Following a successful event in Miami, I am now looking forward to Forrester’s Sourcing & Vendor Management (SVM) Forum EMEA in the UK next week (Herts, Nov 30-Dec 1). An invaluable component of our forums are always the industry expert presentations and so I’m excited to be joined on stage on day one by Maureen McKinney, Director, Strategic Partner Management, Nike. Maureen will be speaking about how to drive more value from vendor relationships, and deliver real value to the business. Ian Dalby, Director Of ICT, UK Ministry Of Justice, will address how different IT and SVM organizations are responding to SVM’s challenges related to connecting demand and supply capabilities within an organization. On day two, Olivier Lefaivre, Head of IT Sourcing and Vendor Management, AXA Group Information Systems, will explain how IT sourcing and vendor management accelerated business transformation at AXA. Our second industry speaker on day two is Jim Nanton, Senior Vice President & CIO, Hanesbrands.

In preparation for the EMEA Forum I spoke to Jim who, in his role of SVP/CIO at global apparel company Hanesbrands, is faced with a unique set of challenges, risks, and opportunities involved in deploying managed and contract services across multiple countries and cultures. Jim told me about how he believes that vendor management is a core competence in a "plan, build, run" organizational structure, and underlines the importance of selecting the right partners and the practices for managing effective relationships.

Below you can find a summary of my conversation with Jim in which he provides insight into what he will be sharing with the audience during his keynote:

Paul Warren: What role does Sourcing and Vendor Management play in your IT strategy, and that of Hanesbrands?

Jim Nanton: SVM is central to our IT strategy which is closely aligned with our business strategy. In order to support rapid business change and international expansion of the firm, we have had to rely on the specialized skills and services of partners to complement our internal IT staff. We have also consciously focused on certain skills and roles that we prefer to retain and identified those that we have chosen to outsource. As our engagement with external partners has increased we have found it essential to develop a formal vendor management discipline.

Paul Warren: Hanesbrands has recently expanded its commercial and supply chain operations into emerging markets such as China. How has your IT organization responded to the changing needs that have come from this expansion?

Jim Nanton: Structurally, we have responded by establishing two levels of responsibility. IT strategy, policies, and standards are set at headquarters; regional and in-country IT leadership is responsible for execution but is empowered to adapt the broad strategic objectives to local circumstances. Focus, therefore, is on outcomes that benefit the business rather than direct control from the center. This structure assumes strong local leadership which can be difficult to recruit and retain in some markets.

Jim Nanton: Frequent changes in business plans have made IT agility as well as communication and collaboration with functions like the supply chain imperative. To this end, we have had success in assigning business relationship managers at a country or regional level. This individual is accountable for all facets of the IT relationship with the business leader for that location. He or she, behind the scenes, coordinates the delivery of IT services and is able to tap into resources, both internal and external, throughout the global IT organization.

Paul Warren: How did you select which skills to retain, which services to outsource, and where they should be located?

Jim Nanton: Increasingly we have emphasized those roles that directly intersect with business users and require deep knowledge of our company, customers and industry. We believe that collaboratively understanding needs and identifying opportunities for the application of technology create the greatest value for our business. Design of solution architectures and mastery of component technologies along with vendor management skill are remain essential. Also important but readily available from commoditized global sources are narrower technical skills to develop, support and maintain applications, and to deliver or administer infrastructure services. As a global IT organization we can take advantage of talent pools regardless of location and assemble virtual teams of internal and external members.

Paul Warren: What are some of the unique challenges, risks, and opportunities in in deploying managed and contract services across multiple countries and cultures?

Jim Nanton: As you might imagine, the normal challenges of managing complex technology projects are magnified when the coordination of cross-national team members with multiple native languages, in various time zones are involved. This is further compounded by the participation of external, contract resources. However, these organizational and communications challenges can be offset by the benefits of local perspectives and the specialized expertise and experience that the team can bring to bear.

Paul Warren: How would you define a true Partner as it relates to your vendor relationships?

Jim Nanton: True partners are rare because of the inherent and conflicting interests of vendors and customers. The vendor seeks to increase revenue and margin and we as customers demand lower costs and better service. However, it is possible to develop over time, strong relationships with key vendors which can evolve into partnership. This involves give and take, mutual trust, and shared risks. The vendor is willing to invest in the relationship in the expectation of longer term benefits. These include expanded opportunity, more predictable income streams, and insight into customer strategy and plans. For us as customer, a stable relationship results yields less disruption from switching, greater productivity and reliability as the vendor becomes more familiar with our environment.
 
If you are interested in joining us at Forrester’s Sourcing & Vendor Management Forum EMEA 2011 please find the agenda and all further details here.

Paul Warren, Practice Leader, Sourcing & Vendor Management Forrester Research

I handle many inquiry calls from clients asking for help negotiating with large suppliers, and often they claim the supplier is a strategic partner. I’ve noticed that many clients use that term, but when I ask them what it actually means in practice, I get varying responses. So Forrester recently surveyed over 150 sourcing and vendor management (SVM) professionals to ask them what they expect to get from strategic partners, and what they offer in return. I was bit disappointed with the results. For instance, while 68% said they would always expect partners to give them the best possible discount, only 6% said they would always make the partner their sole source for specific technology categories.

What’s wrong with this picture? Well, to quote Godfather 2, when explaining Hyman Roth’s longevity Johnnie Ola says “He always made money for his partners”. That concept doesn’t seem to apply in the technology world. On the one hand, buyers complain about vendors’ unfair policies (see my recent report Buyers Should Reject Unfair Licensing Rules) and transactional sales approach. Yet on the other hand they want to squeeze their partners’ margins while still expecting them to sell their wares site-by-site and product-by-product around their enterprise. As one senior software executive told me the other day “sure, I’ll waive my usual policies for partners, but only if they let me off the huge cost of supporting individual, small product buying decisions.”

The situation reminds me of those self-help relationship books that explain how couples fail to communicate effectively. For example I remember learning very early in my marriage that when I asked my wife if I could go to play golf instead of spending time with her, and she said "you do what you want", what she actually meant was "this is a test of how much you love me, so you better pick the right option".  Similarly, when buyers talk about wanting 'innovation', they mean 'enhancements in return for my maintenance spend', but the seller hears 'additional products that I can sell you'.

Does this mean you should consolidate your supply base into a small number of partners with category-specific monopolies? Absolutely not, at least not yet! The problem is that very few of the major technology providers can actually be trusted with such favored status, because their corporate targets, sales incentives, processes, culture, etc drive them to take advantage of any lack of competition, to overcharge and under-deliver. No, we first need to define more clearly what we need from our strategic partners, and pick companies that can meet our criteria. We also need to understand what we need to do to deliver on our side of the bargain, and help our partners make money too. And this may mean downgrading some of the firms we currently call partners to ‘expensive incumbents’, and reducing our dependence on them.

I’ll be expanding on these themes in my keynote speeches at our upcoming Sourcing & Vendor Management Forums in Miami (Nov 7 – 8) and the UK (Nov 30 – Dec 1). I’ll be suggesting some criteria to assess suppliers’ ability to be partners, and giving Forrester’s assessments of how the existing giants measure up. The speech will be interesting, controversial, and also fun. So I hope to see you there. In the meantime, I'd love to hear from people who have established strong, mutually beneficial partnerships with technology suppliers. What were the keys to establishing this relationship, and what are the benefits?

Duncan Jones is Principal Analyst at Forrester Research where he primarily contributes to Forrester's offerings for Sourcing & Vendor Management professionals. He is a leading expert on software pricing and licensing and helps clients understand and address the effect of technology changes on software contracts. Duncan blogs at http://blogs.forrester.com/duncan_jones/
 
 

We are learning once again that what people want most is to be free


John Quincy Adams (sixth President of the US) said: "Who but shall learn that freedom is the prize… and on the oppressor's head to break the chain." Glorious change. Monumental change. Empowerment and Freedom. I submit humbly but with absolute conviction to all of you that we are in the midst of revolution in personal computing - the extent of which we will only fully comprehend once it's over, and established vendors and IT leaders alike are scattered on the side of the road.

It's not about Microsoft vs. Apple or Google vs. Apple. It's about freedom. Freedom from control. Freedom from establishments. Freedom of identity. Freedom from IT departments too understaffed and ill-equipped to help. Freedom from layers of management agents and miscellaneous junk that sap minutes to hours of productive time from our lives every day. The price of compliance and security you say? Hogwash.

End user experience is at an all-time low


The end user experience has deteriorated to the point that we sit and wait while the hourglass spins, as IT's remote bots take inventory, or install software updates while we're frantically trying to get our slides together for a customer meeting. The mindless bots scan for threats and lock the cursor while we're trying to write an e-mail, and we get embarrassing pop-up reminders while we're presenting to rooms full of people to make sure we know to update Adobe Acrobat. We're as mad as hell, and we're not going to take it any more! Who gave someone the right to assume that what their tool needs to do at any given moment is more important than the work we have to get done?

High performers are being hanged for taking matters into their own hands


Our workspaces don't belong to us any more, so more and more of us are choosing to go it alone and risk the wrath. One of the brightest people I know was fired from a company recently because his IT department determined he was violating security policy by using his personal computer in the office rather than the one IT provided. The one IT provided was too underpowered for his job, so he had purchased one (with his own money) that would work. In any rational situation, he might have been rewarded for his commitment. Instead, he was dismissed, and his former employer's top competitor snapped him up in less than two weeks -- this guy had closed $3m in business last year. It's lunacy! I go back to John Quincy Adams again: "To believe all men honest would be folly. To believe none so is something worse." Perhaps this thinking has something to offer us.

It doesn't have to be like this


So what do we as I&O professionals do? We can start by embracing the idea that less is more, and that the best way to shape behavior is to create value where you want people to go. As you are developing your support plans for virtual desktops and mobile devices, and you think "how will we control…", stop yourself. Think instead about how you will make it easier for people to adopt these devices without breaking the regulations your business is sworn to uphold. The client virtualization mobile apps from Citrix and VMware are a great help here, and the LogMeIn client for remote control of any desktop is the best I've seen. Think in terms of automated configuration for e-mail on iOS and Android to ease the burden on the user and the service desk. Make sure both e-mail addresses AND phone numbers are in Exchange so that everyone in the firm using a mobile device can call any other employee.

New technologies must be allowed to unleash new levels of productivity and value


For virtual desktops, try to figure out how to manage them without the same layers of agents you used on the physical desktops. I saw some interesting technology from a company called Ziften this week that looks promising because it controls how much CPU, memory and I/O extraneous "stuff" can consume. Think about offering service catalogs full of pre-configured virtual desktops that people can request and use for specific purposes. Imagine a graphics design workstation offering with all the trimmings, or an engineering workstation designed by the finest engineers in your organization. These kinds of ideas will create value that really leverages what these technologies can offer your business, and people will go where they see value for them.

What do you think? What are some great ways to strike a better balance between information security and usability? How can we offer people freedom of choice in personal computing without spending more on management and support? If you are doing this today, what tools are indispensible to you?

David Johnson is Senior Analyst at Forrester Research, where he serves Infrastructure & Operations Professionals, primarily focusing on client management, client operating systems and hardware, client virtualization, and related IT operations areas. For more posts by David, and other Forrester analysts, please visit: http://blogs.forrester.com/information_technology

With the updated version of ITIL imminent, I participated in a BrightTalk webinar on “what next for ITIL.”

My views on this are very clear, that we need to “look back before we look forward.” I touched on some of this in a previous blog, 2011: An ITIL Versioning Odyssey, but think it worthwhile to continue to articulate my views in this area.

Let's start with what I consider to be the biggest issue: the gulf between theory and practice with ITIL.

There is no doubt that ITIL can benefit I&O organizations. There are certainly many I&O organizations encouraging, or even forcing, their people to take ITIL training and qualifications: There are at least 1.5 million people with the certification and there is no sign of this slowing down. Not only are trainers busy, so are ITSM consultants and, of course, industry analysts. But, from an industry analyst perspective, there is a lot wrong with ITIL. This is not just how it ballooned in size from ITIL v2 to ITIL v3, but also how it is adopted in the real world.
So what's going wrong?

1.    If you look at existing ITIL v2 adoption, there is a focus on the reactive elements such as incident management, problem management, change management, and maybe even configuration management and service-level management. How many organizations have moved on to the more proactive elements such as availability management, capacity management, IT financial management, and continual service improvement?

2.    I&O organizations often overstate where they are with ITIL. They say “we do ITIL” but what this really means is that we have adopted the reactive processes mentioned above. There is also a misconception that everyone else is doing it and doing it right. This myth needs to be debunked. This is then magnified with ITIL v3 where I&O organizations say that they “do ITIL v3” when in reality they still do what they did with ITIL v2, have sent people on ITIL v3 training, and have bought a service catalog. But they haven't necessarily collectively understood and subscribed to: firstly, the concept of IT delivered as a service and, secondly, the concept of the IT service life cycle. Customer-focus is also still often lacking.

3.    There is what I call “the elephant in the ITIL-adoption living room” where initial ITIL adoption activities went well but as soon as the ITSM tool vendor’s professional services team and external IT service management consultants leave, ITIL adoption loses momentum and I&O fails to progress further with this journey to increase IT service management maturity.

There are, of course, other issues I could delve into (if my word count permitted), but I think it's best to start to look forward. So what needs to change?

1.    How ITIL v4 (or ITIL 2015 edition?) is presented to I&O organizations. We need to cut down on the bloat (i.e., the number of processes) and also make it more relevant to the changing business and IT landscapes (e.g., focus on business value delivery, cloud, and multi-sourcing and service integration). Oh, and let’s not forget customer service.

2.    How ITIL’s message and education is delivered. Basic training should not be about “cramming” process-based information but be more about the concept of IT delivered as a service, the service life cycle, customer service, and even topics such as outside–in thinking. My bottom line here is that, as is, I think that my dad could pass the ITIL foundation certificate and he's never touched a PC in his life. It’s scary that people can be hired based on the qualification.

3.    The proactive processes need to be pushed, including via vendor offering support. I&O organizations need to learn how to “spend a penny to save a pound” by being more proactive. Both of the previously mentioned points should help to address this.

4.    I&O organizations need to be honest with themselves and others about ITIL adoption. What did they set out to achieve relative to what they do now? How well do they “do ITSM” now?

5.    Those with a vested interest in the success of ITIL should do more to assist with its real-world (rather than financial) success. This includes those involved in publishing, training, consulting, selling ITSM technology, and selling ancillary services. We at least need to recognize and discuss how ITIL-adoption momentum dies post technology implementation project and what can be done about it.

So that's me, done. Please let me know if you think I am “holidaying in cloud cuckoo land.”

Stephen Mann is Senior Analyst at Forrester Research where he serves Infrastructure & Operations Professionals. For more posts by Stephen, and other Forrester analysts, please click here.

At first glance, our forecast that the global IT market will expand by 7.1% in 2011 is right in line with the 7.2% growth we are estimating occurred in 2010 (see our January  11, 2011, "2010-2012 Global Tech Industry Outlook" report).  In fact, there are many points of similarity between the two years besides the overall growth rates, such as comparable growth rates in communications equipment purchases, or the US and Asia Pacific growing at similar rates in 2010 and 2011.

However, there are three important points of difference that I think make our projected growth for 2011 more impressive than the almost identical rate of growth that occurred last year:

•    Minimal rebound effects in 2011.  2010 was the year when IT capital investment bounced back from recession-depressed levels in 2009, especially in computer equipment and to a lesser degree in software.  Companies had been cutting back on purchases of servers, personal computers, storage devices, and peripherals like printers and monitors since 2007.  That meant a build-up of a lot of deferred demand for replacement equipment, which was unleashed in 2010, helping to drive 11% growth in this category last year.  Licensed software also felt some of these effects, with freezes on capital investment pushing purchases from 2009 into 2010.  Thus, in both cases, 2010 growth rates were measured off of low bases in 2009.  In contrast, the 2011 growth will reflect new demand for IT goods and services, not pent-up demand for prior years.  And the 2011 growth rates will be measured off a stronger base that reflects that fact.

•    A sectoral rotation from computer hardware to software and services.  It is common for tech market recoveries from economic recessions to be led by computer hardware, because that is the category of purchases that CIOs can most easily and safely cut during downturns.  But what gives sustained strength to tech recoveries is increased buying of software products, and along with that purchases of the IT consulting and systems integration services for implementing that software.  Those two categories represent 44% of the global IT market (excluding telecommunications services), and close to 50% in advanced economies like the US.  Moreover, these categories of purchases tend to be more sustained, both because some involve large projects that take many months to complete and because other smaller scale projects have fast paybacks that encourage additional investment.  So, the fact that both of these categories are looking at good growth in 2011 points to continued and even stronger growth in 2012.

•    A broader pattern of geographical IT market growth in 2011.  In 2010, the strongest growth rates measured in dollars were in emerging market economies like Latin America; Eastern Europe, the Middle East, and Africa (EEMEA); and Asia Pacific; or in Canada (thanks to the stronger Canadian dollar).  Western and Central Europe had a decline in dollar-denominated growth due to the negative impacts of Greek and Irish debt crises on economic growth and the value of the euro.  While Europe is still vulnerable to these impacts, the tech market outlook for that region is brighter in 2011, while growth rates in other regions are likely to slow to high-single digits from the double-digit growth they experienced in 2010.  The results will be more balanced growth in the global tech market, with all regions pulling their weight.  Growth measured in local currencies will still be highest in Latin America and EEMEA, but tech vendors can expect solid growth in the much larger markets of North America, Europe, and Asia Pacific. 

Andrew Bartels is VP and Principal Analyst at Forrester Research serving Vendor Strategy Professionals. For more information, check out Andrew, and other Forrester Analyst blogs at:  http://blogs.forrester.com