Reinventing for change
The challenges of predictable ICT in
Australia and New Zealand
Sam Higgins
Research Director
August 2008
Copyright © 2008 Longhaus Pty Ltd

Who is Longhaus?
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technology
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strong focus on government
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Research Focus
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Outline
• What patterns exist to help CEOs and CIOs predict
changes?
• How does change impact the value of ICT service delivery?
• What are the business and technical challenges currently
facing CIOs?
• How should ICT organisations respond to these
challenges?
• Which strategies are being used in the local market?
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Predictability in business is hard, but patterns help CEOs
plan ahead
9
8
7
6
5 Forecast
4
3
2
1
0
-1
Average long
-2 business
cycle is 34
quarters
-3 (8 1/2 years)
36 qtrs. 34 qtrs. 34 qtrs. 33 qtrs. 38 qtrs. 33 qtrs.
-4
-5
Annual real GDP growth (%) progressed in quarters to September 2007 (and forecast to June 2011)
-6
1962
1966
1970
1974
1978
1982
1984
1986
1988
1992
1994
1996
2000
2004
2006
2008
2010
2012
2014
2016
2018
2020
1960
1964
1968
1972
1976
1980
1990
1998
2002
Source: Paul Ruthven of IBISWorld 07/12/07

And savvy CIOs recognise that patterns also exist for the
“ business of ICT”
Post Y2K Synchronised ICT Asset Renewal Cycle
Asset
Replacement
Renewal
Business Planning
As Usual
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Longhaus
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Longhaus’ Annual ICT Spending & Priorities Study aims
to help organisations understanding these cycles
• Sampling 100+ ICT decision makers from over 6000 medium to large
firms
• Giving us a 95% confidence level with a MOE of +/-10%
• Australian and New Zealand firms:
– Allocate 5% of revenue on ICT
– Spend 12% more on ICT in 2008
– Increase new investment by 16% Lights On:
80%  84%
• A real average increase of only 3.2%
New Investments:
20%  16%
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But as business and ICT cycles change so does
the perceived “value of ICT”
• Just as personal needs change with economic cycles, so
the IT needs focus of an enterprise change
The Hierarchy
of Personal • Self Actualisation
Needs
• Esteem Needs
• Social Needs
• Safety Needs
• Physiological Needs
Source: Abraham Maslow, 1943
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But as business and ICT cycles change so does
the perceived “value of ICT”
• Just as personal needs change with economic cycles, so
the IT needs focus of an enterprise change
The IT
Value • Paradigm Shifting
Hierarchy
• Competitive Differentiation
• Integrated Information
• Stability & Security
• Infrastructure & Connectivity
Source: Robert Urwiler & Mark Frolick, 2008
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The result is that CIOs face a raft of challenges both
business and technical
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Addressing these challenges requires a balanced
approach to planning and provision of ICT services
The Business
operation of ICT
Use of ICT in the
Business
Provision of ICT
for the Business
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Service management remains a key strategy locally for
improving the business of ICT
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But many organisations focus on project management
ahead of service management
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Provisioning of ICT for the business remains hardware
focused, but this is changing
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Open source, SaaS and Virtualisation are emerging as
mainstream ICT strategies
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However, Longhaus cautions organisations to look
beyond the hype
• Open source offers alternatives, but…
– Strong open source solutions remain commodity focused
• Virtualisation offers savings through utilisation, but…
– Virtual server sprawl now rivals physical sprawl
• Service-oriented architecture offers flexibility, but…
– SOA creep means many connections are unmanaged
• Software-as-a-Service offers ease of consumption, but…
– Data integration and data leakage prevention become difficult
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Wrapping Up
• Cycles do exist that provide predictability in the face of
seemingly constant change
• Over time the current and desired level of ICT value
changes in response to these cycles
• Successfully meeting the challenge of change requires
planning and activities across the three dimensions of ICT
delivery
• Strategies focused on application renewal will take centre
stage in Australia and New Zealand in 2009
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Selected Source Material
• Successful Portfolio Management Unifies ICT Management Practices,
Longview, September 2006
• The Three dimensions of ICT Planning for Queensland Government
CIOs, Brief, November 2007
• Post-Y2K bubble looms as an asset replacement train wreck, Longview,
December 2006
• Managing not implementing SOA becomes the real challenge,
Longview, December 2006
• Business culture is the next barrier to second generation SOA projects,
Longview, December 2007
• IT Spending and Priorities Study 2008, February 2008
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Thank you
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