Displaying articles for: 03-28-2010 - 04-03-2010
HP will increasingly focus on services. A trend we are seeing in the marketplace with HP's acquisition of EDS and Dell's acquisition of Perot Systems.... HP is definitely moving from "a printer company" to a focus on the entire spectrum of how business value is generated using technology. Service is becoming the largest revenue producer in HP. The HP portfolio now covers the entire IT market - network, storage, servers and software are blending together into a services world and someone needs to be able to provide integration. It will not be easy for companies to make that switch, since some foundational shifts in perspective will be required - for the providers as well as the consumers. HP is definitely, trying to perform that role and the heavy services focus helps make the case for an "everything as a service" model, within HP.
For the infrastructure space, HP has 'converged infrastructure' to address an organization's "private cloud" needs. HP's infrastructure cloud strategy is also starting to see the light. In the software area, more flexible approaches are being developed. IT outsourcing and BPO always had a cloudy aspect to them when done right, that's one of the reasons HP bought EDS.
One of the big questions is: Can product companies make the shift from a product perspective, where the people are considered overhead, to a services perspective, where the people's skills are what generate revenue. Naturally, one of those skills is the amount of automation that can be implemented. Taking people out of the normal activities and having them focus on turning the anomalies into opportunities is key to making a services approach cost effective.
This movement to everything as a service has numerous other implications as well:
- The architectural perspective Service Architecture becomes critical
- The CIO's role and understanding of service management will become paramount.
- How will an organization measure service levels and progress along the way
It becomes less of a "you against the world" approach and more of a situation where the number of resources (from any source) that can be brought to bear on a problem, quickly, that makes a difference.
A recent article announced: World Business Process Outsourcing Market to Reach $975 Billion by 2012, According to a New Report by Global Industry Analysts. Gartner has a more conservative estimate of $188 Billion by 2012 with 6% annual growth-still a big number. This growth of BPO is currently fuelled by cost savings, but in the long term it will be driven by competitive necessity.
BPO is not about moving business functions to other countries. In some cases, this may involve the use of lower-income personnel in other countries, but this is not the primary purpose of BPO.
BPO is not about the IT, it is about business functions that are not core to the business of the client enterprise. It's letting somebody who can do it better take care of those functions where there is no competitive advantage to doing it yourself. Hewlett-Packard is in the BPO business. For examples of BPO services, see HP BPO service offerings. Additional offerings are under development.
BPO can provide the following benefits:
- Scalability. A successful BPO provider will serve many clients so it should be able to easily accommodate changes in the scale of particular clients.
- Economies of scale. The BPO provider spreads fixed costs and optimizes resource utilization over many clients thus reducing the cost for each client.
- Expertise. The BPO provider can develop and maintain specialized expertise and invest in innovative solutions as a result of its scale.
- Management of complexity. Global operations and regulations of multiple governments have made some basic business functions very complex. A BPO provider can monitor and address these concerns for many clients and relieve clients of this burden.
- Technology independence. BPO services should be accessed through well-defined interfaces that remove technology as a client concern and enable the BPO provider to optimize the utilization and upgrades of technology to remain competitive.
These benefits are not new, but the potential value has increased. The Internet has made services globally accessible and minimized the cost and risk of accessing services. Service oriented architecture (SOA) has provided a framework and infrastructure for incorporating shared services into the enterprise architecture. Global operations and markets have increased business complexity as a result of dealing with multiple languages, cultures and governments.
The result is that clients can rely on the expertise of BPO providers and focus their attention on their core business. Enterprises will become virtual enterprises where multiple corporate entities participate in the operation of a business and many of these entities will be engaged in multiple virtual enterprises as BPO providers.
The reduction in cost and complexity for clients will become sufficiently significant to be a competitive necessity. In June, 2008, I wrote Why SOA Is a Competitive Necessity. SOA supports the consolidation of capabilities to be shared by multiple lines of business. BPO takes this a step further by providing economies of scale from sharing across many enterprises.
Enterprises that don't outsource will be burdened with higher operating costs, a greater management burden and barriers to scaling up or down in response to market demands and economic trends. At the same time, new entries into their market will be able to focus on their core business without developing all the supporting business functions. They will be able to immediately operate internationally and scale up in rapid response to business growth. Barriers to entry of new competitors will be significantly reduced.
I recently wrote, BPM is the Beginning of the End of ERP. ERP functions will be transformed by BPM, and BPO will replace client-operated ERP systems. Instead of purchasing large scale applications and adapting them to their requirements, clients will integrate outsourced services. The BPO services should be finer grained than ERP systems for more distinct business functions to enable flexibility and to enable clients to replace these services if competitors offer better value.
Of course there are risks. Contracts must be designed to define clear performance requirements and provide appropriate incentives for continuous improvement. BPO providers must maintain security that exceeds that provided by clients on their own, and ensures separation of the intellectual property and confidential data of multiple clients. Failure of a BPO provider could endanger the business of all of its clients. These concerns should be addressed through due diligence when selecting a BPO provider, through performance monitoring and through periodic audits.
Hewlett-Packard offers the following BPO advantages:
- Global reach. HP has business operations around the globe and is doing business in more than 170 countries.
- Industry expertise. HP, along with resources obtained from EDS, has expertise in all major industries and government operations.
- Optimized technology stack. As the world's largest technology company, HP can provide a full stack of leading edge computing technology to deliver high quality and performance.
- Established customer service operations. HP provides around the clock, customer service/help desk services for a variety of clients in a variety of languages.
- Scale. HP is already one of the world's largest BPO providers.
- Automation expertise. HP already makes extensive use of automation and will continue to enhance performance and quality of services based on experiences with large-scale operations in both its BPO and IT services and experience with clients in multiple industries.
The age of virtual enterprises is emerging. For traditional enterprises, it will be a major transformation over many years, while their start-up competitors will rapidly integrate and grow. It's time to start the transformation.
You may have seen a recent Project Runway episode (hey, my daughter likes it), where the contestants were given the tools and materials to create custom fabric. They pulled it off, although not everyone liked the result. HP and Intel support show. I did think it was interesting they gave them one that looks exactly the same as the tablet I use every day (theirs is the newer model though).
As we move into this age of mass customization and personal fabrication, it makes me wonder how soon these techniques become readily available in the consumer market. With HP getting into 3D printing, hopefully we'll see the price drop in this area as well.
Moving bits, not atoms is a different way to be agile and green using IT.
This Technology Review blog entry describes a "enhanced vision system" from General Motors that can highlighting landmarks, obstacles and road edges on the windshield in real-time. The video in the entry also talks about integrating with GPS systems, to clearly mark desired locations. By using a variety of sensors, various hazards and points of interest can also be shown.
"The merger between reality and computer displays is becoming more prevalent and transparent. There were a few good entries on this topic in 2009, and I expect it to increase radically in the mobile computing space. This is one significant way of overcoming information overload issues with the massive amount of data being collected."
"To turn the entire windshield into a transparent display, GM uses a special type of glass coated with red-emitting and blue-emitting phosphors--a clear synthetic material that glows when it is excited by ultraviolet light. "
Looks like this particular technology is a way off since the articles says it will not be part of a production car until 2018 at the earliest.
One of the other items described in the video was the use of eye-tracking to achieve an effective virtual interface. They are getting more information than just how to align the graphics, since eye-tracking adds a new dimension to the interaction with the computer, allowing it to fade into the environment - when done correctly. The eye-tracking can see how effective the virtual display is at attracting attention and aid with attention management for the driver.