Enclosed is report of cloud computing solutions for Celcom Axiata Berhard for your reference and consideration. This report is a summary of findings from study, online researches, and depth interview during March – May 2011 as part of assignment for Management Information System in University of Southern Queensland.
The report include overview of cloud computing solutions, analysis of current IT infrastructure issues and challenges, and how cloud computing can be beneficial to your company.
Cloud computing is latest current disruptive technologies and is the fastest growing form of computing, with an estimated market size in 2009 of $8 billion, and a projected size of $160 billion in 2012 (Gartner, 2008; Merrill Lynch, 2008). As mobile and social computing are growing faster in the history of technology, and enterprise applications will need to adapt to provide similar concept inside company to increase business collaboration and at the end will improve business processes, as well cost reduction.
We thank you for good corporation from Celcom IT Infrastructure department by facilitating depth interview and group discussion within IT team during our research. If you have any questions and/or comments regarding of this report please feel free to contact us.
Yours sincerely,
Sriyani, A’an & Fan Jiang
This report evaluates corporate mission, business strategy, grand IT Infrastructure of Celcom Axiata Berhard in order to provide recommendations regarding cloud computing solutions in company IT strategy.
A detailed cloud computing definition has provided in this report, followed by differentiation deployment models, service models and also further elaboration to benefits and cost cloud computing solution.
A major finding in current complexity IT infrastructure to support business requirement and challenges to reduce increasing cost of maintenance and deployment of IT technology every year. Depth analysis and research to cloud computing solutions provided in the market, and also adoption recommendation have been provided in this report.
It is recommended Celcom as multinational company must have strategic outlook on the future of ICT practices as market is undergoing changes due to technological advancements to adapt and follow market trends and increase ability to compete in the market.
In this report, company is suggested to run pilot project to adapt sales cloud to improve business process in sales division and develop private cloud computing by doing virtualization
Aim of this report is giving ideas to increase productivity, improve business process and keep focus to reduce cost of maintenance and deployment of IT Technology. Company also has huge opportunity to deliver new business services via cloud computing to current business user customers.
Celcom Axiata Berhard (Bhd) is one of market leader mobile operator in Malaysia and occupying over one-third of the market share at the end of Year 2010. Under the control of the Axiata Group, was rebranded from Telekom Malaysia’s international mobile operations unit Telekom Malaysia International (TMI) on March 31 2009 and formerly launching its new identity on April 2 2009. Axiata Group’s major shareholder is Khazanah Nasional Berhad, with a 44.51% stake, while it’s other significant shareholders with over 5% holdings are the Employees Provident Fund Board (14.22%) and Amanah Raya Nominees (8.52%).
As the first mobile operator in Malaysia, Celcom has the widest network coverage in the country, covering 98% of the populated areas in the country. Align with their mission to become number one mobile operator in Malaysia by 2013 and vision to deliver best service for customers and growing innovation in mobile technology, currently Celcom closing the gap with over 11 million subscribers by Quarter 4, 2010.
Celcom’s core business is in providing prepaid and postpaid mobile voice services. Under Prepaid strong hold, has 3 different brands covering different segmentation, Xpax including sub brand UOX and SOX for Youth segment, Blue for Basic Malaysian, and Celcom Sukses for International segment. In postpaid segment Celcom has Postpaid Exec to serve personal user and Celcom Biz to serve enterprise business user. Celcom strong growth has been further supplemented by the growing data services segment and mobile broadband business, making it Malaysia’s leading mobile broadband provider.
All complete information about Celcom Axiata Berhard (Bhd) can be found through company website at www.celcom.com.my
This report was prepared to evaluate the IT Infrastructure and introduce cloud computing as part of IT future strategy to drive greater cost efficiencies, improvement business process as well new revenue stream for the company. It was commissioned by Mr. Noor Kamarul Anuar Nuruddin as Chief Information Technology & Transformation Officer of Celcom Axiata Berhard
To serve over 11 million subscriber and more than 3,900 employees nationwide at Head office included 6 regional offices, Celcom is really dependent to integrated, systematic and high standards Information Technology (IT) Infrastructure. Information technology is playing a very critical role to support and enhance business process, nevertheless to meet business expectation in timely manner.
According to General Manager IT Infrastructure there are several challenges in IT organization as listed below:
Complexity of IT and Network elements to support business requirements
its fact that IT has always been massively complex and considerably inefficient. To support business requirement, most often are not designed for efficiency but to get the job done.
New business requirement which forced beyond articulated needs to create first-of-a-kind products and service. New disruptive technology in market like facebook and other social network has direct impact yet create reduction of customer voice usage and impacting to revenue growth slow-down.
Increasing operation & Maintenance cost
Operational expenditure cost keeps increasing year on year by 9% mostly for maintenance legacy system and company profitability growth will be challenging to keep without continuous cost optimization.
Continuation of staff reduction in response to smart spending initiative
To provide internal best solution, Celcom has policy standard operating environment (SOE) to use 2 different vendors in each major component. These 2 vendors should be chosen from Tier 1 and Tier 2 recommendation by Gartner and able to provide best and breed solutions. Gartner, Inc. is the world’s leading information technology research and advisory company headquartered in Stamford, Connecticut, U.S.A., and has 4,400 associates, including 1,200 research analysts and consultants, and clients in 85 countries (http://www.gartner.com/technology/about.jsp).
Under current organization, Celcom IT ecosystem consists of:
Office automation is really important to support daily works for all employees. According to Wikipedia (2011, p. 1) “office automation refers to the varied computer machinery and software used to digitally create, collect, store, manipulate, and relay office information needed for accomplishing basic tasks”. Office automation helps in optimizing and automating existing office procedures which using LAN/WAN as back bone for Celcom offices and 45 branches including administration and management for electronic scheduling and messaging system using Outlook, antivirus, working desktop/laptop, telephony (Pabx), printer, scanner, facsimile, and mobile device for each employee.
Enterprise applications are systems that span functional areas, focus on executing business processes across the business firm and include all levels of management (Laudon & Laudon 2010, p. 82). In Celcom, enterprise application enabling company to execute and optimize business support processes with modular solutions.
To handle core accounting and reporting capabilities, receivables management, treasury and shared services
To support day to day business process procurement purchasing or management module, vendor record management, sourcing & request for quotation (RFQ) management, contract management, purchase order management, requisition management, invoice processing, and automatic settlement
SAP Sales Distribution (SD)To support processing sales quotation, processing sales order, and delivery starter pack & reload coupon processing, reporting, and sales commission for dealer
SAP provides better insight and visibility across organizations, improve operational efficiency and effectiveness, and increase flexibility to address business change.
To support business process of online attendance, employee claim management, leave, overtime management, record pay and compensation history, payroll and compensation, employee performance and development documents, review and evaluation, record history details employee, and recruitment
Intranet base portal with collection of knowledge and information reports compilation includes whitepapers, conference papers presented at various events. Interactive session and discussion forums chat and search engine functionality to ease searching knowledge process.
Customer Service Relationship (CRM) handled by system Rover 2 Customer service tools for prepaid activation account & service, customer enquiries, reload, customer record data, migration brand (change plan), and bill payment.
Call Center (Amdocs) serve for call center agent to handling complaint, record complaint history, case interaction
Next System, Integrated with SAP SD to register & activate customer account, ordering stock starter pack & recharge, monitor sales performance, distributor allocate to certain id dealer and tagging id base on allocation for commission payment, real time report base on activation and reload denomination.
Cube (Desk Next), monitoring sales performance base on distributor until business manager until dealer name, floating stock, activation, distribution allocation, report payment commission base on tier incentive scheme and performance.
Reporting & Monitoring
Operational Data Storage (ODS), consist of internal raw data of sales, revenue, recharge, migration, churn for analysis purposes.
Enterprise Information Portal (EIP), is dashboard monitoring daily, weekly, monthly by brand and regional performance.
Networking/Telecommunications
LAN (local area network) connects network devices over a relatively short distance between floors and Wan (wide area network) connects networking Head office, regional office and branches.
Data management and storage
A storage area network (SAN) is a dedicated storage network that provides access to consolidated, block level storage. SAN used to make storage devices having accessible to servers and devices appear as locally attached to the operating system. On top of that, for data management and storage also using network attached storage as a convenient method of sharing files for multiple computers with additional benefits of network-attached storage, which giving faster data access, easier administration, and simple configuration
Security
To protect networks from unauthorized access while permitting legitimate communications and Firewall, Anti Virus, Anti Spamming
Back up recovery and monitoring
The purpose to do back up, recovery and monitoring is to avoid data losses and ability to recover data in certain time frame where have been defined by user under data retention policy made by company.
Base on NIST Definition of Cloud Computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models (Peter Mell & Timothy Grance. 2011, p. 2)
Four deployment models differentiation base on NIST definition of cloud computing (Peter Mell & Timothy Grance. 2011, p. 3)
Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.
Community cloud. The cloud infrastructure is shared by several organizations and supports specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.
Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.
Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load balancing between clouds)
Cloud computing is the current highlight among IT expert and strategically to push cloud computing forward. First, Cloud computing enabling technologies such as virtualization, open source, massive scale automation and multi tenancy. Second, more successful vendor with their offerings are filling the market with positive customer experiences. Third, recession continues to squeeze funds from IT budgets and prompt CIO’s to look for more ways to save money.
By it characteristic flexible and scalable, cloud computing business models base on as-needed basis or popular with pay-as-you-go. These new business models will reduce the amount of capital and resources tied up in in-house IT, automated and charges base on actual usage data and user able to access lightweight applications that are sufficient for specific business needs, self serve.
Base on NIST Definition of Cloud Computing there are 3services models of cloud computing solution (Peter Mell & Timothy Grance. 2011, p. 2) :
SAAS Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g.,web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.
Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.
Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).
Benefits & Cost of Cloud Computing
Understanding current ecosystem in company, SAAS and IAAS are better option to be adapted to achieve cost reduction and improve business process. Currently, some leading cloud vendors such as Amazon, Sales Force, Google, Citrix and Microsoft, HP are providing cloud computing solutions.
Benefits SAAS models
Some application offered by clouds vendors can be considered to be applied such as Sales and CRM application where give company more benefits:
Lower capital costs & flexible pricing models. With cloud computing company don’t need to spend large investments on servers and storage, up front licenses fees, maintenance fees for software. New pricing models bring by cloud computing are typically paid for on a per user subscription basis.
Mobility and Flexibility. applications can be accessible anytime and anywhere using internet connection
Ease of use, maintenance and integration. User friendly application, easy to configure and easy to integrate with other application in current ecosystem
Reliable and Secure. There are more cloud computing provider in the market with numbers of client offering reliability and security over data and 24 hours support.
Seamless software upgrade. Upgrade to latest software can be done seamlessly to add more features with no additional cost.
Benefits IAAS models
Company can consider private cloud computing in data center by doing virtualization whereby Virtualization is a converged infrastructure for shared services where as few number of server would be act as a pool of data centers removing hundred over physical servers which seated and eating up floor space and power consumption.
Benefit from virtualization can be obtained from 3 areas:
Automates application provisioning. Automates application provisioning eliminates number of actual resources and time consumed in internal meetings required for coordination
Time savings. Application deployment elapsed time savings; virtualization allows application to be set up in minutes instead of weeks or months.
Power infrastructure cost avoidance; Compaq structured data center cutting down electricity cost hence there is no more massive power and cooling needed.
Along the line with company strategy to be number 1 mobile operator in Malaysia by 2013, and look into market maturity company need to improve business process, focus on cost reduction, and drive new revenue stream from non voice and data. Business growth always required more IT investment meanwhile in the same time company need to focus on cost reduction. Current company grand IT infrastructure still using traditional concept where by company buy and have full ownership all hardware and software. All Malaysia mobile operators haven’t considered cloud computing as part of IT strategy, but major global mobile operators such as AT&T, British Telecom, Orange, Verizon include SingTel in Asia region has adapt cloud computing in their IT strategy.
To achieve greater competitive advantages and gain more market share we recommend company to start consider cloud computing as part of IT strategy.
Meanwhile IT division have to do proper analysis and examination to create comprehensive cloud computing strategy, we suggest company adopt light application sales cloud offered by Sales force and doing virtualization for IAAS as a pilot project to introduce cloud computing solutions.
Base on observation in sales division, more than 70% time consume by sales agent not for selling but looking for information for new leads dealership, customer complaint, deal updates, administration and approval, data monitoring, product and promotion latest updates and presentations. There is no application collaboration from head office until regional level that can help them to get all above information so they can concentrate more to sales jobs. Sales force offer sales cloud service base on pay per user basis where user can access it anywhere through an Internet-enabled mobile device or a connected computer can be answered to above problems.
Sales force founded in March 1999 by former Oracle executive Marc Benioff, Parker Harris, Dave Moellenhoff, and Frank Dominguez specializing in software as a service (SaaS). Currently, have 82,400 customers and over 2,100,000 subscribers. Sales force, service running in the cloud.
Some benefits using sales & service cloud from Sales Force are:
Integrated application and information from leads, account, contact, opportunities, reports and dashboard in one application, hence sales & customer service agent will not waste their working time to find information and juggle in different application
Real time update information through smart phone hence latest product and promotion can be reached in quicker time for sales and customer service agent. Since every employee in company have been provided blackberry smart phone, from now on blackberry will bring new function to support sales and service.
Small investment compare to total cost of ownership internal technology assets from hardware and software acquisition, installation, training, support, maintenance, infrastructure, downtime/failure cost, space and energy.
Flexibility upgrade to new software whenever needed without losing cost on prior internal in house investment and additional hardware to support customer growth. Include automatic latest version upgrade without losing time upgrading each of computer unit
High adoption due to sales force is using web base application internet and also training support
Seamless Integration due to sales force is using different application programming interface (Api) that easily can be integrated with current company infrastructure
As we discussed earlier, in cloud business models sales force are giving lower capital cost because company don’t need to spend in large servers, storage, license fee and ongoing maintenance by giving flexible pricing models base on number of user starting from USD5 – 125/user/month
For years, IT have been adding servers, storage and networking devices to keep pace with applications and data generation. As a result Celcom has a massive data center where by IT resources locked up in countless number technology structured. To ensure service level agreements (SLAs), IT resources have created over provisioning and underutilization, becoming collectively difficult to manage. As a result, greater budget portion is being spent on operations and create more difficulties for IT to deploy new services in quickly and efficiently manner.
To avoid further diminished productivity, complex networking and unnecessary facility cost, IT organization must heads up to private cloud by doing virtualization server.
provision and modify complex infrastructure can be done in minutes not months thru self provision from desktop, notebook even tablet pc from anywhere in or out office contrary with legacy system where need more staff and third party to provision. When additional capacity is needed, workload can be moved to where capacity is exists and server that isn’t used can be shut down to save energy. Utilization of servers is increasing; reducing loaded of servers needed in data center and minimizes floor space.
To get better view how much cost can be saved by doing virtualization, HP technical team did exercise calculation total savings over 3 years together using HP Blade system Matrix. Illustration of calculation as below table :
In long term strategy, virtualization is also leading company as telecommunication provider to serve Current enterprise business customers (SMEs) by offering Infrastructure as a service (Iaas). These can also be seen as a potential opportunity to gain new revenue streams. As a benchmark AT&T Europe Telecommunication provider has launched Sypnotic storage as a service.
Sypnotic storage as a service is Web service-based virtualized storage on-demand solution that easily scales up and down with pay-only-for storage used availability. Sypnotic a pay-as-you-go service that is billed based on company actual usage each month. The service has several usage-based components, including virtual machine resources, networking resources, additional storage and data access. (Peter Hall. 2010, p.10).
In bottom line, Celcom also has huge opportunity to bundle Iaas service with current business package with voice, broadband, business mobile and email solution to existing Celcom Biz enterprise customers. Celcom can leverage reputations and solid performances to offer reliable, comprehensive and secure cloud services.
This report has analyzed overall the grand IT infrastructure, current disruptive technology of cloud computing solution and overall business strategy. The following points and findings were made in this report:
Information technology has enter to new era with cloud computing solutions where offer flexibility, scalability and new pricing model
Company must consider cloud computing solutions to achieve improvement in business process, cost reduction and chance to gain new revenue stream by having new product solution for business customers.
Celcom as a multinational company must have strategic outlook on the future of ICT practices as market is undergoing changes due to technological advancements. It is also important company to adapt and follow market trends and increase ability to compete in the market.
Company to adapt sales cloud offer by sales force to improve business process in sales division.
Company to develop private cloud computing by doing virtualization makes it easier for IT to deliver faster and taking advantage of speed to deploy IT-based solutions faster to meet the business needs. In the end, virtualization aim to increase productivity and reduce facility cost.
Company also has huge opportunity to deliver new business services by bundle Iaas with current business package such as voice, broadband, business mobile and email solution to existing Celcom Biz enterprise customers. By ensuring the value of services delivered via cloud computing, company not only delivers business value to their business users but increase value preposition and extend company sustainability.
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