Industry Evolution & Impact on Enterprise IT Strategy, Operating Model & Organizational Development...
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Transcript of Industry Evolution & Impact on Enterprise IT Strategy, Operating Model & Organizational Development...
Industry Evolution & Impact on Enterprise ITStrategy, Operating Model & Organizational Development
Tom Fountain
Global CIO, Bunge Ltd.
Agenda
• IT Vision & Strategy
• Industry Evolution
• Impact on Enterprise IT
2
IT Vision: “Smart Operations” – Converting Intelligence into Recognized Business Value
3
Integration Intelligence Optimization Orchestration• Customer• Partner• Supplier• Internal
• Data• Information• Knowledge
“Select an Optimal Business Response from among Valid Alternatives”
• Customer• Partner• Supplier• Internal
• Identify Alternatives• Trade-Offs w/Constraints• Select Optimal Response
“Develop insight into the past, present, and future behaviors of Business Assets”
“Acquire timely and complete information upon which we can act”
“Manage the Actions of Internal and External Assets to Deliver Value”
Trading Crushing/Refining LogisticsOrig. / Distrib.
“Run Plants with Optimal Balance of Production, Maintenance, Capital Expansion, and Safety”
“Identify Pricing Mis-Alignment and Exploit with Risk-Adjusted Strategies”
“Comprehend Market Conditions and Exploit with Aggregation, Scale, and Global Reach
“Match Supply / Demand with a Balanced View of Transportation Options, Market Pricing, and Operational Risk ”
Sense Analyze / Optimize Respond
Smart Operations
“Smart Operations” – The Optimized Execution of Managed Business Processes Enabled by Value Chain Integration and Business Intelligence
IT Mission: “Improve the Speed, Cost, and Quality of Business Decisions, Transactions, and Processes” (IT v2.0)
4
Time
IT V
alu
e to
th
e B
usi
nes
s
Operations (Service Level Achievement)
Cost (Total Cost of Ownership)
Business Value (Return on Investment)
Innovation & Growth(New Products, IT-enabled Services, New Business Models, etc )
IT v1.0
IT v2.0
Expand the IT Mission through People, Process, & Technology Transformation
Current IT Position
Future IT Position
Enterprise Architecture: Mapping Core / Context
5
IT Must Re-Think Core v Context, Delivery Model, Architecture, Integration
Infrastructure
Applications
Process / Data
Integration / Collaboration
Core Systems & Services• Built or Bought & Integrated by
Enterprise IT• Elements may be Cloud-based
Context Systems & Services• Bought & Integrated by
Enterprise IT• Often Cloud-hosted
Enterprise IT: Owns the Stack• Alignment with Business• Architecture Design• Sourcing• Integration• Performance Mgmt• Efficiency
Agenda
• IT Vision & Strategy
• Industry Evolution
• Impact on Enterprise IT
6
Evolution of the IT Industry
7New Choices, New Players, and New Challenges
Client/Server
Web
Time
Cloud-based(Public, Semi-Private)
Integrated Stacks(Single vendor – HW/SW)
Best-of-Breed(Multi-vendor,
Layer-by-layer)
Mainframe
Relationship with the Technology Provider
Relationship with the Service Provider
Over Time…• We left a Single Vendor model to unleash
innovation / competition
• Best-of-Breed drove the build-out of a world-scale industry
• Complexity of competing standards, integration challenges, expertise development, etc led to late / failed programs, high IT costs, and frustrated customers
• Cloud-based Service Providers enter the mix to deal with complexity, scale, and flexibility shortcomings of Best-of-Breed
• Integrated stacks make a comeback as multi-layer integration / optimization provides new price/performance opportunities and helps with operational complexity
Today
Pros & Cons of these New Paradigms
8
As Usual One Size Does not Fit All…
Best-of-Breed
Cloud-based
Integrated Stacks
Pros Cons
• Accumulated Experience• Vendor Competition• Innovation on a layer basis• Open Standards
• Scale Economics• Variably priced services• Low Upfront Investments• Best-of-Breed Offerings at
the Service Level
• Breakthrough Price / Performance
• Single Vendor responsibility• Eliminates layer integration
challenges
• Mismatched pace of change across layers• Multi-vendor integration complexity• Multi-vendor management complexity
• Security / Privacy• Integration with Legacy• Maturity of Offerings• Lack of Pricing, Management, Tech
Standards
• Potential Vendor Lock-in• Potential Alignment Issues with Vendor
Strategy
Best Use Situation (?)
• Broad Deployment• Need Low Cost / unit• Manageable integration• Negotiable Savings• e.g. Web Servers
• Context System• Modest Security (or less)• Standard Functionality• Highly Variable workload• e.g. HR, AP/AR
• High Strategic Business Value (Core)
• High Performance / Security• High Reliability• Slower Pace of Customer
Change• e.g. High Performance BI
Vendor Offerings – Integrated Stacks
9Cloud-like Characteristics in your own Datacenter
A Future View of the World??...Mix/Match Your Optimal Set
10An Ecosystem of Capabilities within a Robust Operating Framework
Infrastructure (IaaS / Private)
App Services (ASaaS / Private)
Applications (SaaS / Private)
Data (DaaS / Private)
Models (MaaS / Private)
Analytical Svcs (BIaaS / Private)
Environment Mgmt Svcs
OptimizationSimulationReporting
LogisticsWeatherFinancialEconometric Commodity
CreditEconomic Companies RegulatoryMarkets
HRISCRMERP
CollaborationECMBPMB2B
NetworkStorageServers
Model-BuildingAnalysis
Engagement Security Mgmt ToolsPricing
GIS
Trading Finance Legal
EAI IAMPortalSearch
Integration
Business Execution Svcs (XaaS / Private)Partner Performance MgmtBusiness Process Mgmt Business Activity Monitoring
Agenda
• IT Vision & Strategy
• Industry Evolution
• Impact on Enterprise IT
11
Opportunities
12
Organizational Development
1. Positions IT to meet with greater speed, driving improved IT Value Proposition and improved staff morale
2. Expanded Career Development opportunities through deeper business partnering
3. IT becomes the lead cross-functional integrator in the company
Enterprise Strategy
1. Re-Architect the IT Operating Model and cost structure for maximum business alignment
2. Source deep and usable expertise / intelligence for critical business problems from a larger ecosystem
3. Capture Scale benefits for cost sensitive operations (large or small)
Financial Management
1. Highly variable cost structure to maximize flexibility with smaller upfront investments (for cloud-based services)
2. Improved price/performance drives unit cost productivity
3. Expanded ecosystem of potential suppliers improves competition
A Transformational Opportunity…IT must be prepared in all areas
Technology Strategy
1. Position workloads to optimize alignment with a company’s specific price and performance needs
2. Capture scale for a full range of workload sizes
3. Services-based solutions increases flexibility and minimizes upfront investments (smaller throw-away cost)
Risks & Challenges
13
Organizational Development
1. Ability to develop necessary Staff Skills: Architecture, Solution Integration, Partner Mgmt, and Business Analysis
2. Change Management around Staff shifts to Solution Integration and Deployment v. Development
3. Further loss of Technological expertise base within a company
Enterprise Strategy
1. Re-positioning IT as a Value Creator, prepared to lead key business focused programs
2. Industry / Vendor / Customer confusion and lack of alignment on standards will delay solution deployment
3. Emergence of de facto proprietary solutions will inhibit choice and integration / Fear of vendor lock-in
Financial Management
1. Lack of industry standards / controls for pricing and consumption management
2. Cost Modeling / Forecasting for consumption-based external services
3. Insufficient cost structure visibility to accurately trigger workload re-positioning
New Classes of Risk for IT including “Services” Integration & Strategy Alignment
Technology Strategy
1. Cloud – Security & Integration…Integrated Stacks – loss of open standards and granular “control”
2. Poor Architecture choices limits flexibility to re-position workloads
3. Improper Sequencing of the build-out limits value creation and increases probability of throw-away
Strategies & Actions
14
Organizational Development
1. Baseline your staff’s skills and competencies…aggressively develop the required capabilities
2. Understand staff motivations and how to retain your key talent up front
3. Aggressively market both imports and exports of staff with business functions
Enterprise Strategy
1. Plan, synchronize, and actively manage the key disciplines (People, Process, Technology, Services, & Financials)
2. Use multi-generational plans to highlight longer term dependencies and optimize sequencing
3. Maintain a deep understanding of the Industry, Players, Standards, Products, and Services
Financial Management
1. Understand IT cost structure at a detailed level to match up with new Product and Service offerings
2. Educate yourself about emerging pricing models for products and services (Cloud, Virtualization, etc)
3. Understand business cost drivers, local profit margins, and cost/value thresholds of a satisfied customer
A Proactive, Highly Business Aligned, & Industry-savvy Strategy Maximizes Probability of Success
Technology Strategy
1. Understand and document your Enterprise Risk appetite
2. Understand and document your Enterprise price/performance requirements
3. Actively seek out and understand industry players strategy
Q & A
15
Help Me Think Smarter about the Future…
Questions Please…