Dana Gardner's BriefingsDirect: Jul 29, 2012

Tuesday, July 31, 2012

For Steria, cloud not so much a technology as catalyst to responsive and agile business

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

The next edition of the HP Discover Performance podcast series brings together a top HP cloud evangelist and a leading-edge adopter of improved IT service delivery for a major European business services provider, Steria.

We're joined by our co-host, Chief Evangelist at HP, Paul Muller, and Jean-Michel Gatelais, IT Service Management (ITSM) Solution Manager at Steria, based near Paris.

In this series, we're focusing on how IT leaders are improving performance of their services to deliver better experiences and payoffs for businesses and end-users alike. The discussion is co-hosted and moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Gardner: We have a fascinating show today, because we are going to learn about how a prominent European IT-enabled business services provider, Steria, is leveraging cloud services to manage complexity and deliver better services to customers.

Paul, is that what you are finding -- that the cloud model is starting to impact this whole notion of effective performance across services in total?

Muller: This is a conversation I've been having a lot lately. The word "cloud" gets thrown around a lot, but when I drill into the topic, I find that customers are really talking about services and integrating different services, whether they are on-premises, in the public cloud arena, or even that gray land, which is called outsourcing. [Follow Paul on Twitter.]

It's the ability to integrate those different supply models -- internal, external, publicly sourced cloud services -- that really differentiate some of the more forward-leaning organizations from those who are still trying to come to grips with what it means to adopt a cloud service.

Business opportunity

We've all come to realize that cloud isn’t so much a technology issue, as it is a business opportunity. It’s an opportunity to improve agility and responsiveness, while also increasing flexibility of cost models, which is incredibly important, especially given the uncertain economic outlook that not only different countries have, but even different segments within different countries.

Take something like the minerals and resources areas within my own country, which are booming right now. Whereas, if you look at other areas of business, perhaps media, or particularly print media, right now, they're going through the opposite type of revolution. They're trying to work out how to adjust their cost to declining demand.

Gardner: With that, let’s move on to our guest. He's been a leading edge adopter for improving IT service delivery for many years, most recently as the IT Service Management (ITSM) Solution Manager at Steria, based near Paris. Please join me in welcoming Jean-Michel Gatelais.

Gatelais: Thank you very much. At Steria, I'm in charge of the Central ITSM Solution we provide for our customers, and I am in-charge of the Global ITSM Program Roadmap, including the ongoing integration from ServiceCenter 6 to Service Manager 9. I'm also responsible for the quality of service that we deliver with this solution, and of the transition of new customers on this platform.

Steria is an IT service provider. We are about a little more than 40 years old. Our business is mainly in system integration, application management, business process outsourcing, and infrastructure management services.

We have big customers in all sectors of industry and services, such as public sector, banking, industry, telecom, and so on. We have customers both in France and UK mainly, but in the whole of Europe also. For example, we have British Telecom, Orange, and the public sector in the UK, with police, etc.

Gardner: What’s different now about IT service delivery than just say few years ago?

Gatelais: It has changed a lot. In fact, few years ago it was something that was very atomic, with different processes and with people running the service with different tools. About three to five years ago, people began to homogenize the processes to run the service, and we saw that in Steria.

In Steria, we bought some companies and we grew. We needed to establish common processes to proceed by a common platform, and that what’s what we did with Service Manager. Now, the way we deliver service is much more mature for all the processes and for the ITSM processes.

Muller: The desire to standardize processes is a really big driver for organizations as they look to improve efficiency and effectiveness. So it's very similar what we're seeing. In fact, I was going to ask Jean-Michel a question. When you talk about homogenizing processes or improving consistently, how does that help the organization? How does that help Steria and its customers perform better?

IT provider

Gatelais: This allows us to deliver the service, whatever the location or organization, because we're an IT provider. We provide services for our customers that can be offshore, nearshore, in Steria local premises, and even in the plant premises. All the common processes and the solution allow us to do to this independently of the customer. Today with this process, we're able to run services for more than 200 customers.

Gardner: I see among your services that you are delivering cloud Workplace on Command, for example, Infrastructure On Command. Is this a bigger part of your business now? Do you find that servicing your cloud customers is dominating some of your strategic thinking?
We have an industrialized solution, allowing our customers to order infrastructure in a couple of minutes.

Gatelais: Yes. Actually, it’s growing day after day. We launched our cloud offering about 18 months ago. Now we can say that we have an industrialized solution, allowing our customers to order infrastructure in a couple of minutes. And this is really integrated with the whole service management solution and the underlying infrastructure.

Gardner: I suppose this gets to this self-service mentality that we are seeing, Paul. End users are seeking a self-service type of approach. They know that they can get services quite easily through a variety of consumer-based means. They're looking for similar choice and enablement in their business dealings.

It seems that an organization like Steria is at the forefront of attracting that sense of enablement and empowerment and then delivering it through a cloud infrastructure. They're interesting on two levels: one, they're delivering cloud and enablement, but they are also using cloud to power their own ability to do so.

Muller: We see almost a contradiction within enterprise users of cloud. We see groups that will quite readily go out and adopt cloud services. The so-called consumerization trend is quite prevalent, especially with what I would describe as simple services. For example, office automation tools, collaboration tools, etc.

Yet, simultaneously, we see reluctance sometimes, particularly for the IT organization, to let go and cloud source services and applications. I sometimes refer to them as "application huggers" or "server huggers."

Relinquish control

In other words, if they can’t see it or touch it, they're reluctant to relinquish control. The most fascinating part for me is that you can often find those two behaviors inside the very same organization. Sometimes, the same person can have diametrically opposed views about the respective merits of those two approaches.

Gardner: Are you selling and delivering cloud services to the IT department or others? Maybe we could call that shadow IT, Jean-Michel?

Gatelais: We do both. In fact, the cloud today is used both for internal organizations and also for our customers. Then, the cloud offering set-up asks to study a business model to study the way we will sell such service. For us, at the central level at Steria, there is no difference between internal delivery and delivery for our customers.

In fact, what we're trying to do is to standardize, as much as possible, the basic offering we propose. On top of that, we have additional requests from our customers. Then, we try to adapt our offering to the specific request.
Providing infrastructure services is not so difficult, but providing platform-as-a-service (PaaS) features can be.

Providing infrastructure services is not so difficult, but providing platform-as-a-service (PaaS) features can be. Even software as a service (SaaS) can be simpler than PaaS, because you provide some package services, startup services, instead for platform services. It’s very consumer specific.

Gardner: So you have the opportunity to go with a fairly standardized approach, but then you can customize on top of that. I'd like to hear some more about your different services. I understand that there’s something called Steria Advanced Remote Services or STARS. How does that fit into the mix, Jean-Michel?

Gatelais: STARS is the ITSM platform Steria rolled out about five years ago, and today this is a framework. It's mainly based on HP products, because it's running on HP Service Manager online, Business Service Manager (BSM), and Operations Orchestration.

We see this platform as a service-enabler, both service-support platform and the service-enabler, because we use it to manage and activate the services we propose to our customer, including cloud services, security services, and our new offering, Workplace On Command services.

STARS is the solution to manage value-added services Steria is offering to its customers.

Muller: When a customer thinks about taking services that maybe they used to run internally and moving those services to Steria, how important is it for them to maintain visibility and control, as they are thinking about moving to cloud?

Depends on the customers

Gatelais: It depends on the customers. You have some customers that are ready to use the services you provide on a common environment, but you also have customers requiring more specific solutions that we can give to them. Steria is developing some facilities to roll out and to instantiate the platforms for dedicated environments.

For example, the STARS solution, with Service Manager in the solution, we can deploy it, instantiate it, when the customer requires it.

Muller: Just following on from that, there's a perception that when you move to cloud services, people don’t really care about visibility, metrics, and service-level reports, because that’s all part of the service-level agreement (SLA). Do you find that customers actually want to see, how their service is performing -- what's the availability and level of security? Do they look for that level of reporting from you?

Gatelais: It depends on the customers. Some are really outsourcing the services. They would only complain if they met some problems on the services.

But other customers want to have the visibility on the quality of service that is delivered by Steria. That means that we need to be able to publish the SLA we have for our offering, but also to publish monthly, for example, the key performance indicators (KPIs) of this platform.
It’s the KPI discussion that is of such great interest to enterprises today.

Muller: And that is certainly a perfect question, because, Dana, it’s the KPI discussion that is of such great interest to enterprises today.

Gardner: Right, and I'm impressed that Steria can manage this variety and be able to provide to each of these customers what they want on their own terms, which is, as you point out, is really what they're calling for.

For you as a provider, that must really amount to quite a bit of complexity. How do you get a handle on that ability to maintain your own profitability while dealing with this level of variability and the different KPIs and giving the visibility to them?

Gatelais: One of the advantages of the cloud structure is that you have to ask these questions in advance. That means that when Steria is designing a new offering, we first design the business model. In fact, that will allow us either to propose some shared services, or for the client that has requested it, some visibility to the services, but based on standard platforms. We try to remain standard in what we propose, and the flexibility is in the configuration of what we propose.

We provide the KPIs that are published for the service offering. This will include such information as service availability rates, outage problems, change management, and also activity reporting.

Strategic decisions

Gardner: Do you have any examples?

Gatelais: Yes. The example I can give is the flexibility the service offering can give to the customers in the software development area.

For example, it allows you to set up some development platforms for a limited period of time, allowing product development. With the service we offer, when the project is finished and you enter into the application management mode, the plant is able to say, "I stopped the server." It's backed up, and if six months later the customer wants to develop a new release of this software, then we would restore his environment. In the meantime, he won't have the use of the platform, but he'll be able to continue his development. This is very flexible.
The notion of tying all of that capital equipment up and leaving it idle for that period of time is simply not tenable.

Muller: The interesting part is that the development and test process is such a resource-intensive process, while you are in the middle of that process. But the minute you are done with it, you go from being almost 100 percent busy and consuming 100 percent of the resources, to, in some cases, doing nothing, as Jean-Michel said, for months, possibly, even years, depending on the nature of the project.

The notion of tying all of that capital equipment up and leaving it idle for that period of time is simply not tenable. The idea of moving all of that into a flex up-flex down model is probably one of the single most commonly pursued use cases for both public and private cloud today.

The other one, as Jean-Michel has already spoken to, is that the idea of more discrete services, particularly that of helpdesk, is just going crazy in terms of adoption by customers.

Gardner: One of the things I am seeing is some of the vision in terms of cloud a few years ago was that one size would fit all, or that it’s cookie cutter, and that there won’t be a need for high variability. But I think what we are actually seeing in practice, and Jean-Michel is certainly highlighting this, is that the KPIs are going to be different for organizations.

There are going to be different requirements for public and private, large and small, jurisdiction by jurisdiction, regulation and compliance. You really need to be able to have the flexibility, not just at the level of infrastructure, but at the level of the types of services, the way that they're built, invoiced, and measured and delivered.
They're interesting for small organizations, because they don’t have to heavily invest in solutions, and we're able to propose shared solutions.

Gatelais: The way we propose the services is they're interesting for small organizations, because they don’t have to heavily invest in solutions, and we're able to propose shared solutions. This is SaaS, this is cloud, and for them it’s very interesting, because it is much more cheaper.

Gardner: What do you advise others who would be pursuing a similar objective?

Gatelais: With such offerings you have to design and think much more than before, to think before running out your solution. You need to be clear on what you want to propose to what kind of customers, where is the market, and then to design your offering according to this. Then, build your business model according to those assumptions.

KPIs that matter

Muller: Right now, I've got a couple of metrics, a couple of KPIs, that matter to me really deeply. From your perspective, are there one or two KPIs that you're looking at at the moment that either make you really happy or that are a cause for concern for you, as you think about business and delivering your services. What are the KPIs that matter to you?

Gatelais: What is very difficult for new services is to evaluate the actual return on investment (ROI). You can establish a business model, a business plan to see if what you will do, you will make some profit with it, but it's much more difficult is to evaluate the ROI.

If I don’t buy this service, it would cost me an amount; if I buy this service, okay, it will cost the service fee, but what would I spend next to that. This is very difficult to measure.

It may be basic, but you should take the configuration management process. That is very important, even in cloud offerings. It's very difficult to make evident that if you do some configuration management, you will have higher a ROI than if you don’t do it.
It's very difficult to make evident that if you do some configuration management, you will have higher a ROI than if you don’t do it.

Today, even internally in Steria, it's much more difficult to get approval to develop and to improve configuration management, because people don’t see the interest, as you don’t sell it directly. It's just a medium to improve your service.

Muller: That’s such a good point. And Dana, it's one of the great benefits. This is going to sound a little bit like an infomercial, but it's worth stating. One of the reasons we've been moving so much of our own management software to the cloud is because it's behind the scenes. It's often seen as plumbing, and people are reluctant to invest often in infrastructure and plumbing, until it has proven its benefit.

It's one of the reasons we've moved to a more variable cost model, or at least have made it available for organizations who might want to dip their toe in the water and show some benefits before they invest more heavily over time.

Distinct line

Gardner: You're really starting to put in place the mechanisms for determining quite distinctly what the payoffs are from investments in IT at that critical business payoff level. So I think that’s a very interesting development in the market.

Muller: The transparency improves, and because you have a variable cost model, it lowers the pain threshold in terms of people being willing to experiment with an idea, see if it works, see if it has that payoff, that ROI. If it doesn’t, stop doing it, and if it does, do more of it. It's really, really very simple.

Gardner: Our audience can carry on this dialogue with Paul Muller through the Discover Performance Group on LinkedIn.

You can also gain more insights and gather more information on the best of IT performance management at www.hp.com/go/discoverperformance.