2.0 for the Enterprise

Archive for the ‘General IT Services’ Category

News, trends, and information on IT Services companies.

Sweet Virginia

Posted by Susan Scrupski on September 4, 2006


Thank you for your wine, California
Thank you for your sweet and bitter fruits

Mick and Keith might not be there, but you will be among friends. The kickoff conference for Web 2.0 for Business is definitely Dion Hinchcliffe’s New New Internet conference here on the East Coast in Tyson’s Corner, Virginia. He has assembled an A-list set of speakers in web 2.0 including Michael Arrington (TechCrunch). If you (customer or vendor) are on the East Coast. DO NOT miss this conference. A first-mover event; will make it into the history books.

Posted in AJAX, Consultants, Enterprise 2.0, Enterprise Mashups, General IT Services, Interactive Agencies, Next Net, Office 2.0, REA, SaaS, SOA, Web 2.0, Web Integrators | 1 Comment »

The Rebirth of the SI Market: Anyone in the Mood for a Fat Margin?

Posted by Susan Scrupski on August 31, 2006

I had a great briefing this week with IBM’s Dan Gisolfi of its Emerging Technology Group. I was able to clear up a few things. For starters, it’s not THAT easy to create a “long tail” micro situational app. Gisolfi says, “Today, it’s extremely hard unless you’re a programmer… and unless you know Ajax, Java script, and programming languages, you’re not going to create a mash-up.” But that’s where this IBM group is headed. With their web 2.0 class of tools– mash-up makers– ultimately, the high IQ guys and gals in IBM’s key installed base accounts will be able to create their own dashboards ad hoc and provision data across departments and groups without troubling anyone from IT at all.

Gisolfi and I waxed philosophically about the cultural trends that are driving Enterprise 2.0 and we agreed about the socio-cultural underpinnings. Now here is a guy who can fit squarely in both camps– traditional IT, wearing the IBM logo, yet can hold a respectable conversation on the latest in open source, or any web 2.0 technology. We agreed the new Enterprise 2.0 wave is not about technology. The technology is evolutionary and Gisolfi recounted many examples of initiatives IBM has been involved in for years that are now hyped as web 2.0. What’s different now, however, are the attitudes that eclipse the technology. He said, “Web 2.0 is a convergence of enablers… coming together at the right time, at the same time.”

We then talked about a possible rebirth of the systems integration industry– something I found intriguing. Gisolfi said, “For the IT guys, we’re not taking away work, we’re creating a new type of work. Instead of doing integration of monolithic applications, today, you’re going to create granular software components.” He used Sarbanes-Oxley as the perfect example of the need for a customized, daily mashboard. He described using a business analyst or consultant to define the data indicators and then pass it to a software guru to render it and provision it as a mashboard.

It’s at this point, I started thinking about the sweet-margin business of the late 80s: systems integration. I checked in with Graham Kemp, who tracked the SI market in those days. Graham said, “In the late 80s, SI margins were good… in the high teens… and FM (facilities management [outsourcing]) margins were fair (low teens). As the 90s came in, both dropped.”

On EDS’ Next Big Thing blog a few days ago, I read with some interest a post resurrecting the “I” word:

For a long time, the Fellows have been talking about the movement away from the Chief Information Officer to the Chief Integration Officer. The integration of process and information flow between and across the enterprise to enable greater flexibility is where all organizations need to be headed.

And as I just wrote recently to the head of analyst relations at CSC, before all outsourcers were called outsourcers, they were systems integrators. It might be time to ditch the losing battle in the ITO market, and start putting up recruiting booths on MySpace. There may be high margin opportunity introducing the Global 2000 to Enterprise 2.0.

Posted in Enterprise 2.0, Enterprise Mashups, General IT Services, IT Outsourcing, Next Net, SaaS, SOA, Web 2.0, Web Integrators | Comments Off on The Rebirth of the SI Market: Anyone in the Mood for a Fat Margin?

Seismic Shifts in the Software Industry

Posted by Susan Scrupski on August 24, 2006

I listened in today on NetSuite’s hosted Enterprise 2.0 and the Software Industry webinar featuring’s M.R. Rangaswami. I was amazed by some of the statistics in the presentation, but remember, I’m new to some of this stuff by five years. For instance, M.R. said Sandhill had done some research and is reporting that 90% of all software firms are now using offshoring for some element of their development. I also was surprised to hear that 80% of a CIO’s IT budget is already committed to maintenance before the year even begins… the point being a mere 20% is left for innovation. He also said Sandhill had counted over 500 Web 2.0 companies, but was quick to point out that, “None of these companies know how to make money.”

NetSuite, a SaaS app, and whose product looked very impressive, btw, said the webinar would be available on their site.

This issue about the IT budget is one where I’m not sure everyone is on the same Enterprise 2.0 page. A few days ago I was pestering poor, old Gary Fernandes (who is really neither) about this point. Gary used to trot out this slide back in the old days while I was covering EDS. It showed how, on average, the IT budget was a mere 10% of the operating budget of most corporations. As Gary was EDS’ Chairman of A.T. Kearney, and the BPO market was just beginning in those days, he was always interested in how EDS could get its hands on the other 90%. Enterprise 2.0 is Gary’s dream come true. The big opportunity here for tech companies is not with the IT budget gestapo, it’s selling directly to the lines of business that can produce real returns on small investments.

I tried to make this point to Vinnie Mirchandani today, who knows better. I know there will be a lot of push back on this issue. And, I’m a lover, not a fighter, but hey– it is a revolution whether you’re the revolutionary type or not.

Posted in Consultants, Enterprise 2.0, Enterprise Mashups, General IT Services, IT Outsourcing, Next Net, SaaS, Web 2.0 | 2 Comments »

ITSinsider 2.0

Posted by Susan Scrupski on August 23, 2006

I see I got a jump today on my blogstats. Visitors must be coming in from my friend Frank’s new outsourcing portal that he launched today. For all my homies coming here from the outsourcing community, I hope you’re not disappointed I’m not writing about EDS, IBMGS, and CSC. (I did leave a comment on EDS’ Next Big Thing blog on web 2.0., however.

The facts are that outsourcing has changed so dramatically in these past five years. I think it was all over for me when I heard George W. Bush use the “O” word sometime in the 2004 election year. When I came back into the business (and you can see some of this in the early postings on this blog), the offshoring phenomenon, the fractured BPO market, the pressure on margins for suppliers, and the sudden plethora of experts that have flooded the market… all drove me back to looking at the Internet again with longing eyes. I’m being cautiously optimistic and giving that Godzilla a second chance.

The good news is– there will be a heck of a lot of systems integration to be done in Enterprise 2.0 with web 2.0 tools. SI is outsourcing’s second cousin. It’s a respectable margin business, so you IT Services firms take heart. The really good news is you can hire or rent kids out of college to do the work (read: better margins).

I’m still finding my way in this new sector, but stay tuned. I’m on it. Please feel free to drop me a note. You know I’d love to hear from you.

A word on Frank’s portal. I think portal is a web 1.0 word, but in this case, it’s working for me. I’ve said this before, but Frank Casale at the Outsourcing Institute has always been a step ahead. He had the foresight to reserve in the mid-90s before anyone was on the web, definitely in the outsourcing sector. He has ambitious and interesting plans for this site, and I’m pleased to be participating in his new venture. For now, I’ll be moderating forum panels on Marketing and The Next Net. More interesting opportunities are in the offing so stay tuned.

Posted in General IT Services | Comments Off on ITSinsider 2.0

Making up Another Mind*

Posted by Susan Scrupski on July 16, 2006

Yesterday, I notice I had a flurry of activity on the blog (a blip really, in blogosphere terms, but a flurry in relative terms for my usual activity) with a reader coming in from a search for “Sapient Blog.”  I would like to cover the Interactive Agency sector fairly aggressively, but my overtures to this market (other than Sapient, actually) have fallen flat.  Remember, most of the firms I covered in my 2000 report have vanished.  The survivors are very different firms today, even Sapient, for that matter.  The firm I have the best relationship with– LBIcon— is a continent away and not a major player in the US.   All that being said, it looks like I’m left standing behind the velvet ropes on this private club.  So, it’s like I told a newly crowned Dick Brown taking over at EDS who chortled at me, “Be good to me Susan!”  I told him he had to earn it.  I’m now on the other side of that hubris and will have to earn the respect of the IA community before they’ll confide in me and allow me into their party.

In the absence of focusing on the IA sector, I’ve turned my attention to the SaaS market and the budding enterprise 2.0 sector.   I’m finding developments and discussions in this sector extremely interesting and addicting.  I’ll be writing a story for GITS for the next two weeks on how the prospect of new enterprise SaaS applications may stand to disintermediate the billable consultant.  It has major implications for the consulting and systems integration markets over time.  I’m looking forward to what I discover in the reporting. 

I have managed to reconnect with more of the IT Services fraternity.  Jeff Kaplan, whom I’ve always had a lot of respect for, has turned his attention to SaaS.  I also had a nice lunch recently with Vinnie Mirchandani whose blog is listed in my blogroll. 

*See post May 17 for headline reference.   

Posted in Enterprise 2.0, General IT Services, Interactive Agencies, SaaS, Web 2.0 | Comments Off on Making up Another Mind*

My Bad (blog and blogging habits)

Posted by Susan Scrupski on July 13, 2006

I received a nudge from a reader I respect who suggested I need to post more regularly to be taken seriously. 

“To be perceived as a blogger with time sensitive market insights, you need to have more frequent postings .”

Ouch.  The good news and bad news about blogging is unlike old school print magazine column-writing, you can see in real time how many people are reading your blog, where they’re coming from, what they searched to find you, and of course, who’s commenting and the quality of the comments. 

The A-list tech bloggers are doing a phenomenal job beating some of the major media to the punch with major developments.  There’s even a bit of a sea change going on in the analyst world with leading independent bloggers usurping the stranglehold on influence that the leading industry analyst firms have always wielded.  See this story in InformationWeek

When I told a friend I had all but abandonned the blog of late, he recoiled,

“Abandoned the services market– no way!  There’s too much action there!”

Personally, I don’t know how the A-list bloggers do it.  Take one of my favorite bloggers, Rod Boothby, who happens to also be a senior guy at E&Y.  I’m interviewing Boothby for a story I’m doing right now for GITS, and he told me he’ll be wrapped up with a client all next week.  So in addition to some sophisticated management consulting day-job work, he’ll squeeze in my interview (and I’m probably one of many), keep up with everything else going on in the blogosphere, and keep posting terrific content on his blog.  It’s superhuman. 

Until I learn how to manage my time better, I’ve opted to accept an offer to VLOG– a video blog with a large outsourcing community.  Details are coming.  I’ll keep you posted.  In the VLOG, I’ll be reporting on news, trends, adds/moves/changes in the outsourcing market, some rumors and general musings. 

Posted in Consultants, General IT Services | Comments Off on My Bad (blog and blogging habits)

Keane settles

Posted by Susan Scrupski on June 21, 2006

I issued a press release this week, so I've been a little busy catching up with old contacts.  I saw this today on InformationWeek's outsourcing newsletter.  Keane settled with Georgina Fisk, the firm's VP of Marketing for $1.4M on alleged charges of sexual harassment.  This is a huge victory for victims of sexual harassment.  And so fast…!  Keane's board ought to be commended. 

Posted in General IT Services | Comments Off on Keane settles

Don’t count out the Big Guys…

Posted by Susan Scrupski on June 16, 2006

A press release issued today from my old friends at EDS caught my eye. EDS announced the company built a secure, web-based portal for its long-time outsourcing customer, Blue Cross/Blue Shield of Massachusetts (BCBSMA). According to the release, EDS integrated several of BCBSMA's internal systems in order to provide convenient and simple access to a host of administrative information and provider processes to BCBSMA's network of 35,000 physicians and healthcare providers.

I was just talking yesterday to Larry Bissinger who leads analyst relations for EDS, making the point that veteran IT Services players and outsourcers are in an enviable position to bring next generation technology to the best customers. Take the BCBSMA relationship for EDS. I remember a DATAMATION column I wrote in June of 1994 where employees who were outsourced to EDS sued BC/BS and received $9M in a class action law suit. It was a landmark case at the time. EDS and BCBSMA survived all the spectacle and strain that must have put on their relationship, and the relationship has been renewed and extended a few times since the first deal-signing. Joe Fraser, the EDS client delivery executive, has been there for 15 years. With those roots, it's logical that BCBSMA would turn to EDS first when they want to investigate technology improvements. Granted, some of the improvements are already in scope of their existing agreements, but EDS is more than the sum of its contract parts. My point here is, we should expect to see innovation and business model reinvention coming from old, familiar places. Not everyone will abandon their preferred vendors for the "hot shop."

Posted in General IT Services, IT Outsourcing, Web Integrators | 1 Comment »

Trust, Communications, Relationship-management…

Posted by Susan Scrupski on June 9, 2006

Frank Casale invited me to co-moderate a workshop yesterday at his Outsourcing Institute NYC Roadshow on "Outsourcing's Bad Rap: Playing Politics." Throughout the day, although the outsourcing market has changed so much over the past ten years, I heard the recurring themes of trust, communications, and old-fashioned relationship management. Buyers and sellers all have their war stories.

The day was excellent. A comfortable and informative series of workshops and presentations. OI holds a series of these workshops. If you're interested in outsourcing, definitely worth attending.

Posted in BP Outsourcing, General IT Services, HR Outsourcing, IT Outsourcing | Comments Off on Trust, Communications, Relationship-management…

Posted by Susan Scrupski on May 12, 2006

Yep. Sexual Harrassment. Mother's Day special. Read the Globe for the scoop. Incidentally, there were some unsavory comments on the Yahoo Financial Bulletin Board reporting eye witness accounts of Brian Keane's behavior at a recent company event. Regardless, the Keane board elected to remove him after considering all the evidence and allegations. For women everywhere who have been victims of real sexual harrassment, I hope this is a victory.

For the record: I was sexually harassed as a young woman in my early career at EDS. As a young professional woman, not wanting to jeopardize my future, I only talked about it to my peers. Enough women had a problem with this particular manager, and to EDS' management's credit, the manager was fired within the year. And this was in the 80s before litigation was so crippling….

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