CIPSA CONFERENCE
Telecommunications, Mobility and Technology
Name: Ian Woollett, Managing Partner, CDRU
Costs Down Revenue Up
Date:
28th May 2013
Leading global excellence in procurement and supply
Practical Approach : Clients Engaged
Leading global excellence in procurement and supply
ICT Market Disruption = Category Opportunity
Leading global excellence in procurement and supply
ICT Procurement in the Enterprise
Enterprise storage is increasing, about
45% per year or doubling every 18
months. Demand Mgt, & active storage
management required.
The worldwide enterprise Cloud-based services market
will grow from $US18.3 billion in 2012 to $US21.9bn in
2017. Cloud is destabilising purchasing models.
80% of Australian Enterprise clients choosing the
Apple iPhone for corporate use with increasing
MDM take-up rates.
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ICT IS ‘CORE’ TO ALL BUSINESS
Australia &
Asia
M&A /
Diverstiture
Activity
Everything as a Service
Mobile Data explosion,
decline in fixed line
services
Consolidation, review of
ICT balance sheet
Government
Mandates
Reduced ICT costs – a
move from provider to
broker and manager
Demand
Management
Strong Case
For ICT
Category
Management
Technology &
Business Model
Changes
Disruptive Cloud
Fixed Access
ICT Competence, core to every business – Commercial cleverness, demand management, flexibility in ICT
sourcing and contractual approaches are needed as ICT local & global market is moving at record pace
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ICT Procurement Challenges & Opportunities
Every day 2.5 quintillion (2.5×1018)
bytes of data created.
Cloud market is expected to grow from $77B in 2010 to
$210B in 2016. This growth relies on stable networks.
Consumerisation of IT – employees using
devices and applications for both business
and personal use.
iPhone 5S Remodelled Hardware Hints at
Fingerprint-Scanning Technology. Increasing
focus on data security in purchasing decisions.
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SOURCING APPROACHES
Request For Solution based approach with suppliers, focused on business outcomes, steps below circa 3-5 months before
establishing to ongoing category management
Typical Process
Discovery
ICT Strategy & Architecture
• Objectives, outcomes, KPI
dates
• Strategic alignment
• Enterprise Architecture,
Current, Future States & GapMapping
Market Benchmarks
• FTE, Infrastructure $ per seat
• Telco Carriage & Access
• Managed services, voice etc
Current State Assessment
IT Strategic Plan
Solutions & Sourcing
Transition & Transformation
Business Requirements &
Supplier Response
Frameworks
Sourcing to A Strategy
• Confirm market instruments
• Probity & go-to-market
• Target desired outcome targets
Strategic Vendor
Management
•
•
•
•
Category Management – Telco & IT
Service requirements and scorecard
Performance management framework
Continual Improvement – remove reliance
on benchmark
• Move from product – to total spend regime
Options & Sensitivity
• Evaluation on agreed TCO baseline
• Risk Models – Supplier/Technology Assessments
Future State Architectures
IT Services Catalogue
Key
Business Case & Roadmap
RFx/RFS
IT Services Cost Baselines
Supplier
Solution Briefing
Docs
Deliverables
Inputs
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ENTERPRISE MOBILITY MANAGEMENT
Definition
•
Enterprise Mobility Management (EMM) is the collection of people, processes and technologies for managing mobile and tablet
devices and related services to enable use of mobile computing for the business.
W h e r e A r e W e To d a y ?
•
EMM is an emerging discipline within the enterprise that has become increasingly important over the past few years as more
workers are using and have brought smartphone and tablet computing devices and have sought support for using these devices
in the workplace.
•
The original software for Mobile Device Management (MDM) has evolved from a simple software solution to control a mobile
device into a sophisticated platform for enabling the enterprise to deliver applications and mobile tools to their workforce.
•
EMM is being delivered either as SaaS or as a traditional on-premise solution
Tre n d s
•
BYOD is becoming more prevalent as a strategy, but
•
Employees are becoming more resistant to installing an MDM agent on their personal devices
•
There is no clear market leader in the software arena, and service providers are immature
•
Independence from Telco carriers is an important decision, adopt independence or not ?
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TELECOM EXPENSE MANAGEMENT (TEM)
Definition
•
Telecom Expense management refers to the systems deployed by a business to process, pay, and audit employee-initiated
expenses. Expense management includes the policies and procedures which govern such spending, as well as the technologies
and services utilized to process and analyse the data associated with it.
•
Many research organizations like Gartner, Forrester and Aberdeen have mentioned in their reports that Telecommunications is
the second largest non operating expense for most enterprises. But Telecom Expense Management is often overlooked, if
followed diligently it can benefit organisations with more than 30% cost savings. Statistical analysis have often pointed out that
telecommunications companies have more than 25% error on monthly bills which they send to their customers.
W h e r e A r e W e To d a y ?
•
TEM software is mainly being used for expense allocations, but not for expense management
•
TEM software is maturing and allows customised reporting, but must be fully integrated into the complete lifecycle of
telecommunications to be effective
•
All the carriers are offering “partners” to provide TEM solutions, however, these partners do not have an incentive to decrease
telecommunications costs and instead provide more of a reporting tool
Tre n d s ?
•
Many companies are implementing TEM software with the mistaken belief that it is a panacea for
controlling run-away costs in the telecommunications category.
•
TEM and MDM solutions are starting to overlap, with TEM solutions beginning to offer real-time tracking of mobile usage &
costs. This real-time tracking offers facilities such as controlling roaming usage, end-user alerts, real-time tracking of device.
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CASE STUDY: CDRU delivering its promise to APA Group
Challenge:
APA Group (APA) is Australia’s largest natural gas infrastructure business, owning
and/or operating approximately $12 billion of energy infrastructure assets.
To support APA’s business a strategic ICT initiative was undertaken to begin a path
of understanding expenditure levels in Telecommunications and looking at
optimisation of this core category.
Solution:
Using CDRU’s UPS process (Understanding, Solutioning, Proposing) sourcing process APA
mapped out the practical steps to be performed over a 6 month period
An additional 3 months to finalise contracts and initiate vendor transition was required.
“We appointed CDRU as our strategic sourcing partner across Information Technology and Telecommunications, with an APA
‘option’ to move into supplier transition, should sourcing meet its stated outcomes. Their fees were aligned to agreed timeframes
and generating real savings, whilst building new strategic networks for us”
APA’s General Manager Group IT Bill Fazl.
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CASE STUDY: CDRU delivering its promise to APA Group
Results/Benefits
•
•
•
•
•
•
Significant network improvements, with single points of failure removed
Improved Quality of Service, better quality and increased bandwidth across key sites
Double Digit operational cost reduction, year one and beyond
Achievement of 160% of the savings target set at the initiation of the engagement
Additional funds are now available for future strategic enablement projects,
Re-investment in increased mobility initiatives and video conferencing underway .
“We appointed CDRU as our strategic sourcing partner across Information Technology and Telecommunications, with an APA
‘option’ to move into supplier transition, should sourcing meet its stated outcomes. Their fees were aligned to agreed timeframes
and generating real savings, whilst building new strategic networks for us”
APA’s General Manager Group IT Bill Fazl.
Leading global excellence in procurement and supply
CASE STUDY: CDRU’s Strategic Sourcing Partnership with InvoCare
Challenge:
Solution:
As the APAC market-leading funeral services provider, InvoCare has taken the lead in introducing a new way of
interacting with it’s customers and the friends and family of the deceased by implementing a customer-centric
‘Digital Business’ strategy and capabilities.
Traditionally, technology expenditure is not a core business function and is generally viewed as a business cost.
They required a Strategic Sourcing initiative aimed at realising tangible cost savings to support the
implementation of its Digital Business strategy.
Using CDRU’s UPS process (Understanding, Solutioning, Proposing) process mapped out the
practical steps to be achieved. Three (3) core areas were identified , IT infrastructure,
Telecommunications and Print/Copy were immediate savings could be achieved.
“We appointed CDRU as our Strategic Sourcing partner across our telecommunications, infrastructure maintenance and printing
supply arrangements as they had a track record of aligning their fees against tangible savings delivered.. We are all very pleased
with what the CDRU and InvoCare ‘One Team’ has achieved. We had no appetite for an ICT-centric engagement. What we wanted
was to deliver a great result for our business as a whole, and the results speak for themselves.”
InvoCare’s Chief Information Officer Andi Luiskandl
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CASE STUDY: CDRU’s Strategic Sourcing Partnership with InvoCare
Results/Benefits
• Renewed supplier arrangement that deliver an overall reduction in ICT operating expenditure of
over 20+% with the bulk of the cost savings (and supplier loyalty funds) flowing straight
through to line of business P&L.
• This made a real difference to the overall profitability of individual funeral homes, cemeteries
and crematoria, and to the InvoCare business as a whole, rather than being confined to ICT
• The CDRU and InvoCare team achieved 152% of the saving target, within agreed timeframes
set at the initiation of the engagement
• Delivered cost savings that are not contingent on transitioning to new products and services
and was performed with existing incumbent suppliers only
“We appointed CDRU as our Strategic Sourcing partner across our telecommunications, infrastructure maintenance and printing
supply arrangements as they had a track record of aligning their fees against tangible savings delivered.. We are all very pleased
with what the CDRU and InvoCare ‘One Team’ has achieved. We had no appetite for an ICT-centric engagement. What we wanted
was to deliver a great result for our business as a whole, and the results speak for themselves.”
InvoCare’s Chief Information Officer Andi Luiskandl
Leading global excellence in procurement and supply
13% - 20% CONTRACT LEAKAGE IMPROVEMENT
Case Study – Typical ICT Supplier Assessment
Review of key ICT supply contracts ; typical spend ~$100 million in annual expenditure ; expected outcomes from, financial, commercial,
and supplier strategy and relationship analysis. Discovery 3-4 months ; Implementation 12+ months
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MARKET ICT LEARNING
1. Cloud services & vendor selling practices target business units, not centralised ICT functions – 60/40%.
Effective supplier categorisation/consolidation following the spend visibility analytics baseline
Lack of Spend
Baseline Visibility
2. TEM & SAM Software available , need significant ongoing interpretation of reports to make sense
Software just a tool, Asset Lifecycle Management Process and People resources needed.
3. Know what the actual software usage across your business is, as ‘over or under’ licence a problem
Constant liability/threat of supplier audit teams in the ‘tough’ times, beware hidden claims
CLOUD actually
delivering value when
using TCO :
1. Use TCO : 30-50%+ savings resulting from IPTEL/ PABX ( in cloud ), rather than Traditional on-premise owned
2. Capital avoidance and general move to Opex for many organisations is occurring
3. IaaS / PaaS still immature as a market in Australia
Results/Benefits
• Watch out for punitive complex contracts, allocate greater proportion to legal costs than normal
• 20% + above in savings if a sourcing and category management process implemented
• Telecommunications a constant provider of savings opportunities, as services evolve so rapidly
A Category Mgt KPI – % increase needed in suppliers that are performance managed, very low base today.
“ICT as a market is undergoing massive global and unprecedented change, the old rules are not working and enterprises are
having to re-think ICT category Management”
Leading global excellence in procurement and supply