Leading in 3-D: A Bimodal AlternativeBank kicked off newly created DevOps COE with year-long project that made substantial short term wins and drove transformation Key Success Elements:

Leading in 3-D: A Bimodal Alternative2016 Canadian CIO Innovation Summit

BillKeyworthIDCVicePresident Research&ITExecutiveAdvisor

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InthisDigitalEconomy...ProfoundChangeisEverywhere...


SleepNumber®Mattresses

AudiConnect

NotabedThe latest, cloud connected,

biosensor and fitness platform

AirbusA380Notanairplane,butaflying

concretetester

NotanA6,butatrafficlight

recognitionsystem

CompetinginaDigitalEconomy

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4

TheDigitalDivideisDeveloping

Source: IDC, Digital Transformation MaturityScape Benchmark, 2016. n=413Showing the % of organizations in the world at each stage of Digital Transformation

ADHOC

OPPORTUNISTIC

REPEATABLE

20%

34%

28% DigitalPlayer

DigitalExplorer

DigitalResister

12% MANAGEDOPTIMIZED5% DigitalDisruptor

DigitalTransformer

5

Competitionwillbebasedon“DigitalInnovation”

© IDC Visit us at IDC.com and follow us on Twitter: @IDC

TheNewKPIsforaDigitalOrganization

33%ofCEOswillhave

technologyleadershipexperience

DIGITALLEADERSHIP

DIGITALOMNI-

EXPERIENCE

35%improvementinNetPromoterscorewhencustomersowntheir

experience

DIGITALINFORMATION

100%growthofrevenuefrominformation-basedproducts

DIGITALOPERATINGMODEL

40%ofoperational

processeswillbeselfhealing

DIGITALWORKFORCE

50%reductionin

managementlayers


WhatistheSingleMostImportantRoleITCouldPlayinYourOrganization’sDigitalTransformation?


PROJECTMANAGEMENTManageourdigitalprojectimplementations

24%TECHNOLOGYIdentifyemergingtechnologiesthatcouldaccelerateourdigitaltransformation

25%INNOVATIONHelpusidentifywhichpartsofthebusinesscouldbedigitallytransformedthoughtheuseoftechnology

32%

ITisNeededtoHelpintheDigitalTransformation

Optimized

DigitalDisrupter

2%

46% 35%

13% 4%

DXWary DXTacticians DXEmbracers DXChangeAgents DXVisionaries


Source: IDC, Leading in 3D Maturity Model Benchmark, 2016; n= 160 IT Executives, January, 2016

ButITisNotReadyIDC’sITDigitalLeadershipTransformationMaturityScape

Only17%ofITorganizationsare

effectivepartnersinDX

• Continuetoruntheexistingbusiness&infrastructure

• Fundinnovationbyde-capitalizingAt-Scale

• Stillaccountableforsecurity&long-termoutcomes

9

• Supportandenablebusiness-unittechnologyexperimentation

• Newmethods/processes• Time-to-Market!

EnableInnovation/Incubators SustainAt-ScaleProcesses/Tech

Bimodal- LittletoNoInnovationBudgetFunding

ITMustSupportbothInnovation&At-ScaleBusinessInitiatives

Bimodal- InadequatetoTask


BimodalIT:ShortcomingsandImplicationsStrategyandGovernance

Createsacontinuousstateofcrisisbetweenthosewhocreatefast,new,solutionsbutarenot

accountableforreliabilityorquality,andtherestfocusonreliability,scale&execution

Governance• Empirical• Contiguous

process-based

Governance• Plan-driven• Approval-based

Strategy• Agility

Strategy• Reliability


11

§ Technicaldebtquantifiesthe‘worklefttodo’when“fastIT”isnotintegrated;e.g.:

§ Security,businesscontinuity,support,(redundant)cloudplatforms,(lackof)CRM,compliance,audit,(lackofwith)systemsofrecord

§ Astechnicaldebtaccumulates:§ Abilitytoinnovate,adapt,andrespond

stall,thendecline§ Redundancyandinconsistencyincrease§ Operationalcostsskyrocket

Change in Investment

Technical Debt

“Slow IT”

“Fast IT”

Incr

ease

Keep theLights on

Technicaldebt,likefinancialdebt,musteventuallybepaid,orthedigitaltransformationinitiativewillgobankruptunderits

ownweight.

Time

BimodalIT:ShortcomingsandImplicationsTechnicalDebt

Source: Leading in 3D: Managing Technical Debt in Digital Transformation, (IDC #US41368416, 2016 )


BimodalIT:ShortcomingsandImplicationsSiloedSourcingStrategiesareExpensive

Contract for legacy on-premise human capital management (HCM) solution renewed • Annual Cost: $1,000K (previously $1,200K)• Commitment: 5 years• Total Cost: $5,000K

Contract for new SaaS HCM solution signed year later by DX transformation office• Annual Cost: $800K

Actual Cost (5yr)$5M + $3.2M = $8.2M

Should Cost (5yr)$1.2M + $3.2M = $3.6M

Anexample:

Siloedsourcingiscausingenterprisestospendfarmorethantheywouldhaveiftheirlegacyandinnovationsourcinginitiativeswereintegrated

12

Source: Vendor Sourcing and Management: Sourcing in 3 Dimensions, (IDC #US41529416, 2016 )


TransformITYourLeadershipRoadmapforDigitalTransformation

INNOVATEwithbusinesstocreate

adigitalenterprise

INTEGRATEdigitalcapabilitieswiththeenterpriseplatform

INCORPORATEnewtechniquesandtechnologiesintotheITorganization


InnovatewithBusinesstoaCreateDigitalEnterprise

FocusonITOrganizationDevelopmentandTalentManagement

RebalanceIT’stalentportfoliofordigitalcompetencies

Developconsumerengagementexpertise

Createaninnovationculture

CreateanInnovativeandDigitallyCompetentITOrganization


Source: IDC, IT Staffing Survey 2015 – N=90

INVEST

CULTIVATEOUTSOURCE

RETRAIN

RebalanceITTalentPortfolioforDigitalCompetencies


DevelopConsumerEngagementExpertise

UPS’MyChoicemobileapplicationinformsconsumersinrealtimeabouttheirdelivery,andallowsthemtorescheduledeliveryordeliverypoint.

KeySuccessElements:• Understandingconsumerpains• Adjacentpossible• Ecosystempartnerships

UPS


CreateanInnovationCulture

McDonald’sdismissedtheiradagencyof35yrs,andisbuildingan“AgencyoftheFuture”– builtarounda“digitalcortexcommand-center”KeySuccessElements:• Combiningalldatainflows[point-of-sale,advertisingandsocialmedia]toone,real-timehuborcommandcenter

• Createsanintegratedmedia/advertising/POShub• Now,onededicated,integrated,empoweredteamtoincreasemanageallexternaladvertising,image,branding

• Agencywilluseapay-for-resultscompensationmodelbasedonMcDonald'sbusinessandbrandperformance

• Lookforhigh-caliberpeoplewhoareexcited,hungry,innovative,andwanttochallengethestatusquo

McDonald’s


IntegrateDigitalCapabilitiesWithEnterprisePlatform

FocusonITServiceManagementandProgramManagement

Createcustomer-facingandecosystem-facingITservices

Integratedigitalcapabilitiesacrosstheenterprise

ImplementcrossfunctionalDXprogrammanagement

CreateaReliable,ScalableandSecureDigitalInfrastructure


CreateCustomer-FacingandEcosystemBusinessServices

EcosystemBusinessServices

• Informationasaproduct• Connectedservices(automation)• Newbusinessmodel

Customer-FacingBusinessServices

• Customeracquisitionandretention• Contextualizedcustomerexperience• Newrevenuestreams

EnterpriseBusinessServices

• Dataforimproveddecisionmaking• Efficientbusinessprocesses• Securecorporatedata

ITServices• Reliablecomputingandcommunications• Employeeproductivity• Systemsresilienttodisaster

SERVICELAYER BUSINESSOUTCOMES


IntegrateDigitalCapabilitiesAcrosstheEnterprise

J&JConsumerProductsdivisioncreatedanalyticscenterofexcellencetospeeddigitalinnovation

KeySuccessElements:• PartnershipbetweenCIOandCMO• Broughttogether300peoplewhowereperforminganalyticaltasks

• “Datalake"servesasaplatformforallsourcesofdata• Governancestructuretohalttheproliferationofdatatools

J&J


IncorporateNewTechniques&TechnologiesIntoITOrg.

FocusonChangeManagementTechniques

TransformITInfrastructureandOperations

Focuson“InfrastructureInnovation”

Selectivelyincorporatenewskills

CreateaFlexibleandOptimizedITInfrastructure

HybridisaGrowingReality

Source: IDC CloudView, January, 2016, n=6159 worldwide respondents; weighted by GDP and company sizeQ: Which aspects of a Hybrid Cloud strategy have you adopted?

0% 20% 40% 60% 80% 100%

Currentlydoingthis Firmplans Aspirations Notanareaoffocus

Subscribingtomultipleexternalcloudservices

Usingamixofpubliccloudandprivatecloudassets

ITarchitecturethatunitesconfiguration/provisioning/management

Supportingportableworkloadsandautomatedbursting

Uniting2+distinctworkloadsinanautomatedconfiguration

ManagingallITundersameservicecatalog,SLAs,etc…

22

By201865%ofallITassetsusedbyenterpriseswillbeoffsite– ahybridworld


I&OISDOMAINSPECIFIC• Deployservicesinasilo• Maintaintheuptimeofindividual

components

I&ODELIVERSPERFORMANCEOPTIMIZATION• DeployserviceswithDevelopmentteams• Optimizeserviceperformanceholistically

REACTIVEIT• ShadowIT• LOBprocurescloudtoimprovebusinessagility• LOBrunscloudprojectsindependently

PROACTIVEIT• BusinessandITCollaboration• ITengagedonclouddeals• BusinessinputdefinesservicesandSLAs

TransformITInfrastructure&Operations


FocusonInfrastructureInnovation

EffectivelyManagingChangeBankkickedoffnewlycreatedDevOps COEwithyear-longprojectthatmadesubstantialshorttermwinsanddrovetransformation

KeySuccessElements:• Culturechange:Carefulattentiontoidentifyingteamandnewculturalnorms

• Newmetrics:WorkedwithHRtocreatenewperformancegoals.• Communication:Teammadeefforttoovercommunicateupdates,challengesandprogress

LargeFinancialServicesFirm

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SelectivelyIncorporateNewSkills

M&Tbankdeliveredon25projectsspanningunifiedCX,expansionofselfservice,andmobileover2years.

KeySuccessElements:• Expandedthecultureofdigitalteamtootherteams• DecidedUIwouldberequirementforinternalapstoo• SetupUXsharedservices• Itisnotallornothing

M&TBank


WeareCreatingaVirtualCycleofITInnovation

BillKeyworthIDC Vice President Reasearch & IT Executive Advisor

IDC Executive [email protected]


Documents

Leading in 3-D: A Bimodal AlternativeBank kicked off newly created DevOps COE with year-long project that made substantial short term wins and drove transformation Key Success Elements: