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The East African : April 28th 2014
The EastAfrican OUTLOOK APRIL 26 - MAY 2, 2014 e -AF R ICAN Managing IT infrastructure demand Functions can ≥educe costs and imp≥ove se≥vice delive≥y A JOINT REPORT NYT News Service T he top priority in 2014 and beyond for many IT infrastructure leaders is to reduce operational costs through efficiency gains. They can then meet tight budgets at a time of economic uncertainty and fund new investments without increased budget allocations. Based on 50 discussions with Fortune Global 500 heads of infrastructure, it is clear that one key initiative to improve the cost and delivery of IT services is to adopt a more commercial-style model of interacting with internal business partners — such as application-development teams, lines of business and support services. We often see frustration between IT and business partners because the partners don’t have the means to understand clearly the cost drivers of the IT services they use and therefore find it difficult to influence their infrastructure expenditure. Hence, some organisations strug- gle to manage demand for IT infrastructure, which includes all the hardware, software and operational support required to provide application hosting, network and end-user services. To save costs and prepare for adoption of next-generation infrastructure technology and hybridcloud models, leading organisations are adopting commercial-style demand and service management that has two key characteristics. The first is a standard services catalogue with clearly priced offerings that can be consumed on a price-times-quantity basis. Such a catalogue requires creating bottom- ise 10 to 20 per cent cost savings. While these changes are well aligned with deployment of nextgeneration infrastructure technologies such as private-cloud platforms, several of the efficiency benefits, including shorter provisioning time, can be achieved with legacy infrastructure as well. A commercial IT infrastructure organisation is based on several essential building blocks: Well-defined services should be described by a strong, comprehensive service catalogue that presents a range of infrastructure offerings defined by functionality, service levels, and unit costs. Self-service portal The catalogue should include five to 10 services in each service area: For example, databases, application platforms and Web platforms covering 80 to 90 per cent of infrastructure requests and costs. As many services as possible should be delivered through a self-service portal with automated provisioning. A service catalogue could also include external services — such as public-cloud computing. Detailed pricing must be linked A computer server room. Picture: File WHAT IS REQUIRED A service-oriented organisation is necessary and should include a product-management team to incorporate unmet business needs into future service offerings, forecast demand and manage capacity. Supporting processes and tools up unit costs for each service based on a detailed bill of materials. The second characteristic they share is that roles have been established for IT to interact with business part- are essential. The biggest challenges for effective demand and service management include managing change across business and IT organisations and designing an effective approach to consumption reporting and cost transparency. ners in a more commercial way. These changes are tough to make. But if an organisation can introduce a new model for demand and service management, it can usually real- to demand choices and measurement of consumption by business units should be automated as much as possible. Accurate cost allocation with automated reporting allows organisations to clearly present consumption and cost data to business partners so they have the information they need to manage and improve their own cost structure. Supply-and-demand metrics and benchmarks should be normalised for differences in (service level agreements (SLAs). For example, the service catalogue could enable SLA-adjusted benchmarking with external cloud providers and offer practical business rules for when additional internal services are required. Facebook could take ove≥ the ≥emittance indust≥y By LEONID BERSHIDSKY Special Correspondent WHO WOULD want to use Facebook as a bank? According to the Financial Times, the social network is close to receiving authorisation from Ireland’s central bank to become an “electronic money institution.” The status would allow it to process transfers and payments throughout Europe, where the market for non-bank financial services appears to be heating up with big new entrants such as Vodafone. The customers Facebook is targeting, though, may be as much in developing nations as in Europe. According to the World Bank, adults with bank accounts range from 98 per cent in Germany to 45 per cent in Romania and financial inclusion rates in Europe will inevitably converge. Google has had an e-money licence in Brit- ain for almost three years but its Google Wallet service appears to be bringing in little revenue. Full functionality, including personal transfers, is available only in the US, where 88 per cent of people have bank accounts. Facebook may be aiming at a different demo- graphic though: Migrants working in the developed world who send money home to the developing world. This is an area ripe for disruption. The firms that dominate the market tend to charge a lot for their services and mostly aren’t much fun to use. Last year, they channelled $404 billion in remittances, which the World Bank predicts will expand to $436 billion. Most expensive ‘corridor’ The most expensive “corridor” runs from South Africa to Zambia: It costs $21 to send $200, according to the World Bank. The biggest recipient country is India, at $71 billion last year. Facebook has about 100 million users in In- dia. One can send the euro equivalent of $200 from Germany to India for $1 in a matter of days using a London start-up called TransferWise, set up by Skype’s first employee Taavet Hinrikus and another Estonian, Kristo Kaarmann. Facebook is likely to improve on that by guar- anteeing instantaneous transfers and offering lower prices and is reportedly talking to TransferWise and its peers about a partnership. The important part is making it easy for peo- ple to withdraw cash. Vodafone’s e-money operation, M-Pesa, solved this in Kenya by setting up a nationwide network of agents who pocket most of the commission the service earns. Facebook has ample motivation to try something similar: If it made a quarter of a cent on each dollar transferred to India by migrant workers, it would have a $177 million revenue stream. If companies such as Facebook and Google build up experience serving the unbanked in the developing world, they could someday challenge retail banks in rich countries. For the time being, getting involved in the remittance industry could be an interesting way to monetise user bases that are not particularly valued by advertisers. BRIEFS Continental IX point to reduce Internet cost NAPAfrica, the Internet exchange (IX) point, is expected to drive down the cost of Internet on the continent as more service providers adapt the exchange which offers virtual connectivity sharing. The service has already been snapped up by Seacom, Liquid Telecoms and New Telco. According to Michele McCann, NAPAfrica’s business development manager, providers are expected to use the exchange to tap into the anticipated growth of user numbers by 2025. The number of Internet-enabled phones used in Africa is expected to rise from 67 million to 360 million by that time, according to the McKinsey Global Institute. Dar to subsidise telcos that cover rural areas 29 A Tanzanian makes a call on his cellphone. Picture: File Tanzania will subsidise mobile operators who are willing to roll out services in the rural areas. Makame Mbarawa, the Minister for Communication, Science and Technology, said the government has signed contracts with some of the operators. Mobile communication services in rural areas are a challenge in East Africa due to poor connectivity. This inaccessibility limits usage of mobile money transfer and Internet services. Samsung new home automation service Samsung has announced plans to build a system that allows service providers in the telecommunication, electronics, construction, energy and security sectors to provide smart home solutions to their customers. With the Samsung Smart Home Service you can download an Android app that, in conjunction with Samsung’s cloud service, will give you control over certain Samsung smart appliances. The app is avalable in smartphones running on Android OS 4.0 and higher. MTN subscribers can now shop online MTN subscribers across the continent will be able to purchase goods on Jumia, Africa’s online shopping site. In East Africa, Jumia, enabled by Africa Internet Holding (AIH), is setting up a Jumia Corner in MTN branches. MTN has branches in Rwanda and Uganda. The first of 80 customer service points were launched last week in Ivory Coast, enabling customers to shop online on mobile devices. Shoppers will pay through MTN’s Mobile Money.
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