White Paper Real ICT Engl

8/6/2019 White Paper Real ICT Engl

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Contents

Abstract 2

1 Challenges posed by modern ICT landscapes to IT and TC managers 3

2 The question: IT, TC and applications, ICT or Real ICT 4

2.1 Initial situation from a companys perspective 4

2.2 Added value of Real ICT 6

2.3 Structure of Real ICT 7

2.3.1 Infrastructure level 7

2.3.2 Application level 7

2.3.3 Process level 7

3 Real ICT in practice 8

3.1 Dynamic Services - or flexibility with demand-oriented concepts 8

3.2 End-to-end workplace management 9

3.3 The Toll Collect system: 10

4 Supplier evolution 11

5 Customer positioning 12

6 Challenges for customers and suppliers 15

7 Conclusion/outlook 15

List of figures 17

List of references 17


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Abstract.

Dynamic markets place ever changing demands on enterprises information technology (IT), telecommu-

nication technology (TC) and application landscapes. By the year 2010, IT, TC and applications will have

merged into a Real ICT world and no longer be differentiable. To maximize the benefits of this trend,

a paradigm shift toward a universal approach is necessary, i.e. harmonization of IT, TC and applications

with overlying business processes.

Besides increased flexibility, cost saving potential and focus on enterprises core competencies, a use of

Real ICT provides further advantages such as optimal implementation of customers business processes

in modern, safe and adaptable ICT environments.

This means impending consolidation for IT, TC and application service providers. Those who want to

remain competitive must acquire an adequate know-how of IT and TC systems, application and business

processes, as well as relevant branches of the industry.


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1 Challenges posed by modern ICT landscapes to IT and TC managers.

What belongs together, comes together. Issued recently by market research company IDC, this state-

ment reflects the steadily increasing coalescence of information technology (IT) and telecommunication

technology (TC). The formerly separate worlds of IT and TC are merging to become ICT: Information and

Communication Technology.

A major challenge to companies today lies in making the right information available at the right time and

place. This requires a concerted effort by staff and companies to efficiently and effectively use knowledge,

besides achieving business processes which are easily scaleable and adaptable to new circumstances.

IT, TC and application managers today face the task of gearing their IT, TC and applications more

strongly to highly dynamic business processes in order to suppor t them optimally. Flexibility is therefore

gaining in importance: Flexibility in meeting customer requirements concerning volume and quality,

fulfilling legal regulations and, needless to say, responding to constant changes in ones own enterprises

organizational and business models. Furthermore, costs (Total Costs of Ownership, TCO) must be

lowered and IT/TC applications increasingly rationalized. According to the market research company

Ovum, the overwhelming majority of chief information officers (CIO) therefore see their greatest chal-

lenges over the next two or three years as being:

Rising costs of operating IT and TC infrastructure;

inadequate integration between both technologies, accompanied by increased coalescence

between overlying applications;

security,

and increasingly mobile staff who need to be equipped with suitable IT and TC devices.

CIOs are also complaining about unclear relationships between the quality and costs of present IT, TC

and application service providers. There is obviously a need for optimization here.

At the same time, many IT, TC and application service providers are struggling to meet changing,

complex requirements and maintain the level of expertise needed to deliver the promised service quality

worldwide.

Real ICT addresses this issue. By universally treating an enterprises business processes, Real ICT

promises to reduce complexity, raise quality and security, and lower costs for customers as well as Real

ICT partners - a compelling prospect.

ICT stands for a merger of IT and

TC into a universal service land-

scape.

Real ICT goes a step further by

offering comprehensive services,

i.e. end-to-end support for

complete business processes.


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2 The question: IT, TC and applications, ICT or Real ICT?

2.1. Initial situation from a companys perspective.

Many companies see similar problems in their initial situation. Competitive pressure continues to rise.

For instance, order processing requires elaborate planning and coordination. For this reason, enterprises

need optimized, continuously adaptable as well as flexible IT, TC and application landscapes permitting

a realization of long-term corporate strategies.

Prerequisites for implementation of forward-looking strategies are defined in the section on business

architecture (see Figure 1). It describes the interface between strategic concept and deployment.

Responsibilities for implementing, executing, monitoring and optimizing business processes as well

as fine-tuning application, IT and TC systems are assigned at the process and infrastructure levels.

In recent years, IT, TC and application service providers have proven their competence primarily at the

lower echelons, i.e. at the infrastructure and application levels. As a result, IT, TC and application service

providers can make use of scale and scope to raise quality while lowering costs. However, service

providers are rarely commissioned by companies to cover entire areas, total support for each area usually

coming from a number of separate suppliers. This makes a management of such services more complex,

and lowers flexibility in responding to changing business requirements. Moreover, IT, TC and application

service providers as well as client companies lack a transparent overview from the strategic level to the

infrastructure level.

Figure 1: Business Architecture as an interface between strategy and deployment

Source: T-Systems

Role of the service

provider

Customer

Customers production

depth is reduced

Customers operations

become more

productive

Business

Analysis

BusinessInformationServices

InfrastructureLevel

ApplicationLevel

ProcessLevel

BusinessArchitecture

Strategy

Role of the service

provider

Customer


depth is reduced


become more

productive

Business

Analysis


InfrastructureLevel

ApplicationLevel

ProcessLevel


Strategy

Role of the service

provider

Customer


depth is reduced


become more

productive

Business

Analysis


InfrastructureLevel

ApplicationLevel

ProcessLevel


Strategy

Reduced production depth on the

customers side optimizes added

value at the horizontal levels.

Standardized interfaces between

the levels permit a transparent flow

of information.


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To remain competitive on a lasting basis, it can be thoroughly advisable for a company to cooperate with

IT, TC and application service providers at higher value-creation levels too. For instance, informing IT, TC

and application service providers about strategic plans already at the Business Architecture level permits

these providers to support the company optimally with universal solutions spanning several levels. This

notably reduces complexity and costs of integration, supply and operation.

What would make customers reduce the production depth of their own IT, TC and applications, and

cooperate with Real ICT partners at higher value-creation levels? Rising competition and increasingly

complex interaction between IT, TC and applications continue to place cost-cutting pressure on enter-

prises. Now that simple cost-cutting potential has been almost fully exploited (adjustment of capacity,

minimization of fixed costs, optimization of suppliers and delivery conditions), attempts are being made

to optimize and lower the costs of business processes and their implementation in applications, IT and

TC. Moreover, many companies feel the need to react more flexibly and quickly to new requirements.

These include regulations such as Basel II and Sarbanes-Oxley which necessitate continuous changes

to business processes as well as IT, TC and application landscapes. This raises Total Costs of Ownership

for IT, TC and application landscapes. According to market observers, maintenance and operations now

make up as much as 80% of an enterprises budget, only 20% being dedicated to advancement and

optimization.

The challenges which companies face can be summarized as follows:

Permanent availability of business processes to ensure productivity

Putting innovations and new technologies to use

Reduction in TCOs

5

Business responsibility

ICT Bundling Real ICT

TC Project Process

Supplier2

Supplier3

Supplier4

IT

Supplier1

TC Project ProcessIT

T-Systems

General contractor

Technological responsibility

Business responsibility


TC Project Process

Supplier2

Supplier3

Supplier4

IT

Supplier1

TC Project ProcessIT

T-Systems

General contractor


TC Project Process

Supplier2

Supplier3

Supplier4

IT

Supplier1

TC Project ProcessIT TC Project ProcessIT

T-Systems

General contractor

Technological responsibility

Figure 2: Unlike ICT Bundling, Real ICT service providers do not act as general contractors.

Real ICT services providers themselves offer comprehensive packages.

Source: T-Systems


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2.2 Added value of Real ICT.

Real ICT merges information and telecommunication technology to provide an enterprises business

processes with comprehensive support: A single Service Level Agreement (SLA) for business processes

is made possible by a high transparency of all involved components.

IT and TC are combined to form ICT - this is also known as ICT Bundling. Real ICT comprises ICT and

applications, accounting for the business processes requiring implementation. Real ICT also allows a

transfer of individual business processes to a real ICT partner without having to perform full outsourcing.

This permits enterprises to concentrate entirely on their core business. In contrast to ICT Bundling which

offers individual Service Level Agreements (SLA), Real ICT provides the customer with one (SLA) for the

entire business process.

Interaction between the enterprise and Real ICT par tner is made as easy as possible by detailed,

comprehensive monitoring and efficient service management. Real ICT services can therefore be

provided quickly, perfectly matched, according to demand and at the highest quality.

ICT positioning Feature

Integration

ValueContribution

Quality

Flexibility

IT/TC ICT Bundling Real ICT

Time

Costs

ICT positioning Feature

Integration

ValueContribution

Quality

Flexibility

IT/TC ICT Bundling Real ICT

Time

Costs

Figure 3: ICT positioning attribute

Source: T-Systems


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2.3 The structure of Real ICT.

Real ICT covers three levels: Infrastructure, application and process.

2.3.1 Infrastructure level.

The infrastructure level comprises, for instance, technical operation of mainframe computers, servers and

databases at computing centres. This level also includes telecommunication services, i.e. network envi-

ronments like WAN & LAN, mobile services, routers, firewalls, telephony systems as well as desktops,

notebooks and handheld devices (workplace equipment).

2.3.2 Application level.

At the application level, the Real ICT partner provides applications ideally matched with the enterprises

business processes. Standards are employed to lower development costs and pave the way for contin-

uous advancement and maintenance. Modern nearshore and offshore services safeguard application life

cycles. This permits continually changing requirements for applications to be fulfilled more quickly, last-

ingly and economically at the highest possible quality.

2.3.3 Process level.

How a companys business and service processes are implemented decisively influences the companys

competitive capability. These processes must be optimized at the application and infrastructure levels in

order to fulfil the enterprises requirements. Close cooperation between the enterprise and Real ICT

partner is needed to fulfil these requirements optimally.

Figure 4: Merging of IT and TC at the process, application and infrastructure levels

Source: McKinsey, Shaping the ICT trend


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3 Real ICT in practice.

The steady convergence of IT and TC can be now be seen in a number of examples:

Internet telephony (VoIP) is being used increasingly by businesses and private customers

Staff are becoming increasingly mobile, requiring access to data from a variety of locations using

different devices and communication channels

PCs and servers increasingly require Remote Service Management via reliable transmission networks

Technologies such as RFID are being used to trace shipments

IT and TC environments in a mega-project like Germanys satellite-aided Toll Collect system jointly

determine truck coordinates, register automotive data and perform financial accounting.

The trend toward Real ICT is gathering pace. More and more customers are calling for integrated, stan-

dardized programs and services. Customers dont want to buy mere technology, but a solution to their

problems - regardless of whether they involve IT, TC or process levels. For this purpose, enterprises need

a Real ICT partner who can supply all required items perfectly matched and standardized. Surveys by

consultancies such as McKinsey already indicate a paradigm shift on the market: IT managers want

end-to-end Services, while IT, TC and application service providers are setting about tr ying to offer

precisely that - Real ICT.

3.1 Dynamic Services - or flexibility with demand-oriented concepts.

Companies implement their business processes in IT, TC and applications to various degrees of efficiency.

This is usually because work processes must be based on availability of the infrastructure and application

layers, not market requirements. In other words, the existent infrastructure layer prevents the company from

perceiving current market requirements. At the same time, too many IT, TC and application resources are

often maintained without being used, thus generating superfluous costs on a rolling basis.

Time

100

90

80

70

60

50

40

30

20

10

0

Paid, but unused

ICT resources

Resource

requirements

Figure 5: Inflexible ICT resources designed to handle peak loads.

Source: T-Systems

As CIOs seek to reduce costs and

complexity, many of them say they

would prefer to purchase end-to-

end service-level agreements from

providers offering a combination

of IT and telecommunications

services rather than contract for

each separately.A rising demand for integrated IT and

telecom services., McKinsey, 05/2006


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Having recognized this problem, Real ICT par tners have for some time now offered dynamic services

whose flexibly available IT, TC and application landscapes can be adapted to a companys current

demand. As a result, only resources actually deployed are invoiced (pay-per-use).

In the case of dynamic services, the company places the ICT par tner in charge of supplying computing

power - including the necessary technologies - and a data transmission network, in addition to providing

and maintaining the required applications, right up to system integration and consultancy services.

Continuous monitoring and reporting on business and service processes maximize transparency for the

Real ICT partner and the company. In the event of a disruption or modification, the Real ICT partner is

able to identify the affected business processes and respond in a pro-active manner. In the long run,

this permits optimization of services and minimization of disruptions including non-productive times.

An example:

A globally active company frequently makes acquisitions at home and abroad. Challenges posed here

include fast integration of new companies into existent business processes and linkage with the parent

companys existent SAP system. So far, upgrading and re-integrating the existent SAP system to meet

rising demands has proven relatively time-consuming and expensive. A Real ICT partner permitting

dynamic extension of resources to meet changing requirements can help facilitate integration through a

ready availability of the entire application and infrastructure levels.

3.2 End-to-end workplace management.

While the end user wants a reliable, simple environment, the management is interested in controlling

support costs and ensuring a competitive advantage.

Time

130

120

110

100

90

80

70

60

50

40

30

20

10

0

Dynamic ICT resources

Resource

requirements

Capacity limit in thecaseof

traditional in-house supply

Savings potential

Time

130

120

110

100

90

80

70

60

50

40

30

20

10

0

Dynamic ICT resources

Resource

requirements

Capacity limit in thecaseof

traditional in-house supply

Savings potential

Figure 6: Dynamic availability of ICT resources

Source: T-Systems


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The options offered by Real ICT at the infrastructure level can be demonstrated using the example of

end-to-end workplace management. Consider a large group which needs to establish a branch

comprising about 500 workplaces outside the headquarters. This branch is to possess the same devel-

opment environment and standards implemented at all other locations. For the company, it is important

to avoid binding investments at the infrastructure and application levels, so that only costs of regular

operations are incurred. From the Real ICT par tners perspective, this means that the customer ultimately

has to be supplied with the entire infrastructure and application levels, and running costs for each work-

place have to be invoiced to the customer using a flexible price model. Since LAN and Desktop Services

are delivered from a single source, for instance, the mega-group receives a transparent SLA covering all

levels. In the event of a disturbance, the customer can get in touch with a local Help Desk via a Single

Point of Contact in order to have the problem sorted out. Due to the Real ICT par tners comprehensive

responsibilities, this entity also bears the full risk of business interruptions.

3.3 The Toll Collect system.

Real ICT is implemented at two levels in the case of Toll Collect: The process level and the technical level.

One special aspect of the Toll Collect project was that the enterprise, being newly established, did not

impose any restrictions in terms of legacy IT, TC or application landscapes. Only a business model had

been put forward; it was to serve as a basis for configuring the business processes and supportive ICT

solution. The Real ICT partner was able to play a part in specifying the infrastructure level and thus fully

deploy a characteristic Real ICT Top-Down approach. After a few initial difficulties, Toll Collect proved

itself in the operating phase so that interest in the system has since been shown by other countries where

the related design principles could be easily reproduced.

At the technical level, Toll Collect was realized through a convergence of IT and TC in combination with

end-to-end management. Introduced in Germany in 2005, the Toll Collect system for trucks is the most

advanced system of its kind in the world. Making use of the Global Positioning System (GPS), Toll Collect

is a highly advanced, flexible toll collection system serving additionally as a platform for future added-

value services such as fleet management, traffic warnings and navigation. This system registers tolls for

different types of truck which use the highway network. The toll is charged according to travelled

distance as well as size and number of axles. Each vehicle is equipped with an On Board Unit (OBU)

tracked by GPS satellites so as to permit the vehicle to be localized down to a few metres whenever

necessary. Radio antennae additionally transmit microwaves to avoid double registrations on toll-free

roads running parallel to neighbouring tollways. The OBU calculates tolls with the help of pre-installed

software and electronic maps. The required toll is signalled via the mobile-phone network to the central

Toll Collect computer system which is also responsible for invoicing. Occasional users without an OBU

can make advance bookings via the Internet or any one of approximately 3700 terminals, the required toll

being calculated automatically. Payments options include cash, filling-station pay card, credit card and

direct debiting.


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Toll Collect is hence relatively complex in terms of system structure and interaction between Real ICT

components. The Real ICT concept is demonstrated by the invoicing process. In this case, a Real ICT

partner guarantees availability and implementation of an entire business process. The par tner must

ensure that toll data calculated during the process of truck registration are relayed via mobile radio links

to the invoicing centre and assigned there to the correct shipping agencies. Because of its diverse layers

and high number of users, this business process absolutely needs the fastest possible response to

disruptions. This can only be achieved by means of sophisticated monitoring and reporting.

4 Supplier evolution.

Ongoing convergence between IT, TC and applications is leading to corresponding changes on the

supplier market. Not only are companies increasingly considering international service providers as

possible suppliers of IT, TC and application patchwork, but the boundaries between suppliers in this

market are becoming increasingly vague. Traditional suppliers must decide today which role they want to

play in tomorrows integrated ICT market, and prepare for the new role as early as possible.

Classical, telecommunication (TC ) companies have long since been confronted with a choice: Either be

a mass supplier with low profit margins but a clear focus on end users and conventional, core business,

or invest heavily in establishment of IT and application resources to become a comprehensive, Real ICT

partner. The pressure to change is increasing: Shareholders in TC companies are calling for growth and

higher margins. Competition is intensifying and IT-related ancillary services serving originally for dif feren-

tiation are now being taken for granted by customers. Not to forget the IP revolution: Someday, all

communications will take place via IP networks permitting cheap telephony and thus further lowering

margins for TC service providers.

Many TC companies are responding by upgrading their business models with network-related IT services

such as Managed Workplace Solutions, and opening up new business areas by investing in Next

Generation Networks supporting, for instance, Triple Play (transmission of audio, data and video). The IT

resources needed for this are obtained usually through partnerships and/or acquisitions of IT compa-

nies. All in al l, such enterprises face complex and risky conversion from product supplier to service

provider.

Having discovered the Internet as a medium for supplying their own services in the meantime, classical

IT Service Providers are investing in their own networks or forming close par tnerships with network oper-

ators. Their objective as integrated Real ICT partners is to offer customers continuous services (global

end-to-end management). Their advantage compared with TC suppliers is a historically evolved, closer

relationship with their customers decision-makers (CIOs, IT managers) and a usually better knowledge

of their business sector. At the same time, Real ICT has established a trend toward standardization and

industrialization of IT, TC and application services, thus enhancing transparency and facilitating inter-

change of IT, TC and application service providers from the customers standpoint. Furthermore, service

providers have to respond to increasing cost pressures by integrating global resources

(nearshore/offshore in low-wage economies), lowering material and staff expenses (through Dynamic

Services) and consolidating international subsidiaries (Operational Scale).

convergence will take place

increasingly and will drive consoli-

dation in the sector. We expect this

consolidation to be driven by telcos

as they try to complete their utility-

based infrastructure offering.Convergence: convergence will finally take

place?, Citigroup, 04/2006


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This revolution among service providers is being accelerated by a development of a completely different

nature. Numerous analysts describe how companies from India are not only acquiring competence on the

international IT, TC and application markets, but also pushing closer toward western Europe. These compa-

nies possess adequate financial resources, have large numbers of well-trained staff, and are not burdened

with the inflexibility of legacy structures.

Nevertheless, analysts agree on one outcome of this development: Only those companies which have already

invested in IT, TC and applications, and are already able to supply Real ICT solutions comprising compatible

elements will get a substantial slice of the pie. According, only a few Real ICT partners will in future be able to

provide everything from a single source. All other companies will have to look for niches in the global market

and specialize, for instance, as low-cost pipe providers or suppliers of IT, TC and applications.

5 Customer positioning.

Commissioned by T-Systems, market analysts from PAC (Pierre Audoin Consultants) conducted a user

survey in January/February 2007. Target groups of this survey were CIOs, IT managers and IT department

heads from companies in Germany, Austria and Switzerland with a total of more than 1000 staff. The survey

yielded 152 interviews which could be evaluated.

The result clearly indicated a high awareness of technological convergence of the two areas. Only 3% of

respondents did not see any signs of convergence. By contrast, 79% of respondents had already noticed

these changes in their own company. In both cases, i.e. broadly speaking and in-house, VoIP and a joint use

of communication structures were mentioned as outstanding trends. A slightly smaller proportion (75%)

already saw a convergence of IT and TC in business processes.

12

Indian firms are rushing to

increase their skills and client

intimacy, while Western firms are

rushing to reduce their cost struc-

tures and maintain differentiation.

Summit 2006, Ovum

7%

8%

11%

11%

14%

0% 2% 4% 6% 8% 10% 12% 14% 16%

In some of the

departm ents (sales,

purchasing etc.)

Telephony (automatic

dialing, Caller ID)

General optim ization of

processes thr ough a

merger of IT and TC

Customer Care area (Call-Center customer data on

PC)

VoIP/video conferencing,

IPTV, special fax and

email solutions

Figure 7: Which, for you, are the first signs of convergence of IT and TC in business processes?

Source: PAC 2007


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Evidently, Real ICT is stil l thought to be characterized strongly by technology and infrastructure, and

defined mainly by VoIP as well as joint usage of infrastructure, rather than a convergence of application

landscapes.

When asked how they thought requirements for IT and TC were changing, 33% of IT managers replied

that both areas were converging perceptibly. The outlook of ever more complex requirements, rising cost

pressures and increasingly significant cost transparency was clearly confirmed too.

Respondents also agree that the most important requirement in future is a continued, substantial conver-

gence of IT, TC and applications, as well as emphasis on customers business processes to maintain effi-

ciency and competitiveness. Accordingly, the majority of customers sees a need for more investment in

Real ICT concepts. In addition, decisions influencing both areas are usually made centrally. At present,

however, Real ICT is still considered to be strongly driven by technology. Technological fusion is evalu-

ated as being extremely useful in increasing efficiency and productivity in order to secure a competitive

advantage. Focal points here are common, integrated infrastructures allowing better, more flexible

communications and standardized, more economical operation. In this sense, Real ICT investments also

lay emphasis on infrastructure, especially in TC-driven areas (Network Services, Mobility, Security). The

main factors behind investments in Real ICT are costs and efficiency; when it comes to par tners,

however, quality and performance play the most important roles in optimizing results.

This is also confirmed by the advantages expected of Real ICT services. Though the majority of respon-

dents (53%) expects their costs to drop notably, 36% see more efficient, faster and more transparent

processes as decisive advantages of convergence. Most IT managers (55%) find it important for all their

IT, TC and application services to come from a single source.

12%

12%

15%

16%

33%

0% 5% 10% 15% 20% 25% 30% 35%

Higher mobility/availability

(e.g. Home Office)

Higher speed/shorter

development cycles

Cost pressure/transparency

of costs/flexible pricing

models

Requirem ents are generally

becoming more complex and

broader

Both areas are merging

noticeably

Figure 8: How are demands on IT and TC changing in your opinion?

Source: PAC 2007


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Evidently, convergence of IT, TC and applications is seen less as supporting business developments

(exploiting new potentials, extending performance spectrums, customer satisfaction, quality) and more

as a cost-cutting measure.

6 Challenges for customers and suppliers.

Now in the final phases of evolution, Real ICT will soon open up many new avenues and advantages for

the economy. To benefit from all aspects of Real ICT, it is essential to turn away from prevalent

approaches and pursue a universal implementation of IT, TC and applications harmonized with overlying

business processes.

IT, TC and application service providers must be able to offer Real ICT solutions which fulfil customer

requirements (e.g. for standardized, consistent and reliable systems). Difficulties arise, for instance, in

trying to achieve the promised level of transparency: The enterprises structures and processes must first

be established and developed, because integrated services, empirical curves and scaling effects take

more than just a couple of days to develop.

What also requires clarification is the number of enterprises already in a position to implement Real ICT.

Existent IT, TC and application landscapes are often more complex than they seem, many of the over-

lying business processes having evolved historically so as to make re-engineering quite difficult.

Developments are also retarded by an aspect of a more subjective nature. Enterprises are wary of

becoming dependent on the services and price models of a Real ICT partner as a result of single

sourcing. Nevertheless, companies could use intelligent sourcing to utilize all the advantages of Real ICT

without becoming fully dependent. At the present stage of development, it is not easy for Real ICT

partners to dispel this entrepreneurial misgiving.

10%

11%

11%

36%

53%

0% 10% 20% 30% 40% 50% 60%

St andardized data

exchange/standard

technologies

Saved tim e/faster

decisions

Use of common

synergies/infrastructure

Pr ocess optimization

(more efficient, faster,

more t ransparent)

Cost savin gs/cost

reductions

Figure 9: Which advantages do you expect from a convergence of IT and TC?

Source: PAC 2007

Many leading CIOs havent yet

integrated their IT and TC depart-

ments and their sourcing strategy

which affects their companies

readiness for converged service

deals.IT/ Telecom Converged Service Delivery

Outsourcing Deals H1/ 2006, Forrester,

Jan2007


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7 Conclusion / outlook.

Even if Real ICT is in an advanced stage of evolution, it will continue to play an increasingly important

role for enterprises as well as IT, TC and application service providers in future. For companies, this is

a chance to concentrate again on core competencies and/or use resources for developing new ideas.

From the providers standpoint, especially large customers are voicing stronger demand for end-to-end

services. According to management consultancy McKinsey, Real ICT partners must therefore be in a

position to supply integrated IT, TC and application services with a single SLA worldwide at a moments

notice in order to remain globally competitive in the long run (also refer to the illustration titled The

winning formula for ICT leadership.).

Aware of the challenges posed by Real ICT, the IT, TC and application service providers are already

working on solutions to achieve a smooth integration of Real ICT into daily enterprise operations.

Especially in the area of error tracking, Real ICT pioneers have developed tools enabling them to identify

and eliminate errors as early as possible.

Customers doubts about dependency on a single Real ICT partner will also soon be put to rest.

Implementation of Real ICT defines clear interfaces between individual technical levels and fully stan-

dardizes services across all levels.

Besides directly impacting IT, TC and application service providers as well as enterprises, Real ICT

opens up new markets and business models, such as the insurance sectors presently debated, dynamic

adjustment of automobile insurance premiums (pay-as-you-drive) on the basis of telematic recordings,

similar to the Toll Collect principle.

The winning formula for ICT leadership

Customer demand

Important buying criteria for TC and IT

outsourcing (forced ranking)

Global delivery

capabilities

for MNCs

TCO reduction

New services

End-to-End SLAs

Security

Pay what you use

Flexibility/Scalability

Incident recovery

Provider offering

Service driven

standard SLAs

Industrialized

production

Global delivery

networks

a

b

c

+

Standar-

dization/

Globalization1

End-to-end services

(across the stack)

Integrated TC and IT

offerings

Integration/

Conver-

gence2

Confirmed

by 92% of inter-viewers

Confirmedby 97% of inter-

viewers

The winning formula for ICT leadership

Customer demand

Important buying criteria for TC and IT

outsourcing (forced ranking)

Global delivery

capabilities

for MNCs

TCO reduction

New services

End-to-End SLAs

Security

Pay what you use

Flexibility/Scalability

Incident recovery

Provider offering

Service driven

standard SLAs

Industrialized

production

Global delivery

networks

a

b

c

+

Standar-

dization/

Globalization1

End-to-end services

(across the stack)

Integrated TC and IT

offerings

Integration/

Conver-

gence2

Confirmed

by 92% of inter-viewers

Confirmedby 97% of inter-

viewers

Figure 10: The winning formula for ICT leadership

Source: Borrowed from McKinsey, Serving Enterprise Customers - The winning formula for ICT leadership.


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Besides considering the significance of Real ICT for enterprises as well as IT, TC and application service

providers, this white paper also briefly describes related technological developments, possible implementa-

tion scenarios and current market trends. Based on a universal approach, analysts from the management

consultancy McKinsey anticipate sophisticated solutions offering clear advantages to customers:

Real ICT solutions with end-to-end management simplify and improve handling of incidents

Comprehensive, Real ICT solutions cut costs while allowing flexible price models

New, Real ICT solutions open up new markets, market segments and business models for the industry.

So far, IT, TC and application levels have of ten been considered in isolation, changes to overlying business

processes sometimes proving time-consuming, expensive and short-sighted. As a result, enterprises

squander a great deal of potential and cannot concentrate fully on performing and extending core compe-

tencies. The success of Real ICT at enterprises is influenced decisively by a paradigm shift to a compre-

hensive approach starting at the process level. Real ICT permits enterprises as well as IT, TC and applica-

tion service providers to re-structure in equal measure, so that both parties can benefit from current market

developments and improve their presence in the global economy.


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List of figures.

Figure 1: Business Architecture as an interface between strategy and deployment

Figure 2: Unlike ICT Bundling, Real ICT service providers do not act as general contractors.

Instead, they offer comprehensive packages from a single source.

Figure 3: ICT positioning attribute

Figure 4: Merging of IT and TC at the process, application and infrastructure levels

Figure 5: Inflexible ICT resources designed to handle peak loads.

Figure 6: Dynamic availabil ity of ICT resources

Figure 7: Which, for you, are the first signs of convergence of IT and TC in business processes?

Figure 8: How are demands on IT and TC changing in your opinion?

Figure 9: Which advantages do you expect from a convergence of IT and TC?

Figure 10: The winning formula for ICT leadership

List of references.

[Citigroup] 04/2006 Convergence: convergence will finally take place?

[Forrester] 06/2006: Converged Service Delivery: The Missing Link In Achieving Business

Flexibility

[Forrester] 01/2007: Positioning T-Systems For Convergence Market Leadership

[Forrester] 01/2007: IT/Telecom Converged Service Delivery Outsourcing Deals H1/ 2006

[HPI] 12/2006: Convergence of media - The future of networks and ser vices

[McKinsey] 2005: Serving Enterprise Customers - The winning formula for ICT leadership

[McKinsey] 2006: Shaping the ICT trend for Future ICT Leadership

[McKinsey] 05/2006: A rising demand for integrated IT and telecom services

[Ovum] 03/2005: The ICT market - who will win the game?

[Ovum] 11/2005: ICT strategies for telcos

[Ovum] 2006 Ovum Summit 2006

[PAC] 04/2006: Trends, Challenges & Oppor tunities for the ICT Industr y

[PAC] 02/2007: Customer Survey of Real ICT

[T-Systems] 02/2007: Perception Analysis ICT

[T-Systems] 2006: Dynamic Ser vices for SAP from T-Systems

[T-Systems] 2006: White Paper Dynamic Services

[T-Systems] 12/2006: T-Systems por tfolio strategy


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Issued by:

T-Systems Enterprise Services GmbH

Corporate Marketing & Communications

Mainzer Landstr. 5060325 Frankfurt

Contact:


Corporate Marketing & Communications

Robert WienrothFasanenweg 5

70771 Leinfelden-Echterdingen

E-mail: [email protected]


Corporate Business Development

Ruediger AmslerMainzer Landstr. 50

60325 Frankfurt am Main

E-mail: [email protected]

White Paper Real ICT Engl

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