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Andy Mulholland – Global Chief Technology Officer Capgemini
Capgemini Executive ClubBusiness and Technology come together in new ways
2© Copyright Capgemini 2011 All Rights Reserved
The key question for 2011
Don’t just ask what the role of the IT department in the Enterprise should be …
Ask what the role of Technology should be in the Business of the Enterprise
3© Copyright Capgemini 2011 All Rights Reserved
• End users autonomy or control – Apple, Web, SaaS
Security, risks, and extent of controls = new policies and training
• Services and Clouds – evolution or revolution
A finance issue; Capex v Opex; or operational issue; Public, Private or Hybrid
• Real-time Data and Social Networks
A huge benefit to be unlocked, or a further problem around Data
• What is meant by ‘at work’
If it’s not a physical place with fixed provisioned PCs• Book to Bill in an online world
Back-office processes extending and connecting externally• Collaborative Agile Business
The decentralised and constantly changing ‘edge of business’
This simple statement covers a lot of new issues!
4© Copyright Capgemini 2011 All Rights Reserved
2 31‘Innovation!’ What does it really mean ?
To create VALUE though a new market or product A game-changing move that provides sustained ‘first mover’ advantage
To change COST of production and size of available market
A break through in any element of the operation of an enterprise
For SERVICABILITY to secure existing and new customers
Where market or product cannot be innovated, service can be used
Defocusing and loss of Optimisation
The immediate and obvious challenge thatany change will bring to an Enterprise
Conway’s Law
Enterprises cannot change beyond the constraints of their communications
The three common forms of innovation
The barriers to innovation
BUT Change is inevitable
Innovation is about controlling the timing and basis of change to be advantageous to our own business
5© Copyright Capgemini 2011 All Rights Reserved
Affinity Club MBNAExclusive membership offering advantages for subs and loyalty
Pay-as-you-go SalesForce.com Replace a CapEx product with an OpEx service
Brokerage Century 21stMatch buyers and sellers for a fee on successful transactions
Premium PhotocopiersExpensive item free, creating a tied market for consumables
Bundling iPod / iTunesConstruct new proposition by simplifying complex transactions
Reverse Auction Elance.com Set high price and allow bidding downward
Crowd Sourcing WikipediaOutsourcing content construction in exchange for broader view
Reverse Premium iPodProvide low-cost consumables to sell high-margin product
Disintermediation WebMDUsing technology to deliver direct not through limited local source
Product to Service Hilti
Switch from selling a unit to providing units as a managed service
Fractionalisation NetJetsCustomer pays for a part of the product but gets full use when needed
Smart Devices VodafonePackage combinations of product and services to maximise market
Freemium SkypeBasic service is free and ubiquitous with premium chargeable
Standardisation MinuteClincLow-cost standardised solution instead of high-cost customisation
Leasing MachineryLinkRecycle expensive products through a managed lease
Subscription Club NetFlix Subscription fee creates a tied in customer base
LowTouch SouthWestLow cost, self service in place of high cost with high service
User Communities Angie’s List
Managed network for common interest with revenue by advertising
Negative Operation Amazon
Re-arbitrage the ‘sell and buy’ cycle to finance the trader
Source: Seizing the White SpaceHarvard Business Press by Mark W Johnson
Innovation - 19 Technology enabled ‘NEW’ Business Models
6© Copyright Capgemini 2011 All Rights Reserved
But there is also ‘Innovation’ in people and their attitudes
Traditionalist(55 - 65)
Boomers(45 – 55)
Gen X (30 – 45)
Millennials(18 – 30)
Training The hard way Too much and I’ll leave Required to keep me Continuous and expected
Learning style Classroom Facilitated Independent Collaborative and networked
Communication style Top-down Guarded Hub and spoke Collaborative
Problem-solving Hierarchical Horizontal Independent Collaborative
Decision-making Seeks approval Team informed Team included Team decided
Leadership style Command and control Get out of the way Coach Partner
Feedback No news is good news Once per year Weekly/Daily On Demand
Technology use Uncomfortable Unsure Unable to work without it Expected to be Intuitive
Job changing Unwise Sets me back Necessary Part of my daily routine
Source: Lancaster & Stillman (2003)
7© Copyright Capgemini 2011 All Rights Reserved
Six Different Roles now decide on how and where to use Technology
SmartBusinessModels
BusinessUsers &
Managers
CFO
BusinessProcess
OutsourcingCIO
CEOBusiness
Infrastructure
8© Copyright Capgemini 2011 All Rights Reserved
RelationshipManagement/DM 12%
Collaboration 43%
KnowledgeWork 38%
IT has been successfulIn its goal of automating
Processes !
In summary, the use of and value from people has changed…
BusinessProcesses 7%
But what about the rest?
Time Spent by Work Type
9© Copyright Capgemini 2011 All Rights Reserved
Value Creating
Cost Driven
Business Intelligence
ExternalWeb & Clouds
Internal Enterprise IT
Focused and strong signals
mixed and weak
signals
Transactions
External Conditions have become the ‘real’ issue
Source and copyright by Peter Evans-Greenwood, Unico pty
Billing &Collections
Sales Support
Operations
Opportunities
Events
10© Copyright Capgemini 2011 All Rights Reserved
Four major ‘zones’ of business use and technology
Interactional Services
State-less Loose Coupled
Shared Services
State-less Loose Coupled
TransactionalApplications
State-full Close Coupled
SharedSources
Everything asa Service
Internal External
People Web Services
Applications Computers
Web 2.0 Services Cloud Services
Traditional IT Cloud Computing
11© Copyright Capgemini 2011 All Rights Reserved
Put together and the real challenges appear …
International Services
State-less Loose Coupled
Shared Services
State-less Loose Coupled
TransactionalApplications
State-full Close Coupled
SharedSources
Everything asa Service
Web 2.0 Services Cloud Services
Traditional IT Cloud Computing
Business Intelligence
Billing &Collections
Sales Support
Operations
Opportunities
SupportingPeople and
Expertise
SupportingComputers
and Systems
Internal External
Cost
Value
12© Copyright Capgemini 2011 All Rights Reserved
Internal External
Cost
Value
With the resulting conflicts in expectations …
IT Technologies
Automation and cost managementinternally and centrally forefficiency and regulatory
support
Cloud & Web Technologies
To create products and compete in external markets providing
differentiation and customisation for revenues and profits
How do we encourage decisionsupport and expertise sharing?
How do we control ‘Social’ toolsand Collaboration?
Can we support a wholly different business model?
Can we reduce costs by virtualisation and sharing?
Enterprise 2.0
So what are the real changes?The nine key points to grasp
14© Copyright Capgemini 2011 All Rights Reserved
Clouds – the correct and simple explanation!
The current final stage in the development of a technology revolution;1. The Internet – standardisation of connectivity2. The Web (1.0) – standardisation of content 3. Web 2.0 - standardisation of social interactions4. Clouds - standardisation of process elements
A shift from Client- Server Technology which is;Close Coupled; State full and Deterministic
To Browser-Cloud Technology which is;Loose Coupled; Stateless and Non
DeterministicThe result?
Its not possible to make an architectural drawing illustrating what system is connected to what system, how and for what, as a result;Connectivity and Functionality can only be shown to a specific Cloud
15© Copyright Capgemini 2011 All Rights Reserved
01 People, Real-Time Data and Process are the new focus
16© Copyright Capgemini 2011 All Rights Reserved
Microsoft Phone 7
Apple iPhone & iPad
02 Presentation and usability is radically different
Consumerisation of IT
17© Copyright Capgemini 2011 All Rights Reserved
User Interaction
Use
r Typ
e/W
ork
Type
Real-timenon-persistent non-searchable
03 How it is developed and deployed changes …
ContentSharingCollaboration
ConferencingAudio Videoon line meetings
TaskExecution
Content Publish
BusinessNetworking
Mobile
KnowledgeWork
43%
Collaboration38%
Relationship Management
12%
BusinessProcess
7%
MessagingSearchContentCreation
MS
Offi
ce, A
dobe
, IE
Bla
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I
DO
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Sear
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Desktop Apps (SAP, etc.)
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SAP
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otes
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Web
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omin
o –
Apps
Static SitesOracle Content Management
Partners
MS
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ce
MS
Sear
ch,
Fast
SAP
Port
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MS
BPO
S-D,
Lo
tusL
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On-
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Workflow
18© Copyright Capgemini 2011 All Rights Reserved
04 Who and where it is used in the Enterprise is new
SmartBusinessModels
BusinessUsers &
Managers
CEO
DecentralisedBusiness Technologies creating go-to-market
competitive capabilities enabling new revenues &
increased market access constantly changing open and interactive paid for from operating
budgets with direct cost allocation to demand
CIO
CFO
BusinessProcess
Outsourcing
CentralisedInformation Technology reducing internal operating
costs of running enterprise necessary for commercial
and legal governance stable and procedural closed and secure an overhead that must be
budgeted and recovered annually
PersonaliseAn Individual’s capability to choose their ‘tools’and how they wish to ‘Interact’ and ‘collaborate’
DifferentiateA Manager’s capability to build locally unique ‘differentiating’
capabilities both externally and internally to create revenue
Core CompetencesCommon, shared core processes that support each differentiated offer
above, and connect to transactional IT applications below
Comply (ERP, etc.)Traditional Enterprise Applications with organised procedures
and data integrity, keeping compliant business results
19© Copyright Capgemini 2011 All Rights Reserved
05 From tight couple computers to loose coupled people!
Clients Desktops Software PCs
Network
ApplicationsDatabases
ServersHardware
StorageMiddleware
BrowsersMashUpsDevices
Collaboration
NetworkAbstraction and policies
Information
Virtualised OperationsHardware
Storage
ServicesIntegration
SystemIntegration
Technology based Integration of the Systems through Enterprise Architecture
Computer and ApplicationsPUSH structured process data
People interact andPULL contextual information
The user and devices become the focus with management of ‘Services’ the new integration issue
20© Copyright Capgemini 2011 All Rights Reserved
06 Introduction of the Next Generation Data Centre
Next Generation Data Centre
Entire Data Centre acts as a single Resource not as a collection of individual resources
Servers, storage elements are all plug and play standardised units
No individual Operating Systems interfacing applications to hardware but a ‘cloud’ layer’ set of simple APIs interfacing Services to resources
Policy Management of Resources both own and external shared is key
Timeline showing Shift from support of Applications to support of Services
Shift from deterministic numbers of applications and systems to use of infinite resources and services
Re-Active toRequiredApplications
Optimised forOperationalOptimisation
Virtualised forOperationalFlexibility
Private Cloudto support growthin Services
Next Generation Data Centre
Choice of Applicationdictates O/Sand hardware
ConsolidationAnd RationalisationWith new tools
Virtualisation to improve efficiency in use of servers
Use of Cloud Middleware to support shift to ‘services’ on demand
Radical shift in requirements towards participation in a common environment with other data centres through hybrid clouds and new generation of users/devices
21© Copyright Capgemini 2011 All Rights Reserved
07 Rich Internet Applications change everything
Real-time interaction with and perception of surroundings
22© Copyright Capgemini 2011 All Rights Reserved
Centralisation for Efficiency
Automation of core Procedures
Cost Reduction
Recharged Overheads
Leverage of Enterprise resources
Data-driven Transactions
Computer and Application centric
Closed and Secure
Justification is COST reduction
08 It’s added a whole additional functional environment
External Market Optimisation
Provides local market differentiation
People Driven Interactions
Expertise with Collaboration
Open with Privacy
Extreme flexibility, frequent change
Direct Bus Unit Attributed cost
Services and Standards based
Value creation in sales/margins
Client – Server Information Technology
Web 2.0 and CloudsBusiness Technology
+
23© Copyright Capgemini 2011 All Rights Reserved
09 Smart Business in ‘White Space’ innovation is the goal
Adjacent BusinessActivities
White SpaceInnovation
DistractingInnovation
Core BusinessActivities
OrganisationalChange
Poor fit to currentOrganisation
Good fit to currentOrganisation
Existing CustomersWith existing products
Existing or New CustomersExtension to existing products
Product Change Source; Seizing the White SpaceHarvard Business Press by Mark w Johnson
Where to start?Core focus areas!
25© Copyright Capgemini 2011 All Rights Reserved
Constructing a focussed Action Plan
Review Portfolio & cluster by use
Ensure familiarity with using SOA
Re affirm effectiveness of existing BI
Front Office differentiation not Back Office automation!
Rethink Maintenance & invest strategically
Build a strong data management model
Re examine Knowledge management approach
Redefine role and responsibilities of ‘IT’
Evaluate Virtualisation for flexibility & Cost
Examine implications of Mobility
Examine data storage architecture
Recognise ‘enablement’ not control is needed
Consider Development Methodologies
Work on Architectural skills adopt TOGAF
Determine the use of unstructured data
Look to establish ‘fast track’ support
Utilise Offshore & Shared Service Centres
Re evaluate role of Middleware
Establish enterprise data governance policies
Re design relationship with business managers
Strengthen Network Capabilities
Identify critical processes & ownership
Evaluate the use of social networking tools
Really get to understand Cloud and Services
Re Examine all aspects of security
Define basic APIs to support ‘services’
Investigate and understand Social CRM
Construct an enterprise ‘leverage’ framework
Plan the new role of the data centre
Re visit all policies & operating procedures
Implement real-time decision support
Develop a RACI model to define relationships
Research emergence of new standards
Research emergence of new standards
Consider broader integration implication
Research emergence of new standards
Infrastructure Integration Intelligence Innovation
Headings are based on the Four Focus points principle of Ray Wang – actions are defined by Capgemini
Roundtables
27© Copyright Capgemini 2011 All Rights Reserved
Topics for roundtable discussions
Is this reality in your company?What are the challenges for you?How will you start the journey?
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