UK HEs must change view of IT to manage funding changes

Higher education institutions must change their view of IT departments if they are to effectively deal with huge funding changes, according to Ovum.

In a new report* the independent technology analyst states that HEs must view IT departments as a ‘strategic partner’ as they will play a critical role in enabling institutions to manage the turbulent times ahead.

Jessica Tsai, Ovum analyst and author of the report, said: “In the face of an uncertain future, HEs must view their IT department as an integral part of the institution’s overall business strategy, not just somewhere to turn when technology is not working.

“The student protests in 2010 highlighted the proposed dramatic increase in tuition fees and the decline in public funding for HEs. The increase in fees will have significant implications for the IT department and will put pressure on institutions to view technology as a valued partner.”

Under the new proposals, the basic tuition fee rate will increase from £3,290 to £6,000 and the cap has been raised to £9,000. In addition public funding has declined and was recently cut by 40 per cent from £7.1 billion

According to Tsai, the changes will boost adoption of technology services and solutions that increase efficiency and productivity. At the same time HE IT departments will be asked to scrutinise their solution portfolios, prioritise outstanding projects and renegotiate vendor contracts so the impact on them is significant.

“This means HEs must view their IT department as a key player in their ability to manage change, which will require a shift in attitudes. IT departments should also step up and voice their expertise and propose ideas and innovative solutions that can help address the challenges institutions are facing,” added Tsai.

-ENDS—

NOTES TO EDITORS

*As UK Higher Education’s Budget Goes Down, IT Steps Up

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

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“Organisational IT structures are often characterised by many different silo’ed teams of technical specialists,” says Roy Illsley, Senior Research Analyst with Butler Group and co-author of the report. “These silos often drive the technology selection process in organisations, which to a large extent is governed by the existing skills within the IT department. This approach has created tensions between the requirements of the business users, and the capabilities to manage the technology of the IT department. The result of this silo’ed approach is that IT resources are locked into technologies, and organisations face expensive retraining or new hiring cost if technologies new to the organisation are selected.”

Systems Management = Simplification

The market in Systems Management has evolved over recent years. The leading vendors have all integrated the ability to monitor and manage a variety of infrastructure components, from virtual servers to network switches, into their solutions. Systems Management tools are changing IT from being mainly reactive in its response, to being more proactive and business focused.

The new, more holistic approach to Systems Management is that of simplification, so that the IT department can manage the technology stack at a higher level, and therefore enable it to manage a wider range of technologies more efficiently.

Allocation of IT resources becomes a major factor in how IT departments are perceived

As IT becomes ever more ingrained in the organisation the need to be responsive to business demand in a controlled approach has increased in significance. In fact Butler Group believes that the approach to this problem will differentiate the good IT departments from the average.

In the current economic climate many organisations are facing a tightening of financial controls and spending, IT is not immune from this recession; a recent Butler Group survey found that 73% of respondents expect their IT budgets to be reduced or remain flat in 2008, as compared to 2007. With this more prudent approach the allocation of IT resources becomes a major factor in how IT departments are perceived.

Different approach required when it comes to managing infrastructure

In order for IT to perform this role a number of fundamental changes are required to its operation and its remit, and these must be endorsed by the executive management team.

Firstly the IT department must have envoys in the business units/departments who act as the eyes and ears of the IT department, while also representing the department/business unit when it comes to delivery of IT change. This dual role creates a tension that IT must exploit so that it can on the one hand collect the real significance and value of any change requested by the business unit/department, and on the other hand ensure that the requirements are in line with IT strategy. Obtaining this level of intelligence will allow IT to establish the impact on existing services, and cost the change accordingly.

Secondly, the IT department must act as the arbitrator, and not decision maker, in the prioritisation of business demand; to do this it must be the IT department’s role to chair a cross-departmental strategy meeting. This meeting should act as the control body where the decisions are made on which new changes are developed, and which services are of a greater importance than another.

Finally, the IT department must develop a strategy that is intrinsically linked to the business strategy; this is a critical shift for most organisations, as IT is not usually invited to the business strategy table. Butler Group contends that having a Chief Technology Officer (CTO) with the responsibility for IT strategy, and making some IT staff have dual reporting into the Chief Information Officer (CIO) and the CTO, provides not only the independence but also the separation required so that IT can play a significant role in the development and execution of business strategy.

Illsley concludes:

“Taking a holistic perspective to managing the organisation’s infrastructure requires a different approach and one which many IT organisations are not equipped to adopt. The concept of business-driven demand is not new – in fact IT has evolved based on this premise – however, currently the IT department responds to the department/business unit that either shouts the loudest, or has the capital to invest in new projects. It is our contention that the landscape is moving, and Chief Executive Officers (CEOs) are increasingly looking toward the CIO as the guardian of business process prioritisation; in other words the IT department is being asked to police the business units based on corporate prioritisation.”

“The need for new and enhanced service provision to support business requirements must drive infrastructure and technology deployment. A services-based approach is best suited to this environment to insulate developers and users from the complexity of the infrastructure, and to ease the integration of the different systems and communication mechanisms. There should be a move towards the provision of common integrated communication services, which are ideal for catering for a complex and distributed environment. Web services can also be utilised to mobilise information to all stakeholders”, says Mark Blowers, Enterprise Architectures Practice Director and co-author of the study.

“Moving away from proprietary solutions for voice and data to a horizontal communications architecture will enable the communications environment to be broken down into separate layers, making use of industry standards to integrate the hardware, common services, and administration elements. This componentisation and services-based approach increases flexibility, enabling services to be developed independent of the equipment. Using IP-based components instead of vendor-dependent solutions improves scalability, along with driving down infrastructure costs with price/performance optimisation.” 

Communications convergence is a key enabler for better collaboration

The term ‘convergence’ can be misleading. It is not a merger of voice and data networks, but the utilisation of the existing data, fixed, and wireless infrastructure for the provision of IP-based services, including voice, data, video, and storage. Within this all-encompassing environment one of the most important building blocks is the establishment of voice as an application. This fundamentally alters the communications paradigm, enabling the development and integration of many new innovative services.

The reach and range of business processes continues to increase as organisations extend and expand their interactions with partners, suppliers, and customers; and so the need to integrate geographically dispersed teams into complex business processes presents something of a challenge for the IT manager. Fax, e-mail, pager, SMS, Web conferencing, video conferencing, and conventional teleconferencing are all in use today, yet many business processes are still hampered by ineffective collaboration. Organisations must therefore re-examine their corporate communication and collaboration strategies in order to better support business activities and objectives.

“Communications play an important role in ensuring businesses function efficiently. It is therefore vital for systems to be effective and easy to use. Enterprises are concerned with both employee and customer satisfaction when deploying communication technologies and are looking to improve productivity through their IP and unified communications investments”, continues Blowers.

“There is pressure on the IT manager to provide enterprise presence functionality due to the availability of consumer instant messaging. Social networking techniques and Web 2.0 functionality used in the consumer environment will be demanded by the enterprise workforce, which will come to expect these new tools and technologies to be readily available at any location, as well as being able to use any device.”

Implementation costs, as well as security and reliability are important considerations within the unified communications environment

Although reliability and security are amongst the most important factors in investment decisions, the cost of implementation is the leading inhibitor. Whilst this is slightly more of a factor for small or medium-sized enterprises with tighter IT budgets, it is still an issue for a majority of the enterprises responding to a 2007 Datamonitor survey on Communications Convergence.

Another challenge is to securing the extended environment that most IT managers now need to support. There are many instances of successful attacks and loss of data, which includes finance companies and government agencies. The issue of security must be adequately addressed when contemplating utilising an IP-based environment. Whilst the introduction of voice and video on to the network presents new security worries, it does not, however, add any new vulnerability that did not previously exist.

Effective management is a key capability in the unified environment where policies must drive availability, and visibility moves from individual point solutions to being system wide, along with the shift from fixed asset administration to dynamic asset utilisation. A cornerstone for the provision of multi-modal channels is the ability to deliver intelligent central performance management, enabling efficient use of the available resources. The accessibility of end-to-end Quality of Service (QoS) supporting data, voice, and multimedia, is an important first step in the evolution towards an automated solution.

Blowers concludes: “Many communication and collaboration strategies are primarily initiated to reap the benefits of infrastructure consolidation, such as reductions in operational costs, and to improve levels of service quality. However, although these are useful goals, the real value afforded by unified communications and collaboration solutions ultimately arises from improvements to business processes, enhancement of stakeholder interactions, the optimisation of workflow, and driving innovation in the business.”

“CRM solutions enable colleges and universities to significantly improve the quality of their relationships with students at every point in the student lifecycle, from a prospective student applying for admission to an alumnus making a donation to the annual fund”, says Nicole Engelbert, Lead Analyst for Education Technology at Datamonitor and author of the study. “The next five years will see a dramatic increase in the number of institution-wide CRM implementations in higher education in the US and abroad.”

CRM enables institutions to create a 360° view of the student experience

Colleges and universities have historically targeted CRM to support specific processes, such as campaign management, in the admissions and development offices.  Fueled by developments in the consumer market, student expectations for institutional services are rising fast and prompting institutions to extend their view of CRM to include a larger and more diverse set of processes and departments.

“Institutions increasingly recognize the value of creating a 360° view of the student experience to their recruitment, retention and development initiatives”, says Engelbert.  “By capturing data and information about each student interaction, CRM provides educators with powerful insight and tools to ensure that future interactions contribute to rather than detract from creating more positive relationships with students.”

While corporate-sector CRM solutions are a good start, higher education has unique requirements that must be addressed

Translating a corporate sector CRM solution into one that meets the specific needs of higher education is a far more complicated task than simply changing references to customers and sales to students and admissions in the end-user interface.

The degree to which CRM vendors have successfully made these changes varies considerably and has given rise to a large and diverse competitive landscape.  The current landscape, however, is likely to evolve.

Engelbert concludes:

“Over the short-term, there is ample room in the higher education market for a diverse set of CRM vendors.  But with the increasing adoption of more sophisticated CRM strategies, enterprise-class applications with strong analytics and the ability to support the entire student lifecycle are likely to prevail as they are better suited to long-term institutional needs.”

London - A number of education institutions around the globe are looking towards open source software (OSS) as a means to gain more control over their solutions. From this a new report by independent market analyst Datamonitor predicts that spend on OSS (including maintenance and services) by the Education sector globally will reach $489.9 million by 2012, compared to $286.2 million today, providing sizeable opportunities for technology vendors. The report, “Unlikely bedfellows – open source initiatives and commercial vendors in the education market,” gives insight into how OSS is becoming more prominent in a number of geographies. The report goes on to note that if the One Laptop per Child (OLPC) project – aimed at children in the developing world, proves successful it could have a large impact upon the education industry and OSS in turn.

Institutions believe OSS will enable them to have further control over their solutions and bring an increased value from their product

According to Datamonitor, OSS is proving a success because institutions believe that their current IT applications are falling at the wayside – and by using open source software they will be able to gain further control over their solutions. With OSS the code is open for all to see – thus developers can view the code of the software – and are free to make changes to the software. This means that institutions are able to make technological changes to the product. If there is an aspect of the technology that an institution finds is inappropriate for its needs, then the institution is able to adapt it as it sees fit.

“Software lock-in is becoming a particular issue, with higher education institutions feeling that upgrades are forced upon them when they are neither needed nor wanted”, says Justin Davidson, Associate Analyst at Datamonitor and author of the study. “A number of institutions believe that proprietary solutions prevent them from effectively sharing their information and methodologies with each other – and that by implementing an OSS they can communicate shared learning methods and ideas. By adopting OSS, institutions can more effectively share upgrades and fix glitches in the software – along with other methodologies of software – specifically Learning Management Systems.”

Open source is a risky option – Institutions should not take the decision of implementing an OSS lightly

With open source, it is imperative that due care and attention are maintained – as there are a number of specific challenges that can occur when implementing OSS. For example, institutions may find that they stumble over a number of issues when attempting to implement OSS. Primarily among these issues is a lack of experienced personnel within an institution. Maintaining and upgrading open source solutions is not a simple process and while communities exist behind open source solutions there is no one at the end of a phone to help fix glitches – as with proprietary software.

If the OLPC project proves successful it could have a large impact upon the education industry

The jury is still out on OLPC. But if it proves successful, the program could have profound effects on the purchasing of technology within the education industry. It could open up technology to students within developing countries. Furthermore, it might force the hand of western technology vendors to ensure they provide affordable services to developing countries. Microsoft is offering a version of its Windows OS to developing countries for US$3 – which should help to ensure it maintains a foothold within the developing world. If OLPC becomes more successful it is likely other vendors will seek to gain headway within the developing markets by offering very cheap or free products.

If OLPC does well, institutions in the west, especially K12 (secondary schools), may see it as a way to move forward – due to the vast cost savings. Already examples of OLPC being used in the west are occurring – in Alabama, in the US, they have agreed to purchase 15,000 XOs (the laptop from OLPC), for US$3 million for students from grade 1 to 8. If more institutions look towards the XO this could then force the hand of large proprietary vendors in terms of the services that they offer to education institutions. In essence western institutions might find the potential cost savings of the XO too great a temptation – and it is possible that the shape of education will change for good.

Davidson concludes:

“OLPC, to date, is in its infancy. So far it has not been possible to judge its success with assisting developing countries to have widespread adoption of technology within education. However, it is possible that OLPC will have both an impact on education not only within the developing world but also the West – as education institutions look towards it as a way in which they can promote technology within their institution. Vendors need to carefully consider the affect of this potential impact upon their business – and how they may respond as education institutions seek to adopt OLPC, or a model similar to it. Importantly for vendors is that they don’t see OLPC as a challenge but an opportunity to further develop and improve the services they offer to education institutions.”

However, according to Andrew Kellett, Butler Group Senior Research Analyst and co-author of the study, before there is an opportunity to get carried away with the benefits package that modern BPM appears to provide, he comments: “There is an underlying requirement to deal with some of the baggage that comes with today’s mainstream BPM products. For example, there remain serious divisions between what the vendors see as the most important components within their all-inclusive offerings, and the basic function-driven approaches to BPM – application development, modelling, and integration services – that business users say drive their basic requirements of the technology.

“Furthermore, as the divide between the vendor and business user view of the key elements of BPM appears to be widening, it is interesting to find that many of the latest features which the vendors genuinely feel add value to their product offerings are viewed by the end-user community as little more than lightweight bells-and-whistles.”

Another significant issue that also divides the vendor and user communities is the ‘automation’ (the vendor position) versus ‘human workflow’ (business analyst vision) disparity that continues to exist. Unfortunately, even today, many BPM vendors still struggle to move away from their entrenched position of seeing BPM as a technology sell, a stance that works to the detriment of human interaction.

Solutions that operate under the BPM banner have become more functionally inclusive

Today solutions that operate under the BPM banner have become more functionally inclusive. A constructive and helpful part of this fleshing-out process has involved a consistency of approach across all service delivery components, so that most core elements of mainstream BPM platforms are properly targeted at the business professional rather than the IT technician.

Many of the solutions can be fairly described as end-to-end offerings; taking in process discovery, modelling, simulation, deployment, lifecycle improvement, and ongoing change management. Many also include, as standard, previous extended functionality such as business rules capabilities, business process reporting, alerting, and more recently analysis, plus associated services such as: Business Activity Monitoring (BAM), Service Oriented Architecture (SOA), and Business Intelligence (BI) functionality.

Understanding, managing, and aligning the rule element of processes is central to ensuring the success of BPM

From a business perspective, one of the oft-promoted benefits of BPM is that it will help remove the functional mismatch that occurs with more traditional development methodologies. This is certainly the case, but it has to be underpinned by a codified structure – which involves bringing together the management of process activities with the rules that underpin their use. Understanding, managing, and aligning the rule element of processes is central to ensuring the success of BPM.

“BPM started out with the clear message that its process-centric approach had the potential to revolutionise the way that business users could interact with manual and technology systems. Automate where appropriate, but essentially focus on the delivery of services where the most efficient combinations of human and technology-driven interactions are brought together for the benefit of all concerned. This, Butler Group continues to see as the primary role of BPM,” says Kellett.

BPM can only deliver on its full potential when the facilities that the vendors provide fully match up to the requirements of the end users

Over the years vendors have promoted BPM on the basis that it has the ability to dynamically link disparate systems by providing a build methodology that will significantly reduce the need for IT involvement when new processes are required or existing processes need to change.

This, Butler Group believes, is an important point that must be emphasised because history tells us that business differentiators tend not to be driven by all organisations making the same use of standard technology. The real differences and advantages come when the innovative skills of the business community to seek and deliver change can be aligned with the effective use of technology solutions that have the flexibility and ease-of-use to deliver change whenever it is required. Fundamentally Butler Group believes that this is the BPM advantage, but it can only deliver on its full potential when the facilities that the vendors provide fully match up to the requirements of the end users.

“BPM is about business improvement and change management, and a supporting systems implementation methodology that enables business processes to be updated in line with operational requirements”, says Kellett. “It has to be accepted that many business processes will constantly need to change, and processes and their usage will cut across each other. Ultimately information flows between processes will span business as well as departmental boundaries.”

Kellett concludes:

“The ownership and the business knowledge of such processes must remain with the users. Their views of the business world and its operational requirements start out from a very human-centric standpoint. Therefore, in Butler Group’s opinion, the way forward for BPM involves getting a better alignment between what the technology vendors think is required, and what the end users are actually looking to do with their BPM solutions.”

“New opportunities continue to emerge which enable organisations to work in a more environmentally-friendly way. Innovative organisations can make the most of these openings to gain a leadership position ahead of the competition. Yet many enterprises are failing to act and have not yet recognised the fact that business-as-usual is no longer an option. IT management and the use of new technologies have a great opportunity to take a leading role in assisting the organisation in meeting these social expectations”, says Mark Blowers, Senior Research Analyst and co-author of the study.

“Two ways in which the IT organisation can help to improve the situation are by enabling measurement of the exposure to climate change, and by increasing the efficiency of IT operations, which comprise such an important part of the overall foundations for the organisation.” 

IT management has an opportunity to take the lead by being proactive in supporting the sustainability objectives of the organisation

There is increasing prominence being placed on the ability of IT deliverables to match organisational sustainability objectives. Unfortunately, there still appears to be a lack of focus by IT management on understanding the organisation’s main goals in this area. Without this, it is impossible to formulate an IT strategy that will meet the organisation’s sustainability needs. To facilitate this IT must improve the flexibility and efficiency of its operations, and measure performance related to environmental and social objectives.

Those taking an interest in environmental aspects of life may have already come across the mantra of the Three R’s – Reduce, Reuse, and Recycle. Butler Group has added a fourth for the IT manager – Re-engineer – which encompasses the approaches and technologies that need some investment in resources to bring to fruition but can be a significant factor in the IT department’s contribution to sustainability.

“Clearly, any organisation’s printing activities are an area likely to be suitable for investigation in terms of lowering environmental impact and possible reuse. Cheap printers ubiquitous in office environments, along with a combination of spiralling information volumes and the accessibility of printed output, have led to wasteful practices and needless paper use. The net effect on resources and the environment is highly detrimental, especially when combined with many organisations’ lack of formal recycling practices”, continues Blowers.

“It is important to take a holistic approach which encompasses not only equipment energy usage, but product, software, and building design. For example, during the procurement process, questions need to be asked regarding the use of toxic chemicals during their manufacture and within the products, as well as ascertaining how recyclable the equipment and resources are.”

Power consumption is a very important consideration for the IT manager

An obvious starting point for energy reduction is to ensure that all computer equipment is turned off when it is not being used, enabling power management capability, and having effective asset management where unused equipment is quickly decommissioned. In addition, all organisations should aim to dispose of old hardware responsibly by sending unwanted PC equipment to be reconditioned and recycled.

Many data centres are bursting at the seams with hundreds of underutilised servers and storage systems, many of which are consuming the same amount of electricity as a fully-loaded server. The adoption of key re-engineering efforts, such as implementing an architectural approach, deploying hardware designed to use a Direct Current (DC) supply, and utilising fresh air cooling, as well as improving utilisation by investing in consolidation and virtualisation, can result in not only reduced energy consumption, but also significant efficiency benefits and lower overheads.

The increasing energy requirements of data storage can no longer be ignored by the IT manager. The growing amount of uncontrolled storage cannot be allowed to carry on indefinitely. The time has come to address the mounting disparity between storage management capability and the increasing number of storage devices and capacity.

Blowers concludes: “One reason why IT departments have been slow to react is because IT management often does not have energy expenditure in their budget. Power costs are usually tied to the property portfolio, so energy savings do not translate directly to budget savings for IT. In addition, we are sometimes guilty of focusing on the effects (such as improving cooling systems) rather than addressing the root causes by looking at things that actually reduce the amount of code processed in the first place (such as software design).”