Are Clouds a Game Change?

IT says no; Business says yes!

Andy Mulholland – Group CTO

Capgemini Group

Engagement Managers

Technology is at a Crossroads today

What role should Technology be playing in my business today?

Technology has become themeans by which Enterprises and theirEmployees can create new revenues by servicing customers and markets in new innovative ways.

The REVOLUTION in the ‘Front’ Office

What is the role of IT dept in the enterprise today?

The EVOLUTION of Back Office

The Revolution leads to Business Innovation

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

Affinity Club MBNAExclusive membership offering advantages for subs and loyalty

Pay-as-you-go SalesForce.comReplace 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.comSet 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 HiltiSwitch 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 NetFlixSubscription fee creates a tied in customer base

LowTouch SouthWestLow cost, self service in place of high cost with high service

User Communities Angie’s ListManaged network for common interest with revenue by advertising

Negative Operation

AmazonRe-arbitrage the ‘sell and buy’ cycle to finance the trader

Source: Seizing the White SpaceHarvard Business Press by Mark W Johnson

And the misunderstood topic of ‘Innovation’ (in Business Models)

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

So Two very Different Business Models and Requirements

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 Clouds

Business Technology

+

A ‘Front Office’ Transformation led by Business Users & Customers

Apple Mac Downloads – Dec 12th 2011“In just three years the App Store changed how people get mobile apps,

and now the Mac App Store is changing the traditional PC software

industry,” said Philip Schiller, Apple’s senior vice president of

Worldwide Marketing. “With more than 100 million

downloads in less than a year, the Mac App Store is the largest

and fastest growing PC software store in the world.”

2011 iPad shipment forecast cut to 40M as

Apple faces 'the mother of all backlogs'

Android Smart Phone up 379% in Q2 2011,Android is now the No. 1 smart phone OS worldwide.

The smart phone market grew 73% year-over-year to

more than 107.7 million units shipped last quarter,

According to DigiTimes sources, non-Apple tablets are set to ship at

134% more units for 2012 than in the current year. In raw numbers,

expect 44-45 million non-Apple tablets to ship in 2012, up from

19-20 million. The large increase is attributed to Google’s

next major Android release, codenamed Ice Cream Sandwich, You don’t buy an iPad to use with Enterprise IT

The majority of Smart Phones are user owned

You don’t any longer do the following;

Because most of you bought a Smart Phone, or a Tablet or a Home PC;

Check Cinema showings by using the newspaper; - Buy tickets online

Go to a travel agent to research your holiday; - Book on line

Check a map for directions when driving ; - Use a navigator

Visit a Bank for every transaction; - Online bank account

Develop and send off photographs; - Print at home or share by cloud

Pay Bills by cheque or at an Office; - Online payments

And, and , and, personal behaviour has and is changing many industries;

But you do use a

wide variety new

services from

Internet Connected

Clouds

The Primary Purpose for each is differentand therefore so should the deployment and governance!

November 2006

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PRESENTATION V5.0.PPT

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Back Office IT

Cost reduction and

process automation

Front Office

Market and Information

value producing

Application

Market

Customers

Suppliers

PartnersInside - Out

Outside - In

Web & Cloud Services

Innovation in Business Models

Outside – In is enabled by four Big Game changing Capabilities

© 2010 Capgemini. All rights reserved.

Insert "Title, Author, Date"

8

Mobility

Any Connection Any Device

Any Service

Cloud

Computer ResourcesApps and Services

On Demand

Big Data

Real-Time InformationAnd Intelligence

Storage and Search

Social Tools

Any Community Any Media

Any Person

Which together create the Business Revolution; an example around Servicing Aircraft between flights

9

Back Office

IT

Back Office

IT

Back Office

IT

Back Office

IT

Back Office

IT

Back Office

IT

Traditional IT Applications

Individual synchronised predictions

On plane scheduled arrival and

Activities with staff Inside the Firewall

Cloud based Services

Real Time Operations and reactions

Between staff sharing information

And communications

Inside-Out

Outside-In

In more detail the differences become clear

Inside – Out

Back Office IT

Outside - In

Front Office

Business Technology

Unstructured Events

Respond to the buyer

and the market

Unable to tell who may

know the answer or the

names of all the people

Social Networks are the

most effective tool as

they are ‘topic’ centric

and therefore scale

Enterprise IT

Structured by Data and Procedure

Work is delivered as expected

to the Worker/Manager

Roles and

Responsibilities

are clear

eMail is effective

to communicate

to these known

people and process

November 20061

1

The Outside-In v Inside Out paradigm

Close Coupled

State full

Deterministic

Applications

Client Server

Loose Coupled …….

Stateless …………………...

Non Deterministic …..

Services Based ……….

Web/Cloud Model ……

BusinessTechnology

Back Office ……………..

Operational …….

Cost Savings ………..

Compliance ……………...

Invest/Overhead …….

Front Office

Sales & Marketing

Value Creating

Innovative

Consumption

People & Event Centric ….

Shared and Collaborative ........

Standards defined …..……………………

Computer & Data centric

Closed and Limited

Proprietary

Externally Focussed

‘post PC and Mobility’

Tablets and Phones

Social Networks,

Real time Agility

Big Data

Internally Focussed

PC and Desktop

ERP and BI

Development Methods

Clouds; a misunderstood topic – the correct and simple explanation!

The current final stage in the development of a technology revolution;

1. The Internet – standardisation of connectivity

2. The Web (1.0) – standardisation of content

3. Web 2.0 - standardisation of social interactions

4. 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 Deterministic

The 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

The four different business and technology groups

1

3

Productivity of People

Social Networking

Collaboration

Tablets & Smart Phones

Computing Resource Shift

Everything as a Service

IaaS, PaaS, & SaaS

Evolution of IT Capabilities

Virtualisation of Data Center

Flexibility and Agility

Development & Test

Front OfficeInternal

Back OfficeInternal

ExternalResourcing

New Markets& Revenues

Innovative Business Models

Digital Transformation

Servicing customers

Front Office Revolution

The Cloud Transformed Enterprise

70%

15%

10% 5%

30%

40%

20%

10% 5% 5%5%

85%

5%

30%

60%

5%

20%

40%

30%

10%10%

30%

30%

30%

5%

60%

30%

5% 15%

40%40%

5%

20%

40%

35%

5%

35%

35%

25%

5%

Leader/Executive People ManagerTransactional/Process Execution Worker Knowledge Worker

Administrative AssistantNew Employee Contributor Networker

Professional Track/SME Mobile Worker/Road Warrior

Relationship Management/Decision MakingKnowledge Work CollaborationBusiness Processes

The odd one out!

‘Front Office Events’ are changing roles and activities

Traditionalist(55 - 65)

Boomers(45 – 55)

Gen X (30 – 45)

Millennials(18 – 30)

Training The hard wayToo much and

I’ll leaveRequired to keep

meContinuous and

expected

Learning style Classroom Facilitated IndependentCollaborative

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 styleCommand and

controlGet out of the

wayCoach Partner

FeedbackNo news is good news

Once per year Weekly/Daily On Demand

Technology use Uncomfortable UnsureUnable to work

without itExpected to be

Intuitive

Job changing Unwise Sets me back NecessaryPart of my daily

routine

Source: Lancaster & Stillman (2003)

The Social Revolution is a people and behaviours shift

The Agile Enterprise

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

Development & Deployment has to change to support the Agility

November 2006

TS - SAAS CIO

PRESENTATION V5.0.PPT1

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PersonaliseAnIndividual’scapabilitytochoosetheir‘tools’

andhowtheywishto‘Interact’and‘collaborate’

Differen ateAManager’scapabilitytobuildlocallyunique‘differen a ng’capabili esbothexternallyandinternallytocreaterevenue

CoreCompetencesCommon,sharedcoreprocessesthatsupporteachdifferen atedofferabove,

andconnecttotransac onalITapplica onsbelow

Comply(ERP,etc.)Tradi onalEnterpriseApplica onswithorganisedprocedures

anddataintegrity,keepingcompliantbusinessresults

System

environments

SAAS

Solutions

Methodolog

y

Acceleration

centers

Factories Pricing

Apps

BOBJ

Business

Explorer

RoamBI

AppStore

SCRUM

Rapid Design

& Visualisation

Rapid

Innovation

Workshop

BI Reports

Apps

Factories

Per Report

Per App

Menu Card

Netweaver

BPM

Cordys

Duet Enterprise

Sharepoint

2010

Cordys BPM SCRUM

Rapid Design

& Visualisation

Rapid

Innovation

Workshop

Rapid Solution

Workshop

BPM Services As a service

Per

functionpoint

Menu Card

Netweaver

Sybase

Force.com

Business

ByDesign

Common

Reference

Architecture

(CORA)

Rapid Solution

Workshop

PI Factory Price per

interface

As a service

CRM

SRM

Sales on

Demand

SalesForce.co

m

Deliver

Rapid Design

& Visualisation

Scrum

Rapid Solution

Workshop

BI (Cubus) As a Service

Menu Card

Fixed Price

ERP Business

ByDesign

Deliver Rapid Solution

Workshop

Remote

Design &

Configuration

As a Service

Menu Card

Fixed Price

Copyright Capgemini 2012

1

8

Those cloud and mobile factors bring capabilities to handle mass amounts of data in

new ways, but also changes in responsibility for internal IT departments and their

accompanying budgets, Plummer said.

"As users take more control of the devices they will use, business managers are taking more control of

the budgets IT organizations have watched shift over the last few years. As the world of IT moves

forward, CIOs are finding that they must coordinate their activities in a much wider scope than they once

controlled,” Plummer said. “While this might be a difficult prospect for IT departments, they must now

adapt or be swept aside.“

Gartner predicts up to 35 percent of enterprise IT expenditures will be managed

outside of the IT department’s budget by 2015.

Because of this financial shift, IT departments will not always be contextualized by the technology that

surrounds them, and their budgets will more often be reallocated to other areas in the enterprise or

redefined on the basis of projects, according to Gartner.

Will It Happen?Taken from a public Web Site; Gartner Predictions for 2012

Source; http://www.information-management.com/news/cloud-unstructured-data-mobile-Gartner-2012-

10021632-1.html?ET=informationmgmt%3Ae2781%3A2263207a%3A&st=email

Ten Technology Groupings

To watch and understand

1) At the Core is the focus on People and Social Tools Networks

Microsoft Phone 7

Apple iPhone & iPad

2. Presentation, Usability and User Interface Experiences

The Post PC Era;

3. From Big IT Applications to Small Orchestrated Services

4. User Self Provisioning and Bring Your Own, BYO.

5. Big Data means more than a lot of Data

?

6.From tightly coupled computers to loosely 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 Applications

PUSH Structured process & data

People interact and

PULL Unstructured Insights & Actions

The user and devices become the focus with management of ‘Services’ the new integration issue

7. Development & Deployment is changing

November 2006

TS - SAAS CIO

PRESENTATION V5.0.PPT2

6

System

environments

SAAS

Solutions

Methodology Acceleration

centers

Factories Pricing

Apps

BOBJ

Business

Explorer

RoamBI

AppStore

SCRUM

Rapid Design

& Visualisation

Rapid

Innovation

Workshop

BI Reports

Apps

Factories

Per Report

Per App

Menu Card

Netweaver

BPM

Cordys

Duet Enterprise

Sharepoint

2010

Cordys BPM SCRUM

Rapid Design

& Visualisation

Rapid

Innovation

Workshop

Rapid Solution

Workshop

BPM Services As a service

Per

functionpoint

Menu Card

Netweaver

Sybase

Force.com

Business

ByDesign

Common

Reference

Architecture

(CORA)

Rapid Solution

Workshop

PI Factory Price per

interface

As a service

CRM

SRM

Sales on

Demand

SalesForce.co

m

Deliver

Rapid Design

& Visualisation

Scrum

Rapid Solution

Workshop

BI (Cubus) As a Service

Menu Card

Fixed Price

ERP Business

ByDesign

Deliver Rapid Solution

Workshop

Remote

Design &

Configuration

As a Service

Menu Card

Fixed Price

Interchange

Public shared

Infrastructure

Private Internal

Infrastructure

8.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

9. Mobility in Everything and Every Sense!

From Devices and Connections

To

Locations and

Interactions

10. The Redefinition of Security

But that won’t be all .....Consumer Trends are now driving even more