Technology & Business - Wharton 2014

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?

We’re Nothing Without IT

Let’s Establish Something Immediately

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

Finance Sales

Strategy

InnovaVon

MarkeVng

Technology

Business Used to Look Like This

Finance Sales

Technology

InnovaVon

MarkeVng

Supply Chains

Now Business Looks Like This

Technology

IT Used to Look Like This

Now IT Looks Like This

We’re Nothing

Without IT

The New Reality

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 …

How Should We Organize IT?

How Should We Govern IT?

How Should We Source IT?

OperaVonal IT

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


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


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


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


Corporate Pla^orm


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)


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)


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 …


ü  PredicVve AnalyVcs from Social Data: Ø  Revenue? Ø  ElecVons? Ø  Corporate Success/Failure? Ø  Regulatory Behavior? Ø  Threats? Ø  Crises?


ü  PredicVve AnalyVcs from Social Data: Ø  Revenue? Ø  ElecVons? Ø  Corporate Success/Failure? Ø  Regulatory Behavior? Ø  Threats? Ø  Crises?


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.”



Engaging with Employees, Suppliers & Partners

Engaging with Customers & CompeVtors

Listening to Employees, Suppliers & Partners

Listening to Customers & CompeVtors

Internal External

Passive

AcVve


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 …


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 …


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


ü  Internal (Human/Financial/Facility Resources)

ü  Social Networks (AcVve & Passive Listening/Engagement)

ü  Partner Ecosystem

ü  Crowdsourcing …

Strategic IT: InnovaVon

Strategic IT: InnocenVve

Strategic IT: NineSigma

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


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, 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

We’re Nothing

Without IT

Just Remember …

Technology is Business

Business is Technology

Thank You!

Stephen J. Andriole, Ph.D.

Thomas G. Labrecque Professor of Business Technology The Villanova School of Business

Villanova University

Wharton| May 2014