25 April 2008

Paul Bevan, director of marketing for outsourcing in the UK at Unisys, explains why the consumerisation of IT is the way forward for financial services firms.

If you hadn’t noticed it, a new generation of users has invaded the corporate IT world. A number of new terms have been coined to categorise this group of young people entering the workspace – GenY, New Millennials, Digital Natives – but whatever the term it appears they are giving IT departments sleepless nights. For the first time people are entering the workplace IT literate and expecting to find the level of technical sophistication and flexibility they have grown up with. Imagine their surprise and disappointment to find that the IT they have to use at work is often not as good as what they have at home, and the way they want to work is seriously hampered by IT policies designed to maximise security and minimise cost, often at the expense of end user productivity.

Their response has been to use the tools and technologies they are used to, to help them collaborate, communicate and access information. Smartphones, PDAs, 3G Phones and Skype applications to name just a few, are now being used with or without the consent of IT departments. The challenge is how to harness this trend for competitive advantage rather than trying to fight it because, according to analyst firm Gartner, this change is unstoppable, and the topic of the ‘consumerisation’ of IT is now one of the most frequently raised in analyst inquiry calls.

The obvious implications of the increasing use of consumer technology in the workplace, leading to a proliferation of devices and software, are on the cost and complexity of end-user support and on security. A recent study conducted by Unisys with over 900 large companies found that in 63 per cent of firms employees were spending 50 per cent more time on computers than five years ago, and that in 51 per cent of firms about a third of users use multiple devices. The result of this has been a rapid surge in end-user support costs with 47 per cent of firms with revenues of more than £500 million reporting costs rising by at least 50 per cent in the last five years.

In the financial services industry, quality customer service is a key differentiator, and this is leading to increasing mobility among advisers and agents. But with trust and reputation of crucial importance, and budgets under pressure financial services companies keenly feel the risks attached to consumerised IT.

It may be surprising therefore to hear Unisys claim that this increased complexity can be handled without increasing costs, and in such a way as to reduce security risks. The use of Web-enabled applications and the emergence of software and hardware virtualisation technologies makes it possible to consider allowing end users far more freedom in what hardware and software they use. If you have a group of users who can access all their applications via the Web, or you can deliver a ‘bubble’ of applications to a user’s laptop through virtualisation technology, you can have a much more controlled corporate environment while still allowing users the flexibility they crave.

But in this anytime, anywhere using any device world, won’t security be compromised? The answer is no. The focus has been on trying to manage an ever-changing network boundary, and assuming that those within the boundary are friendly. By focusing on pulling in the network boundary much more tightly, on access via the Web and the use of SSL VPN technology, and then by assuming that all those accessing the network are potentially hostile, you actually tighten up security.

So in this new Web-enabled, virtualised world is it necessary any longer for companies to procure and own their end-user devices? A few companies have started to experiment with models that allow select groups of employees to be given a ‘digital allowance’ to buy and maintain their own technology. The nearest analogy to this is the company car. Twenty years ago company cars, bought and maintained by the company, were common. Yet nowadays it is far more usual to find car allowances where employees are given an annual allowance to provide their own vehicles based on certain minimum specifications and requirements.

This is not a complete free-for-all, and IT departments will need to draw up a minimum set of specifications that users must adhere to. There is still the question of end-user support. The car allowance works well because there is a tried and tested support mechanism in place from networks of dealers and independent garages. Will this work as well in the IT space? From a hardware perspective Unisys sees the model moving increasingly to a swap-out and replace rather than repair model more akin to what we see today in the mobile phone market, as users keep technology up to date and change before warranty has expired. For software the situation is obviously more complex. Having your corporate applications Web-enabled or virtualised may enable IT departments to keep those applications running, but no doubt users will still experience problems caused by pieces of their own software not working well together. To address this issue, service desk providers will need to take on some more consumer characteristics and start offering pay-for-use models to individuals as well as more standard service desk contracts.

An unintended, but potentially beneficial consequence of the use of a digital allowance is the transfer of responsibility and liability from the company to the end-user for issues such as software licensing and unlawful content. At the moment, if a company employee is found with unlicensed soft - ware or unlawful content such as pornography on his laptop or desktop, he or she may be liable to disciplinary action. But the law holds the company legally responsible because the hardware belongs to them. Under a digital allowance, that liability now falls squarely on the employee.

A digital allowance also removes the assets from companies’ spreadsheets and brings a level of visibility and consistency to end-user computing expenditure. It could also be less costly, since these days it is often cheaper to spot-buy technology from your local retailer than to acquire it on a corporate contract.

The consumerisation of IT need not be the nightmare it at first seems. There is no ‘one size fits all’ answer. The issues are as much about business process, policies and people as they are about technology. However, viewed positively it does offer IT departments the opportunity to align IT closely to the business. Microsoft will be strongly placed to provide the solutions inherent in its Unified Communications strategy, particularly Communications Manager, into this space alongside its more traditional personal productivity and office applications. Meanwhile Unisys, with its business blueprinting methodology, its heritage and track record in delivering secure business solutions, and capabilities in end-user support services believes the time is right for companies to start on the road to embracing the consumerisation of IT and delivering to the CIO an important weapon in the battle to attract and retain the best new GenY talent.

This article was originally published in the Winter 2007 issue of Finance on Windows magazine.