Pit and the Pendulum: Managing the Accelerating Pace of Technological Change
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Transcript of Pit and the Pendulum: Managing the Accelerating Pace of Technological Change
THE PIT & THE PENDULUM
MANAGING THE EVER ACCELERATING PACE OF TECHNOLOGY CHANGE
May 17, 2012
1
ALVAREZ & MARSAL IN ONE PAGE – FINANCE | OPERATIONS | IT
2
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© Copyright 2011 Alvarez & Marsal Holdings, LLC. All rights reserved. ALVAREZ & MARSAL®,
® and A&M® are trademarks of Alvarez & Marsal Holdings, LLC.
THE PIT & THE PENDULUM I. Background
II. The Challenge
III. Frameworks
IV. The Strategies
BACKGROUND
POE’S CONUNDRUM (1842)
5
THE PENDULUM
6
THE PIT
7
8
MY CAREER IS BOOK-ENDED WITH INNOVATION CHALLENGES
1985 9
2011
THE CHALLENGE
PERVASIVE CONTINUOUS TECHNOLOGY INNOVATION
MEMORY LANE | FAX | WYSIWYG | CASE Tools | Screen Scrapers | Packages | EDI | Batch Interface |
Maintenance Window | CONCEPTS & TECHNIQUES | Waterfall | Agile | SCRUM | JAD | Brainstorm |
Brownpaper | Flowcharting | ERD | Process Decomposition | RACI | Swim Lanes | Reengineering | Interface |
Integration | Best of Breed | Middleware | SOA | Workflow | PMO | DEVICE | DecWriter | Dumb Terminal |
Smart Terminal | PC | Macintosh | Sewing Machine | Clamshell | Notebook | Netbook | Reader | Tablet |
Smartphone | BYOD | Sensors | PRINT | Ribbon | Daisy Wheel | Line Printer | 9 pin Dot Matrix | InkJet | Laser |
Color Laser | HUMAN INTERFACE | Key Punch | Punch Tape | Line Editors | Full Screen Editors | Green
Screen | GUI | Mouse - Drag & Drop, Cut & Paste | Joystick | Bar Code | Touch | Multi-Touch | Gesture | IVR |
Video | Speech Recognition | Thought Interface | COLLABORATION | Version Control | Document
Management | Knowledge Management | Answering Machine | Voice Mail | eMail | Spam | Text | IM / Chat |
Wiki | VIdeo Conference | Webinar | Video Chat | Unified Communication | FORMAT | WAV | MPA | MP3 | MP4 |
MOV | M4A | PDF | TXT | DOC | XLS | PPT | JPEG | BMP | TELEPHONY| Pulse | Touch Tone | CPE | Cordless |
Caller ID | Call Forward | Cellular | SmartPhone | GSM | iPhone | Android | NETWORK / CONNECTIVITY |
SYNC | ASYNC | 9600 Baud | Acoustic | Analog | Digital | Optical | VPN | VOIP | ArpaNet | FTP | Internet |
WWW | On-line | LANGUAGE | Fortran | Pascal | BASIC | PL/1 | RPG | COBOL | SAS | SPSS | FOCUS |
PowerBuilder | ABAP | C | C++ | Java | .net | Python | 3GL | 4GL | Object Oriented | Flash | HTML5 |
ARCHITECTURE | Mainframe | Minicomputer | Microcomputer | Client Server | Distributed | Data Server |
Applications Server | OS| CICS | VM | MVS | Pick | | OS/400 | VMS | UNIX | LINUX | CP/M | DOS | MAC OS |
Windows 2 / 95 / 98 / 2000 / ME / NT / Vista / 7 / 8 | Android | BROWSER | MOSAIC | Netscape | IE | Firefox |
Chrome | Opera | SEO | CONNECTION | Modem | RJ11 | Serial | Parallel | Ethernet | Firewire | USB | Infrared |
LAN | WAN | Wireless | HotSpot | WiFi | WiMax | Bluetooth | RFID | STORAGE| Punch Card | Mag Tape |
Cartridge Loaders | Tape Silos | Floppy Drive | Hard Drive | RAID | Blade | SAN | Solid State | Thumb Drive |
DATABASE| Flat Files | Hierarchical | Relational | IMS | IDMS | DB2 | FoxBase | DBase | SQL | Ingres | Sybase |
Oracle | Triggers | SAN| Events | DELIVERY| Contracting | Outsourcing | Offshoring | Timesharing | Hosting |
SaaS | Cloud | Dashboards | BI | Analytics | APPLICATION | MRP | MRP II | ERP | CRM | McCormick & Dodge |
MSA | BPCS | MAPICS | SSA | MANMAN | BAAN | i2 | salesforce.com | Sage | Great Plains | Epicor | GEAC |
Infor | Lawson | Peoplesoft | MS Dynamics | SAP | Oracle | EPIC | HARDWARE | IBM | Burroughs | Sperry
Univac | Unisys | NCR | Control Data | Honeywell | Data General | Hewlett Packard | DEC | Apple | Compaq |
Dell | Toshiba | Apollo | APPS | Social Media | Blog | Facebook | LinkedIn | eBay | Google | Amazon | YouTube
| iTunes | Skype | Bing | Wikipedia | Pandora | WordPress | Groupon | Dropbox | Box | Yelp | OpenTable |
Craig's List | GroupOn | Pinterest
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12
ACCELERATING TECHNOLOGY INNOVATIONS
13 Source: WSJ Study
PRODUCT LIFE CYCLE
Decline
Maturity
Growth
Introduction
Inception
14
… SHORTER… FASTER… OVERLAPPING INTEGRATED PRODUCTS…
Decline
Maturity
Growth
Introduction
Inception
15
YESTERDAY’S INNOVATIONS ARE NOW AN ALBATROSS
16
PERVASIVE CONTINUOUS BUSINESS INNOVATION
“Bookstores, record labels,
airlines, encyclopedias, hotel
chains, retail outlets,
newspapers, phonebook printers,
travel agents, realtors and many
other business that were too slow
to realize what was going on
began to lose their customers
and their profits.”
17
“Sony could have created Napster
but it didn’t. Barnes & Noble could
have created Amazon; AT&T could
have created Google; Britannica
could have created Wikipedia, or the
Chicago Times could have created
eBay or Craig’s List; but they
didn’t.”
Source: Re-Boot by Lisa Jasper and Jim Smelley
“CHANGE CONTROL” IS BECOMING AN OXYMORON
SaaS
Cloud
ITO
AMO
BPO
End-User Dev
BYOD
18
The IT Function owns
technology…
… unless a business unit
has the money and
decides to do it
themselves…
… unless they decide IT
to should support it later
SLOW PROJECTS ARE #1
19
THE CATCH 22
Urgency,
Lack of
Planning
Thorough
Planning,
Little
Urgency
Failure
THE RISKS
Late Mover
• Lacking current features
• Disappearing skills
• Difficult to retain staff
• Expensive contractors
• Limited vendor support
• Limited training options
• Difficult to integrate; compatibility
issues
• Vendor financial stability
• Lifetime warranty – yours or theirs?
21
Early Mover
• Missing features
• Emerging skills
• Difficult to retain staff
• Expensive contractors
• Over-extended or immature support
• Limited training
• Difficult to integrate; compatibility
issues
• Vendor financial stability
• Lifetime warranty – theirs may be even
shorter
• Security
• Scalability
• Support
• Interoperability
• Intuitive / usability
• True TCO?
WE’RE DOOMED! THANK YOU FOR COMING
Luddite Cell Phone
FRAMEWORKS
WHAT IS THE ROLE OF IT IN THE ORGANIZATION?
24
Functional
Level 1
The Enterprise regards IT as a commodity used for cost-effective transaction processing
IT delivers a limited set of core capabilities. IT focuses on running the business cost effectively.
Transformational
Level 5
IT is a primary driver of business model innovation.
IT is leveraged to redefine markets and rules of competition.
Differentiating
Level 4
IT is a source of agility and product / service innovation.
IT collaborates with other disciplines to deliver new products / services.
Contributing
Level 3
IT is addresses explicit business issues, its contributions to business performance are well understood.
Technology strategy is explicitly aligned to business goals. IT service and solution capabilities are stable and reliable.
Enabling
Level 2
Business unit leaders independently leverage IT as and when they consider it necessary
IT is run like a business. Outcomes are measured against performance obligations.
Adapted from Gartner ITScore model
ADOPTION OF INNOVATION: THE DIAMOND APPROACH
25
Technology
Complexity Novelty
Super high-tech
High-tech
Medium-tech
Low-tech
Regular
Fast/competitive
Time-critical
Blitz
Arr
ay
Syste
m
As
se
mb
ly
De
riv
ati
ve
Pla
tfo
rm
As
se
mb
ly
Source: Aaron Shenhar & Dov Dvir
PARAMETERS OF INNOVATION
Te
ch
no
log
y I
nn
ova
tio
n Better
Mousetrap
Magical
Amulet
Tectonic
Shift
Blind
Date Frankenstein
Business Innovation
26
What is needed?
What
is
possib
le?
INNOVATION COMES IN MANY FLAVORS
Te
ch
no
log
y I
nn
ova
tio
n Better
Mousetrap
Magical
Amulet
Tectonic
Shift
Blind
Date Frankenstein
Business Innovation
27
What is needed?
What
is
possib
le?
ALL INNOVATION NOT CREATED EQUAL
Te
ch
no
log
y I
nn
ova
tio
n Better
Mousetrap
Magic
Amulet
Tectonic
Shift
Dog Tricks Blind Date Frankenstein
Business Innovation
28
What is needed?
What
is
possib
le?
THE STRATEGIES
DOG TRICKS
1. Recognize that dated technology
may have a higher ROI than
replacement with new technology
Migration costs
Risk factors 2. Plan to be self supporting as the
market and vendors leave you
behind
Hiring and training
Spares
DESCRIPTION “Sit and Stay”
EXAMPLES
SOA Back-ends
Custom industry apps
POS
DISCOVERY NA
30
THE BETTER MOUSETRAP
1. Develop adoption evaluation
criteria – ROI, stability,
scalability, etc.
2. Develop a retirement evaluation
criteria – same factors
3. Vendors as primary source of
ideas
DESCRIPTION
New technology which
does existing tasks
cheaper, better, faster
EXAMPLES
VM
SAN
VOIP
Bandwidth
DISCOVERY Vendors
Architects
31
THE BLIND DATE
1. Apples-to-Apples: compare with
“could be” versus “as is”
2. Recognize true commodity skills
versus valued knowledge
3. SLAs with Teeth
4. Maintain the ability to plan,
manage and evaluate
performance
5. Transitions of service are
greatest risk
6. Penalties usually linked to fees,
not impact
DESCRIPTION
Known technologies and
business needs
supported by new
source
EXAMPLES
Outsourcing
Offshoring
CLOUD
DISCOVERY IT and / or
Business Functions
32
THE MAGIC AMULET
1. Build sandboxes; hedge
2. Look ahead
3. Look outside your industry
4. Consider what it can do, not what
it “is”
5. Be willing to pull the plug
DESCRIPTION
Breakthrough
technology where
application not yet
defined
EXAMPLES
Any new apple product
Android
Mobile devices –
Touch screen
Voice Recognition
Camera / Video
GPS
DISCOVERY Skunk Works
External 33
FRANKENSTEIN
1. Think outside your box
2. Component integration is a big
risk
3. Standards may trump features DESCRIPTION
Proven technical
components combined
in a new way
EXAMPLES
Smart Grid
Multi-cloud solutions
Best of Breed
DISCOVERY Business leadership
34
TECTONIC SHIFT
1. Skate to where the puck will be
Forecast
Sandbox 2. Full frontal collaboration
“Skunk Works” works 3. Plan to be self supporting
Just like “Dog Tricks”
To a genius, support is a
waste of time 4. If you are behind, acquire
Buy the learning curve
DESCRIPTION “Game Change” built on
technology
EXAMPLES
Geico
Amazon > Kindle
iTunes
Online Travel
NetFlix / Red Box
DISCOVERY Executive Leadership
Technology Leadership
35
CLOSING THOUGHTS
• “Speed to Market” may trump “Perfection” – know when
• Don’t choose one approach… know when to hold ‘em, know when to
fold ‘em
• Failure IS often an option
• But.. don’t fold when you’re all in
• When innovating, have a Plan B when possible
• Bet the portfolio, not the project
• 10,000 hours is too long to wait
• Solid foundation / flexible delivery --- SOA & MDM
• RACI of innovation depends on type of innovation
• Discovery versus Adoption
• Technology versus Business Model
• Never stop reading; Blogs are more current than books
36
BIBLIOGRAPHY
• 37 Signals - Rework
• Christensen, Clayton M. - The Innovators Dilemma
• Collins, Jim - From Good to Great
• Collins, Jim - Built to Last
• Feld, Charlie - Blind Spot: A Leader's Guide To IT-Enabled Business Transformation
• Friedman, Thomas L. - The World is Flat
• Gladwell, Malcolm - Blink
• Gladwell, Malcolm - The Tipping Point
• Hammer, Michael and James Champy - Reengineering the Corporation
• Jasper, Lisa B. and Jim Smelley - Re-Boot
• Kidder, Tracy – The Soul of a New Machine
• Michalko, Michael - Thinkertoys: A Handbook of Creative Thinking Techniques
• Moore, Geoffrey Al - Crossing the Chasm
• Poe, Edgar Allen – The Pit and the Pendulum
• Shenhar, Aaron and Dov Dvir – Reinventing Project Management: The Diamond Approach
to Successful Growth & Innovation
37
Progress is the extinction of ideas that were
once excellent.
TOM PECK – CIO, LEVI STRAUSS
Too often, I've chosen an early-adopter
approach to new technologies. I've found the
risk more often than not outweighs the
potential benefits. I'm now more likely to be a
fast follower unless there's super-clear joint
accountability.
BACK COVER
Kevin Christ
Alvarez & Marsal Business Consulting
2100 Ross Avenue, 21st Floor | Dallas, TX 75201
817.706.6974