Tom Honan knows his blades from his non-blade servers, the difference between consolidation and virtualisation, the benefits of commoditisation, the risks of consumerisation and personalisation, and the importance of embracing green technology. The chief financial officer of Computershare knows the numbers - in units and dollars - spent on, and saved by, adopting new hardware-based technologies and trends. (Honan starts as CFO at Transurban this month.) Village Roadshow chief financial officer Julie Raffe, on the other hand, may not be able to spot a blade server at 10 paces, but she is well abreast of hardware technologies and trends. Like Computershare's Honan, she knows the details of her company's adoption and implementation of the latest hardware, keeps a close eye on progress and is happy with the results.
"CFOs have to be ICT [information and communication technology] literate and up to date on the latest trends and technologies in all areas," Honan says - and that means hardware, software, communications and services. "Otherwise, how can we work closely with the chief information officer, report effectively and responsibly to the chief executive and the board, and ensure the company is operating effectively, efficiently and can grow?"
Topping the list of hardware trends and technologies for at least the next three years are green ICT; virtualisation and consolidation; commoditisation; consumerisation and personalisation; and other esoteric goodies, such as fabric computing, storage-as-a-service, and three-dimensional printing, modelling, prototyping, faxing and scanning.
Green ICT focuses on the "three Rs" - reducing, reusing and recycling - of desktops and laptops, monitors, servers, fixed-line and mobile telecommunications, printers, and local area networks and office communications.
The best results have been on the desktop, followed by servers in data centres.
Virtualisation means decoupling software from hardware and making components more interchangeable. It improves ICT resource use and capacity, reduces costs and unit numbers, and increases flexibility and resilience in the face of changing requirements and workloads. It is particularly effective in reducing server numbers: one physical unit can commonly convert to as many as 10 virtual machines.
"Hardware's future is virtualised," the managing vice-president for global hardware teams for Gartner, Matt Boon, says.
Fabric computing is the evolution of server design beyond today's blade servers. It enables as many as 32 blades or processors to be merged over a fabric, or network, to operate as a large single system that can be configured to suit an organisation's needs. Optimal results occur in combination with consolidation and virtualisation.
Commoditisation refers to the trend of treating what once was a strategic enterprise-wide acquisition as a commodity, making it sensitive to return on investment and total cost of ownership. This has focused on desktops, laptops, mobile and handheld devices, telephones and printers, and the trend will continue as prices fall and markets become saturated.
"Commoditisation is beneficial for ICT user organisations, as it enables them to reliably buy products from different vendors over time, yet have those products function the same," Boon says. "Each hardware segment is at a different stage of commoditisation. Desktops are nearly commodity products, laptops are not quite there yet, and servers and storage devices are fast heading that way."
Consumerisation and personalisation is ICT marketing-speak for the incorporation of consumer devices into the corporate world. For hardware, it refers to users being able to buy whatever devices they like or need from whomever they want, whenever they want. They then personalise these to their specific needs, and use them whenever and wherever they want.
Of these hardware technologies and trends, the two that are grabbing CFOs' attention are green ICT and virtualisation. Boon says that's not a surprise. They are "most closely tied to user organisations' current and ongoing challenges of doing more with less, better managing assets, improving agility and flexibility, and cutting operational costs".
In the thick of it
Computershare has made strides in implementing new server technology and virtualisation. Its server-based virtualisation program began in North America (which accounts for half the company's business) three years ago, is well under way in Europe and has begun in Australia. "We didn't take a softly, softly approach to the adoption and implementation," Honan says. "We jumped in, boots and all. So far, we have reduced our server numbers in the US from 1200 to 100 and, therefore, [have reduced] our data centre needs and costs, while increasing our server and storage capacity and scalability. We expect similar results in Europe and Australia."
The virtualisation program has had a marked affect on Computershare's ICT requirements and has made its ICT environment greener. "Virtualisation is revolutionary," Honan says. "All our ICT requirements have changed. We need less space and less power. We have different costs, skill sets and planning styles."
The decision to implement virtualisation technologies was done for business reasons and any green benefits were an added bonus, he says. "The decision was done to enable us to grow and cope with growth," he says.
Honan says the move has also changed Computershare's ICT procurement process for the better. "We no longer have to deal with lumpy amounts of capital on a monthly basis," he says. "Although the total amount is larger, it is now annual and can be better planned for."
Village Roadshow has also been busy adopting and implementing new server, storage and virtualisation technologies, with significant positive results. "[These] have been a major area of focus," Raffe says.
After introducing the changes last year, the company was able to "close one of our largest data centres and relocate systems to a company-located facility with one of our network providers".
Computershare and Village have also embraced green ICT. Honan says his company is well into a green review and change program. "We have plans to replace monitors with flat screens, introduce power management systems, decommission unused equipment, and review our printing systems, needs and use," he says. "We are further reviewing our data centre requirements, reviewing e-waste levels and disposal, reviewing the greenness of our suppliers and evaluating how our staff can be technologically greener."
Computershare has a green ICT manager and Raffe says Village has a corporate social responsibility manager, whose ambit covers more than just greening ICT. She says this manager works on sustainable ICT and business goals companywide.
"This role is instrumental in facilitating the discussion and ensuring the challenge is carried across our group to ensure all areas continue to be focused," she says.
"New policies and procedures have been introduced, and projects are under way to introduce appropriate changes to many aspects of our diverse business. We see real commercial benefits [in going green]."
Server virtualisation and green ICT are not the only new hardware technologies and trends Computershare and Village have adopted and implemented. Honan says Computershare plans to extend its virtualisation program to other ICT areas. For example, the company is evaluating the replacement of a large number of its desktops with dumb terminals or flat screens.
Raffe says the results of the server virtualisation program at Village have been so positive that the company has extended it to provide solutions for development, test and production systems. She says the company has also outsourced its printer management (improving printer use, saving costs and reducing resources), and adopted the latest imaging, archiving, video conferencing and collaborative technologies.
Neither organisation has adopted consumerisation or personalisation. Honan and Raffe say security risk is the main reason for not allowing staff to do their own thing with hardware. Both have centralised ICT purchasing, and company-bought commodity-style devices are provided for staff outside their main ICT capital budgets. "If an employee wants to work offsite, either at home or on the road, we will provide them with the tools, and manage their ability to connect to our systems," Honan says, echoing Raffe's position.
While Honan, Raffe and other finance and information chiefs may be fighting against ICT consumerisation and personalisation in the workplace, Gartner's research vice-president for desktops, laptops and handheld devices, Leslie Fiering, believes they're fighting a losing battle. "Consumerisation and personalisation are unavoidable," the US-based Fiering told executive-level delegates at the 2007 Gartner Symposium in Sydney last November. "Hardware is as diverse as your users and will continue to be so. Accept [consumerisation and personalisation] and move on."
Adopting any trend or technology is risky, says Gartner's US-based vice-president and global analyst for enterprise architecture, Betsy Burton. The degree of risk can vary, and it is lower - and easier to calculate - for technologies and trends aimed at operational rather than transformational needs.
Honan and Raffe know the risks, but say the benefits have so far been greater. "[Our decisions] have strategic and operational benefits," Raffe says. "By continuing to invest in the latest hardware technologies, we [the CFO and CIO] ensure that the company can keep functioning and growing."
Beware the pitfalls
The research vice-president and global analyst for enterprise architecture at Gartner, Betsy Burton, says
business cases for investments in emerging technologies mostly will fail if they:
- Focus solely on technology, rather than on the changes needed to be made in business processes and personnel to realise the benefits.
- Have little or no involvement with or commitment from stakeholders.
- Do not quantify all potential short- and long-term benefits, identify who will achieve them and specify how they will be measured.
- Are not aligned with corporate plans, objectives and strategies.
- Ignore the main risks and how they will be mitigated.
- Are not documented clearly and credibly.
- Are not used to rethink the value streams being created.
- Burton also advises that before any investment in new technologies is made, chief information officers and chief financial officers must identify external market forces, business objectives, business opportunities and threats.
- Then, she says, senior decision-makers must clearly define an ICT response based on several factors, including: future requirements; the culture of the business; its operating and delivery models; funding; and organisational skills and competencies.
- Burton also advises that a new technology should be adopted only if it will improve the running of a business or successfully expand and/or transform it. CFO Australia
Fairfax Business Media
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