Recessionary crises? Time for a little subversive transformation

Dr Richard Sykes extends his discussion into subversive IT transformation by putting some additional questions to Steria – read them at the end of this article.

The instinctive response to the current recessionary crises is to freeze into stasis. The CFO is hoarding cash (so definitely no capex) and the CEO is aggressively scrutinising headcount. Not the time to take risks and launch new projects. And yet the crisis looks set to be both severe and long lasting, so is now really the time to reinforce the status quo? Especially if it includes much inflexible and expensive to operate & maintain legacy, ill positioning the business to rapidly shed cost and respond flexibly to the inevitability of new challenges?

Time, rather, for a little subversive transformation. Indeed, two transformational exercises will speedily deliver the immediate benefits of sharply reduced operational costs and dramatically increased operational flexibilities – both vital to steering a lower risk, more positive systems course at this time. They will also better position the business to exploit the upturn that will come, even if not until a year or two into the next decade.

But subversively? SOA technical architectures now provide the means to cut the Gordian legacy knot of older, tightly integrated architectures without the need for mega projects that take years to deliver with all their investments of human resource and capex. New generation Business Process Management capabilities, built holistically with open systems/SOA architectures at their core, can be used to deconstruct legacy structures in virtual terms.
This in turn enables the implementation of systems change through simpler and shorter term projects that, by steadily breaking the restraints of tightly coupled legacy, will deliver returns measured in months rather than years. These are projects that can be managed as opex exercises because of their speed and low cost of implementation, combined with such rapid returns.

In aggregate their impact is transformational – but compared to classic transformational initiatives, subversive. Ian Thompson, former Managing Director, Group Operational Services at Lloyds TSB, comments: “Balancing the long-term business requirements for modernisation with the shorter term P&L needs as well as the current capital constraints is one of the biggest challenges CIOs face today. Setting out a strategic road map including SaaS and virtualisation and then implementing fast, short-term projects can provide the win-win that the CIO is striving for."

So what are these two transformational exercises? The first is the determined commoditisation through virtualisation of data processing, data storage and data networking requirements. Through conversion of the business’s own facilities or through migration onto externally-sourced ‘on-demand’ infrastructural services ‘from the Cloud’ (or a mix of both), the outcome is the same: business operations underwritten by a specifically crafted platform of highly scalable on-demand capacity, delivering much reduced and commoditised transactional costs, a flexibility for further change, and the end of the need to raid the corporate capital programme.

The second is the developing SaaS (Software as a Service) transformation of the software supply chain. Generic back office and front office systems requirements can increasingly be sourced as standardised and competitively priced SaaS capabilities – and the same SOA architectures enable them to be easily managed and integrated with in-house delivered systems on the operational platforms described above. These platforms can also now serve to simplify the integration of the business’s web-based services more directly with the (now virtually deconstructed) legacy systems.

Steria’s Financial Services Sector managing director Yvonne Spalding is keen on this type of subversion. She comments: “The combined exploitation of these two developments represents a significantly transformational journey. This requires careful scoping and design, as all change brings new risks in ensuring the maintenance of security and continuity with the assurance of unbroken legal and regulatory compliance. Steria is a trusted partner of choice in crafting and making this journey, able to draw on extensive experience at every step. And the design of the journey as a series of distinct and short-term projects, with rapid pay backs, to be delivered within the restraints of the business’s opex cash flows, plays to the core of our solutions creativity: a leader in delivering the subversive transformation business model.”

So the CIO is now on side – no capex requirements and a sharp reduction in operational costs. And the CEO? In tough, recessionary times, the focus has to be on ensuring the business has the right people focused on the right roles in delivering front line competitive core competencies. The transformational journey scoped here modernises and commoditises underlying infrastructural and back office operations so that the people agenda can be correctly re-focused where it really counts – on exploiting those front line competitive core competencies. The CEO is delighted! 

Steria in the spotlight
So now, let’s put some questions to Steria in order that we can dig deeper into this subject from the service provider perspective.

Can you expand on the comments around risk and the need to ensure the maintenance of security and continuity in this transformation journey?
There is an understandable concern that with the advent of ‘Cloud’ computing and the greater uptake of Software as a Service the security of your internally-managed systems that you’ve carefully nurtured over the years will be put at risk. You may be considering using the services of an external data centre via the Cloud – what’s more that datacentre could be in a different country with different regulatory regimes than your own so there will be audit concerns as well. How can you guarantee the security and integrity of data that’s being provided across the internet?

Governance and rigid processes for managing that data must be integral to the solution you source. If yours is a global business, make sure those processes embrace different regulatory requirements. Do the processes meet your data needs in terms of storage, retrieval and removal from the system? A partner such as Steria with a proven record of both compliant service delivery and data assurance can support your transformational journey to a new business model that’s equally as secure, if not more so, than your current one. Relationship quality and longevity is also vital – many of Steria’s relationships with its clients extend more than 15 years and encompass a broad range of services and solutions. This ‘long term’ approach is vital if a company is going to entrust its valuable customer and corporate information to an external company.

Ask the questions you want to ask before embarking on your subversive transformation – not half way through it – and you can work in partnership with your services provider to safeguard your information assets.

Transformation of any size is a major commitment, so why would I choose Steria over and above some of the larger global players or pure play Indian suppliers?
Steria has the size and capability to stand shoulder to shoulder with large organisations, working on risk/reward contracts that most of Steria’s competitors would not consider. With 20,000 professionals in 16 countries across the world, Steria delivers IT-enabled business processes and services designed to help companies operate more efficiently and profitably. We combine an in depth understanding of our clients’ businesses with expertise in IT and business process outsourcing to develop tailored solutions that address the key operational challenges faced by companies today.

Knowing that offshoring is a business model suited to Cloud computing and that Steria’s own model features offshore service delivery, can you allay my organisation’s concerns about whether this approach will genuinely reduce our costs and improve service levels?
Steria works with many of the UK’s largest banking and insurance companies, a large number of whom use our offshoring services. We have a more sophisticated approach to outsourcing than many of our competitors. We deliver the benefits of globally standardised processes and tools where it really counts – locally, thanks to our onshore-offshore-onsite model. This enables us to streamline and refine processes to drive out costs and improve operating rates. We work with companies to deliver customer service excellence across multiple channels and provide the capability and flexibility to accelerate speed to market and assure business insight and regulatory compliance.

While this article has focused on adopting subversive tactics to IT transformation, at Steria we recognise that each company must evolve its own IT strategy in its own way. Our partnership approach to working with our clients means that we understand your business objectives and constraints. We won’t just work with you to evolve and extend the life of your systems but, if your business model demands, we’ll develop innovative, even subversive, IT roadmaps that can support your IT evolution in the years to come. That evolution may incorporate Cloud computing or other technologies that have yet to emerge as alternative routes to cost reduction and service enhancement.

To find out more about how Steria works with leading banks and insurance companies visit www.steria.co.uk/finance.