May 2, 2013

Aligning Corporate Business Goals with Technology

Chris Yetman, SVP Business Process & Technology

2Technology you trust. People you know.

Digital Natives and Immigrants.

+ Digital Immigrants: Those of us who were not born into the Digital World and adopted it later in our lives. Even if you’ve been in IT for more than 20 years and feel you ‘grew up with it’ you’re still an immigrant compared to the majority of younger people / employees in your company, users of your applications who grew up with from toddlers to college grads with smart phones and tablets in hand that they have used since before they grew out of diapers.

+ Digital Natives: Most employees are now “native speakers” of the digital language of computers, video games and the Internet. They are used to technology. They grew up with it as part of normal life and have grown to expect everything digital to be easily obtained with no hassle and no waiting. They don’t care how hard you think it is to deploy a solution. If they can’t get what they want from you, they search quickly and find alternate routes to the data they want leaving you in the digital dust.

3Technology you trust. People you know.

End users are no longer ignorant of technology

+ Your employees or users of your applications are no longer ignorant of technology:• They can find functionality off of the shelf that would rival applications it

might have taken IT organizations months or years to develop.• They are getting more and more used to having it NOW. Just

download the application and go. (Users of commodity technology have adopted a “Good enough now” approach to IT)

• They are the most savvy digital users we have ever dealt with. It doesn’t matter if they don’t appreciate how much work it took to make it look so easy for them. Why should they care?

• A terrific example of this is the BYOD approach people are adopting. Even when you don’t adopt it, people bring their own tech to the table whether or not you want to support it.

• If you can’t provide a working laptop or mobile device on the day they arrive they could go to BestBuy and get one that works and could be quickly integrated.

4Technology you trust. People you know.

Infrastructure is now a commodity

+ January 2012: 762 Billion Objects Stored on Amazon’s AWS S3 Cloud.

+ March 2012: Data Center Knowledge article estimates that Amazon’s AWS infrastructure contains at least 454,000 servers (that they could find).

+ Virtualization allows you to not only better utilize the infrastructure but it allows you to replicate and move from host to host on demand.

+ Machine images can deploy in 6 minutes what used to take 6 weeks to order, build and deploy.

+ July 2012: Netflix releases the Chaos Monkey to the wild. Fault tolerant infrastructure is a thing of the past. Chaos Monkey destroys whole machine instances and the software recovers the environment. This allows the software to run on any cloud any white label hardware and still be more redundant than solutions costing significantly more.

5Technology you trust. People you know.

Infrastructure is now a commodity

+ Cloud providers have scale most of us can’t achieve and virtualization that allows for auto scaling of storage and servers.

+ Not only can you scale up quickly but (and perhaps more importantly) you can scale down quickly.

+ When you are working with providers who can deliver infrastructure that you can rent for less than you can build and maintain for yourself, you pay less and then also only pay for what you need.

+ Run a campaign? No problem! • Ramp up, deliver a result, ramp down.

+ Overestimate and build more machines than needed for the load? No problem, toss them back and stop paying rent.

+ Server down? No problem, automate away to another waiting server.

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Software is fast becoming a commodity.

+ NETSUITE (ERP)

+ Salesforce.com (CRM)

+ ServiceNow (Service Desk)• (Users accept the imposition of standardization in the Cloud (which they have

trouble with from internal IT) – Why? Because the Cloud gives them “Good enough now”, rather than “Perfect Later”)

+ With standard process definition, Software is quickly being commoditized.

+ Processes are central to the Organization and not a commodity.

+ IT should be the brain trust of Organization’s Processes.

+ Building Software should not be the Core Competency of IT Departments.

+ One Patch by Salesforce.com fixes thousands of its customers.

+ SaaS companies can over subscribe and FLEX allowing IT departments to respond instantly to increased demand with little or no delays.

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What about Big Data and Analytics?

+ Big data and analytics are changing how businesses react to trends, customers and competition.

+ Stop waiting for people to tell you what they want to see in reporting and analytics. (inside out versus outside in)• Collect and ingest as much as you can find/generate.• Focus on having the data available without having to go hunt for it.• The data needed to solve analytical challenges should already be on-hand.• Worry about performance after you get your answers. Finding data you don’t

have easy access to is harder than waiting for a sub optimized report.• Storage is cheap!

+ Ultra-large computing capacities may be needed – you can’t build it or own it yourself more cost effectively than you can rent it.

+ Data administrators will become less important than data scientists and data explorers

+ Consider offerings like AWS’ Redshift. You can rent 1TB of fast query warehouse for $1K/year.

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It’s not what you build, it’s how you integrate.

+ Digital Natives – For them IT has been consumerized and is now a commodity. They can do more in their hands than many of us could do with entire data centers a decade ago. (of course they can because they have multiple data centers backing them up from the cloud)

+ Those consuming IT resources already treat it like the commodity it is becoming. No more FUD from IT is tolerated. When you tell them how hard it is they think you’re a whiner.

+ BYOD – It’s about self empowerment and not about the devices and support for them.

+ Cloud – It’s all about the model and not the technology. I would be afraid to be a high end server manufacturer right about now. The right software running on commodity hardware will win on cost, performance and availability.

+ If you continue to hold on to the old familiar ways of providing IT solutions you will eventually (maybe sooner than you’d like) be replaced by people embracing the new models providing better service at lower costs.

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Role of IT in a Modern Organization

+ Role of IT is to make organizations efficient and protect data using technology as a tool.

+ Processes sit at the heart of automation, Software is a tool to automate process.

+ IT’s strength should be the knowledge of it’s Organization’s process and the expertise to automate these processes using software.

+ IT should be more of a consumer of technology as opposed to the generator.

+ Most IT Organizations are technology focused today. They know how to make an engine (Code) but do not know how to drive the car (the business).

+ IT needs to be at the forefront with the business, building expertise in what is proprietary to Organization.

+ Old organizations think IT is a service, New organizations think IT is strategic.

+ Many IT departments have been caught off guard with this rapid transition and are stuck with the legacy systems, personnel, and approach. What’s worse is they are married to them for fear of losing control of what they built (or losing their jobs).

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What does IT deliver?

This and the following two slides were shamelessly ripped off and reformatted from an excellent presentation by Terry White of CXO Advisor.

This is what CEOs want

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What percentage does IT typically deliver?

+ Sadly, it usually looks a lot like this:

CXO Advisor: Based on an analysis of 100 IT strategies

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What does the business want from IT?

+ Go ahead and ask your CEO what she wants from IT.

13Technology you trust. People you know.

Stop building start driving!

+ Stop taking orders for engines.

+ Ask your stakeholders about what’s holding up their business.• What would enable them to accelerate revenue?• What would enable them to reduce churn?• What would enable them to improve customer service?

+ While they may answer in terms of ‘systems’ what they are really describing and you need to listen for, is the business problem.

+ Your role is to understand the business problem and the processes that support the business so that you can determine what about the process needs to change in order to solve the problem.

+ Then go find and implement technology that helps support and address the needed change in the processes that are required to improve the business.

14Technology you trust. People you know.

Driving behavior and changing goals.

+ By all means, manage by objective. Please! However, if your objective is to deliver system X by date Y then you need to re-think what you are doing.

+ Your business goals and objectives should be focused on the BUSINESS not the technology or the delivery of systems.

+ If you can’t measure X and Y; the first goal should be to measure X and Y.

+ Once measured, you can ask the business owner what success looks like.

+ Then change your goals from deploying system X by date Y to improving the business . Focus on the business result and not the engine.

+ A better (and more scary way) to define IT goals:

+Deliver performance from X to Y for an improvement of Z.

+Define success in business terms. You are not succeeding when the business is failing.

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Some goal examples:

+ Reduce order entry from 3 hours to 2 hours for an improvement of 33% by September 30 2013.• This is scary because you don’t directly control the order entry teams.

However, if you’ve bought into driving the business, then you would dive into their process with them to understand the process problems that cause the longer order intervals and then design with them a new process and then go automate as much of it as possible.

• This is driving a business result and not simply dropping off an engine for them to drive and then absolving yourself when they fail.

+ Increase automated deployment of product ABC from 28% to 65% for an improvement of 160% by December 31 2013.• Again, working with the teams that deploy the product ,understand the

process and determine where current automation is lacking and define the process needed to improve the yield. Get your teams focused on deploying change in process and technology to drive/automate it!

16Technology you trust. People you know.

Listen past the software and hardware examples

+ Stop delivering technology first.

+ Customers speak in terms of what they have seen or know. So they use tool and technology references to frame their ask. See past that and focus on the business problem they are trying to solve.• Time to market?• Fewer failures?• Key product features?

+ When they say “I know that when I was at my old company we had a illudium Q-36 explosive space modulator and it did everything for us” they are drawing on their experience which is natural.

+ You need to use your experience as a driver of technology to apply the correct process changes and technology to support them. Solve their business problem! If that means you get to build the illudium Q-36 explosive space modulator then that is simply a bonus!

Start thinking about “proof of concept” rather than projects – deliver the POC, before you prepare the PowerPoint presentation – only show real results, not intentions

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What does this mean for IT?

+ IT should seek to understand and define the business problem/goal.

+ IT should dive into the processes used to deliver the current objectives and determine what needs to change in order to deliver the desired performance.

+ IT needs to stop making excuses for why they need to build it. Someone can frequently build it cheaper, better and faster than you.

+ IT needs to be the leader in managing technology. If you don’t the Digital Natives will render you irrelevant as they route around you and make you both ineffective and miserable.

+ Process experience is valued as much as technology experience, change the shape of your teams.

+ Data Analytics are more important than database administrators, change the shape of your teams.

+ IT’s success is measured by the business’s success.

18Technology you trust. People you know.

Summary

+ Your success is measured by your ability to directly drive the business goals and improvements.

+ You are now living in a world that is commoditizing many of the tools you used to build as part of the company’s secret sauce.

+ Sustainable advantage (the new secret sauce) is gained by using the lowest cost commodity tools and applying the best processes and procedures that your competitors can’t easily replicate.

+ Embrace a model of driving technology and not building it. Otherwise someone else driving it will run you over.

Process Leads and Automation Follows!

Do it to yourself before someone does it to you

19Technology you trust. People you know.

Questions?