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1 WHITE PAPER Network Consulting Services Lead Enterprise Transformation Sponsored by: HP Leslie Rosenberg February 2011 Curtis Price Global Headquarters: 5 Speen Street Framingham, MA USA P F IDC OPINION The IP network has become business critical for organizations that increasingly rely on it for all forms of communication and business processes. Additionally, the desire for advanced technologies residing on the network rapidly increases the complexity on the network. This complexity requires that IT professionals seek guidance from outside resources to help with the demands placed on the network to achieve business outcomes. As a result of these demands, services organizations will play an increasingly important role in helping enterprises develop network strategies to optimize and successfully deploy networking investments.! The extended enterprise. Enterprises are struggling to keep pace with increasing business demands that employees, customers, and partners are placing on the network. Enterprises are more global, mobile, and 24 x 7 than ever, and the proliferation of consumer devices as well as the inclusion of virtual communities and collaboration tools that are deployed in the enterprise environment will continue to increase for IT organizations.! Securing the enterprise. With an increase in the number of devices and endpoints (both enterprise and consumer) now attached to the network, security can no longer be an afterthought. It must be strategically incorporated into every process and network design. As a result, services firms must expertly guide their enterprise customers on the impact of extending their network to a variety of users and consumers.! Ensuring customer adoption. New networking initiatives, such as datacenter consolidation or collaboration, can be transformative yet disruptive to organizations and the way they conduct business. Any new, advanced networking deployment cannot be considered complete without comprehensive end-user training to ensure successful end-user adoption.! Opportunity: enterprise network consulting and integration market size and growth. Enterprise IT organizations have historically procured networking solutions (products and services) from one of three sources: network equipment suppliers and their channel partners, systems integrators, or telecom service providers. Demand for network consulting and integration services (NCIS) is continually driven by the enterprise's desire to incorporate more advanced technologies into the network, such as IP voice, video, mobility, unified communications (UC), virtualization, datacenter, and cloud-based solutions.

2 The desire to integrate next-generation solutions with existing technology investments increases the need for more high-value services such as strategy and planning activities. IDC believes technologies such as virtualization and datacenter consolidation will be drivers of these service activities. The majority of NCIS activities are technology driven; however, as more complex technologies come online, enterprises must understand the need to add additional service capabilities such as process consulting, integration, and optimization to the overall scope of the engagement. According to IDC's recent Enterprise Communications Infrastructure Survey, the significant reasons for use of IT products and services include increasing efficiency, increasing growth, and continuing to be competitive. Organizations want to increase operational efficiency, by managing costs and the business more effectively, while deriving maximum value from every customer and investment dollar. They want to gain efficiency from existing and potential new IT investments. Enterprises want to grow and expand into new markets and tap into new opportunities. And of course, they want to be competitive. Technology helps them to do this. Additionally, according to the results of IDC's 2010 EMEA WAN Manager Survey, enterprises stated that improving and optimizing existing infrastructure is top of mind. Projects that fall into this category such as improving application performance, network security, server virtualization, and simplification of the network will be top priorities in the next months. Specific technologies such as UC, cloud, mobile applications, and video on the network will also be drivers for network upgrades and associated services. Because all of these initiatives are complex and transformative, the need for professional services will increase to help make these projects come to fruition (see Figure 1). 2 # IDC

3 FIGURE 1 Top 3 Most Important Issues to Enterprises Q. Of the following issues, can you say which three are the most important to your organization at the moment? Improving application performance on the WAN Virtualizing servers Improving WAN security Simplifying WAN structure Converging voice and data on IP Deploying unified communications Deploying applications on mobile devices Moving toward cloud computing Putting video over the WAN (% of respondents) n = 1,546 Source: IDC's EMEA WAN Manager Survey, 2010 IDC believes that migration to next-generation solutions will be transformative for many enterprises. These projects will be broad and involve various stakeholders within the enterprise. As a result, there will be an increased emphasis on up-front consulting services to help minimize the risk associated with migration to next-generation solutions while ensuring that business objectives are achieved. The impact of an improper deployment on the business will increase in significance as the network evolves to support critical business processes. Consequently, IDC believes that consulting-related activities will represent a larger portion of next-generation solutions revenue. Challenging economic conditions have affected project-based services, slowing spending on networking upgrades and new network-based initiatives in the near term, but IDC feels that project-based services, in particular NCIS, will rebound and grow over the forecast period. The network remains core to IT strategy, and IDC believes that NCIS, which is intimately tied to enterprise network infrastructure growth, will begin to rebound over the forecast period to $29.5 billion by IDC #

4 IN THIS WHITE PAPER This IDC White Paper aims to help senior executives and channel partners better understand the strategic importance of the network in their organization. This paper outlines how network consulting and integration services can help define network-based strategies to increase competitiveness, efficiency, and cost savings surrounding advanced network-based deployments. This document is largely based on IDC's existing knowledge and research of the IT and communications marketplace. SITUATION OVERVIEW Maximizing the Network as a Competitive Business Differentiator and Valued Business Investment The role of the enterprise network has evolved over the past few years. Historically, network and communications infrastructure was considered a cost center; however, that view is changing as many organizations now view the network as a key enabler of business agility and operational efficiency and as a source of differentiation. Through effective utilization of the network, businesses can stay closely connected to customers and suppliers while becoming more responsive to rapidly changing customer requirements. As a result, investments in network infrastructure technology are increasingly being linked to business objectives. While these objectives can range from increased worker productivity to improved customer experience, the reliance on the network to enable these objectives will place greater emphasis on ensuring high network availability and minimizing the risk of disruption. Technology advancements and market dynamics continually drive the need for enterprises to utilize professional services that have strong NCIS skills to help them maximize investments made in network infrastructure as well as to help strategize for future initiatives and investments. These factors can greatly impact the strategic direction IT organizations will take to help them be competitive. Services organizations with proven methodologies, best practices, and experience will help guide enterprises through how these factors can impact the network and desired business outcomes.! Network convergence. Services firms have the capability to manage the convergence of servers, storage, and networking equipment, coupled with systems management software and the ability to manage power and cooling resources, into a converged infrastructure or virtualized common fabric.! The value of migrating from proprietary to an open architecture. Enterprises cannot afford a "rip and replace" strategy when migrating to a next-generation solution. The proprietary nature of existing network technology solutions has locked customers into the supplier's development cycle. This limits the flexibility with which and pace at which enterprises can drive innovation in their network infrastructure. For this reason there is increasing value in implementing a more agile and open network architecture. Services firms that understand this investment and work to build a migration strategy to develop more open, flexible, 4 # IDC

5 product-agnostic networks can ultimately deliver more agile and cost-effective network architectures. In doing so, this strategy can free up expensive resources and talent to be utilized on other mission-critical projects.! Reducing network complexity to simplify management and accelerate agility. Services firms must understand the IT staffing, resource, and budget constraints of enterprise organizations and build strategies that will allow IT managers to bring new services to market rapidly and securely. Simplifying the network infrastructure not only improves cost savings but also helps IT organizations react more quickly to changing market conditions, bringing new services to market faster to capitalize on new revenue opportunities.! Reducing cost of network ownership. Networks today are viewed less as cost centers and more as strategic investments for delivering new services, gaining competitive advantage, and increasing productivity. Services firms can help enterprises realize the potential in their networks by developing strategies to help organizations optimize networking investments as well as work to unlock the potential for new revenue streams based on business strategies. Consulting services offered by services firms help enterprises reduce the overall cost of network ownership by transforming the network into a business innovation center. Networking Services Enable Transformation Services firms play an integral role in developing strategies for enterprises to optimize their network investments. Traditionally, services firms have been viewed as having primarily technology expertise, but today, services firms have transformed their own skills to emphasize the importance that business strategy and consulting will have in defining the direction of the network as it plays a much more strategic role within the enterprise.! Aligning transformation goals and business objectives. Services firms provide tested methodologies and best practices for enabling transformation of enterprise network strategies. A transformation engagement should begin with a strategy session to ensure that business objectives are defined and stakeholders are in agreement. A thorough assessment of current networking assets should be completed during this phase, and a tight alignment between the desired and current state must be defined. Goals are then defined and the services organization will guide the enterprise customer which may include a variety of stakeholders and decision makers depending on the business objective through a series of distinct phases, all of which include benchmarking and end-customer agreement. This type of work is very people, process, information, and technology intensive. A services firm's ability to understand the interdependencies of these elements and orchestrate a transformation strategy with this in mind will provide high value to an enterprise pursuing network transformation.! Designing a migration road map to network transformation based on business benefits. Technical expertise and strong project management skills are requisite in this phase of the transformation. Designing, architecting, and migrating to new technologies must include a risk mitigation plan to ensure successful deployment with no disruption to the business. Benchmarking and meeting defined metrics during this phase are essential IDC #

6 ! Minimizing complexity through simplification. Integrating or consolidating sprawling networking systems and architectures is extremely complex and costly to the business. Services firms' technical expertise can take the complexity out of these systems by carefully architecting solutions by leveraging the latest technology to maximize simplification, reduce TCO, enhance performance, and optimize the network for future objectives.! Coordinating across departments. Transformational projects involve multiple stakeholders throughout the enterprise, all of which have varied requirements and desires. Services firms develop planning discussions or workshops early in the process with these stakeholders to ensure that all parties are in agreement. They then need to work with the organization to set achievable goals and define success metrics. Services organizations will take the onus to ensure coordination and collaboration between departments and that the project stays on track even through revisions and modifications throughout the project.! Maximizing transformation through education services. IDC believes that one of the most critical aspects of a transformational project is end-user adoption. Without an established plan for education services to increase adoption of the technology by end users employees, partners, or customers the investment becomes expensive and irrelevant. Cultural paradigms, etiquette, and usage patterns all play a role in the adoption of new technologies. Services firms with defined education services will only ensure the success of a transformation project. A Set of Service Capabilities for Successful Network Transformation Each enterprise transformation journey is unique, and services firms must intimately understand the business needs and challenges within the organization as well as understand the long-term vision of their client. Services firms that leverage pretested, defined methodologies and established best practices that include workshops, road maps, and goal setting, coupled with best technology practices throughout every stage of the project, will minimize the risk associated with undertaking a network transformation. IDC believes that services firms that have multivendor expertise are best positioned to understand their customers' complex environments and also can deliver best-inclass technology expertise. The ability to be product agnostic, coupled with delivering best-in-class solutions across a broad set of suppliers, while being open to customers' desires and budget requirements is extremely powerful. For global enterprise customers, the ability to plan and design the network, as well as have the capability to procure, install, and deploy the solution globally, will be critical. Many services firms do not have this capability and will need to reach out to partners locally to complete deployment of the solution globally. While this is acceptable for many solutions, leveraging one firm to deploy a global solution is optimal. 6 # IDC

7 And lastly, providing education and training services to ensure end-user adoption and successful deployment of the solution is essential. The following critical skills are needed to deliver transformation:! Proven methodologies and best practices. Best-of-breed technology expertise with end-to-end solution capabilities! Multivendor expertise. Experience in implementing multivendor environments! Broad technological expertise (IT and networking). A broad partner ecosystem and access to a range of technologies! Project management skills. Certified personnel to cost-effectively deliver transformation objectives and manage multiple stakeholders! Global services delivery! Appropriate levels of automation and tools, education services FUTURE OUTLOOK The result of up-front consulting services is an adaptable map a blueprint that aligns business strategy with the underlying infrastructure of where the enterprise customer is today and how it can get to a future state that allows for lower-cost operation and improved business efficiency and effectiveness. IDC believes that consulting services as part of a network transformation strategy will continue to increase in importance in the enterprise. This will primarily be driven by the desire for advanced technologies and mission-critical applications residing on the network. The challenge becomes not about deploying and integrated the latest technology but about designing network road maps in a manner that achieves business goals. The increased complexity of the networking environment will require enterprises to seek expertise from services firms to help them navigate and plan for future initiatives and investments. CHALLENGES/OPPORTUNITIES Organizations need to understand that project-based services, such as network consulting and integration services, may seem costly in the near term, especially with tight budgets, but inaction or not fully leveraging the services offered can be even more costly to the business.! Failure to completely identify business needs. A complete road map may not be fully developed, thereby missing critical business issues that need to be addressed.! Risk mitigation. Critical business processes may be negatively impacted.! Benchmarking. Full potential of network transformation may not be fully realized IDC #

8 ! TCO analysis. Full cost benefits may not be achieved.! Open standards discovery. A product-agnostic discussion of existing and future network purchases may be needed to reach desired business objectives.! Talent and expertise. Undertaking a major network transformation may tax limited internal IT resources.! Collaboration. Buy-in across multiple users and groups may be missed. CONCLUSION As businesses deliver more mission-critical applications, network services, and sensitive customer data to the network edge, enabling employees and partners to better collaborate and serve end customers, they are more dependent than ever on the reliability, security, and redundancy of their infrastructure. Increasingly, customer transformation requirements include both network services that ensure uptime and operation and network consulting services that enable maximum value and deliver on the experience and expected business value/return of the investment. IDC believes that enterprises that are using network consulting services realize the value of the services in ensuring a successful network deployment that in many cases creates a sustainable competitive advantage. Customers are gaining an appreciation of the increased complexity of what they are implementing. By leveraging network consulting and integration services, enterprises gain access to project teams with deep skills in transformation. Copyright Notice External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2011 IDC. Reproduction without written permission is completely forbidden. 8 # IDC

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