CIO Strategies 2008

CIO STRATEGIES 2008 CHANGE RESILIENCE INNOVATION

@STKI 2008 change is the process by which the future invades our lives Alvin Toffler Change Resilience Innovation Creativity

Resilience: Not only the ability to recover from a change or shock. Resilience : Not only the capacity of people to cope with change , stress or catastrophe. @STKI 2008

RESILIENCE: The rate at which any system returns to a single steady state following a system perturbation.

Rapid change makes resilience even more important. It isn't just about being prepared, its about being flexible and adaptable enough to cope with change of any kind . IT RESILIANCE : The ability to provide an acceptable level of service in the face of faults and challenges to normal operation. @STKI 2008

The future is really only an innovation problem How do we find the future we prefer? Innovation is the ability to move from the existing to the preferred

Innovation versus Creativity Innovation is the engine that drives transformation.. @STKI 2008 Present Desired Future Default Future Vision

Business-CIO model innovation

Innovation IS strategy: from BUILD to CREATE Red Ocean Strategy Blue Ocean Strategy Compete in existing market space. Create uncontested market space. Beat the competition. Make the competition irrelevant . Exploit existing demand. Create and capture new demand. Make the value-cost trade-off. Break the value-cost trade-off. Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost. Align the whole system of a firm’s activities in pursuit of differentiation and low cost . The New Economic Age

Innovation IS strategy: from BUILD to CREATE Red Ocean Strategy Blue Ocean Strategy Compete in existing market space. Create uncontested market space. Beat the competition. Make the competition irrelevant . Exploit existing demand. Create and capture new demand. Make the value-cost trade-off. Break the value-cost trade-off. Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost. Align the whole system of a firm’s activities in pursuit of differentiation and low cost .

Innovation Management? It is called ENTERPRISE 2.0

Successful Innovation Needs Silliness

Sounds like a strange advice? Remember…

FedEx was silly

World Wide Web was silly.. Way back in 1995

.. And so was …

Post-it Notes were silly .

What is this?

The Dyson phenomena

Masters of Changing the rules

Google INNOVATIVE ?

Most Google’s new services are acquired

Those include:

video-sharing service YouTube

weblog publisher Blogger

virtual globe Google Earth

online word processor Writely (Google Docs)

wiki developer JotSpot

news syndication service Feedburner

Internet phone service GrandCentral

IT Innovation strategic tactical Partnering Business with Technology (Innovation) Aligning Technology with Business Strategy (Alignment)

Disruptive technologies

Introduction of the IBM Mainframe ( 1960’s)

Introduction of the Apple II (1978), IBM PC (1981), TCP/IP (1980’s), C/S Architectures (1980’s), SUN workstations (1980’s), Internet (1990’s)

Introduction of XML-based Composite Applications (2006), Service Oriented Architectures (2005), Virtualized Infrastructures (2004),Web 2/internet 2 (2007)

BOOK OF THE 1990’s

Introduced the business world to rethinking operations.

Demonstrated how process redesign can yield breakthroughs in performance

Put the word "reengineering" into the English language.

Plus 10,000 rebuttals And 20+ books

BOOK OF THE 1990’s

Introduced the business world to rethinking operations.

Demonstrated how process redesign can yield breakthroughs in performance

Put the word "reengineering" into the English language.

Business Process enabled IT Plus 10,000 rebuttals And 20+ books

A business process Requisition Approval Process Notify Approver

Organizations have only BP

BOOK OF 2003 copied: “The Myth of Real Time Information”, HBR 1966 Plus 2000+ rebuttals And 5 books

BOOK OF 2003 copied: “The Myth of Real Time Information”, HBR 1966 Tactical and Strategic IT management Plus 2000+ rebuttals And 5 books

CIOs do matter: innovation war ERP Value captured by verticals Business Process 1 ERP Value captured by verticals Business Process 2 Sales Prospect Market IT of Competitor IT of Competitor No Real difference in value Competitive Differentiation 1 2

CIOs do matter: innovation war ERP Value captured by verticals Business Process 1 ERP Value captured by verticals Business Process 2 Sales Prospect Market IT of Competitor IT of Competitor No Real difference in value Competitive Differentiation 1 2 Best Business Practices Innovation war

important implications for CIOs compound annual growth rate over five years [Source: IBM, Global CEO Study 2006]

“ The End of Corporate Computing” Sloan Management Review, May 2005 NICK CARR

Book of the century (4/2005)

Thomas Friedman

3 billion people (consumers & producers) entered the world economies

Eastern Europe (ie: Rumania)

Asia (ie: China, India)

Now we have a “new” economy:

Interconnected (fiber everywhere)

Standardized (Open Source)

Supply Chains Management

Out-sourcing, In-sourcing, Off-shoring

Info sourcing

My “creative hero”

technology innovation

Cheap Technology: The Ultimate Driver... Jimmy ’ s Law: Memory, bandwidth and computing power continue to decrease in cost.. exponentially US $ - Logarithmic Scale 1 10 100 1,000 10,000 100,000 1,000,000 0.1 (3) 75 85 95 07 10 Bandwidth Cost of sending 1 trillion bits Storage Cost of 1 megabyte storage Computing Cost of 1 MHz processor speed Source : Federal Reserve Bank of Dallas,

...and the effect on networks When the network is as fast as the computer’s internal links, the machine disintegrates across the net into a set of special purpose appliances

effect on people as seen in New Maslow’s hierarchy of needs

I am a smartphone addict.

I use my smartphone for 90% of the tasks I did from my laptop while carrying less than 5% of the weight.

Being a low power device with great always-on connectivity, smartphones are the perfect thin client.

IT people have not yet realized that the killer app of a smartphone is the web browser .

I am a smartphone addict.

and the effect on IT…….

Peopleware: The ‘Follow Me’ Portal that supports the “Digital Identity” Banking Portal Government Portal Megaportal Work Portal DI #2789

What kind of knowledge do we need?

The Peopleware Ecosystem Peopleware WCM Security Application Servers EAI Web Services E-Forms/Workflow Search Development Tools E-Learning Directory Collaboration Expertise Location & Mgmt. SSO Wireless Business Intelligence Knowledge Mgmt. DM BPM Identity Management Composite App. Framework BAM

… some of the then overly ambitious but valid concepts actually get implemented

“ The Network Corporation”

2007: the year of my discovery

“ SACRED ORDER OF THE EXTERNAL MIND”

I could outsource mental tasks

Life is a math problem and I have a calculator

MAGIC OF THE INFORMATION AGE

Not that it allows us to know more

It really allows us to know less

An example: my romantic attachment to my “GPS”

I have outsourced part of my life to external cognitive servants :

No longer need a memory

Google

Yahoo

Wikipedia

Personal Information

Smartphone tells me about birthdays, phones, addresses

Musical taste:

Itunes

Books and others:

Amazon

Social Capital

LinkedIn

Xing

Facebook

Pinpoints a supermarket in MEXICO ? my son is calling from there

WEB 2008 phenomenon

(fi-nom- uh -non)

-noun

a rare or significant fact or event in the web that happened in 2007

something that is impressive or extraordinary that happened in 2007

WEB 2008: user Transaction Sites Multimedia Sites Game Sites Social Sites

Why search as HOME PAGE

Search lets users control their own destiny and assert independence from websites’ attempt to direct how they use the Web.

Search is also users’ escape hatch when they are stuck in navigation .

When they can’t find a reasonable place to go next, they often turn to the search function.

This is why you should make HOME PAGE in every page on the site; you cannot predict where users will be when they become lost.

SLIDE PRESENTATION http://www.slideshare.net/jimmyschwarzkopf Favorite Slideshows

Search Engines Definition: A search engine is a searchable database of Internet files collected by a computer program (called a wanderer, crawler, robot, worm, spider).

social computing Institutions Communities Communities drive innovation Institutions facilitate experiences, shaped and owned by communities Communities take power from institutions

WIKIPEDIA STKI מתוך ויקיפדיה , האנציקלופדיה החופשית חברת STKI - Schwarzkopf The Knowledge Integrators היא חברת ייעוץ בתחום מערכות מידע בישראל , המפעילה צוות של אנליסטים . לקוחות החברה כוללים בנקים , חברות ביטוח , משרדי ממשלה , חברות היי - טק ותעשייה , חברות טלקום ועוד . באמצע שנות ה -80, ד " ר ג ' ימי ( חיים ) שוורצקוף ביצע את המחקר הראשון מסוגו אודות שוק טכנולוגיית המידע בישראל , עבור חברת DEC . המחקר הכה גלים בשוק הישראלי , ונתן תמונת מצב קונקרטית בשוק שהיה עד אותה עת בלתי ממופה . ד " ר שוורצקוף המשיך בחקר השוק ובשנת 1992 הקים את חברת Meta Group Israel , ששימשה כנציגות בישראל של חברת Meta Group העולמית . במסגרת החברה , המשיך ד " ר שוורצקוף לפרסם מחקרי שוק בתחום באופן קבוע , וכן לספק ייעוץ לחברות והארגונים המובילים בשוק . בשנת 2004 נרכשה Meta Group העולמית על ידי חברת גרטנר , וד " ר שוורצקוף והאנליסטים המשיכו בפעילותם בישראל תחת השם STKI . כיום , STKI משתפת פעולה עם שלוש חברות ייעוץ מהמובילות בעולם – Butler Group , Cutter Consortium ו - Datamonitor .

Widgets bring micro applications to the desktop

WEB 2008 EXAMPLES

WEB 2008 EXAMPLES …. 2

The WEB 2008+ experience

Soon each website will become a 3 dimensional room that can be experienced alone or with friends

Virtual worlds

Definition: 3D online persistent world with a sense of presence and simultaneous experience in context

Examples (over 30 worlds):

Second Life

ActiveWorlds

Entropia Universe

There

MultiVerse

Vast Park

Metaplace

Second Life is the biggest virtual world

40,000 concurrency (at any time)

450,000 active users (last 7 days)

1.4 m active users (last 2 months)

10.6 m total accounts

2 m assets created per day

35 TB of user-created data

800,000 unique items sold or traded per month

500 events per day

15 m concurrent scripts

10 Gbps peak bandwidth

Source: http://secondlife.com/whatis/economy-graphsphp Million Square Meters of Second Life Land Total User Hours (millions) Source: Linden Lab

Currency: Linden$

LindeX exchange operated by Linden Lab

Buy: USD $.30 transaction fee

Sell: 3.5% transaction fee

Monetary policy

Sources: http://secondlife.com/whatis/economy-market.php, http://secondlife.com/whatis/economy-graphs.php, http://secondlife.reuters.com US$ Spent by Users (in Millions) US $ Exchanged on Lindex (in Millions) Source: Linden Lab 270 L$ =$1 USD

Rapidly developing virtual world ecosystem Investment transaction in 2007 or acquisition Virtual World Providers Linden Lab/Second Life , ActiveWorlds, Entropia Universe, There, Kaneva, Muse, MultiVerse, vastpark, metaplace, Cybertown, Habbo Hotel, Whyville, Voodoo Chat, Taatu, Traveler, Sims Online, Club Penguin, WebKins, Hipihi, Uonenet, Noviking Virtual Businesses and Brands Anshe Chung Studios, DeCuir Creations, FairChang, Etopia, Hunter’s Cove, SL Boutique , Preen, House of Nyla, Second Life Cable Network, Rezzable, caLLie cLine, PeoplePool, Raven Pennyfeather, Lapointe & Bastchild Designs, InStyle, Vista Animations, Chai Skins, Acedia Albion, AV Puli Animations, Reel Expression, J&S Aviation, SZ Designs, Vindy Vindaloo, Esoterica Couture Virtual World Developers and Agencies Electric Sheep Company, Millions of Us, Rivers Run Red, CMP, Aimee Weber Studio, depo consulting, Forterra, Metaversatility, Wish Farmers, Virtual Worldlets, Icarus Studios, Proton Media, NGI Group 3Di, DAZ 3D, Code 4 3D Physics Engines and 3D Modeling Platforms Havok , Ageia PhysX, Unreal Engine, Open GL, Maya, 3D Studio, Croquet, SoftimageIXSI, Form Z, Strata 3D CX, RenderMan, Blender, Wings3D

Economy

Reuters

Banking and credit

Stock markets

SL Capital Exchange (US, 20 listings)

World Stock Exchange (Australia, 15 listings)

VSTEX (Italy, 7 listings)

Ancapex (US, 3 listings)

Source: http://secondlife.reuters.com

Business Motorati SpokesAvatar: caLLie cLine H&R Block IBM Dr. Dobbs Life 2.0 Conference Cisco Best Buy’s Geek Squad Preen Principal: Aimee Weber Preen

Scion, Toyota's youth-oriented brand, has sold (2H07) about 200 computer-generated cars in Second Life

Advisory/Analyst firms H&R Block Island BDO Stoy Hayward Island KAWG&F (Baltimore MD CPA firm), CPA Island Accenture We hope that during 2009 STKI will be present there and will have it’s first SUMMIT

Academia, museums, non-profits Princeton Art Gallery Science Friday International Spaceflight Museum Computer History Museum American Cancer Society Relay for Life

Government, politics and collective action US Congress European Community US Congress – hot topic legislation Campaign HQs Davos protest

Internet 2 is not Web 2

WEB 2 are WEB Technologies

Internet 2 are NETWORK TECHNOLOGIES @STKI 2008

Internet2: IT Implications Research and Development Commercialization Partnerships Privatization Internet1 1. Need to learn from lessons of Internet1 2. Need to understand opportunities and threats of Internet2 3. Need to realize that the window for action is shorter @STKI 2008 2009 1997 2011

WEB 2008 pushes need for “new CIO” Time Innovation WEB 2008

2008 the year when we want to “ keep it simple stupid” (KISS)

Availability of key skills

Downturn in major economies

Over-regulation

Low-cost competition

CEOs study by Pricewaterhouse Coopers released at the World Economic Forum in Davos (1/2008) .

Smaller budget ?

Less resources ?

Less discretionary spending on new technology ?

New ways of doing things, like software as a service ?

More outsourcing ?

CIOs have three long term agendas

IMPROVEMENT AGENDA : concentrates on building better processes

INNOVATION AGENDA: concentrates in finding high potential technologies and ways to use them

COST-REDUCTION AGENDA: rises when either the economic outlook becomes stormier or new technologies present a fresh chance to save money

A look at the changes and trends IT executives expect in 2008:

Strategic IT services ( development and acquisition of CORE SYSTEMS, BI..) using SOA

Management of IT (Office of the CIO,PMO, BSM, CMDB…..)

Infrastructure technologies (DATA CENTER, GREEN ,BLADES, thin clients..)

Security (all new needs)

Regulations (building the IT reg. group: ISO, ITIL and COBIT)

Pop-tech culture (Facebook, Google, iPhone, Second World and others )

Consolidation: Exploiting software & hardware resources & payment options to best serve a variable workload EII: Delivering meaningful information from many sources to many consumers SOA: Delivering IT functionality as reusable, interoperable business services Peopleware: portal convergence VoIP Internet2-Web2 OTC: giving users all the resources they need at the time they are needed, at a cost that is related to the business value delivered Service Oriented Architecture Hwre Sftwre Consolidation Enterprise Information Integration Peopleware Computing Office of the CIO: OTC enabling deployment of concurrent initiatives

What is SOA ? Service Oriented Architecture is a state of mind

APPLISTRUCTURE and SOA

Why do we want to change ????

Need of standard XML

Building many “Business Services” Business Logic Business Logic Business Logic Business Logic LEGACY ERP CRM FINANCE “ Transfer Funds ” “ Execute trade” “ Etc., etc.” “ Get Portfolio Balance”

The Process Driven Organisation Process number one Process number two Process number three

IT will sell only BP solutions Deliver Receive Service Business Processes IT Infrastructure Enterprise Applications

Composite Applications Composite Applications Drop-and-configure Optimize Rate Plan Get Customer Process Order Get Value Get Churn

how do you implement a data model architecture?

Is the new product selling only in London? NO also in Berlin NO also in Paris NO also in Moscow

Enterprise v1: circa 2007

Threat to a Single Version of the Truth

YOUR WORST ENEMY IS HAVING SEVERAL VIEWS OF THE TRUTH

2008:DATA ARCHITECTURE MASTER DATA MANAGER

The “dream” XML Process Manager EII eBusiness System Legacy System Front- & Backoffice System CRM System Financial System SCM System Workflow Management System Enterprise Integration Bus Portal as assembly engine Enterprise Portal

In order to finish my wish for 2008