Technology is Business
Business is Technology
Stephen J. Andriole, Ph.D.
Thomas G. Labrecque Professor of Business Technology The Villanova School of Business
Villanova University
Wharton| May 2014
So Where Are We?
ü “IT Doesn’t MaOer”?
ü “IT’s Time”?
ü IT’s a Cost Center?
ü IT’s a Profit Center?
ü It’s the End of IT?
So Where Are We?
ü “IT Doesn’t MaOer”?
ü “IT’s Time”?
ü IT’s a Cost Center?
ü IT’s a Profit Center?
ü It’s the End of IT?
ü Disconnect Everyone from email, the Web, SoTware ApplicaVons and the Data Bases They Use All Day (and Night) to do Their Jobs (and Live Their Lives): See How Long It Takes for the Help Desk to Light Up with Angry Employees Threatening to Do All Sorts of Unspeakable Things to You and Your Technology Providers
ü Then Disconnect Your Customers and Suppliers: See How Long It Takes for Revenue to Crash ü While OperaVonal Technology has CommodiVzed, Our Dependence on OperaIonal and Strategic Technology is So Complete that It's Impossible to Separate Business – at Any Level – From Technology ü In Fact, All of the Major Strategic Challenges That Companies Face Today Cannot Be Solved Without Technology
We’re Nothing Without IT
ü How Do We Make IT Work?
Ø How Do We Achieve OperaIonal Excellence?
v How Do We Organize IT? v How Do We Govern IT? v How Do We Source IT?
OK, Now That We’ve Cleared That Up …
ü How Do We Make IT Work?
Ø How Do We Create Strategic Value?
v How Do We Track Our Clients? v How Do We Distribute Our Services? v How Do We “Listen” to Our Community? v How Do We Exploit AnalyVcs? v How Do We Innovate?
The Business Value of IT
ü Empirical Research, Especially Technology ForecasIng, Technology AdopIon, Organiza-‐ Ional EffecIveness & Customer SaIsfacIon Data
ü Best PracIces Data (Gartner, Forrester, Etc.)
ü Experience as CIO, CTO, SVP, CEO, Corporate Director, Consultant & Professor
ü Some (Clearly Marked) Opinions
The Bases for Our Discussion …
OperaVonal IT: How Should We Organize?
CIO/CTO
Business Office
ü Project Management
ü Vendor Management
ü IT Finance, HR & CommunicaVons
Infrastructure
ü Networks & CommunicaVons
ü Storage ü Devices
ü Security Admin
ü Back-‐Up & Recovery …
ApplicaVons
ü Back Office Plajorms
ü Enterprise ApplicaVons
ü ApplicaVons RaVonalizaVon
ü Delivery …
Architecture
ü Enterprise, ApplicaVons, InformaVon,
CommunicaVons, Hardware & Security
Architecture Standards
ü R&D …
Business RelaVonship Management
ü BPM
ü Demand Management
ü Requirements Modeling
ü NegoVaVons …
Finance & Procurement
IT Governance CommiOee
Audit
OperaVons
Strategic
Technology
ü Business ApplicaVons
ü Business Model DisrupVon
ü Emerging Technology
OpVmizaVon ...
ü The Big QuesVon: FederaIon Ø 65% of All OrganizaVons are Feder-‐ ated
v PoliVcally Popular – & Unpopular v Shared Governance v Higher Cost v Agile …
OperaVonal IT: How Should We Organize?
OperaVonal IT: How Should We Govern?
I n t e r n a l
E x t e r n a l
Hardware, SoTware & Services Providers
The Enterprise
Partners & Suppliers
The Crowd
Corporate FuncVons
Business Units
OperaVonal Technology
Strategic Technology
Emerging Technology ParVcipants
Technologies
OperaVonal IT: How Should We Govern?
I n t e r n a l
E x t e r n a l
Hardware, SoTware & Services Providers
The Enterprise
Partners & Suppliers
The Crowd
Corporate FuncVons
Business Units
OperaVonal Technology
Strategic Technology
Emerging Technology ParVcipants
Technologies
Who Owns the Matrix?
ü Federated OrganizaVons Share Governance ü Centralized OrganizaVons Control Everything
ü But Both Structures Must Acknowledge the Roles, ResponsibiliVes & Power of Service Providers, Partners & Even the Crowd: Gov-‐ ernance is Now Shared Regardless of the Internal OrganizaIonal Structure
OperaVonal IT: How Should We Govern?
ü Federated OrganizaVons Share Governance ü Centralized OrganizaVons Control Everything
ü But Both Structures Must Acknowledge the Roles, ResponsibiliVes & Power of Service Providers, Partners & Even the Crowd: Gov-‐ ernance is Now Shared Regardless of the Internal OrganizaIonal Structure
OperaVonal IT: How Should We Govern?
In the Age of ConsumerizaIon, the Pace of Technology Change & CompeIIve Pressures, FederaIon
– the Shared Control of Technology – Clearly Makes the Most Sense (Centralized Control is So 1990s)
Cloud Pla^orm
Web 2.0 Technologies
Outsourcing
SoTware-‐ As-‐a-‐Service
Ultra Thin Clients
Web Services, SOA
& APIs
Open Source SoTware
Hardware-‐ As-‐a-‐Service
Web 3.0 Technologies
Corporate Pla^orm
Web 1.0 Technologies
In-‐Sourcing
Customized & Packaged SoTware
Fat Clients ETL & EAI
Proprietary SoTware
Data Centers
Some ERP, CRM & NSM
1980 – 2005
2005 –
OperaVonal IT: How Should We Source?
ü CAPEX à OPEX/Buy à Rent: The Shi_ is Well Underway
ü MigraVons from Internally Hosted ApplicaVons, Data Centers & Development to the (Public/ Private) Cloud
Ø Infrastructure as a Service (Email, Data, Storage) Ø SoTware as a Service (ApplicaVons) Ø Plajorm as a Service (Development)
OperaVonal IT: How Should We Source?
ü CAPEX à OPEX/Buy à Rent: The Shi_ is Well Underway
ü MigraVons from Internally Hosted ApplicaVons, Data Centers & Development to the (Public/ Private) Cloud
Ø Infrastructure as a Service (Email, Storage) Ø SoTware as a Service (ApplicaVons) Ø Plajorm as a Service (Development)
OperaVonal IT: How Should We Source?
71% are Happy With Cloud ERP
83% are Happy With Cloud BI
91% are Happy With Cloud Infrastructure
Cloud = Future
How Should We Track Our Clients?
How Should We Distribute Our Services?
How Should We “Listen”?
How Should We Exploit AnalyIcs?
How Should We Innovate?
Strategic IT
Strategic IT: OpportuniVes
Cloud
Architecture
Social Media
Big Data AnalyVcs
BYOD/DIY
Interfaces
Thin/Wearable Devices
IOT/IOE
LocaVon Services
InnovaVon
Strategic Value
ü LocaVon-‐Based Services Provide Real-‐Time Client Trails
Ø Foursquare (www.foursquare.com) Ø Loopt (www.loopt.com) Ø Yelp for Mobile (www.yelp.com/yelpmobile) Ø Neer (www.neerlife.com) Ø SCVNGR (www.scvngr.com)
ü Listen to Them 24/7 in Social Media Ø Engagement Ø Lead GeneraVon …
Strategic IT: Tracking Clients
ü 4 Screens|Always On
ü Shared ApplicaVons ü DIY/Wearables
ü Asynchronous
ü AdapVve ü Mobile …
Strategic IT: DistribuVng Services
ü 4 Screens|Always On
ü Shared ApplicaVons ü DIY/Wearables
ü Asynchronous
ü AdapVve ü Mobile …
Strategic IT: DistribuVng Services
Web 2.0 (Technologies)
Social Media (CollaboraVon & Sharing)
Social Networking (B2B, B2C, C2C, E2E Networks)
Social Business Intelligence (Analysis of Social Data)
Strategic IT: Listening
ü Product InnovaVon ü Brand Management ü Market Intelligence ü CompeVVve Intelligence ü Customer Service ü ReputaVon Management ü Risk & Threat Analysis …
Strategic IT: Listening
ü PredicVve AnalyVcs from Social Data: Ø Revenue? Ø ElecVons? Ø Corporate Success/Failure? Ø Regulatory Behavior? Ø Threats? Ø Crises?
Strategic IT: Listening
ü PredicVve AnalyVcs from Social Data: Ø Revenue? Ø ElecVons? Ø Corporate Success/Failure? Ø Regulatory Behavior? Ø Threats? Ø Crises?
Strategic IT: Listening
Yes
Tweets have already been used to measure movie senVment and box-‐office revenue with amazing accuracy. Note the work of Asur and Bernardo who predicted the movie “Dear John” would earn $30.71 million at the box office on its opening weekend. It actually generated $30.46 million. For the movie “The Crazies,” they predicted a $16.8 million opening: it generated $16.07 million. According to the authors of the NaVonal Science FoundaVon-‐supported study, "we use the chaOer from TwiOer.com to forecast box-‐office revenues for movies. We show that a simple model built from the rate at which tweets are created about par-‐Icular topics can outperform market-‐based predictors.”
Strategic IT: Listening
Strategic IT: Listening
Engaging with Employees, Suppliers & Partners
Engaging with Customers & CompeVtors
Listening to Employees, Suppliers & Partners
Listening to Customers & CompeVtors
Internal External
Passive
AcVve
Strategic IT: Listening
Engaging with Employees, Suppliers & Partners
Engaging with Customers & CompeVtors
Listening to Employees, Suppliers & Partners
Listening to Customers & CompeVtors
Internal External
Passive
AcVve
Who Owns the Social Strategy?
ü Big Data AnalyVcs is a “Must Have” Competency as the Volume of Digital Content Grows to 2.7 zeOabytes (ZB), Up 48% from 2012 & the DiagnosVcity QuoVent of the Data Rises
ü Over 90% of this InformaVon is Unstructured (Images, MP3 files, Videos & Social Media) – Full of Rich Infor-‐ maVon, but Difficult to Profile & Analyze (+ Exploding Structured Data from TransacVons, Sensors [the IOT] & Other Sources)
ü Over 90% of All Digital Data Has Been Generated in the Past 2 Years
Strategic IT: AnalyVcs
Strategic IT: IBM on Big Data AnalyVcs
Content
TransacVonal / ApplicaVon Data
Machine Data
Social Media Data
Know Everything About Your Customers
Run Zero-‐Latency OperaVons
Innovate New Products at Speed and Scale
Instant Awareness of Fraud and Risk
Exploit Instrumented Assets
“Achieve Breakthrough Outcomes by Analyzing Any Big Data Type”
Solve Share/Leverage Structured & Unstructured Data …
Real-‐Time OperaVonal & Strategic AnalyVcs …
Contextual Problem-‐ Solving …
Store
Analyze
InformaVon Data Knowledge
DBMSs
Oracle IBM MicrosoT …
Data Warehouses
Data Marts …
Knowledge Repositories & Content Managers …
On-‐Line TransacVon Processing
Querying …
Real-‐Time Data Mining & PredicVve AnalyVcs …
Knowledge Mining, Sharing & Publishing …
Strategic IT: AnalyVcs
Solve Share/Leverage Structured & Unstructured Data …
Real-‐Time OperaVonal & Strategic AnalyVcs …
Contextual Problem-‐ Solving …
Store
Analyze
InformaVon Data Knowledge
DBMSs
Oracle IBM MicrosoT …
Data Warehouses
Data Marts …
Knowledge Repositories & Content Managers …
On-‐Line TransacVon Processing
Querying …
Real-‐Time Data Mining & PredicVve AnalyVcs …
Knowledge Mining, Sharing & Publishing …
Strategic IT: AnalyVcs
E.G., Mobility + LocaIon Awareness +
Social Media = AnalyIcs
R&D Networks Security
Applications Operations …
Strategic
Operational
Internal External
Applications Management
R&D
Systems & Network Management
Security …
Supply Chain Planning & Management
Distribution
Channel Effectiveness
Partnerships & Alliances …
Business Process Modeling,
Management & Reengineering
Business Activity Management
Competitor Intel …
Customer Profiling
Up-Selling & Cross-Selling
Customization
Location-Based
Services …
Real-Time
Strategic IT: AnalyVcs
ü Internal (Human/Financial/Facility Resources)
ü Social Networks (AcVve & Passive Listening/Engagement)
ü Partner Ecosystem
ü Crowdsourcing …
Strategic IT: InnovaVon
Strategic IT: More OpportuniVes Today
Cloud
Architecture
Social Media
Big Data AnalyVcs
BYOD/DIY
Interfaces
Thin/Wearable Devices
IOT/IOE
LocaVon Services
InnovaVon
Strategic Value
Lack of Con-‐sistent Leader-‐ship Support
Bad Vendors
Styles/Biases of Managers
Lack of Skills & Competencies
Corporate Culture
Landmines People, People
(& People)
How IT Can Go Wrong
Lack of Con-‐sistent Leader-‐ship Support
Bad Vendors
Styles/Biases of Managers
Lack of Skills & Competencies
Corporate Culture
Landmines People, People
(& People)
How IT Can Go Wrong
New, Extended Business Models
New, Integrated Technology
Perfect Synergism & Total Interdependence
What’s Next?
MulV-‐Purpose Crowdsourcing
Real-‐Time AnalyVcs-‐Based Sales/ MarkeVng/Services
ConVnuous Supply Chain, DistribuVon & Sales TransacVon
Processing
MulV-‐Focus Freemiums
Real-‐Time/ ConVnuous AucVoning
SubscripVon-‐ Based Product & Service
Delivery
All-‐Lingual 24/7 On-‐Line/Off-‐Line Global
TransacVon Processing
Digital/Organic InterconnecVvity for
Profiling/Sales/ MarkeVng/Service
LocaVon-‐Based Sales & Service
Intelligent Augmented TransacVon Processing
New, Extended Business Models
Public/Private/ Hybrid Cloud CompuVng
Open, Hybrid & Proprietary Architectures
Social Networking & Social Media
Real-‐Time BI & All Data AnalyVcs
BYOD 4+ Screens
VirtualizaVon, SimulaVon, Gaming & Augmented Reality
Smart, Networked Wearable Devices
Internet of Things & Everything (IOT/IOE)
Real-‐Time LocaVon-‐Based Services
Quasi-‐ & Fully-‐Automated
Intelligent Systems
New, Integrated
Technology
Business & Technology Is …
ü SynergisVc ü Interdependent
ü MulV-‐DirecVonal
ü Inseparable
ü Virtual …
New, Extended Business Models
New, Integrated Technology
New Form & Content of “Business”
What to Do Tomorrow …
ü Rent as Much Technology as Possible ü Go BYOD, Thin, Mobile & Wearable ü Exploit Big Data AnalyVcs ü Mine Social Media ü Keep Technology Open & AgnosVc ü Know Where Everyone Is ü Track & Deploy "Ready" Technology ü Crowdsource ü Federate IT ü Assess, Refresh & Relocate Technology Talent