HfS Network
Ollie O’Donoghue
 
Senior Research Analyst 
Learn more about Ollie O’Donoghue
Dodge Digital Disaster: Get Your Back Office Ducks in a Row
May 29, 2017 | Ollie O’Donoghue

Over the last few years, it’s been almost impossible to attend an IT Operations conference without Enterprise Service Management (ESM) taking up more than its fair share of the agenda. Before joining HfS, I’d spent about four years covering the trend in its various forms as both a practitioner and an analyst. So it came as a bit of a surprise to see such a huge gap between the businesses I’m covering now to those I had in my previous role.

For the clients and companies I follow now, trends like ESM and Shared Services are old hat – they’ve moved on to other more advanced forms of aligning business services. Whereas for those I worked with in my former role, the trend is only really starting to take shape now.

To best exemplify this difference between organisations, I’ll tell a quick story about the last presentation I gave before joining HfS.

At an ITSM conference at the start of the year, I took to the stage to deliver a presentation using the huge amount of data I’d collected over the years to paint a picture of trends in the industry, one of which happened to be ESM. I argued that by the end of the year up to 85% of organisations will be exhibiting some form of it – from simply sharing best practice right through to the formation of single shared service centres. The audience responded to the prediction with a few reassuring nods. Crucially, no-one chased me off the stage, although a few did come up after the presentation to utter “that was brave” before patting me on the back and walking off.

Ultimately, though, I stand by the prediction, and I continue to do so in the safe harbors of HfS, the home of the Digital OneOffice™ concept. According to HfS experts, ESM is just one fundamental of the framework. A stop on a much larger journey to truly embrace digital transformation. In support of this, they have plenty of data and analysis which, by happy coincidence supports my “brave” prediction. We can pool the dynamics into two camps -  which for anyone with a passing interest in economics will recognise: Supply and Demand.

Demand: Business leaders see greater back-office alignment as critical to their success

First of all, we have demand, and this demand is coming right from business leaders at the top. HfS research shows that there is a considerable appetite amongst leaders for improved alignment of business services so much so that it’s considered to be mission critical by 31% of executives, while 48% believe it to be of increasing importance. While the evidence suggests lower ends of the senior leadership team are embracing it with the same vigor, it’s more than reasonable to suggest the demand at the C-Level will have a considerable impact on the shaping of the modern business environment.

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Supply: Providers are shoring up their brains and brawn to build services that deliver greater alignment

Encouragingly, we’re also starting to see evolution in the business services supplier ecosystem. Take Atos’ recent acquisition of Engage ESM – a specialist provider in the field of enterprise service management technology and consultancy – that will add the brains and brawn of 150 ESM specialists to their offering.

Similarly, take the ambitions of ServiceNow to carve up a much larger chunk of business services. Launching from its stable footing in the ITSM space and no doubt leveraging it’s almost ubiquitous partnering of all large IT Service Providers to build a value proposition that takes what it does best in IT and apply it to the rest of the back office.

I have no doubt we’ll soon see even more providers aiming to match their services with the increased business demand.

Bigger Picture: We’ve got to get this right!

Outside of the evolution of supply and demand dynamics, there’s a much greater force at play – the drive towards a digital economy. The source of pressure on modern businesses that will see some succeed and others fail. Crucially, intelligent and aligned business services are the backbone of successful digital transformation.

For some of the organisations I have met over the years, truly aligning back-office services sounds like a pipe dream. However, for HfS, the thought leaders who designed the Digital OneOffice framework, the roadmap is clear, and if businesses want to survive in the modern digital economy, they must get their back office ducks in a row. Without back office alignment, it won’t be a robust enough platform to provide the agility needed in the digital world. By using technologies and providers of analytics, automation and the digitisation of resources and processes, businesses can break down siloed legacy operations to build efficient end-to-end business processes – the perfect platform for business agility and innovation.

 

So hopefully, the bold prediction I made a few months ago isn’t way off the mark. At least that is assuming businesses don’t swiftly change their minds and yearn for a siloed back office, supporting traditional communication channels and processes because “we’ve always done it this way”. Nevertheless, in a year were political pollsters and researchers have been just as surprised by the results as the winners, I may hold back on celebrating for a little while yet.

Bottom Line: Aligned Business Services are the backbone of the Digital OneOffice – companies need to get this right to survive in the digital economy.

Stop sawing that plank with a fish: An RPA 101
May 16, 2017 | Ollie O’Donoghue

These days, we talk about Robotic Process Automation as if it’s the remedy to all modern business woes. But, as with all technologies, the capacity for RPA to deliver value has its limits.

Last week I had the privilege of attending an RPA user group event hosted by the Global Sourcing Association packed with service providers, buyers, and experts - where this solutions capacity to deliver was laid bare. After two refreshingly honest presentations by automation gurus from  Symphony Ventures and Thoughtonomy, the roundtable discussions kicked off. Several buyers joined me, alongside two of Symphony Ventures finest consultants, Katharine and Nick, who were both more than willing to impart honest and impartial advice. While the parameters of the conversation were broad, there are four key takeaways that I’d be happy to share with you. I have built all of the following out of the challenges brought to the table by practitioners and buyers. With the answers that came from the knowledge and expertise of the experts or those having weathered some implementations.

 

1. RPA isn’t the salve for all wounds

There’s no doubt about it, the technology is powerful, but it’s important to recognise that there are limits. Environments with chaotic data sets or irrational processes are not suitable without a huge amount of refining. Nor are you likely to find much success if processes rely too heavily on external data sources – unless the owner of the source is particularly liberal with access.

RPA works best on processes that are formulaic and rules-based. If your process has a set input required to achieve the desired outcome, with a series of consistent steps in between it’s in scope. Even if there are a huge number of steps or the rules to follow are relatively complex, a solution can be built, albeit with the hard work and knowledge of providers and experts.

2. Don’t be tempted to go rogue

Some of you may be tempted to leave other areas of the organisation, especially IT, out of an RPA project. However, all the experts in the room warned against doing so. Inviting IT to the party is essential to help navigate through some of the trickier aspects of the implementation with solid business and technical knowledge.

Some of the providers I spoke to at the event provided plenty of examples of when their implementation was made just that little bit harder when relations between the buyer and IT were…less than harmonious. The key is to build relationships with all stakeholders before embarking on the project to ensure your RPA project delivers the most business value and has the greatest chance of success.

3. The process may have RPA written all over it, that doesn’t make it suitable

Let’s say you have a process that ticks all the boxes – boring, formulaic, rules-based stuff that nobody wants to do. Although it seems perfect, it may not be suitable for a simple reason: the ROI isn’t there. Examples abounded of processes pushed forward for consideration that was already relatively inexpensive to handle, making the cost of automation fail to add up. Such as a long-winded rules-based process that, in practice, was only handled by a single person in the first place.

After all the calculations are laid out on the table, the economics of automation may not add up, at least from a cost saving perspective. However, be careful of ruling it out completely as it’s possible that freeing up someone’s time or improving the process may add economic value in another way, by improving customer and employee experience, for example.

4. In some cases, RPA is the last solution on the list

For some processes implementing RPA is the equivalent of hitting a nail with a sledgehammer (I ruined a perfectly good shed attempting that). For others, it’s like sawing a plank of wood with a fish, just plain unnecessary. For example, a process highlighted for consideration due to its resource demands may, in fact, also be managed elsewhere in the organisation. The simple fix would be to merge all parallel processes to not only ensure consistent outcomes but also to reduce the resource overheads significantly.

Halting unnecessary processes or merging duplicate ones may be the solution businesses are looking for instead of automation. Katharine and Nick, the consultants we spoke with advised that they often start an engagement first by taking a holistic view of all processes before jumping in with an RPA implementation to make sure it’s the best solution for the problem.

Summary

RPA simply isn’t the right solution for every problem, and these are just a few of those discussed at the user group. Perhaps it’s the right time for the industry to take a step back and understand what value the technology can add in different situations. Instead of pushing it as the miracle cure for all business woes – a perception facilitated by buyers looking for a shiny new tool and providers seeking to make the most of the RPA Gold Rush.

Bottom Line: Without a doubt, RPA is a powerful technology, but for some business challenges there are far more effective solutions to consider.

Automation doesn’t have to be a dirty word…
May 08, 2017 | Ollie O’Donoghue

Without a doubt, the impact of automation on the IT Services industry is a topic of much debate and contention. The challenge is that speculation drives much of the discussion, rather than quality data and analysis.

While the subject of automation has been discussed a few times on the blog, I feel compelled to add my experiences and those of the IT professionals I met on my travels to the discussion.

Not long before joining HfS, I spent several months presenting research on automation at events and conferences across the UK. While the research covered a broad range of topics, automation in IT services was by far the most popular. After a few presentations discussing the increased adoption of automation and the growing capability of the tooling, it became apparent where the popularity of the topic originated - fear. After each session, a small gathering of IT professionals would question me on job security, headcount decreases and how automation augered a bleak future for the industry.

It’s not difficult to see why the audience felt this way. The mainstream media and even some analyst firms have been stoking the climate of fear with considerable vigor.

So I went back to the drawing board and changed my presentation. I took a fresh look at the data to examine what was happening in the industry – did we genuinely need to worry? Beginning with an impactful quote most media outlets were running with – something along the lines of “be terrified, the robots are coming” – I started to dismantle these theories with my research data on employment trends, headcount increases, and industry perception.

While many argued that automation would lead to job cuts, my data showed the opposite. Organizations recognized the importance of technology to their businesses and were investing in the services needed to support it. The data revealed that in organizations with higher levels of automation, workers were not disappearing, they were moving to higher value areas of the support structure - taking on strategic projects or developing services.

At the end of the presentation, I concluded that the reality of automation’s impact on modern IT services was far from the bleak picture painted by other analysts and consultants.

Nevertheless, a few minutes after the session ended the same horror stories started to emerge: IT leaders facing a backlash from staff as automation projects ramp up and professionals working themselves into a frenzy over their job security if projects continued. It was frightening stuff.

Crucially, my research revealed that the cause of this panic doesn’t come directly from the automation itself – there were almost no real-life examples of automation leading to sweeping changes in any of the organizations I was working with. Without a doubt, much of the fear was generated by analysts and media outlets whipping up this distorted perception, but surely there must have been another force at work.

After a bit of digging around the real cause of the hysteria became clear. In organizations with little or no perception issues, it was clear that the leadership team had taken the time to communicate with their teams. Conversely, those with stressed and worried staff had not.

When I questioned an executive who sought advice on soothing fears in his team if he had clearly explained his vision, and what the outcome of the project would be, he replied that it was obvious what he was trying to achieve. If that were true, the perception crisis in his organization would not be there.

Successful automation projects have an engaged team working behind them. The most effective I have seen understand what will be automated and why. They know what impact it will have and, for the most part, agree it was an area of manual work they found repetitive, boring and unfulfilling anyway. They eagerly anticipated a time when they could dedicate their efforts to more meaningful and valuable work.

Under different circumstances, this committed group would be dealing with the same fear and stress as their peers in organizations with less effective communication.

In the noisy information age we now live in, it’s easy to get caught up in the hype. Business leaders have an obligation to provide clear, effective communication that outlines the vision and journey of automation projects. Without the context and understanding they provide, an engaged team can quickly turn into a stressed one. And a stressed team will undoubtedly hold your project back. It’s not hard to understand why an individual afraid of becoming obsolete may not be working towards your goals with total enthusiasm.

Bottom Line: Effective communication strengthens the fine line between a successful automation project and one held back by a nervous and stressed team.

Millennials: A Generation of Digital Natives stretch IT Services to their limits
April 28, 2017 | Ollie O’Donoghue

If someone were to perform a literary review of all the blogs and articles written about millennials, they would probably form three conclusions – although they’re great with technology, they’re difficult to manage and are a mystery to many business managers. Of course, sweeping generalisations about an entire generation are often far from the truth.

A Generation reared by radical technological change

Since the first industrial revolution, no generation has experienced as many large technological changes as Millennials. Although dates vary, the consensus is that anyone born in the early 1980s belongs to this generation. So to look at some fundamental technological shifts during this period will give us an idea of the pace of change. In no particular order the following technologies jump out as a source of change for the way humans work, play and communicate:

  • The internet
  • E-mail (Although around long before 1980, it’s popularity increased enormously during the period. Incidentally, 1978 saw the first recognised spam email. So Millennials are also a generation that can’t remember a time when their inboxes weren’t full of promises of weight loss, risk-free wealth generation schemes or erm bodily enlargement procedures.)
  • Mobile phone to smartphone
  • GPS (I knew someone who had a proper map once. It didn’t actively update, so they got lost a lot)
    • Social Media
  • Open Knowledge and Information sources – from Wikipedia to Wikileaks
  • On demand – Television, Film and Music streaming sites

The point here is that this generation grew up in a world where the pace of change has increased year on year. And I haven’t even mentioned some of the cool technologies and tools just around the corner like AI and Robots.

So if our literary review of all-things-millennial were to dig a little deeper, it’s not surprising to see most commentators discussing the role of technology in the workplace.

Millennials demand a lot from Enterprise Technology

To the distress of some organisations, this generation is particularly demanding of enterprise technology. It’s not hard to see why. For the most part, consumer technology is an essential component of the modern lifestyle – from smartphones to social media to on-demand tv and taxis. Access to these tools and technologies build expectations that most enterprises struggle to meet.

Expectations like omnichannel support structures and intuitive devices and applications are readily met in the consumer market by businesses trying to compete for this demanding groups affections. But the enterprise hasn’t concerned itself with the same market pressures. But it might have to start…

Consumer-grade technology and personalised service

If there’s a broad statement – supported by data – that can be applied to Millennials, it’s that they’re far more mobile than preceding generations. The numbers vary considerably, although some sources suggest the average tenure of a millennial is half that of the current workforce average at between two and three years. Others estimate that this generation could have 20 job changes in their working lifetime - the new workforce is mobile and certainly not afraid to change employers.

Crucially, a mobile workforce mimics the dynamic we can see in the consumer marketplace – choice. Smartphone manufacturers hope customers will choose their device because it offers something more than competing models – improved UI, a better camera, or just a better price. This dynamic can kick in anywhere that individuals are free to choose.

The same principle will undoubtedly have an impact on a person's choice of employer. Of course, the decision is somewhat more complicated than regular purchases, but choice and experience can be powerful forces. For example, if an individual has worked in a business that fulfilled all their technological needs and then moved to one that offered relatively little, they may begin to regret their choice. Indeed, some anecdotal evidence suggests that Millennials have left jobs that were well paid but poorly equipped for ones with better technology but a lesser salary.

We can see a softer example of this dynamic already at play when employees choose to work from their own consumer-grade devices – perhaps because they perform better than standard equipment. Historically, Bring Your Own Device (BYOD) has been problematic for organisations desperate to mitigate security and governance risks, but this hasn’t stymied demand. Employees are readily making the economic trade-off – “I will risk breaking the rules if it makes me more productive.” Which isn’t an enormous leap from “I will risk moving to another employer if I can be more productive.”

In this increasingly competitive labour market, businesses need to invest in becoming more attractive to potential employees.

Is investing in hiring Millennials enough?

Encouragingly, recent research conducted by HfS and KPMG suggests some modern businesses are keen to invest in hiring millennials. Investment sorely needed in an already competitive market, but attracting talent is only half the battle, keeping them will be the biggest struggle.

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As the report astutely points out, a third of today’s workforce is built up from this generation and, of course, that percentage is increasing. As they take a greater labour share, hiring is likely to become less challenging; the hard part will be keeping them from utilising their increased mobility to find a more attractive employer.

For buyers of IT services this augers a stark warning – if services don’t meet the expectations of the new workforce, attracting talent will be tough, retaining it will be impossible.

Luckily, most suppliers are busily building services and solutions that satisfy this consumer-grade demand. For a generation that prefers to work on their own devices, innovative Enterprise Mobility Management solutions are taking form. To meet demand for intuitive applications, customer centric application development and management services are available.

Procuring services has always been a tough job. But it’s now going to become even harder as the most demanding workforce the modern business landscape has ever seen begins to exercise it’s freedom of choice.

Bottom Line: Buyers need to anticipate the expectations of the Millennial labour force, and find a supplier that meets its requirements.

By golly, HfS hires Ollie...
April 22, 2017 | Phil FershtOllie O’Donoghue

From staring at his fish tank to working on an IT service desk... to becoming an analyst, then ending up at HfS.  Now that is unlearning personified for Ollie O'Donoghue (see bio), our latest recruit covering the IT services landscape from the UK.... so let's learn a bit more about this curious fellow...

Welcome Ollie!  Can you share a little about your background and why you have chosen research and strategy as your career path? 

Hi Phil! My career started in IT Services after I graduated from University with a History degree. Luckily for me, by the time I graduated, IT organisations had become more focused on service as opposed to technical ability – of which I have none.

I joined a large public sector organisation and moved around to a few different positions in the three years I was with them. I thoroughly enjoyed my time there, but my real passion lies in research, so I jumped at the opportunity to join an organisation as an Industry Analyst covering IT services. After a year or so, I made the jump to Head of Research and Insight which allowed me to develop and drive the research agenda. 

It was around this period I started on the IT Service speaker circuit. At the time, the industry was particularly concerned about the impact of automation, so I tailored my presentations to bring data and research to the party which, at the time, was being overrun with sensationalism from the mainstream media. Finding good data and sources for my sessions brought me into contact with HfS who, unlike some of the other analyst firms, were mirroring what I saw taking place in the industry. 

Why did you choose to join HfS... and why now?

As they say, all good things come to an end. Covering the service and support industry was great fun, and I made some amazing friends and contacts. But after a few years, I felt the need to expand my coverage to encapsulate a lot of the other key areas and trends at play in the wider business landscape.

When it came down to it, moving to HfS was an easy decision, I just asked the question: Do I want to join the Blockbuster of the analyst industry, or the Netflix?

HfS have been busily disrupting the industry for years with their freemium model and high

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