effectively support and utilize your converged systems.

By having the right organization and processes in place you can drive adoption and consumption across the business, and have a solid foundation for your future IT initiatives.

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A New IT Operating Model for Converged Infrastructure https://infocus.dellemc.com/norman-dee/new-operating-model-converged-infrastructure/ https://infocus.dellemc.com/norman-dee/new-operating-model-converged-infrastructure/#comments Thu, 27 Apr 2017 09:00:50 +0000 https://infocus.dellemc.com/?p=31055 Converged infrastructure and hyper-converged infrastructure take away the complexity of IT management, enabling rapid service deployment, and empowering IT to spend more time on innovation and less time on maintenance. How can you capitalize on simpler IT to accelerate business outcomes? By adopting a new approach to IT operations; an approach that focuses on end-to-end […]

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Converged infrastructure and hyper-converged infrastructure take away the complexity of IT management, enabling rapid service deployment, and empowering IT to spend more time on innovation and less time on maintenance.

How can you capitalize on simpler IT to accelerate business outcomes? By adopting a new approach to IT operations; an approach that focuses on end-to-end service delivery, and provides a compelling consumption experience for your end users.

Start with a set of service-focused IT processes that will enable you to be operational with your new infrastructure. Include processes that span the full service management lifecycle: from service strategy, to service design, to service construction and transition, to service operation.

Prepare your team for new roles, including both service management roles and roles to support your converged or hyper-converged platform.

Provide the IT services that the business needs. Make it easy for users to find, request and consume these services.View the infographic below to learn more about an IT operating model that will help you get the most business value from your converged infrastructure.

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The ROI of Private Cloud: Reducing Outsourced Operations Management Costs https://infocus.dellemc.com/norman-dee/private-cloud-reducing-outsourced-costs/ https://infocus.dellemc.com/norman-dee/private-cloud-reducing-outsourced-costs/#respond Mon, 13 Mar 2017 10:00:46 +0000 https://infocus.dellemc.com/?p=30356 This blog is part of The ROI of Private Cloud series which discusses key concepts in projecting ROI, as well as the detailed analyses of three organizations looking to move to private cloud. Dell EMC Services has performed ROI analyses for dozens of organizations looking to move to private cloud, each with varying transformation scope […]

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This blog is part of The ROI of Private Cloud series which discusses key concepts in projecting ROI, as well as the detailed analyses of three organizations looking to move to private cloud.

Dell EMC Services has performed ROI analyses for dozens of organizations looking to move to private cloud, each with varying transformation scope and objectives.  Let’s take a look at one example: a premier energy company looking to move to private cloud to reduce the data center footprint as well as the cost of outsourced operations management.

Scenario

This premier energy company had 15 data centers. An external provider managed the day-to-day operations such as monitoring services and systems, patching software, and racking and stacking equipment. In order to reduce the cost of the outsourced operations, as well as overall production costs, the organization wanted to consolidate their data centers running 400 specific applications from 15 to 7.

To address this, the IT organization was looking to implement a private cloud with Enterprise Hybrid Cloud deployed on mirrored Vblock systems for seven sites of various sizes. Key characteristics included:

  • Self-service and automated provisioning to increase the speed in which IT is able to deliver services
  • Resource elasticity to optimize resource utilization delaying the purchases of additional capacity
  • Automated monitoring to improve availability as well as reduce the IT staff FTE effort
  • Backup and recovery for data protection
  • Replication and recovery for disaster recovery

Current and Target Environments

The 400 in-scope applications were hosted on 1,900 servers across the 15 sites. These applications would be migrated to seven VCE Vblock systems across seven sites.

Development of an online service catalog, and modifying IT roles and processes were not in scope for the initial deployment. The focus was on infrastructure standardization, consolidation and automation, as well as the migration of the 400 applications.

ROI Analysis

This organization was focused on the hardware and software savings, as well as reduced contract costs for outsourced operations management, that could be achieved through modernization and consolidation. There were parallel programs in place affecting the operating model and catalog services that were not included in the analysis. The metrics used to determine the ROI included run rate savings, total investment, and net savings.

The projected Net Savings is $23M (38% cost savings) with an NPV of $20M. Investment costs are $18.6M, with an NPV of $17.5M. The resulting ROI is 123%, reflecting the low level of investment relative to the high run rate savings. The Payback Period is 2.4 years.

Key benefits of the transformation include:

  • Consolidation of 15 data centers to seven for the in-scope applications
  • Improved efficiency through automation
  • Increased scalability with 100% server virtualization
  • 25% reduction in the contract cost for outsourced operations management

In conclusion, this organization can not only reduce their outsourced operations costs by 25%, but can achieve 38% overall operating savings. The transformation can enable them to be more flexible with data center utilization as well as be able to provide more rapid and agile services.

Learn more about the typical savings that can be achieved and see the detailed ROI analyses of other organizations in The ROI of Private Cloud: Quantifying the Cost Savings and Benefits of Moving to a Private Cloud.

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The ROI of Private Cloud: Driving Down Operational Costs https://infocus.dellemc.com/norman-dee/private-cloud-driving-operational-costs/ https://infocus.dellemc.com/norman-dee/private-cloud-driving-operational-costs/#respond Mon, 06 Mar 2017 11:00:32 +0000 https://infocus.dellemc.com/?p=30351 This blog is part of The ROI of Private Cloud series which discusses key concepts in projecting ROI, as well as the detailed analyses of three organizations looking to move to private cloud. Dell EMC Services has performed ROI analyses for dozens of organizations looking to move to private cloud, each with varying transformation scope […]

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This blog is part of The ROI of Private Cloud series which discusses key concepts in projecting ROI, as well as the detailed analyses of three organizations looking to move to private cloud.

Dell EMC Services has performed ROI analyses for dozens of organizations looking to move to private cloud, each with varying transformation scope and objectives.  Let’s take a look at one example: a global insurance organization looking to move to private cloud to reduce operational costs.

Scenario

The main transformation objective of this global insurance organization was to reduce overall costs of their production environment. They wanted to modernize and automate as much of their IT environment as they could, and to improve operational efficiencies. They already had a high degree of virtualization and standardized service offerings. However, they had no online service catalog, and no self service capability. It typically took six to eight weeks to provision a service. Key service management processes were not in place.

IT realized they needed to improve their overall service management competence. They wanted self service capabilities and automated provisioning to drive provisioning time down to one week. They were also looking for greater elasticity, shared workloads with pooled capacity, and metered consumption of services.

To address this, the IT organization was looking to implement a private cloud with Enterprise Hybrid Cloud deployed on multiple mirrored Vblock systems for two sites. Key characteristics of the platform included:

  • Self-service and automated provisioning to increase the speed of delivering IT services at lower cost
  • Multi-tenancy to support heterogeneous environments
  • Resource elasticity to optimize the utilization of IT resources
  • Metering and chargeback to inform the business of their service utilization
  • Automated monitoring to proactively manage services and increase availability
  • Backup and recovery for Data Protection
  • Replication and recovery for Disaster Recovery

Current and Target Environments

This organization had over a 100 sites total; however, production ran in two main data centers. Virtualization was clustered with varying degrees of utilization and density. The target environment consisted of consolidated clusters in the two main data centers using VCE Vblock systems running VMware vRealize automation software.

For this implementation, 500 existing applications would be migrated to the new environment. An initial IaaS service catalog of Windows and Linux servers would be deployed. The transformation would include creating 15 new service management processes spanning the entire service management lifecycle, as well as realigning the IT organization, roles and skills to manage the new processes.

ROI Analysis

This organization wanted to understand the advantages of converged architectures for their major production sites. The cost of services for operating model transformation was included in the analysis to understand the total benefit. The metrics used to determine the ROI included the run rate savings, total investment, and net savings over five years.


The projected Net Savings for this transformation is $14.2M (17% cost savings) with an NPV of $12.0M. Investment costs are $14.1M, with an NPV of $13.1M. The ROI is 101%, reflecting the moderate level of investment relative to the run rate savings. The Payback Period is 3.3 years.

Key benefits of the transformation include:

  • Improved agility and efficiency through automation
  • Increased scalability through increased server virtualization and utilization
  • Time to provision production services reduced from  eight weeks to less than one week through self-service and automated provisioning
  • 33% of IT staff time reallocated to new initiatives

In conclusion, the analysis shows how this organization could substantially decrease operational costs, cover the costs of transitional services, increase efficiency, and gain support from both management and the lines of business to move forward with their transformation.

Learn more about the typical savings that can be achieved and see the detailed ROI analyses of other organizations in The ROI of Private Cloud: Quantifying the Cost Savings and Benefits of Moving to a Private Cloud.

 

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The ROI of Private Cloud: Improving Developer Productivity https://infocus.dellemc.com/norman-dee/private-cloud-improving-productivity/ https://infocus.dellemc.com/norman-dee/private-cloud-improving-productivity/#respond Tue, 28 Feb 2017 10:00:56 +0000 https://infocus.dellemc.com/?p=30344 This blog is part of The ROI of Private Cloud series which discusses key concepts in projecting ROI, as well as the detailed analyses of three organizations looking to move to private cloud. Dell EMC Services has performed ROI analyses for dozens of organizations looking to move to private cloud, each with varying transformation scope […]

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This blog is part of The ROI of Private Cloud series which discusses key concepts in projecting ROI, as well as the detailed analyses of three organizations looking to move to private cloud.

Dell EMC Services has performed ROI analyses for dozens of organizations looking to move to private cloud, each with varying transformation scope and objectives.  Let’s take a look at one example: a regional healthcare provider looking to move to private cloud to improve developer productivity.

Scenario

This healthcare provider was looking to better support the application developers aligned to the business units. There were specific challenges that impacted their IT organization’s ability to provide the services that the development teams needed. They had no service catalog; they only had internal rate cards. There was no automation, and no self-service capability. It typically took weeks, and even months, to provision services to the project teams. As a result, the application development teams were using external vendors to get the infrastructure services needed to support development activities. IT needed way to provide their developers with an automated, self-service environment with rapid provisioning of infrastructure services meet development needs and timelines, and to discourage Shadow IT.

To address this, the IT organization was looking to implement a private cloud with Enterprise Hybrid Cloud deployed on mirrored VCE Vblock systems as the foundation for their development environment. Key characteristics of the platform included:

  • Self-service and automated provisioning to increase the speed in which IT is able to deliver services
  • Multi-tenancy to support multiple heterogeneous environments
  • Resource elasticity to optimize resource utilization delaying the purchases of additional capacity
  • Metering and chargeback to inform the business of their utilization
  • Automated monitoring to improve availability as well as reduce the IT staff FTE effort
  • Backup and recovery for data protection
  • Replication and recovery for disaster recovery

Current and Target Environments

This organization had two parallel sites that they wanted to maintain for their key application development and maintenance workloads. This included 150 existing applications across 2,000 servers that were needed to support development and maintenance activities. These 2000 servers would be replaced by two VCE Vblock systems. All 150 applications would be migrated to the new environment.

An initial Infrastructure as a Service (IaaS) service catalog of Linux and Windows servers would be deployed. The transformation included adapting existing service operation, changed control and security processes for the new environment, as well as creating a new service portfolio management process, and aligning IT and application development staff to these processes.

ROI Analysis

This organization was pursuing a comprehensive transformation that included people, processes and technology. The analysis was based on the projected savings through improving processes, aligning the organization, as well as the cost benefit analysis of hardware and software consolidation. The metrics used to determine the ROI included the run rate savings, total investment, and net savings over five years.

The projected Net Savings is $9.0M (33% cost savings over BAU costs) with an NPV of $7.6M. Investment costs, including both capital and services investments required for the transformation, are $9.4M with an NPV of $8.7M. The ROI is 96%, driven by the moderate total investment relative to the run rate savings. The Payback Period is 2.7 years.

Key benefits of the transformation include:

  • Improved agility and efficiency through automated processes
  • Increased scalability and utilization through server virtualization
  • Time to provision developer services reduced from 8 weeks to 1 day through self-service and automated provisioning
  • 50% of IT staff time reallocated to new initiatives

In conclusion, the analysis shows how this organization could dramatically reduce provisioning time for developers, reducing the overall development timeline, delivering apps faster, at rates better than market. In addition, though not captured in this study, there are additional savings in the cost avoidance of paying premium pricing for shadow IT services.  Establishing a self-service catalog with transparent rates in addition to a customer focused communication plan would lead to the reduction of shadow IT spend.

Learn more about the typical savings that can be achieved and see the detailed ROI analyses of other organizations in The ROI of Private Cloud: Quantifying the Cost Savings and Benefits of Moving to a Private Cloud

 

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