IT Governance/Office of the CIO Trends Stki Summit 2009

Office of the CIO 2009 Your Text here Your Text here Galit Fein VP & Senior Analyst Office of the CIO Strategies Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 1

Agenda 1 IT Trends 2009 2 IT Budget Mngt 3 Officehere the CIO/ ITAM of Your Text Your Text here 4 Sourcing/ Cloud Computing 5 Conclusion Enterprise Risk Mngt 6 Mobile/ Social Networks Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 2

STKI Israeli Positioning • Not a technological positioning, refers only to Israeli market • Focused on enterprise market (not SMB) Vendor A • Not an STKI recommendation  Market Presence (X) Vendor B  Market share - existing and new sales (more emphasis) Local Support  Mind share (how user organizations rate vendors) Your Text here Your Text here Worldwide  Local Support (Y) – is influenced by (X) Leader  Experience & technical knowledge, localization, support, number and kind of integrators  Worldwide leaders marked, based on global positioning  Vendors to watch: Are only just entering Israeli Market Vendors to Watch: so can’t be positioned but should be watched Vendor C Market Presence Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 3

General IT in Aggressive Cost-Cutting Times Trends IT Market decreasing -12.53% Capex Crisis IT budget mngt IT Budget cuts Need for better IT Your Text here Your Text here Increased focus investments Office of the CIO on ITG optimization Shift to IT Asset Mngt Technology budget discretionary is mostly non- Sourcing Models cost basis when discretionary Cloud Computing possible Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 4

General IT in Aggressive Cost-Cutting Times Trends Financial crisis forced better Increased spend Enterprise Risk regulations & risk on IT risk mngt Mngt mngt Complex IT environment Your Text here Set standards, Your Text here best practices & ITIL, CobiT, ISO requires heavy methodologies support New business Mobile Innovation models Web 2.0 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 5

General Actions taken to cut IT costs Trends Jan- Restrict IT travel expenses Freeze IT hiring Postpone discretionary IT projects Your Text here Your Text here Renegotiate IT vendor contracts Freeze or cancel IT capital spending Reduce spending on IT staff training Reduce IT headcount Source: CIO IT Budget & Staffing Survey Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 6

Top IT’s Priorities for 2009 General Trends in Israel Consolidation of IT infrastructure Renegotiation of contract Selection of IT investments based on ROI Your Text here Your Text here Business Intelligence Requirement and Portfolio management Improvement of IT security and compliance Automation and outsourcing testing Source: STKI Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 7

Technologies Maturity Model General 2009 Trends Business Value Investment Web Mobile 2.0 for CEM to make money Mobile 4 Cut internal needs PPM OTC IT Project costs, Increase Pure productivity Project Resource Demand mng Asset Business mng mngt Project Your Text here mngt Your Text here Commodity IT Help Size of figure = complexity/ Services Desk cost of project Investment SOX for regulations for IT Using Implementing Looking Market Maturity Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 8

IT Budget IT in Aggressive Cost-Cutting Times mngt Your Text here Your Text here IT Budget Cuts Capex crisis IT budget mngt Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 9

IT Budget IT Budget Reduction mngt Capex Crisis - cash flow is the KING Move from Capex/Opex to Zero-based budgeting Your Text here Your Text here Trade non-discretionary costs for discretionary costs Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 10

IT Budget Capex - Capital Expenditure mngt Allowed company to increase their profit in the yearly report by Your Text here Your Text here to depreciating the investment over several years Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 11

IT Budget What is Capex ? mngt Company„s physical assets: Your Text here Your Text here Capex can include everything from repairing a roof to building a brand new factory Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 12

IT Budget Zero-Based Budgeting mngt Bottom Up Budgeting - justification of all expenses must be done every year Every function within an organization is its needs & costs Your Text here Your Text here analyzed for Zero-Based Budgeting is built based on what is needed for the upcoming period Instead of Top Down Budgeting Definition: Investopedia Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 13

IT Budget History Based Budgeting mngt Establishing budget targets in percentage increments/reduction: “next year 10% less!” Your Text here Your Text here Allocates resources based on allocations from the previous period Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 14

IT Budget Non-Discretionary Costs mngt IT budget with previous commitment & no flexibility Your Text here Your Text here Current high non-discretionary costs prevent business agility Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 15

IT Budget “Hidden” IT costs mngt Expenses assigned before the budget year: • People cost (internal staff) • Professional services based on annually contracts Your Text here Your Text here • HW & SW maintenance (annual app maintenance fees) • Data Storage, Networks, Mandatory & ―must‖ projects Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 16

Trade non-discretionary costs IT Budget mngt for discretionary costs Discretionary Non-discretionary Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 17

Non-Discretionary vs. Discretionary IT Budget mngt What % of your total budget is devoted to Non-discretionary items (infra, support & maintenance) or Discretionary items (new capabilities)? Unsure 4% Your Text here Your Text here Discretionary spends 36% Non-Discretionary spends 60% 0% 10% 20% 30% 40% 50% 60% 70% Source: CIO magazine \"the State of the CIO\" online survey 2008 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 18

How to Increase IT Budget mngt Discretionary Budget? ITG IT asset IT management procurement • Office of the • Software • Sourcing models CIO Text here Your Your Text here • Prof. services • Agility licenses • Cloud computing • Portfolio mngt Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 19

Office of IT in Aggressive Cost-Cutting Times the CIO IT Your Text here investments Increased focus Your Text here Office of the CIO optimization on ITG Upcoming STKI Round Table on Office of the CIO: 10/06/2009 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 20

Office of Taking Advantage of a Downturn the CIO Reduced IT spending: Maintenance mode:  Financial crisis has  IT new project/ increased the attention to technology on hold IT costs mngt  Extracting value from Your Text here Your Text here  IT can‟t afford bad existing investments decisions Increased focus on Office of the CIO Need for better PPM Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 21

Top IT’s Priorities for 2009 Office of in Israel the CIO Consolidation of IT infrastructure Contract renegotiations Improving the ROI of IT investments Your Text here Your Text here Business Intelligence Requirement and Portfolio management Improving IT security and compliance Automating and outsourcing testing Source: STKI Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 22

Office of IT Organization Today: the CIO ITO directly affects on every business aspect Highly embedded for the organization success: • Increasing complexity of org. products/ services Your Text here Your Text here • Multi-channel customer interaction Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 23

Office of IT Organization Today: the CIO Hundreds of employees, external contractors Technology abundance & complexity Hundreds of projects, requirements, contracts Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 24

Office of IT Transformation the CIO Internal External Internal Service Service focused IT Provider Provider Your Text here Your Text here •Available & accurate info •Align IT to business •Align IT to customers •IT maintenance •Best solution for •Business partner •IT staff mngt business needs •Business innovator •HW availability &uptime •IT portfolio mngt of engine •Technical support LOBs demands •Transformation initiator Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 25

Office of IT Transformation through ITG the CIO OTC To Strategic conference table From Text here Your Your Text here Data Center room Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 26

Office of Business Partnership Office the CIO What is it? Your Text here Your Text here What is it not? Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 27

Office of Location of Business Referents the CIO LOB LOB LOB International Trends: • BRM is not part of the IT BRM • BR manager – business skills with understanding of IT IT Your Text here Your Text here IT Israeli Trends: • BRM is part of the IT - OTC: Office of the CIO  Political issue PMO, QA, KPIs, CSO • OTC manager – IT manager with understanding of business Infra Develop. Operation Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 28

Office of Business Relationship Management the CIO Partnership between business & IT/2way communication BRM vs. traditional account management Business innovator engine Business processes transformation initiator Text here Your Text here Your BRM becoming the IT most important office, but Only with CEOs recognition of IT contribution to business innovation & competitive advantage Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 29

Office of Business Innovation: Changing the Game the CIO Leveraging technology to create new ways of engaging the customer Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 30

What is your IT organization's role Office of in business innovation the CIO Your Text here Your Text here Source: Cutter Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 31

Office of the CIO Office of the CIO Israeli Trends Advanced - ITG  Innovation P  Strategic alignment B  Business value / IT cost optimization B  Demand / prioritization & mngt B You’re Here  ResourceText here Your allocation & mngt B Your Text here  Increasing PMO efficiency B Basic - EPM We all do it to certain extent, but “What got you here, won’t get you there.” Marshall Goldsmith Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 32

Office of Office of the CIO under New Constraints the CIO  Increase IT business value through IT cost optimization  Rebalance the IT portfolio to Increase Revenue, Reduce Costs, Manage Risk, with minor investments for Growing Your Text here Your Text here Revenue & Avoiding Future Costs  Invest where others can‟t to create competitive gaps  Target discretionary funds for maximum ROI Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 33

Office of Not ROI but Payback Period the CIO Payback period - how quickly investments are repaid? Shorter payback period : • Quick free cash for other investments Your Text here Your Text here • Lower risk - new future regulations, new software, new business requirements Org. will require shorter payback period Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 34

Office of OTC/ PMO Staffing Ratio the CIO  Average size of Israeli OTC/ PMO department: 3-5 • ~2% of IT department (between 0.5% - 4%*) • Compared to ~5-8% in global orgs Text here Your Text here Your * in large enterprises, varies according to the maturity of IT Governance in the organization Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 35

Office of OTC/ PMO positions the CIO  IT Plan Development  Methodology & standardization  Demand mngt  Budget mngt Your Text here Your Text here  Resource allocation  Supportive tools  Post-implementation audits (accompany the implementation, ensure successful system-use)  Continuous improvement Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 36

Office of Demand Management the CIO Initialization process • Alignment to business LOB strategic goal Your Text here • Pre-agreed categories set Your Text here OTC Business • Business Priority • Risk (new tech, # of LOBs PMO Referent involvement ) • ROI/ NPV • IT Evaluation • Approval Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 37

Office of Automized Demand Management the CIO Initialization process •Alignment to business strategic goal LOB •Pre-agreed categories set OTC Business Your Text here Your Text here •Risk (new tech, nu PMO Referent of LOBs involvement ) •Anything that helps accurate evaluation Source: CA PPM Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 38

Office of Prioritization Process the CIO Small requests IT Plan Small requests Large Projects Prioritization done By OTC/ BRM, because they know the strategy Strategic, tactical, regulatory of the business Large Projects Your Text here Your Text here Categorization of Projects’ Set in Israeli ITOs:  Per Cost (< $50K)  Per Time (more than 10 working days; 1 man - month)  Many to many – cross involvement  CEO’s approval Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 39

Project Evaluation Office of the CIO Israeli Trends  Projects evaluation is based on previous experience only: • No methodology or pricing model!  Top Down budgeting allocation: Your Text here Your Text here • Price tag remains the same during the projects‟ lifecycle  PMOs don‟t use Service Catalog: • Requirements variety Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 40

Office of Holistic View - Portfolio Evaluation Matrix the CIO Projects’ Size, Risk & Value 5 The preferred project 4 3 ROI/ Your Text here Your Text here Payback The size of each 2 bubble is proportional to risk/ IT complexity 1 1 2 3 4 5 Business prioritization/ Strategic alignment Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 41

Office of General Welfare the CIO Best interests – Org. holistic view vs. LOB Each requirement is examined by its contribution to the org. Contribution is not necessarily financial: • Innovation Your Text here Your Text here • Branding Total cost of ownership (TCO) – training, infrastructure Requirements integration Integrated Project Project Project/ X Y New infra product Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 42

Office of Resource Allocation & Mngt the CIO One DB for resource mngt Transparency Planning based on Your Text here Your Text here actual data IT Planning vs. Execution Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 43

Office of IT Portfolio Review the CIO Current situation: • Annual / quarterly steering committee Your Text here Your Text here There is no regularly automation review of IT investments • Transparency, unify platform for open discussion Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 44

Office of Real Time Projects’ Dashboard the CIO Client On On Scope Project # Satisfaction Risk Budget On Time Total Quality Gates 25 140 Your Text here Your Text here 32 2 89 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 45

Office of ITG/ PPM Tools the CIO Demand mngt Portfolio Reporting mngt Your Text here Your Text here IT process Project mngt mngt Resource Financial mngt mngt Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 47

ITG/ PPM Tools Office of the CIO Israeli Trends  PPM tools are not up-to-date, because of limited budget ITOs choose in-house developments  Many ITOs are looking for PPM tools as a cure-all for their Your Text here Your Text here problem of governance  PPM solution implementation brings to same language between business & IT, & also the actual tool shows to the CEO the IT‟s contribution Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 48

ITG/ PPM Tools Office of the CIO Israeli Trends  Most ITOs don‟t implement the complete ITG/ PPM solution  Prefer to acquire only the missing PPM modules: • Demand mngt • Portfolio mngt Manage thehere Your Text other modules by existing solutions, as: Your Text here • Project mngt – MS Project, PS Next, etc • Financial mngt – ERP, etc • Resource mngt – SP, MS Project, In-house tools, etc • IT process mngt • Reporting Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 49

Office of ITG/ PPM- Positioning of the Israeli Market the CIO Vendors to Watch: Compuware IBM Worldwide Leader CA Enterprise Local Support Local Solution Your Text here HP Your Text here Mid-Tier Microsoft MSP PS Next This analysis should be used with its supporting documents Market Presence Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 50

Project Mngt - Positioning of the Office of the CIO Israeli Market Vendors to Watch: Compuware IBM Microsoft Enterprise Local Support CA Existing Israeli experience in Your Text here Your Text here project mng PS Next Worldwide HP Leader Primavera This analysis should be used with its supporting documents Market Presence Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 51

PPM Tools & Integrators in Israel Office of the CIO PPM Clients New Clients Integrators on-Demand 08‟ Clarity (CA) V Ministry of Leumi Card CA, Proceed Tourism, Clalit, SanDisk PPM (HP) V Partner, Mataf HP, Taldor Motorola(Global), Your Text here Your Text here Compuware Jacada (Global), Matrix Changepoint Retalix (Global) (Matrix) BAW,EPM, RA IBM M, RD Composer (IBM) Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 52

PPM Tools & Integrators in Israel Office of the CIO PPM Clients New Clients 08‟ Integrators on-Demand MSP V Menora IAI, Tel-Aviv Municipality MSP CIO Dashboard: Random Logic, Ayalon-ins, IDF PS Next (Xioma) V Bank Discount, Menora, Teva Visa Cal Xioma, Signifer, Tefen Non IT clients: BVR, Nova, Non IT: Leadcom Networks BigBand, Evogene Your Text here Hazera Genetics Your Text here PPS (Microsoft) Malan Matan, Orantech EPM (Microsoft) M-system, Leumit, IAI, IAA, Matan: Alvarion, IAA, Better Matan, Orantech, Lotem, Bezeq, Mekorot, Tel Place, Tnuva, Random Aviv Municip, Orbotech, Bank Logic; Orantech: Teva, Neway, PZ Leumi, Coca-Cola, Nice, Ceragon, Logic, AD Gency Projects, Strauss-Elite Sol gel Rocar Playtech; Proceed, Tefen KAKAL, MODU, Kodak, RAD Proceed: Malam Primavera Mercava, IDF Aviv (Being acquired by Oracle) Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 53

ITG/ PPM Israeli Consultants Office of the CIO Partial List (alphabetical)  Ben-Arzi Hezi  Neway (Microsoft representative)  Bi-pro Orantech (Microsoft  Bit Plus representative)  Parush Zvi  Dagan Avi  Harel Arnon here Your Text Proceed Text here Your (CA & Microsoft tools representative) Matan (Microsoft tools PZ Projects (Microsoft representative) representative)  Ron Gabi Mateor  Sibam Methoda Strauss Avner  MSP (MSP tools representative)  Tefen (Microsoft representative) Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 54

Another opinion – not all is Bleak! Office of the CIO ITG is mostly suitable for large enterprises There is great sense of control in SMBs Expensive technology & methodology that require Your Text here Your Text here additional resources would bring the desired transparency which will also lead to interventions & high evolvement in IT budgets Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 55

Office of Conclusions the CIO  OTC raises IT from a cost center to a business value center  OTC shifts the discussion from bits & bytes to resource investment vs. business value  Value-focused IT spending Your Text here Your Text here  PPM tools are second preference – the real change to the org. will bring governance procedures & right methodology Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 56

IT in Aggressive Cost-Cutting Times ITAM Shift to IT Asset Mngt Technology budget Your Text here Your Text here discretionary is mostly non- Sourcing Models cost basis when discretionary Cloud Computing possible Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 57

IT Asset Management ITAM Some IT assets are still being managed like this Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 58

If you don’t know – then… ITAM  If you don't know what you have, you don't know anything • Accurate inventory of IT assets (HW & SW) • Business value • Operating status Your Text here Your Text here  If you don't know where it is, you don't have it • Identification of each asset & its geographical location  If you don't know the cost, you don't know anything • Licensing agreements management • Avoiding financial penalties Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 59

Application Portfolio Mngt ITAM Israeli Trends Contracts & leases management – complex & costly The search for more sophisticated tools Multiple purchasing options Maintenance renewals for SW – automatically renewals Your Text here Your Text here Most organizations negotiate vendors with lack of any processes or tools Good contract is not about getting a good price – it’s about assuring value! Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 60

Software Licenses Mngt ITAM  Cost savings: • Re-use your licenses by monitoring actual usage  SW contracts review: • Licensing terms, total nu of licenses, costs to the org.  InventoryText here desktops & what is installed on each Your of all Your Text here  Monitor the actual demand for SW licenses: • Overpayment for licenses that aren't being used (result of volume discount) • Apps have been abandoned, but the vendor is still receiving licensing revenue / Zombie SW programs Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 61

SW Licensing Models & Pricing Metrics ITAM Perpetual license: • Perpetuity product usage (within the boundaries defined in the agreement) Subscription license: Your Text here Your Text here • Limited period of time for which usage rights are granted (typically 1 to 5 years) Suppliers moving toward the subscription license model due to economic downturn Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 62

Strengths & Weaknesses ITAM The Customer's Perspective Delivery Strengths Weaknesses When to Choose Model Perpetual •Lowest 5 year license fees •Premature •No requirement to •Lowest cost of negotiation retirement results achieve lowest initial •Greatest control of license in high sunk costs cash outlay agreement •Longer & more •Commitment to the •Financing that can reduce amount of initial cash outlay complex product for a minimum •Possibility of continued use of negotiation of 5 years Your Text here Your Text here product without maintenance if product has significantly matured Subscrip. •Lowest initial cost - faster approval •Higher license fee & •Requirement for lowest Based •Predictability of annual license & negotiation costs over initial cash outlay maintenance costs a 5-year cost of •Benefits beyond initial •Avoids the extensive requirements ownership cash outlay are important for capital expenditure approvals •SW must be to the organization •Better link between performance & deinstalled if license •Product purchased to negotiation process is not renewed meet a short-term need Source: Reiner Associates, Inc.; Sales Strategies, Inc Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 63

Strengths & Weaknesses ITAM The Supplier's Perspective Delivery Strengths Weaknesses Model Perpetual •Most up-front revenue •Competitive losses to •Lower cost of sales during the suppliers offering lifecycle of product subscriptions •More predictable maintenance •Length of sales cycle Your Text here Your Text here revenue Subscription •Predictability of the annuity •Lower up-front -Based revenue stream revenue •Possibility of delivering greater •Easier for customer revenue over time to terminate use Source: Reiner Associates, Inc.; Sales Strategies, Inc Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 64

IT Application Portfolio Mngt ITAM Israeli Trends  High variety between the ITOs • from having no idea where IT assets are – to ITAM with full SW usage metering with integration to ERP & HD  Major challenges: Your Text here Your Text here • SW Usage metering • Type of usage (change performance/ read only)  The tougher the formal procedures are - the easier ITAM  Lack of ITAM tools maturity  ITAM tools often viewed as an extension of ERP & PPM tools Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 65

IT Application Portfolio Mngt Tools ITAM Selected Installations in Israel Clients New Clients 08’ Integrators CA Bank Discount, Bank Leumi, IAI, Air Force 888, Ministry of CA, Ness, MSP, Justice, Min. of Malam, Cabao Defense, Petah – Tikva Municip. BMC Partner – eng, Social Security, NDS, ZIM Motorola Matrix , Xor HP HP, Xor IBM - Tivoli Bank Mizrachi IBM Symantech Your Text here Your Text here Malam-Team HP Altiris Bynet Artnet E&M Virgonet Aman SAP – Coca-cola, IEC, Ness, Malam-Team Solution mng Government Microsoft Bank Leumi, Mataf, Amdocs, DSW, IDF(Mamram), Rafael, IAA, Ramot Hospital, Matrix, Malam- SMS Ministry of Foreign Affairs, Teva, Bank Mizrahi, Intelligence Blue Square, Team, Bynet, corps, Comverse, IAI, Clalit, Netvision, IEC, Postil Superpharm, Audiocodes Taldor, DB@net Tel-Aviv mun, Eged, Pelephone Novell – Strauss- ZENworks Elite, Tnuva, Teva, Mirs, Menora, Orbotech, IAI, Nur, Netafim, Pe lephone, Rafael, Bezeq Online, Jerusalem Mun, CaesarStone, Ministry of Transport, Social Affairs, Traide&Laborwork Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic Galit Fein’s 66

Service Service Desk Desk HD is amongst the primary targets for cost cutting Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 67

Service Israeli Trends of Service Desk Desk  Although a lot have been done to improve HD staff productivity: • Best practices (ITIL) widespread acceptance among large & more complex ITOs Your Text here Your Text here • Desktop configurations standardization • Sophisticated HD tools - web-based user self-service, automated email response SW, incident tracking systems • Remote access Upcoming STKI RT • Outsourcing on SD: 31/05/2009 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 68

Different solutions for lack of HD staff Service Desk Customer recommendations  Self service through web access tools & knowledge mngt  Integration of 1st & 2nd levels support with distribution for expertise  Production system care only after working hours Your Text here Your Text here  SD is SPOC for every type of question (IT, HR, ect) – headcounter job integration  Best practices - ITIL Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 69

Service HD Staffing Ratio Desk  Average ratio of Israeli Help Desk department: • ~360 users per HD FTE (between 120 – 1,400) • Compared to ~300 in global orgs Your Text here Your Text here  Average nu of incidents per month: 12,000 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 70

HD Israeli Benchmarks Service Desk Your Text here Your Text here missed calls % incidents opened % incidents closed % by self service st level support by Source: STKI Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 71

Service Trends of Service Desk Tools Desk Over the past several years, there have been significant improvements in the tools available to Help Desks These tools can help in the automation of support & in Your Text here Your Text here the remedy of problems Progressed HD tools can optimize the size & the responsibilities of HD personnel Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 72

Vendors Trends of Service Desk Service Desk Tools Vendors have followed with tools that assist in the implementation of ITIL processes Major vendors have expanded their offerings: Your Text here Your Text here • Asset mngt portfolio • SaaS model • CMDB Service desk mngt tool is a mature market Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 73

IT Service Desk – Service Desk Positioning of the Israeli Market Vendors to Watch: Microsoft IBM CA SAP Worldwide Local Support Leader HP BMC Enterprise Siebel Your Text here Your Text here MID-Tier Pivotal SysAid IT HD PeopleSoft Modules This analysis should be used with its supporting documents Market Presence Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 74

IT Service Desk Tools Service Desk Selected Installations in Israel Clients New Clients 08’ Integrators Comverse, IAI, Discount, Elta, ECI, HOT, Motorola, Teva, Bank Hapoalim, Bank CA, Ness, Malam, CA Elbit, Mekorot, Osem, Phoenix, DSW, Bezeq Int, Beit Berl, Yahav, Mifal Hapais, MSP, Cabao Israel Police, Tnuva, Central Bureau of Statistics, EL-AL, Ministry of Justice, Tamas, TASE, Ministry of Health, Tel-Aviv Municipality, Ministry of Defense, Herzelia Munic. Clalbit, Shabas, Rafael, Isracard, Yediot, Petah-Tikva Munic Shupersal, 888, 9900, Bank Israel Zim, Malan, IGS, MED Nautilus, Malam, Kneset, NDS, Sandisk Matrix ,Aman, BMC Social Insurance, Uniliver, Creo, Intel, Motorola, Summit Taldor, Xor Design, Polycom, Cellcom- eng. HOT-eng. Partner – eng Your Text here Your Text here HPOV:IDF, Netafim, Shaam, Open University, Orbotech, Service Manager Aman, HP, Xor HP Tower Semiconductors, Haaretz Tefensoft: Clalit Health, Menora, Migdal, Prime Minister, Strauss-Elite, Hadasa, Machteshim, Maman, AudioCodes Rav-Bariach, Marvell, Dan, Jonson & Jonson, Highway 6, Coca Cola, Prisma, Beit Consist SysAid Omrix, Wintegra, Sami Shimon College, Minicom, Litcom, Barel College, Ashdod Ilient Africa Israel, Mei-Eden, AIG, Electra, McCann Erickson, Port Diesenhaus unitours, Flash Opal Networsks, Liveperson, Hertz, Psagot Ofek Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 75

Service IT Help Desk Modules from CRM packages Desk Clients New Clients 08’ Integrators Microsoft Ministry of Finance, Malan, Israeli EL AD: Judicial Authority 20 Partners, including: Navy, Intel, Prime Minister, Visa, Malam-Team: TAU Matrix- CRM* Cellcom, Ministry of Education Matrix-Effect: Igud, Effect, SIT, Advantech (*ITIL complaint) Superpharm , Malam- Netwise: Amal Team, Netwise, Bynet SW, El-AD…. Pivotal Super-Pharm, Bat-Yam Tadiran, Negev Ceramics, ONE1 Municipality, Exlibris, Systematics, Orad Your Panorama, Telmap, Ericom FGG Text here Your Text here Radvision, Gilat, Maccabi, Shahal, Ritalix, Globs Paz, Isr. Government Ness, IBM, EDS, SAP Bazan Advantech PeopleSoft Ministry of Foreign Affairs, Matrix Mamram, Bezeq - Siebel* Tnuva, Golden Pages, Bank Leumi Taldor, IBM - Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 76

Sourcing IT in Aggressive Cost-Cutting Times Models Shift to Your Text here Technology is not a discretionary Your Text here Sourcing Models discretionary asset cost basis when possible Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 77

What are the most important management Sourcing initiatives taken to reduce IT costs? Models Your Text here Your Text here Source: Cutter Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 79

Sourcing Typical Benefits from Outsourcing Models  Focus on ―core‖ competence of the company  Cost-savings (reduced overheads, economies of scale)  Service quality improvement due to specialization of service provider  Reduction of capital expenditure - Discretionary costs Text here Your Text here Your structure  Standardized IT infrastructure & processes - access to best practices  Improvement in processes & their documentation  Offshoring – labor arbitrage Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 80

Sourcing Typical Costs & Risks Models Loss of day-to-day mngt control of outsourced services Dependence on service provider for strategic info on internal technology, operational & business options Your Text here Your Text here Risks of losing valuable knowledge & experience Additional costs associated with managing the outsourcing service provider Bad PR if deal is off Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 81

What kinds of work are you currently Sourcing Models outsourcing or planning to outsource? Your Text here Your Text here Source: Cutter Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 82

For what reasons have you considered Sourcing Models backsourcing? Your Text here Your Text here Source: Cutter Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 83

Sourcing Global Trends of Outsourcing Models Outsourcing/ Offshoring will continue to expand during economic meltdown Outsourcing landscape changing due to: Your Text here Your Text here • Globalization • Cloud Computing • Providers will turn to SaaS during the financial crisis Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 84

Sourcing Global Trends of Outsourcing Models ITOs will turn to outsourcing for cost cutting • Non-discretionary expenditure reduction • Avoidance of capital investment Your Text here Your Text here Growing outsourcing segments: • QA • BPO - greater variety of offerings Crowdsourcing Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 85

Sourcing Crowdsourcing Models “Taking a job traditionally performed by a designated employee & outsourcing here to an undefined, Your Text it Your Text here generally large group in the form of an open call.“ Howe Best & least expensive sources of innovation lie outside the corporate walls Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 86

Sourcing Advantages of Crowdsourcing Models  Several, alternative designs & solutions  24x7 workforce (project gets done faster)  Applies to other aspects of innovation: • Netflix recommender service • Dell's IdeaStorm • Amazon.com's Mechanical Turk (http://www.mturk.com/mturk/welcome) Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 87

Sourcing Disadvantages of Crowdsourcing Models  Requires great coordination  Exposure of intellectual property (both the contractor & the sponsor)  Corporate Social Responsibility issues Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 88

Sourcing Israeli Trends of Outsourcing Models Steady & mature market Outsourcing market grew this year due to increasing scope of existing client & a few new deals Decline in number of deals Your Text here Your Text here Both largest deals of this year were comprehensive IT outsourcing in Public sector Rest of deals – small selective outsourcing NO backsourcing deals Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 89

Sourcing Israeli Trends of Outsourcing Models Increased focus on detailed feasibility study Clients prefer a trial period of 1-3 years in long term (8-10 years) contracts Your Text here Your Text here Outsourcing service provider evaluation by the client • Meeting SLA terms of contract • Periodic review using a consulting company Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 90

Outsourcing - Not only due to cost reduction Sourcing Models Israeli Trends  Israeli ITOs consider sourcing models due to: • The focus on strategic & innovative core competencies • Vendor expertise & sophistication (service methodologies, quality of service) Your Text here Your Text here  Expectancy of 20% off by outsourcing is vanishing  Sometimes sourcing deals cost even more due to: • costs of identifying & evaluating the right vendor • the cost of transition to a new vendor • legal costs, etc. Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 91

Current Provider Landscape Sourcing Models Israeli Trends • HP-EDS, Ness, Malam-Team, IBM • New global player: TCS (TATA) Your Text here Your Text here Number of vendors went up in 2008 due to entrance of many specialized players: • Bynet, Taldor, Yael, El-AD, etc Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 92

Sourcing Consultants in Israel Sourcing Models Partial List (alphabetical) CallteC (Help desk)  Ginsburg Tami  ICON  It-solutions Mateor Your Text here Your Text here Methoda  Prime  Rabin Zvika  Ron Gabi  Seker Strauss Avner Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 93

Sourcing QA Israeli Trends Models  Rapidly growing sourcing segment  Acknowledging the advantage & cost saving (up to 50%) by outsourcing: the transition from PS to outsourcing  Service Your Text here provides added value – HD employees transition to QA on- Your Text here demand (e.g. Calanit-Carmon)  Israeli nearshore existing clients have broaden their scope  Israeli nearshore providers are used as offshore by global clients due to standards of work & languish (e.g. Matrix Global) Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 94

Sourcing Israeli Main Nearshore Players Models Matrix Global Your Text here Malam (Ma’alot);Your Text here Ness (EDC); Aman (Tehila) Offshore: NTS Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 95

Sourcing Business Process Outsourcing Models Sourcing of integrated, end-to-end business solution & value-added service: Your Text here Your Text here HR, accounting, billing & investment mngt, internal audit, payroll, logistics, & customer services & much more… Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 96

Sourcing Business Process Outsourcing Models  Transfer of peripheral business activities to more efficient, specialized providers: • Calanit-Carmon –Data Center mngt; • EL-AD - The Judicial Authority; Your Text here Your Text here • Gilon – Marketing Analytics(BI); • I.E.Mittwoch – ATM; • Malam-Team, Hilan, Ness – Payroll; • Taldor - computerized theory tests • Comax – Account 4u - Financial Services inc. ERP onDemand Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 97

Sourcing Training Management Models  Recession will narrow the training & implementation market growth  The investment of 5-10 training days of employees  Increasing need for management & service skills courses Your Text here Your Text here  Main topics: .NET, MF, J2EE, security  Gathering momentum: ITIL, PMI, SOX, virtual communities Main Players: Matrix, Ness, Sela Group, Emet, Malam-Team, YANA Group Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 98

Israeli Trends Sourcing Models of Professional Services Professional services market has dropped – decrease of 31%  Mostly due to price & PS working hours reduction Your Text here Your Text here  PS provided, as promised, flexibility to org, which had to decrease their activity Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 99

Israeli Trends Sourcing Models of Professional Services Cheapest ―Cost Plus‖ model  buying PS instead of the capacity Your Text here Your Text here Failure of the business model  NO premium for flexibility & providers‘ financing: (overtime hours, sick pay, miluim, training, support, interest, etc) Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 100

Which IT skills are you Sourcing Models planning to outsource? Your Text here Your Text here Source: Cutter Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 101

IT in Aggressive Cost-Cutting Times Shift to Your Text here Technology is not a discretionary Your Text here Cloud Computing discretionary asset cost basis where possible Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 102

Cloud Computing Cloud Computing Definition  Cloud computing refers to highly scalable IT resources— software, CPUs, storage capacity—that are housed outside of company data centers, available on demand over the Internet, and whose usage is measured and billed incrementally.  Inhouse clouds mimic those characteristics Your Text here Your Text here inside the company firewall but lack the economies of scale of public clouds. Source: Informationweek Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 103

Cloud Computing Benefits Cloud Computing No Capital Expenditure but pay-per-use  Device & location independence  Performance is monitored 24x7 Your Text here Your Text here  Reliability with cloud cells in multiple DC/ DR Scalability with enough additional capacity in centers Innovation Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 104

Cloud Computing Challenges Cloud Computing Mngt ability of cloud companies Credit dilemma Reliability of cloud service providers (ISO, SAS70) Your Text issues Regulationshere Your Text here Quality of informational security Monitoring Job Security TCO – Total Cost of Ownership – Will it become lower? Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 105

Cloud Computing Trends Cloud Computing  Cloud computing not widely accepted yet • Reluctance to lose control  Multiple areas (SaaS, PaaS, IaaS, DaaS) • Especially in IaaS area Your Text here Your Text here • In some markets SaaS is highly popular Source: Insight Research Corporation  Cloud ownership diversity: • Enterprise cloud, partner cloud, service cloud • Private enterprise clouds seem attractive Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 106

Types of Cloud Services Cloud Computing Cloud SW Multi tenancy/Platform-Centric/ User controls the data/ERP-CRM-HR Desktop as a Service Your Text here PAAS Your Text here Desktop apps via the Internet Platform as a Service Write your own application/ Development tools IAAS Infrastructure as a Service Servers / Storage / Networks Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 107

Cloud Computing Examples Cloud Computing Desktop as a Service PAAS Platform as a Service Docs & spreadsheets Your Text here Your Text here IAAS SAAS Infrastructure as a Service Software as a Service Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 108

Cloud The necessity to evaluate the new model Computing  Hot new area with great potential  ITOs are already starting to evaluate: • During companies acquisition Your Text here Your Text here • Shortage of cash, servers - while testing Amazon EC2 platform  During today‟s economic crisis even the most conservative of people will have to evaluate the new model Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 109

STKI Recommendation Cloud Computing For Users: • to experience in the establishment of Amazon EC servers • to use SaaS apps for marginal org. needs Your Text here Your Text here (pilot) For Vendors: • to evaluate which service/ product is appropriate for cloud work environment -to proceed the new players Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 110

Company X “Rent“ ASP app. tier App.(Supplier portal1) Company Y Company Z Option I Company X Customized Company Y Customized Company Z Customized “Rent” View 1 View 2 View 3 Customized SaaS app. Application (CRM1) Option II Data Center Virtualized Data Center Customized application “Rent” Cloud SW / PaaS Tenancy Platform agreement Infrastructure 111 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 111

Alternative sourcing model Cloud Computing On site outsourcing Hosting Your Text here Your Text here Off site Outsourcing Outsource to Cloud • Automated Upgrades • Continuous Innovation • Better Usability/ Faster Over Time • More Secure Over Time Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 112

Why is it Cheaper? Cloud Computing Economy of scale! Google server farm Your Text here Your Text here WalMart products Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 113

Pricing Cloud Computing • Use- based charge: Infrastructure • S3 –$0.15c/month per a gig Cloud • EC2–pay per use via on demand VMs-$0.10 VM instance/hour. (Amazon) Desktop Cloud • Free to $10 per user per month Your Text here Your Text here • Pay per use: Platform Cloud • $15 per light license per month • Pay per seat: Cloud Application • CRM: $40-$140 per user per month High costs due to being a monopoly. Galit Fein’s work Copyright 2009 @STKI Cost may go down when new comers arrive Do not remove source or attribution from any graphic or portion of graphic 114

IT in Aggressive Cost-Cutting Times ERM Financial Text herecrisis Your global YourEnterprise Risk Text here Increase spend forced better on IT risk mngt Mngt regulations & risk mng Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 115

Need for ERM Holistic Approach ERM Increasing business Increasing types of IT risks dependence on IT Your Text here ERM holistic Your Text here approach Increasing number of new Increasing focus on IT regulations compliance Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 117

IT Enterprise Risk Mngt ERM Global Trends 2009 Global financial crises & increasing number of recent frauds exposed the need for new regulations & better enforcement Your Text here Your Text here General dissatisfaction with poor corporate governance, regulatory oversight & risk mngt Increased org. budget for regulation & security Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 118

IT Enterprise Risk Mngt ERM Global Trends 2009 Risk mngt based on set of approved standards raises the level of customers confidence In-house methodology ITIL, CobiT, ISO Increased standards of regulation & risks mngt Your Text here Your Text here requires more automation ITOs seek for solutions that meet regulations at reasonable cost & with minimal disruption Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 119

Enterprise Risk Management ERM CEO must know what are the risks associated with IT investments just as he aware of risks associated with finance - Doubtful Debt / or other important risk IT investment / project: Your Text here Your Text here ROI Budget Schedule ? Risk factors Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 120

Prepare to the Unpredictable ERM Who Can? Satyam, Madoff Admits Wipro, 50 Billion $ Fraud Comverse, IBM, Oracle, Amdocs, Infosys, Cognizant, HP firing 9/11 Your Text here Your Text here Banking crisis: Lehman Brothers bankruptcy Wall Street crisis Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 121

Top Pressures Driving ERM Enterprise Risk Mngt Top Pressers Driving ERM New/ changing regulations YourBetter risk mngt Text here Your Text here Protect the organization Improve operational efficiencies Source: Aberdeen Group 2008 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 122

Regulations bring improvements into IT ERM The role of CIO & ITOs will evolve under SOX Resources & recognition of vulnerabilities in the IT area SOX brings improvements into the following areas: • information system security Your Text here Your Text here • segregation of duties • access controls & access monitoring • test procedures & program change mngt • processes to document policies, & controls Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 123

Unify Compliance with Risk mngt ERM  SOX brought compliance into the spotlight (penalties on serious risk issues)  Compliance required infra & mngt change backed by auditability & specification of procedures: • Mngt framework – ITIL, COBIT, ISO Your Text here Your Text here  GRC - unify compliance with risk mngt: • business process improvement empowered by automated systems capable of bringing together process monitoring, mngt frameworks, & compliance Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 124

GRC – Governance, Risk & Compliance ERM Balanced risk Process development portfolio, examination & procedures of real, quantifiable establishment based costs associated with on set of different types of IT measurements risks Your Text here Your Text here SOX / Sector regulations compliance Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 125

Current Situation in Israel: ERM Compliance, Risk & What?  Quick fix one-time, often outsourced, regulation projects  ―SOX is the must have - it will not have strategic impact on the organization‖ Your Text here Your Text here  Fragmented approach to GRC is inefficient & becoming a huge cost driver  ―Existing tools handle only documentation of SOX compliance procedures -they don‘t check the level of enforcement!‖ Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 126

Governance, Risk & Compliance! ERM Need for ongoing effort to comply with regulation Move compliance from a tactical reaction to strategic imperative Your Text here Your Text here Firms can no longer afford to approach compliance as tactical project like meeting the SOX deadline GRC technologies move from niche specialist vendors towards the large systems Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 127

GRC Tools Adoption ERM Global Trends Fully Deployed Piloting Your Text here Your Text here Plan to Pilot No Plans to Invest Source: IREC Security budget & spend benchmarking survey Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 128

The Growing Interest of SW vendors ERM  GRC acquisitions • 2006: SAP acquired Virsa, ERM SW provider, to bolster SAP‘s SW compliance skills • 2007: Sun reached for startup Vaau • 2008: Oracle picked up longtime partner LogicalApps Your Text here Your Text here  Israeli new enforcement Start-ups: • Xpandion – Risk mngt & behavioral analyzing SW solution • SPATIQ – provides an automatic tool for Entitlement mngt  GRC often viewed as an extension of ERP & BPM tools  Tools cannot provide a complete solution without actual process change Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 129

Major GRC Players & ERM Selected Installations in Israel  CA (GRC)  IBM (Tivoly Compliance Insight Manager) - Isracard  Oracle (Logical Apps)  SAP (GRC Risk Mngt/ process control) – Inbal, Israel Chemicals  Matrix (Investment Control) – Trust comps Bank Hapoalim, Igud  Dynasec (Easy2comply) – Bank Leumi, Hapoalim, Mizrachi,here Your Text here Your Text Phoenix, Migdal, Harel, IEC, IAI  Xpandion (Profile Tailor) – ZIM (access control), Hadasa (behavioral analyzing + SW licensing cost reduction), Delta 3 (segregation of duty)  SPATIQ There are also numerous other tools (security mngt, event mngt solutions, etc) Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 130

IT ERM/ GRC Consultants in Israel ERM Partial List (alphabetical) BYON HMS introSight One Your Text here Your Text here SecOz Spider Taldor Tulip Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 131

IT in Aggressive Cost-Cutting Times Complex IT Set environment Your Text here standards, best Your Text here ITIL, CobiT, ISO requires heavy practices & support methodologies Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 132

Management Frameworks GRC ERM based on mngt frameworks not only lowers the overall cost but may improve the business processes Compliance & frameworks together:Your Text here Your Text here • Easier to adapt to new regulations • To meet auditing • To manage changes in requirements Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 133

Enterprise Risk Management GRC Common Frameworks Process: Process Developing process to improve ITIL Maturity models efficiency & IT service delivery – CMMI , PMM Quality control: Your Text here Quality control Your Text here ISO 9001 Build metrics to follow up Total Quality Mngt performance & improvement (TQM) Six Sigma Governance: Governance Establishing oversight measures COBIT Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 134

What’s the Best Practice Framework? GRC No single mngt framework meant to represent the “New Testament” of IT mngt ITIL COBIT CMMI Adopt whatever works in creating mngt value for your org. Six ISO Your Text here Your Text here Sigma The combination of process methodologies will provide a more complete view of IT‟s operational/ support processes Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 135

The most adopted GRC mngt methodologies: Management Perspective CobiT Your Text here Process Description Text here Your ITIL v.3 Quality Control ISO 9001 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 136

GRC Framework Adoption GRC Global Trends ISO ITIL Your Text here Your Text here CobiT Full Use with Certification Full Use without Certification Limited Use No Plan to Use Source: IREC Security budget & spend benchmarking survey Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 137

ITIL v.3 GRC Strategic, operational, & technical process guidance Creation of business value through the delivery of quality technology services Plan Do Establish processes Your Text here Implement processes Text here Your Strategy Design Transition Operate Continual Service improvement Check Act Monitor & evaluate the Remediate & adjust Source: Cutter implemented processes Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 138

Unify Compliance with Risk Mngt GRC Frameworks are linked to each other Different frameworks handled by various orgs roles: • Accountants, CIO, CTO, QA managers, CISO, etc. Responsibility of all frameworks MUST be unified: Your Text here Your Text here This translates itself to greater efficiency & resource saving Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 139

IT in Aggressive Cost-Cutting Times Mobile Innovation Your TextMobile Your Text here New business here Multi channel customer interaction models Web 2.0 Upcoming STKI Round Table on Mobile: 06/05/2009 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 140

The Mobile Revolution is just Begun Mobile • Mobile phones • Smart phones • Pocket PCs • PDAs Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 142

Mobile Phone - MEGA Trends 2009 Mobile Private Sector M O Primary interface for Internet & Social Networks B Personalization I L Consumers will watch more TV on mobiles E Your Text here Your Text here Dominant platform for listening to music T Mobile Wallet R E N D S Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 143

Time Allocation per Mobile Smartphone Application Productivity Utility Games Browsing VoiceText here Voice Your Messaging Your Text here only 13%! 13% 39% PIM Multimedia Source: Smartphone 360 study Nokia Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 144

Mobile Phone - MEGA Trends 2009 Mobile Business M O Increasing complexity & capacity of platforms & apps B Multi channel customer interaction I L Employees use their private mobile devices for work so E Your Text here Your Text here expect org. technical support T • Therefore , outsourcing for R E technical support N D S Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 145

Mobile Phone - MEGA Trends 2009 Mobile Business & Private Use M O Constant internet connection B Digitalized ID I L Video conference through online accounts E Your Text here Your Text here ‗Real‘ smart phone – blurring lines between T business & personal use R E N You won’t need your laptop anymore?! D S Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 146

Key Drivers Mobile Grand convergence of computing & communications in a small device Wireless connectivity – mobile Internet Your Text here Your Text here Ability to integrate voice, data, & multimedia Location independence & personalization Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 147

Mobile Technology will Change Mobile The way people work Significant impact on: The way companies are • Business models & organized & operate processes Your Text here Your Text here The way people • Industry structure interact & live • Competition Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 148

When you’re NOT in front of the Computer Mobile Now you can: purchase a product or service conduct financial transactions mobile ticketing Your Text here Your Text here Send/ receive digital pictures download entertainment content Many org. haven't yet fully understood the opportunities offered by mobility Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 149

Mobile Applications Mobile Stone Age Mobile Smartphone • Voice communication • Higher data transactions • Thin-data transfer Your Text here • Mobile payments Your Text here • Personal information mngt • Higher levels of interactivity • Personal productivity • Location & context enhancement awareness • Personalization • Access to enterprise information systems • Remote monitoring &control Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 150

First-generation Mobile Apps: Mobile Messaging Mobile • Short message service • Multimedia message service E-mail telephony • Instant messaging Personal info mngt Your Text here Your Text here • Calendar Info push Web browsing • Organizer services • To-do lists • Address books Simple, single- Positioning & Audio, video, & player, standalone navigation systems television services games Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 151

New–generation Mobile Apps: Mobile Remote monitoring Mobile Enterprise Mobile Commerce & control Location- Your Text here Your Text here Multiplayer, mobile based, context- gaming services Mobile ID/key aware services Voice over Wireless IP Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 152

Mobilize your Business Mobile • Improve & enrich customer service & satisfaction Customers • Offer new apps / services • Create new markets Your Text here Your Text here Mobile Innovation Operations Initiatives • Improve worker productivity • Work Smarter • Improve efficiency of external Supply • Optimize internal WF operations Chain • Build responsive & flexible org Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 153

Mobile Enterprise Mobile  Mobile workers – offering additional products/services to field customers  Access to/ update of enterprise info - guidance for fixing malfunctions  Dynamic scheduling & update of task assignments Your Text here Your Text here  Remote monitoring & control - Real-time field data analyzing (what, when, how much?) Selective Examples: Matrix (CallDinator)– Bezeq, HOT, Ort One (ONE1Mobile) – Bank Hapoalim, Hospitals Taldor – IDF, USPostal Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 154

Mobile Banking Mobile The use of a mobile phone for financial transactions Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 155

Mobile Banking Mobile  Bank transactions from any location in real-time: • Account activity, deposits/withdrawals, money transfer  Stock trading: • Real-time data, news & updates alerts, virtual stock portfolio, buying & selling of stocks Text here Your Text here Your  Credit cards: • Credit card charges • Real-time data of checking account balance, rapid loans • Location-based, context-aware services – relevant real-time discounts (mall parking, in-shop sale, ect) Selective Examples: Matrix (Bank2go) – Bank Leumi; Netwise – Mizrahi Live Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 156

Mobile Commerce Mobile  Online shopping • Purchasing retail items through scanning - mobile wallet  Advertisement : • Mobile ROI measurement & analytics use to better deliver mobile campaigns & understanding consumer needs here Your Text here Your Text  Appointments remainders & scheduling, medical results receiving: Martix  Travel reservations & ticketing  Shorten business process - E.g. Car acquisition – real time check on mobile (who is the owner, legal owner/stolen, does it have a test? Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 157

Mobile Players in Israel Mobile Partial List (alphabetical) Bynet (Paybox) IBM (Lotus mobile) Matrix (MMIS) Ness (Sybase) Your (Mintbox) – browsing solution Netwise Text here Your Text here (Cellerium) – client solution One (One1Mobile) Taldor Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 158

What is Social Networking? Web 2.0  ~500 million social network members  Be where consumers are & where future consumers will be  The largest & fastest growing application in the history Your Text here Your Text here of the web  Social networking extends the marketing reach of traditional methods : • Communication, Hiring, KM, Public relations, R & D Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 160

How is Social Networking Used? Web 2.0 Job searches Business Card Connect socially • Sharing videos, photos, status updates Businesshere Your Text Your Text here • Marketing, prospecting & promoting • But most don‘t use it effectively • This is where our associates need assistance Source: http://www.slideshare.net/bradhanks/social-networking-wiifmb-whats-in-it-for-my-business-presentation Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 161

STKI Group in LinkedIn Social Networking During a 2 month period: 483 members from all of the world, tens of In online discussions, summit participation approvals Your Text here Your Text here Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 162

My Blog Social Networking Galit Fein’s World Your Text here Your Text here Current Country Totals From 15 Oct 2008 to 16 Feb 2009 Israel (IL) 2,203 Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 163

Summary  Increased focus on Office of the CIO  Advanced IT Gov.:  Business value / IT cost optimization  Innovation  Strategic alignment Your Text here Your Text here Alternative Sourcing Models – Cloud Computing GRC-Need for ongoing effort backed by mngt frameworks  New business models – Mobile, Social Networks Galit Fein’s work Copyright 2009 @STKI Do not remove source or attribution from any graphic or portion of graphic 165

IT Governance/Office of the CIO Trends Stki Summit 2009

0 comments

Notes on slide 1

19 Favorites