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 Head to Head
13 December 2006 | ITSM
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IT Organisation Transformation
We caught up with Michel Savoie and Martin Warner of BearingPoint to discuss the changes awaiting CIOs

IT industry leaders from all market segments, from CIOs, vendors, analysts and consultants across the globe, are warming fast to the idea that the enterprise IT landscape is transforming and that a sea-change is about to happen in the CIO role.

ITP Global went to Paris to catch up with Michel Savoie, Managing Director for Technology Solutions, EMEA, at BearingPoint, and Martin Warner, BearingPoint's Head of IT Advisory & IT Management EMEA, about the market transformation in store for the CIO and got a sneak preview at how these entrepreneurs are packaging innovation to help CIOs transform their IT organisations.

BearingPoint, one of the world's leading management and technology consulting firms, has, through its own evolution, recognised the next wave of IT innovation that is taking shape across industries today and made significant investment to realise this value for its customers. In this rare interview we gain insight into how one consultancy firm is innovating to move the market and enable IT organisations to take advantage of the next big wave in IT.

Michel Savoie has evolved and re-structured the firm's EMEA thinking and re-imagined the 21st century business service that can take advantage of the change ahead. Martin Warner, an outspoken IT visionary, has been working with CIOs and the supply-side of the IT industry to deliver the innovation to stay ahead of the market and, as he describes, we are about to see another profound IT change in the corporation.

What are the key challenges for the CIO and how will innovation help to address them?
Michel Savoie: I believe the CIO has some fundamentally basic challenges to deal with. Examples like delivering service effectively with the right experience, managing the investment portfolio and executing change, tackling IT security, managing the cost of the operation and future IT demand and business-application delivery.  Today, innovation is often seen in the way specific business applications are delivered to run the business. But apart from business applications, workflow automation and integration is changing the way we manage IT infrastructure; more can be done with technology.  We are seeing great leaps in Search technologies giving us greater ways to access information.  There is still great technological innovation to be had in enterprise IT.
Martin Warner: I agree with Michel; there are of course other challenges, but these examples allow us to build on the innovation part of the question.  Innovation is actually coming from three directions in the industry:
  1. Technology capability & automation
  2. Off-shoring & outsourcing
  3. Business model evolution
All of which are improving our productivity. On point one, what we have seen is that managing IT is about process and technology convergence and this is giving us greater efficiencies and better decision capability.  Also, as Michel states, search is shifting the game in terms of accessing unstructured data. Additionally, information disciplines and tools are also converging in areas such as business intelligence, search, collaboration and traditional information management tools.  These tools are giving us much more flexibility in the way we build skill-sets in IT.  On the point of off-shoring/outsourcing, we assume we have done it all, but, in fact, there are new innovative deal structures still out there, particularly around multi-sourcing, that can and will make IT organisations (and other functions) more successful.  Finally, technology is creating new business models, and this is demanding new ways to align with the business - just think of the recent internet acquisitions - with social net communities being a good example.

Can you share with us the changes you foresee in enterprise IT, and characterise how these changes will affect IT organisations?
Martin Warner: The first question goes some way to answering this and I would argue that a sea-change in IT will come from a number of key distinct areas:
  1. In the way CIOs manage IT - the market is, ironically, called 'IT Management' - and we are seeing management disciplines converging at a rapid rate, such as service management, asset management, portfolio management to name a few.  Through IT's evolution we are getting smarter about IT processes and about the decisions we need to make. The software community (HP, IBM, CA et al.) is buying up companies at an incredible rate in order to create the next integrated management suite for IT organisations. This will lead to smarter processes, eventually different skill-sets and cheaper, more effective technology. We (BearingPoint), internally, have taken our 10-15 years' experience across these management disciplines and evolved our thinking and solutions to help customers take advantage of this change.
  2. There is a need for approaches to reduce IT complexity; we are now seeing greater adoption of portfolio management solutions that will help create structured visibility, help to drive rationalisation across the IT infrastructure, and much more.
  3. Another big bang is happening in the quest to manage information. I call this the race for information intelligence and there are pragmatic steps CIOs can take now to ensure they make smart decisions across information management and reporting platforms. 
We are witnessing a significant convergence wave across a number of key areas in IT that will see IT organisations refocus their resources, get smarter with skill-sets and become leaner in delivering more productivity. The next big wave in IT is here.

Michel Savoie: The question for most CIOs is, "what shall I do that will increases productivity, that ensures sustainability, improves customer experience (or doesn't hurt it) and can be done without risk?" This is not trivial, as in most complex IT organisations decisions are often made in trade-off situations. Balancing service with a major application upgrade requires trade-off acceptance, as does undergoing significant transformation or restructuring, such as outsourcing, requires clear critical path management and a solid understanding of the IT portfolio. On many occasions I've seen spreadsheet reports summarising change for the CIO, and later it is found that there were unforeseen risks in that portfolio. We are going to see project portfolio management solutions adopt at a great pace, as it is a consistent way to manage effective change and investment prioritisation.

Is it an open secret that the whole IT industry has to undergo a transformation, both CIOs and consultants alike?
Martin Warner: I think it is a tightly correlated problem and solution. IT (along with other functions) has to evolve - processes mature and normally fuse with the environment. As an example, most IT architects realise that service management processes require integration with asset management data and tools in order to deliver effective services. Many processes in enterprise IT are getting smarter through integrated thinking that used to be siloed. As IT becomes more competitive, there is greater demand to evidence this evolution. On the other side, the software companies have figured out that there is a universal data model and that this new management suite has many similarities to ERP and have begun, and are some considerable way into, converging their applications, and in the process buying up IT companies that hold pieces of the puzzle.

What does the CIO need to do to take advantage of this change?
Michel Savoie:
We still think of enterprise architecture, but we must also look at a key subset: the IT management architecture, and make conscious decisions around the integrated suite of processes and technologies. This re-examination and forward planning with the software gorillas (large enterprise software companies) will enable smart integration decisions that will relieve considerable risk and cost. Also, picking a strategic vendor that has the right integration strategy and most of the components will help unlock automation benefits, and enable eventual simplification in the IT skill-set. 

Martin Warner:
It's about identifying the right opportunities and determining the level of risk over a specific timeframe. IT is investing and most CIOs are taking small risks like service-oriented architecture; CIO's want to see evidence before committing their strategy. Indeed, the CIO has to take calculated risk - it's a risk vs. reward game. I personally believe what I hear: most CIOs talk about making pragmatic and relevant decisions, and ones that can be measured incrementally. This is a good outlook. If the CIO is seeking a competitive advantage, then it is about short time-to-market, increased investment, high due diligence and accelerating technology innovation. I am seeing greater appetite for game-changing attitudes to take full advantage of this change; it will take effective and tight collaboration between the customer, supplier and vendor, combining the very best intellectual property, skills and technology. 

What is the timing of these changes and when should we see the market fully adopt them?
Martin Warner: In the next three years, we will see technology innovation take a jump forward across IT management, IT security, information intelligence, mobility and across new innovative business applications using service and web-oriented architectures. We are starting see IT organisations adopt, but they need more from the technology. I believe our role is to make the end solution successful and accelerate success through this adoption. We are doing just that.

There is a lot of talk in the industry about how consulting organisations will continue to differentiate themselves. What is BearingPoint doing differently in the IT solutions space?
Michel Savoie:
We have been investing in innovation from a number of perspectives. For example, we created the BearingPoint Institute for Executive Insight, which seeks to understand the issues faced by leaders and determine solutions across all C-level functions. We have invested in innovative leaders and consultants alike. We have transformed our view of value to the CIO. Taking advantage of our existing IP and many years of experience, we have researched and proved how to help CIOs take the next leap across a number of key areas in IT.
Martin Warner: In the last two years we took the UK as one of the hothouses for innovation, and decided to fundamentally re-examine our technology solutions. We had to look from the inside out to determine how we could innovate and differentiate ourselves. An example is our IT management framework that is built on solid experience in areas such as service management, asset management, and many others. We created the next generation of IT management processes and architecture to help CIOs manage their IT organisations better.

How did BearingPoint arrive at its conclusions and when did it become apparent that new IT innovation was needed?
Michel Savoie: We are always testing ourselves, but large waves of change happen only every 10 to 20 years in IT. I am excited to say that we have developed great solutions for our clients through harnessing this wave of innovation.

Martin Warner: There is a saying: you have to keep running to stand still. It is a competitive market out there and we must have the best solutions on the market. Michel said it best; it is about constant re-examination.

What countries are accelerating their adoption of IT innovation?
Michel Savoie: This is a great question. EMEA is a funny territory with regard to adoption and market forces; it is different for every country. So my simple answer is this: they are all innovating and there are some consistencies. We still see innovative sourcing and cost efficiency initiatives across EMEA. We see lots of interest for portfolio management in most of EMEA. There is a lot of focus on integration and a real thirst for information intelligence everywhere.  As we look at traditional infrastructure management, most countries have varying levels of maturity.

How does this innovation get packaged? Is it up to the customer to recognise the need, or is it proactively led by software or consulting companies?
Martin Warner:
I believe it has always been all three and will continue to be that way.  For us, on the outside looking in, it is about having trusted relationships, ideas that are worth distracting a CIO away from the day to day pressures, and conveying solutions that inspire and that can be delivered on. 

Can CIOs do it alone? Can they successfully transform themselves without outside help?
Michel Savoie: There are some great CIOs and some great IT organisations, but given the complexity, there is a need for the projects to use outside help. It comes down to understanding who to get the right value from.

What will the market look like in 3 years time? And, of course, where will BearingPoint be in this timeframe?
Martin Warner:
The enterprise IT market will have undergone most of its consolidation and there will be much more (but not complete) integration in the IT management software suite. Two to three software gorillas will offer a new ERP system, this time for IT, and will dominate the market. CIOs will re-examine the skill-sets required to manage the infrastructure of their organisation and, once again, we will see increased simplification and efficiencies across IT management.
Mobility will force a true re-examination of firms' facilities costs, as max-bandwidth will be available for everyone. The birth of the super-PDA will arrive, causing us to re-consider how we interact in our everyday roles.
Corporations will have even more complexity, and even more opportunities across the web, and we will rely more on unstructured approaches for receiving information.  We will see more intelligent information/search and reporting tools available - and this you will be receiving on your PDA!
Michel Savoie: We will be right at the centre of this transformation across IT management, information intelligence, mobility and much more.

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