IT: The Business of Technology

Slide 1: IT: The Business of Technology Ken Anderson Tuesday – April 22, 2008 Executive Strategist Wednesday – April 23, 2008 Chris Haddad Vice President, Service Director Application Platform Strategies All Contents © 2007 Burton Group. All rights reserved.

Slide 2: The Executive Viewpoint 2 •As the internet connects the world, the world flattens, creating a new global economy. •With a new “connected world” and countries shedding their 3rd world status, business is changing. •Executives, burdened by past technology investments and wary of economic changes, are viewing IT investments with additional skepticism. •Executives realize that finding new ways to deliver their core business, automate process and reduce cost - is not enough.

Slide 3: IT Viewpoint 3 •IT departments are struggling to maintain legacy systems, provide required services, and fund new initiatives. • Technologies, (once thought revolutionary), that free employees from their desktops, enable a virtual workforce, and provide information—any where, any time, and any place—are now considered basic services and candidates for outsourcing. • IT professionals, once primarily viewed as technologists, find themselves in the unfamiliar territory of having to justify their role in today’s less technical, more traditional business landscape. •IT budgets, once bolstered by the excitement of change, are under scrutiny by executives who demand value from the millions spent.

Slide 4: The Birth of IT - Information Technology 4 Network Automate Deploy Move Optimize IT People Business Best-of-Breed Business to Data Process Applications to the Web 0 1980 1990 2000 2 Mainframe to PC World Wide Web SOA E-Mail Security and Risk Management IM Remote Workforce Laptops Y2K Social Networking Intel 4004 IBM PC Unified Communications Macintosh Collaboration Window 3.0 Identity Management NetScape PDA’s Virtualization WordPerfect Business Intelligence Remote Access Content Management Business Continuation Lotus 1-2-3 Wide Area Networks LINUX Digital Asset Management Portfolio Management DBase Software as a Service Local Area Networks Cell Phones Napster

Slide 5: Impact of Technology on the World 5 Before Christopher Columbus After Christopher Columbus Before the Internet After the Internet

Slide 6: Impact of Technology on People 6 A Google search on “information overload” yields 1,640,000 results.

Slide 7: Today 7 •With a new “flatter, connected world,” business is changing. •Businesses are struggling to provide consumable – actionable information from their multiple data sources. •Businesses are changing, looking for new ideas and markets. •Businesses look to divest and outsource non-core capabilities. Expand into emerging markets and exploit acquisition opportunities. •IT innovating alone, finding new ways to deliver, automate and reducing cost is not enough. •IT needs to enable business opportunities •IT needs to think like a business

Slide 8: Thinking Like a Business 8 •A traditional IT department operates as a monopoly with captive customers who are required to use corporate standards and internal IT services. •Successful businesses, provide their customers the right products and services. •Thinking like a business forces an IT department to transform itself into a service organization that offers core services and is managed as a business and marketed as though the customer has a choice. •IT professionals need to integrate the world of business into their world of technology.

Slide 9: Thinking Like a Business 9 •Smart businesses realize their success is directly tied to customer success. •This is not a process of alignment but an integration - requires an investment of limited IT resources to improve efficiency, increase productivity, and enable revenue generation. •IT professionals need to understand their customers’ needs (the business is the customer), incorporate feedback, and agree on a set of business-oriented metrics managed by IT departments and customers.

Slide 10: Measuring Success - Efficiency vs. Effectiveness 10 •IT departments rely on efficiency metrics to communicate status and success. •Efficiency metrics are easier to measure as they are derived from known data sources and generally presented as factual. •Common IT efficiency metrics include uptime, capacity, project progress, bugs logged, and expense against budget. •Effective metrics define impacts and outcomes such as market growth, marketing efficiency, customer trends, and product profitability.

Slide 11: Effective Business Metrics 11 •Effective based metrics are more difficult to implement as they define impacts and outcomes; data points require analysis and outputs are subject to interpretation. • Revenue • Business capability/process/service delivery efficiency • Business inventories or other expenses • Ability to identify and pursue new business opportunities • Customer relations • Single corporate image and unified channels • Comprehensive view of customer needs, desires, and interactions • Business process cycle times

Slide 12: Building Business Partnerships 12 •Businesses that effectively build and maintain relationships with their customers have a competitive advantage in today’s marketplace. •Effective partnerships are fostered when both parties work toward common goals and strengthened when those partners work together to overcome obstacles. •Through partnership, IT departments gain an intimate understanding of their customers and a unique viewpoint into the business world. •Partnerships also provide a clear understanding to all parties: If the project succeeds, the partners succeed; if the project fails, everyone fails.

Slide 13: Recommendations 13 •IT professionals who are comfortable communicating in technical language need to communicate in business terms that transcend return on investment predictions. •This requires an understanding of the customer’s business, goals, and what makes their specialties unique. •This understanding goes beyond traditional requirements documents; it must be an ongoing, interactive, and iterative process that improves over time. •IT proposals that have traditionally focused on cost and impact on infrastructure need to focus on changes and improvements to the customer’s business - establish project success criteria - focus on higher level outcomes.

Slide 14: Recommendations – cont. 14 •Businesses with experienced, efficient, flexible, integrated and innovative IT departments will have a distinct advantage when implementing new business ideas. Businesses that rely on their IT departments to only optimize and reduce cost, are at a disadvantage. Operational Efficiency vs. Opportunity Effectiveness •The future requires IT to be connected with the business, efficient and flexible, ready to implement new business ideas.