Welcome to the SASIT April newsletter
In this issue
The digital disrupters will win – even if they lose
Moving toward a digital future
Infrastructure as code
Business Continuity Planning – Bah humbug
10 Surprising Facts About Larry Ellison
9 Things that you might not know about IBM’s Watson
IBMi 7.1 selected software withdrawal and support discontinuance
The disrupters will win - even if they lose
By Phil Martin - Group CEO
Allow me to explain what I mean – disruption is happening across all business areas. Not all disrupters end up being an Amazon behemoth – but in the course of them playing in what might be a space that your organisation owns, they will drive change that might be difficult to react to quickly. In the early days of Amazon (when Amazon was focused on books) it wasn’t just the high street book stores that felt the shift, it was the printing companies that no longer printed books as Amazon went digital once they’d built the customer base and platform to provide downloadable content.
Uber might not force the taxi companies to provide a competing service proposition in the first instance, but eventually an alternative to the traditional taxi service will “force” change that many taxi companies are ill prepared to compete with – especially the smaller ones. In the meantime Uber can afford to lose millions – driving down taxi prices across the world, and changing the experience of taxi ride consumers who can now see where their ride is, can read reviews on the driver, and know the make and model of the car that is collecting them, and pinpoint where it is at any time prior to picking them up. That level of service and information will become the new norm.
It is in that context that the IT environment continues to evolve and change at an ever increasing rate, and the capability of "IT" continues on a steep growth trajectory that leaves some businesses behind, and others streaking ahead. Increasingly the competitive landscape will change as the strategies and investments being made today play a part in how organisations market themselves, and stay relevant to their customers tomorrow.
Technology is being used as a change agent and enabler, and often a game changer for organisations as never before. The media is full of articles focusing on the business disrupters, in the context of either being disrupted, or being the disrupter. More recently in Australia Amazon have made the first steps in setting up warehousing and distribution capacity - which has some traditional retailers in a "pickle". Those without a strong internet presence (and I don’t just mean a static online purchasing portal), without an Omni channel capability are likely to be seriously threatened by the new entrant - who arrives with massive financial resources, and a clear internet sales strategy, with a lower cost to serve/deliver. It should be noted that Amazon is not just about selling product over the internet – what they are doing is using computing algorithms to better understand you, the consumer, so that when you log in they know what you might want before you even need to ask. Amazon already knows what your browsing history is, what you’ve previously purchased, and can pick with reasonable accuracy what you might want to look at or purchase next – and then they populate the screen with those choices – making your job as the consumer so much easier – reducing the time to value for both.
There are also no shortage of tech startup's either, with amazing new ideas and insights, and no lack of capital entering the market in support of these tech startups.
With businesses that are largely dependent on bricks and mortar, with branch networks to sustain, it's getting harder and harder to create a roadmap of change - where the business gets the support it needs for today, whilst it builds out the capability and functionality it needs for tomorrow. The answer is to capitalize on the functionality of the current systems, through integration – as the business still needs its traditional business operating at optimal levels – whilst building the platforms for future customers to interact with.
Back to the concept of value – which is an ever changing commodity. Where once a branch network with skilled and capable staff was enough – on its own it is becoming far from that. Customers might want to visit a branch “sometimes” seeking technical advice, support, or to see and touch a product – but where they want to transact on line, the mechanism for them to do so needs to be available – without which the customer will go elsewhere. If their experience elsewhere is better than your business can provide – much of that persons business will walk with them.
The concept of bi-model was born out of the desire (probably need) to support the applications that deliver the current business model, whilst bringing on disruptive technologies to support where the business needs to be at some point in the future - or at some point on the evolutionary continuum - to compete with these well-funded disruptors.
Life in IT is not getting easier either - the number of technologies that need to be supported keeps increasing - the working day is getting longer, with everyone being connected all of the time, and the new reality is that 24 x 7 accessibility to "all" systems - including email - is a necessity. Social media has been primarily the preserve of the “younger” generation (and yes Facebook et al is used by all generations – but it’s the younger generation who are posting anything and everything - constantly – and it’s this new generation who are just starting to increase their earnings, and spending power, and will soon become a dominant force in the consumption based market.
So how can businesses deliver IT in this new environment? It's not easy, and it won't really get easier with time.
What I see happening more and more is that the new CIO/IT Manager is becoming the conductor of an ever changing orchestra, with the members of the orchestra being made up of skills based on internal capability, closely aligned with external partners where it makes sense. It’s just not practical (or cost effective) for most organisations to employ all of the skills across all of the products and services that they need. Of course playing tunes 24 x 7, whilst the conductor adds and removes the band members is tricky, but necessary, and the IT environment needs to be in a position of flexibility so that it can deliver what the business needs in support of the business strategy (assuming that there is a clear business strategy that incorporates change).
Innovation within a business needs headspace to grow, it needs to be nurtured, watered and fed. Without innovation it's likely that others within any industry will be making the investments - making the changes, and investing - and that in time the relevance that was once the reason for your customers to remain loyal is a thing of the past. Failure to change and adapt quickly is more and more likely to mean extinction.
An example of this phenomenon could be the branch networks of old, where bricks and mortar meant products were in front of people - so that customers could visit, see the product, and make a decision based on the capability of the sales person within the store to understand the needs/wants and provide the appropriate outcome.
These days, more and more people are educating themselves on line - to the point of becoming almost experts, before they seek out that same assistance. They have become educated buyers. Many know what they want before they look to purchase. That means they don't need to visit a store front. They will buy online, knowing that what they've purchased will meet their requirements. If the item doesn’t match they can return the item for a credit - reducing the risks associated with buying on line.
Commodity items were the first to make the change from store front to on line. An example of this phenomenon has been Amazon and the impact on book sales from the local book retailer, and in turn the move away from physical books to the delivery of electronic books - in this case Amazon disrupted its own profitable book sales and distribution business to provide the digital equivalent at a much lower price. Distribution in this case moved from bricks and mortar, to downloads - changing the market forever. What is also interesting is where Amazon are pouring money into now (outside of the AWS Cloud). Big Data and analytics – watch this space.
All is not lost for retailers though - and the advent of the Omni-channel marketing engine was born. One of many definitions of Omni-channel refers to the shift of businesses to provide a seamless experience, regardless of the sales channel, or device used. Consumers can then engage with the company in a physical store, through a website, mobile app, catalogue, or via social media. The seamless presentation of information and knowledge provides everything that is needed for the buyer to make a "decision" to buy.
More and more people are conducting their research on line, interacting with others who have purchased the products or services, without the seller knowing anything about the prospective purchaser. The first the reseller might know is when they make a sale. The game now is how can a business influence the buying cycle, providing the information as and when required, to logically take the customer on a journey (possibly of discovery) - to the point where the interaction has been a positive one - leading to the natural conclusion - being a sale.
Introducing flexibility and agility. Companies need to ensure that the systems that make the business its revenue and profits “now” continue to operate and deliver as they have been, whilst a new business model is built to deliver the experience required by the new form of buyer/customer. The two environments then ideally are linked together to provide the seamless transition from old style to new. In most cases that doesn't mean throwing the baby out with the bathwater, and replacing everything in a big bang (and quite frankly very risky) approach. It involves creating the new, and then integrating the old with the new, as both styles of buyer will continue to coexist.
That co-existence is the business saviour. Continue making money from the current model, whilst using the new model to increase sales in the face of ever changing competition. Doing nothing is a go out of business strategy, and perhaps not doing enough will still leave the business heavily exposed to disruption, which may not be recoverable - it's just a matter of when (and can often mean death by a thousand cuts). The value of disrupting your own business before someone else does can’t be underestimated.
As an IT provider we are working with a number of organisations to assist them to deliver outcomes that will have those businesses ready to take on the changing competition when it does arrive - as it surely will (arguably most businesses have already faced a degree of competition brought on by digital disruption). Again - the name of the game is to disrupt your own organisation when you have the time and resources to do so - before you're in a position of having neither the time nor the money when someone else disrupts it for you. The new kid on the block might not last long - they don't need to - to have caused irrecoverable harm to your business. They just need to outlast you with a proposition that takes your customers away - long enough for your business to go out of business. Don’t be the frog in heating water who doesn’t realize that he’s being boiled alive as the incremental temperature changes are too small to catch and react to.
Dr. Sean van Deventer
Head of Professional Services
Sean is responsible for the Professional Services Team which focuses on Architecture at the Enterprise and Solution levels, Business Consultancy, the Project Management Office and Project Services.
Sean has been in the IT industry 20 years and holds a Masters Degree in Business Administration from the University of Stellenbosh and a PHD in Business Information Systems from the University of Auckland.
Prior to joining SASIT, Sean held senior roles at Theta, KiwiRail and HCL Technologies.
Away from the office Sean can be found on the Motocross track where he competes in various competitions through-out the year.
Moving toward a digital future
By Tony Wilson - Consultant
Bimodal on the face of it seems a very logical approach to implementing business change in the digital world. It's founded on levelling the massive amounts of data available to the business to achieve new outcomes and realities. This is often enabled with the assistance of data scientists and can incorporate machine learning or similar technologies.
Bimodal, as its name says, has two modes of operation. Mode 1 refers to the current tried and tested operation of any given business. And Mode 2 refers to small practical experimentation projects designed to prove before being implemented the initiatives that can be used to drive Mode 1 forward.
Both Mode 1 and 2 can be used to drive in the same strategic direction. The really interesting part is how the initiatives to drive this forward, are incubated and implemented.
Bimodal is not the only approach to digital transformation in the enterprise and may not be suitable to all. However, bimodal approaches provide business leaders with an approach to innovation without risking critical business systems and operational processes and provide business leadership with a level of comfort for implementing change. Particularly for the organisations that have not done anything innovative for some time! But a Bimodal approach can good approach to enable organisations to move towards a digital future. In this article, I will look at how to go about bimodal and what that means.
Modes of Operation
As I outlined in Part 1 bimodal as its name says has two modes of working. Mode 1 focuses on making existing business systems digital ready. Mode 2 is more exploratory, using experiments to solve new digital transformation issues.
Gartner defines bimodal as having three implementation stages: Start, Synthesise and Scale.
First, the Mode 2 systems, infrastructure and supporting team needs to be created and then verified that Mode 1 and Mode 2 can work independently on small contained projects that emphasise learning. The key point being that Mode 1 and 2 systems and processes are actually independent. This phase helps build confidence for the later scale phase that no interdependencies exist between the two modes. To scale, companies then need to take bimodal to an enterprise level, with the ability to take on more projects with increased complexity and interdependence within the modes.
During the synthesis phase, bimodal has to be embedded into the organisation and start to become part of the DNA. Once bimodal has been embedded and is operating satisfactorily at a small scale, the following six key principles can be followed to scale it to the organisation.
Goals, Metrics and Collaboration
Bimodal requires a single business strategy and a single vision to unite everyone. Despite the two modes, the entire enterprise needs to operate under a cohesive strategy to create a collaborative culture. Business and IT leaders need to recognise and reward collaborative work, the desired result is the formation of virtual teams focused on outcomes.
This is very much something that needs to be done and shown, not told". Bimodal needs to be experienced, and it's important to gain organisational buy-in to the concept. To build support, select a few small projects and demonstrate how bimodal works, keep it practical.
Land and Expand
Select a particular aspect of the business and focus only on bimodal in that area. Use that one area of the company to go "deep" with bimodal techniques by working to make it agile, employ DevOps, and utilise lean start-up techniques and innovation techniques. Once you've developed "deep" bimodal in one business unit, start to move the same principles across other business units. Add one team, then another, to go "wide" within the business.
Mode 2 is the place to develop capabilities as plant seedlings would develop strong roots in a nursery. After they are strong, transplant the capabilities out to the Mode 1 organisation.
Modernise before Scale
The key to bimodal success is the core environment must be ready for digital work. Mode 1 will be mainly responsible for addressing issues with core technology. This includes tasks such as implementing an API architecture, modernising the applications portfolio or implementing the hybrid cloud. Bimodal doesn't mean IT teams can ignore key technology or systems. However, Mode 2 can be used as a lever to get the business to invest in the core as it defines in a very practical way what is possible and how to implement it. In this vein, IT leaders and their teams must showcase the potential for what the technology core could offer if the business is willing to invest. Renovating the core is vital to scaling bimodal operations!
Optimise Don't Just Implement
Physically road map the process of getting the best ideas incorporated into products and services. Look at where the delays are, and apply the capabilities (i.e. agile, DevOps) to those areas. Being able to clearly show where in the process these techniques will help the organisation improve agility and speed is the key to gaining buy-in. Then apply lean principles to creating agility, speed, velocity and innovation.
Bimodal can split the IT departments focus and take the eye off the ball of winning business in the digital age. If it is solely focused on the improvement of internal business systems, bimodal can work against key principles of customer obsession. However, it's not a new idea to have two organisations operating in very different ways with different goals. But it does run the risk of not having customers central to the technology strategy.
There are principally three headline risks to manage:
Risk 1 - Alienation of Personnel leading to disengagement
If an organisation does go too far down the two speed delivery approach advocated by bimodal there is a risk of alienation of personnel. Some people like to be involved in rapid change and don't want to think they are working in slow core business systems. Other people don't like too much change and will likely push back on rapid change.
To mitigate this it's important that the personnel mix is well thought out and people need to feel they can move on with the change. Its old fashioned business change 101 where the process and speed of change need to be core to the approach.
Risk 2 - Isolation of IT from the business operation
Bimodal risks further isolates IT from business functions by relegating change management responsibilities solely to IT. There is a risk that it could lead back to a culture of IT domination with little business alignment or buy in.
The obvious mitigation to this is that bimodal project engagements must be a combination of business and IT personnel.
Risk 3 - Competing architectures
Organisations run in bimodal way can create a stigma that the mode 1 group operating back-office systems is slower than the mode 2 unit building digital technologies. Employees may not want to work on mode 1 because of the perception that it is not innovative. This runs the risk of creating a culture of competing architectures.
Companies recognise that traditional IT and business change delivery conducted in stages cannot cultivate the crisp innovation required. Bimodal does help enable a culture of experimentation and innovation but the key to this is it cannot be IT alone and the implementation of business change must be managed like any other business change project.
Bimodal comes with the concept of planned and predictable change. The basic concept is to try out the change in an innovative practical but small way (Mode 2) then once the small initiative is proven scale it up (Mode 1). On the face of it this is a practical way to bring about change whilst managing the risks. However, follow bimodal incorrectly and you risk operating in two parallel businesses. This means that management must keep unity between probably two teams and more likely two sets of supporting IT systems. Both groups following the same strategy, vision and goals but at different stages of development.
Gartner reports that now around 80% of organisations have completed a bimodal project of some nature and nearly half of them subsequently moved on to make strategic decisions based on the outcomes. One of the key tenants of Bimodal being to fail faster and get comfortable with the learning process. But doing this often means an uncomfortable mind set change for business leaders.
The Mindset Challenge
Mode 1 is based on the experience the business and its leaders have gained through years of experience. But Mode 2 forces leaders to be open to new technologies and use cases. Often doing this means throwing out or at least pushing to one side that Mode 1 experience and being open to the opportunities and challenges of Mode 2. To do this requires that leaders take a beginners mind set, that's a lot easier said than done when they are experienced people.
An example of this is the car plant that traditionally took areas of its plant off line on a rotating schedule for maintenance. A bimodal project applied to a single piece of plant indicated that maintenance could be carried out using predictive analytics to identify on a component level the parts of the plan requiring maintenance. This promised the outcome that no longer did they need to take whole sections of plant off line for maintenance, instead it could be maintained using small maintenance windows and the predictive process identified in mode 2. However, moving the change process from Mode 2 to Mode 1 was a very scary step to make. But when they eventually did it, they saved a huge amount of money and efficiency gains.
Learning to Unlearn and Grasp the Digital Future
Business leaders need to learn to unlearn based on a combination of best practices and development of new ideas. To do this a diverse culture needs to be developed based on information. To do this requires developing a lot of organisational competencies in data science and machine learning. This then needs to be put alongside the ongoing work of digital anthropologists who are constantly pushing out research on how people are behaving and interacting in the digital world. People don't all think alike but it’s our diversity that delivers the outcomes for business, and bimodal does have a lot of good points to enable delivery.
Infrastructure as code – the next frontier
By Simon Murphy
Part 1 – first things first
Modern IT teams are increasingly adopting software development practices to build and manage infrastructure, leveraging many of the same techniques and process flows that our software development cousins have been employing for decades. Managing infrastructure elements (servers, storage, networking, etc.) as code allows us to develop, test and deploy changes with greater velocity and less risk than has been possible in the past.
Infrastructure as Code is an operating model and change management practice of deploying and managing infrastructure using the same tools and approaches that developers use build and maintain software applications. Configuration changes are made to scripts and definition files, which are committed to a version control system (VCS) before being rolled out to production via a series of automated and semi-automated test and validation cycles. When managing infrastructure as code, changes are never manually made to a production system (in fact, logging on to a production server at all is discouraged) outside of the automated change pipeline.
There are a number of reasons why we would want to move to a more structured and controlled way of deploying and managing infrastructure:
- Velocity of Change - using software development approaches we can rapidly develop, test and deploy changes, allowing us to move with agility and speed. The goal is to build infrastructure that supports change, rather than inhibits it
- Reduce Risk - by automating the test and release cycle we can vastly improve the reliability and consistency of infrastructure changes. Versioning allows for rapid rollback in the event of a production issue, we can even rebuild our entire environment using another cloud provider if required
- Reduce cost - high levels of automation and rigorous testing leads to increased standardisation. Instead of troubleshooting production issues on a particular server, we can simply redeploy a new one in its place, as its configuration is defined in the codebase it is easily reproducible.
To achieve the above outcomes, there are three basic guiding principles that we can apply:
Reproducible – it should be possible to easily and reliably rebuild or replace any infrastructure element at any time
Consistent – there should be virtually (different IP addresses are OK) no difference between individual systems providing the same service, configuration drift is one of the main enemies and should be eliminated as far as possible
Repeatable – it should be possible for team members to apply changes using easily repeatable methods, this usually means using scripts, automation tools or server tempting in favour of making manual, ad-hoc changes
In Part 2, we will take a look at some of the more practical aspects of managing infrastructure as code, as well as starting to look at some of the basic tooling and processes.
Business Continuity Planning – Bah humbug
By Nalin Wijetilleke – CEO Continuity NZ
Well, unfortunately that is the attitude of many NZ organisations.
If it happens we will deal with it – after all, why would we spend time and money working on something that might not even happen?
Once upon a time that kind of thinking was acceptable, but things are changing rapidly and that approach is now reckless at best.
Yes, it’s difficult to understand the complexity of modern threats like cyber terrorism, let alone the probability of being impacted, but that’s no excuse for not having some kind of business continuity plan.
A plan that will guide process and actions in the event that your organisation is brought to its knees, whether through a cyber attack, weather event, malicious staff action, hardware or software failure.
To help you avoid embarrassing questions from your CEO (after all, there are quite harsh penalties in NZ with respect to Director liabilities) or worse, a journalist, we spoke with highly respected Business Continuity specialist Nalin Wijetilleke who shared his thoughts on the steps that should be taken to ensure that our organisations are protected from mortal outages.
1. Risk Reduction - The risks that could jeopardise the running of business should be identified and appropriately mitigated. While that does sound straightforward, many threats are often unknown or unquantified, which is why specialist advice is crucial to implement the correct tools, techniques and practices.
2. Response - The way the organisation responds is very important. A small issue could easily get out of control and become a crisis. There are ample examples from within New Zealand when basic safety issues have been overlooked resulting in major disasters. To be well prepared to effectively respond to such situations, organisations must have well-rehearsed plans and communication strategies.
3. Recover - Recovery plans should be designed to be flexible and scalable to a broad range of scenarios. Those responsible must detail the actions required within pre-established time frames. Whom to contact, when to escalate and plans with the key suppliers should be in place. The plan should show the priority and sequence of resolution activities.
Resume - Once the problem is resolved, the process for resuming operations must be started. All critical activities and when to resume after a disruption must be pre-defined.
4. Restore - Depending on the nature of the disruption or the disaster, restoration can take anywhere from hours to months. The time to return to ‘business as usual’ after a critical process or product/service line failure can be pre-defined based on analytical techniques. Preplanning provides opportunity to think ahead as to what resources, external support or stakeholder communications are needed during the recovery and resumption stages.
5. Review - It’s always good to learn from your mistakes. They should be well documented and actions taken to further improve resilience. Impact on the people, business, customers, community, and environment are all key aspects reviews should focus upon.
According to managing director of Continuity NZ and international speaker on the discipline of business continuity management, Nalin Wijetilleke, a logical first step is to take stock of your business’ current state including extent of exposure.
10 Surprising Facts About Larry Ellison
Oracle's founder is infamous for his lavish lifestyle and business acumen. Here are 10 surprising facts you may not know about Larry Ellison:
1. Ellison is currently the 7th richest person on the planet, with a net worth of $52.2 billion.
2. Born to an unwed mother in New York City, he contracted pneumonia at just nine months of age and was given to his great-aunt and uncle for adoption. He wouldn't see his biological mother again for almost five decades.
3. Unlike Bill Gates, Larry Ellison was not exposed to computers in his childhood and didn't have that inherent advantage early in life. He was first introduced to computer design during his second attempt at university.
4. The first company Ellison co-founded launched in 1977. It was called Software Development Laboratories and his investment was $1200. He and his partners won a two-year contract to build a database for the CIA; they called the project "Oracle." Their company would become Relational Software Inc. in 1979, and change names one more time, in 1982, to become Oracle Systems Corporation.
5. Ellison almost lost everything when Oracle nearly went bankrupt in the early 1990s.
6. An adventurer and adrenaline junkie at heart, Ellison suffered numerous injuries as a result of his participation in extreme sports, including mountain biking and body surfing.
7. A 2003 book authored by investigative journalist Mike Wilson gets right to the heart of Ellison's legendary reputation. It's titled, The Difference Between God and Larry Ellison*: God Doesn't Think He's Larry Ellison.
8. Ellison owned one of the largest yachts on the planet until 2010, when he sold his rights to the Rising Sun to David Geffen.
10. Ellison has been married and divorced four times. His second wife married him prior to the founding of Oracle and when they divorced shortly after, signed off on any rights to the company for $500.
9 Things that you might not know about IBM’s Watson
1. Watson was named after IBM's first CEO, industrialist Thomas J. Watson.
2. The computer system was specifically developed to answer questions on the quiz show Jeopardy.
3. When competing on Jeopardy Watson had access to 200 million pages of structured and unstructured content consuming four terabytes of disk storage including the full text of Wikipedia but was not connected to the Internet during the game.
4. In February 2013, IBM announced that Watson software system's first commercial application would be for utilization management decisions in lung cancer treatment at Memorial Sloan Kettering Cancer Center, New York City, in conjunction with health insurance company WellPoint.
5. Watson parses questions into different keywords and sentence fragments in order to find statistically related phrases. Watson's main innovation was not in the creation of a new algorithm for this operation but rather its ability to quickly execute hundreds of proven language analysis algorithms simultaneously to find the correct answer. The more algorithms that find the same answer independently the more likely Watson is to be correct. Once Watson has a small number of potential solutions, it is able to check against its database to ascertain whether the solution makes sense.
6. Watson uses IBM's DeepQA software and the Apache UIMA (Unstructured Information Management Architecture) framework. The system was written in various languages, including Java, C++, and Prolog, and runs on the SUSE Linux Enterprise Server 11 operating system using Apache Hadoop framework to provide distributed computing.
7. Watson can process 500 gigabytes, the equivalent of a million books, per second.
8. In August 2016, IBM announced it would be using Watson for weather forecasting. Specifically, the company announced they would use Watson to analyse data from over 200,000 weather stations, and data from other sources.
9. In July, 2016, IBM and Manipal Hospitals (a leading hospital chain in India), announced launch of IBM Watson for Oncology, for cancer patients. This product provides information and insights to physicians and cancer patients to help them identify personalised, evidence-based cancer care options.
IBMi 7.1 selected software withdrawal and support discontinuance
IBM has announced that it has withdrawn IBMi OS V7R1 from marketing effective September 30 2017. IBMi OS V7R1 became generally available in April 2010. No new functionality will be added to V7R1 and support will end on 30 April 2018, after which time IBM intend to announce a fee based extended service offering. Hardware maintenance is not affected by this announcement.
We strongly encourage customers to upgrade, as there are many functional benefits with V7R2 and V7R3 and of course to avoid the costs of paid support for V7R1 post April 2018. Our technical teams are available and keen to assist you to plan and execute your OS upgrade.