12 Nov Gartner's Top 10: Wisconsin companies progress to hot strategic technologies
Madison and Milwaukee, Wis. – Green information technology, unified communications, and virtualization have something in common other than their obvious technological focus.
All have been identified by Gartner, Inc., the information technology research and advisory firm, as IT opportunities that should be considered in conjunction with fully-matured technologies to provide organizations with real business value. They are part of Gartner’s Top 10 strategic technologies and trends, outlined at the recent Gartner Symposium/ITxpo, and are defined as those with the potential for significant impact on “the enterprise” in the next three years, including a high potential for disruption to IT or the business.
Gartner analysts view them as a strategic for most organizations, but what do Wisconsin CIOs think? In this look at the Gartner Top 10, which typically require a major dollar investment or come with a huge risk associated with being late to adopt, WTN spoke to Wisconsin technology managers about whether the Gartner trends are part of their short-range and long-term plans.
Different businesses will have different strategies at any one time, but one Greater Madison CIO found value in each strategy. “All 10 items are hot tickets and high priority items for most companies out there,” said Peter Logothetis, senior vice president and CIO of QBE Regional Insurance.
The technologies that Gartner analysts believe should be part of strategic planning discussions over the next two years include the following:
• Green information technology, where the focus is on data center energy consumption and capacity growth.
• Unified communications, which involves the migration from PBX systems to IP telephony.
• Business process modeling, including the linking of data management initiatives such as customer data integration, product integration, and product information management.
• Virtualization. With the addition of automation technologies on the service level, Gartner believes virtualization can dramatically improve resource efficiency, automate flexibility, and enable CIOs to manage services holistically.
• Mashups and composite applications. Since mashup technologies are expected to evolve significantly over the next five years, application leaders must take this into account when evaluating the impact of mashups and in forming an enterprise mashup strategy.
• Web platforms and web-oriented architecture. Service-based access to infrastructure services, information, applications, and business processes through Web-based “cloud computing” environments is just around the corner. Companies also must look beyond software as a service (SaaS) to examine how Web platforms will impact their business in three to five years.
• Computing fabric, the evolution of server design, is part of a progression in which the introduction of technology allows several blades to be merged operationally over the “fabric,” operating as a larger single system.
• Real World Web, an informal term referring to places where information from the Internet is applied to a particular location, activity, or context in the real world. It is intended to augment the reality that a user faces, not to replace it as in virtual worlds. Gartner believes it can be used for new applications, new revenue streams, and improvements to business processes.
• Social Software. Through 2010, the enterprise Web 2.0 product environment will experience growth, and significant consolidation is expected as competitors deliver Web 2.0 offerings to the enterprise.
Alex Yarmulnik, CIO of Midwest Airlines, is somewhat skeptical of the enterprise value of social computing, and views it more as a consumer phenomenon. He sees value as an intranet for employees, but he’s not really sure how it can be leveraged to a company’s advantage.
He declined to get into specifics about projects, but cited unified communications and virtualization as technologies that Midwest Express is either looking into or is in the process of deploying.
Gartner indicates that only 20 percent of the installed base with PBX phones has migrated to IP telephony, a figure that rings true for Yarmulnik. He said more business organizations are seeing value in Voice over IP, which was an obvious blessing to firms with offices in multiple cities because Web-based phone service enables them to save on long-distance phone costs.
Virtualization is “big for us,” he said, noting the Midwest Airlines no longer buys new (physical servers). “A lot of it goes right into VMware,” he said.
Another big strategic technology is SaaS in a web platform, which he said is “almost a standard now with how we move data around with vendors.”
Metadata management is not a strategic thrust for Midwest, but the airline is looking into it as time allows, mostly as a method of standardization.
Mashups go no farther than a Yahoo portal and Google Maps, and while energy usage and spend is a concern for every organization, Yarmulnik is among those who view green IT as a buzzword.
For QBE Regional Insurance, the most relevant trends are unified communications, business-process modeling, metadata management, and virtualization. Expense reduction is the common denominator for most, but the benefits extend beyond cost, according to Logothetis.
The company, the former General Casualty Insurance and Winterthur U.S. Holdings, now is part of QBE Insurance Group. Even before QBE’s acquisition, much of the company had migrated to a VoIP solution, and there is more unified communicating to be done. For a company with regional offices, the savings on long-distance costs have been real (if unspecified), and it has yet to fully leverage the system. One of the advanced features, the ability to connected your phone line to the system as you travel, in effect moving your phone line with you, but the company has yet to activate this feature.
Business process transformation, which is being accomplished with the help of service-oriented architecture, also is driving down costs for imaging and work-flow solutions. The company has identified 12 reusable services, including driving records and credit card checks typically used in personal lines insurance, where SOA-enabled business process transformation can speed time to market for various coverages.
Applying business process transformation to 12 reusable services means that QBE has 12 fewer things to replace, program, and implement, and it can build one reusable gateway in which users can communicate with vendors on issues like credit history instead of relying on multiple systems to connect externally.
Along the lines that Gartner has outlined, the company is upgrading its business intelligence and data warehousing capabilities as part of a program to upgrade metadata management. While some companies in this position are trying to glean more value from customer information, QBE is looking to drive predictive analytics so that it can better rate and price its products.
QBE also is taking advantage of virtualization technologies, from VMware to server consolidation and to storage area network storage consolidation. This would allow the company to better optimize and use its hardware investments in this area.
Going to school on replacement
Herman Nell, CIO of School Specialty, Inc., is another technology manager with an eye on trends identified by Gartner, and he plans to time them with server and telecommunications replacement cycles.
Over the next two to three years, unified communications also will drive costs down. School Specialty, an educational products company, has a number of call centers throughout the nation. The company envisions more savings if this function is handled in a virtual (VoIP) environment, but after attending a Cisco presentation on unified communications, Nell sees a role for a variety of IP solutions (voice, data, wireless, and other formats).
“I think we can leverage the technology over the next two to three yeas as we go through a replacement cycle,” he noted.
Plans for virtualization are linked to unified communication, which allows virtualization across telecommunications capabilities.
Nell thinks green IT, which largely is driven by heating and cooling costs in data centers, now enters each project discussion he’s engaged in. While the company has a corporate data center, part of its enterprise planning system is outsourced. As it replaces physical servers and other equipment in its data center with virtual successors, it will have opportunities to ramp up energy efficiency.
“With each project, there is an element where we look at efficiency of our energy utilization, not just to be socially conscious, but it’s a real cost factor for us.”
He also said business process modernization is complementary to School Specialty’s move to lean manufacturing. Business process remodeling is exactly what you get when lean manufacturing concepts are applied to IT, Nell indicated.
While he thinks social computing is somewhat over-hyped at the moment, he recognizes its importance outside the enterprise. Nell, however, expects to gradually introduce those concepts because the company’s workforce eventually will become younger, and the younger demographics generally embrace social computing.
“I suspect we will transition to this in a three to five-year time frame,” he said.
The public enterprise
One public institution that enthusiastically embraces Gartner principles is the University of Wisconsin-Milwaukee, a Gartner member that relies the national consultant for IT analysis.
CIO Bruce Maas said the university is actively involved with each Gartner trend, though some have advanced more than others. In particular, business process modeling is the IT department’s key initiative. Maas has recruited a process architect to work with him on services related to business process engineering because the university needs to help its business units think through and document their business processes.
Maas also has established a group to work with different campus units to improve and in many cases standardize business processes. “This is a major undertaking for us,” he said.
At this point, UWM’s approach may not be as sophisticated as the one Gartner suggests, but the firm outlines “maturity models” where member organizations can evaluate their stage of maturity to assess how far they can go. UWM is in a back-to-the-basics mode, but the university will be more aggressive once it has a good grasp of the business needs of campus units, and after it builds the accompanying automation software or purchases a hosted service.
When it comes to “build versus buy,” Maas said the university is “totally agnostic” and bases its decisions on what works best with its technology architecture.
Given the technology savvy nature of today’s student populations, no public university could live for long without examples of social networks. UWM has set the stage for enhanced adoption of Web 2.0 by replacing what Maas called an antiquated e-mail system. The university, through an RFP process, has selected an economical – $10 per user – Zimbra e-mail calendaring and messaging tool to serve its 50,000 plus mailboxes.
Maas believes Zimbra will be looking to build social networks solutions into the software, in part because it has raised the issue in conversations and in part because Yahoo! just purchased Zimba. The university expects Yahoo! to incorporate into Zimbra products its social-networking capabilities.
To drive green IT and lower energy usage, the university favors vendors like Sun Microsystems, which is producing more energy efficient servers, and it is replacing physical servers with VMware, a process that is in its earliest stages.
Making the right call
David Cearley, vice president and distinguished analyst at Gartner, said the right decision sometimes will be to do nothing with a particular technology. In other cases, it will be to continue investing in the technology at the current rate, and in still other cases the best call might be to test the technology or more aggressively adopt and deploy it.
“The important thing,” Cearley said, “is to ask the question and proactively plan.”
• Data center sticker shock? Companies may be in for cost surprise
• Pitching virtualization: Benefits go far beyond cost cutting
• CIO Leadership Series: School Specialty’s Herman Nell aims to spur organic growth
• CIO Leadership Series: Logothetis likes CIO’s evolving role
• CIO Leadership Series: Bruce Maas, UWM