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Who is the customer? February 24, 2011

Posted by Mark Hillary in IT Services, Outsourcing.
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Possibly the most important discussion I had at the Nasscom event in India recently was around the changing role of the CIO, and how this changes the whole relationship between the client and the service supplier.

The CIO is an evolving role. It is becoming more strategically significant and is focusing more purely on information use and flow – which means that there is less emphasis on the purchase of IT systems.

At the same time, services are getting easier to buy. Companies are offering complete solutions that can be delivered using a web browser so absolutely no infrastructure or software is required – beyond Internet access.

So business heads are getting far more involved in specifying what they need and even going to the market and purchasing it without any involvement from the IT department. In fact, if there is no IT infrastructure requirement then why would the IT department need to know what is being purchased or used by the business?

This has always been the case in BPO. The person buying a new HR system was the HR director – not the CIO. They might purchase a system in communication with the CIO, but ultimately the decision was that of the business line head.

Now the same is applicable for a wider variety of systems – even technical systems that would previously have needed agreement from the CIO.

Does it make the CIO redundant as a function? I don’t think so as there still needs to be a strategy around infrastructure and security, but this does signal a complete change in the way companies use IT. The business user not only has the budget, but the power to buy, install, and maintain their own systems without any IT department interference.

Is the cloud just hype or are some missing the boat? February 15, 2011

Posted by Mark Hillary in IT Services, Outsourcing.
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I was out in Mumbai recently for the annual Nasscom conference. Nasscom is the hi-tech trade association in India and their annual leadership summit each February defines not only the direction of the industry in India, but for many regions around the world.

In fact, there were 35 other countries represented at the Nasscom event, some just as delegates, but most with an official party speaking and representing the advantages offered in their region so this has become quite an international event.
The industry in India has grown by some 23 per cent in the past year so there is strong optimism that IT firms and the BPO service players are back on a growth track again after a few years of recession. This is backed up by new orders being placed, but I wonder if there is some troubled times ahead for some of the big players in India?

One of the key topics being discussed in India was the cloud. It’s a topic that divides commentators, but what is clear is that some service companies have embraced it. Just look at firms like Salesforce.com, who are now moving beyond their CRM roots into all aspects of cloud-based services.

But many have not.

I asked several of the more traditional systems integrator firms what they think of the cloud and the opportunities it may offer them, and despite the threat to their own industry, many just rejected it as hype.

The firms making a killing today on software upgrades are going to have to evolve or die in an environment where IT systems can be paid for only as they are used – but some still seem to have their head in the sand.