Galit Office of the CIO trends 2009

Office of the CIO Scenarios 2009 Galit Fein VP & Senior Analyst Office of the CIO Strategies

My Topics

All will be covered in STKI Summit 2009

Presentation Agenda 1 2 Technologies Maturity Model 2009 3 Technologies categorization Major changes in Office of the CIO 4 5 Considering alternative sourcing models What are the most important OTC areas for 2009?

Technologies Maturity Model 2009 Investment to make money Cut costs, Increase productivity Investment for regulations Commodity IT Services Using Implementing Looking Web 2.0 SOX for IT Business Value Market Maturity Pure Business Project IT Project Size of figure = complexity/ cost of project Help Desk PPM Asset mngt Project mngt Office of the CIO Demand mng Resource mng Mobile for CEM Mobile 4 internal needs

Technologies Categorization 2009 Investment to make money Investment to cut costs & Increase productivity Investment for regulations Commodity IT Services Core & Operations Optional Enhancements Business Value Value Growth Transform Non-Discretionally Needed Enhancements Low Risk High Risk Increase Revenues Reduce Cost Expenses SOX for IT Web 2.0 Service Desk Project Mngt Asset Mngt PPM Mobile 4 CEM Demand mng Office of the CIO Mobile 4 inter. needs Discretionally

Changes in Office of the CIO

Reduced IT spend:

Move from Capex/Opex to cash flow mngt

Move from non discretionary to discretionary

Maintenance mode:

Less new project/technology

Extracting value from existing investments

Need for new consumption & delivery models Need to better IT portfolio mngt

Taking Advantage of a Downturn

Financial crisis has increased the attention to the management of IT costs - cash flow is the KING

IT can’t afford bad decisions

Better prioritization, LOB cooperation, & resource allocation increase IT capacity

Increased focus on Project & Portfolio Mngt (PPM)

Contract renegotiations

IT Business Communication Management Measurement Source: STKI 2005

Software Licensing

Stop constant, unnecessary upgrades

Cut maintenance contracts on mature or non-critical SW. Take the risk & lower cost.

Cut back on SW proliferation - use these times to create fewer, stronger standards & rationalize licenses.

Re-negotiate perpetual licenses, if needed (although some have better value than new contracts).

From Business Burden… IT Non-discretionary spend

SW & HW maintenance

PS (Annual contracts)

Annual app maintenance

fees (% of license)

“ Must” projects:

end of life

upgrades 4 needed performance

operational BI

changes to existing apps

From Black Box to Transparent IT IT Open the BOX Benefits

Better decision making

IT alignment with

business strategy

Better understanding of

IT costs

Restrains demand

Overspend prevention

Updated projects’ status

Portfolio Evolution Matrix Business prioritization/ Business alignment NPV 1 2 3 4 5 1 2 3 4 5 The size of each bubble is proportional to risk/ IT complexity The preferred project Projects’ Size, Risk & Value

Non-Discretionary vs. Discretionary What % of you total budget is devoted to Non-discretionary items – infra, support & maintenance or Discretionary items - new capabilities? Source: CIO magazine "the State of the CIO" online survey 2008

From Non-Discretionary to Discretionary Too often, cuts made only in discretionary IT spending

Driving Innovation By transforming the % of IT spending consumed by Non-discretionary … Source: HP

What is Cloud Computing?

IT resources virtual assemble

Multi-tenancy

Real-time on-demand computing

Pay-per-use or subscription model

Cloud Computing Client / Server & App Server Platforms Mainframe Platforms

App.(Supplier portal 1 ) Application (CRM 1 ) Data Center Virtualized Data Center “ Rent“ app. tier “ Rent” Customized app. “ Rent” Tenancy agreement ASP SaaS Cloud SW Company X Company Y Company Z Customized View 1 Customized View 2 Customized View 3 Company X Company Y Company Z Customized application Platform Infrastructure

Alternative sourcing model

Automated Upgrades

Continuous Innovation

Better Usability/ Faster Over Time

More Secure Over Time

Types of Cloud Services

Servers / Storage / Networks

desktop apps (word & spreadsheet) via the Internet Multi tenancy/Platform-Centric/ User controls the data Write your own application IAAS Infrastructure as a Service PAAS Platform as a Service Desktop as a Service Cloud SW

Cloud Computing Examples Docs & spreadsheets IAAS Infrastructure as a Service PAAS Platform as a Service Desktop as a Service SAAS Software as a Service

Why is it Cheaper? Economy of scale! Google server farm WalMart products

Pricing

Most important OTC areas for 2009