Technology business management_7.13

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Technology business management_7.13

  1. 1. What, Why, How and the state of the industry Joel A Manfredo Managing Director, Acies Consulting 11-Jul-2013
  2. 2. 2 Background What is TBM Why TBM The move to ITaaS Questions & Answers Technology Business Management
  3. 3. 3 Background Gartner Trends 10 Critical Tech Trends For The Next Five Years 1. Organizational entrenchment and disruption 2. Software-defined networks 3. Bigger data and storage 4. Hybrid cloud services 5. Client and server architectures 6. Internet of things 7. IT appliance madness 8. Operational complexity 9. Virtual data centers 10. IT demand Top 10 Strategic Technology Trends For 2013 1. Mobile device battles 2. Mobile applications & HTML 5 3. Personal Cloud 4. Internet of Things 5. Hybrid IT and Cloud Computing 6. Strategic Big Data 7. Actionable Analytics 8. Mainstream In-Memory Computing 9. Integrated Ecosystems 10. Enterprise App Stores
  4. 4. 6 Background Source: “Building the IT Brand: Impacting the Front Office and Beyond”, Meehan & McMullen, Gartner Executive Programs, October 2011 … Source: 37 Signals, Feb., 2011 Source: ComputerWeekly.com, August 2012
  5. 5. Background 7
  6. 6. 8 Background Source: “CIO Business Vision”, Info~Tech Research Group, Jun 2013 1. Understand Business Satisfaction with the IT Satisfaction Scorecard 2. Demonstrate Business Demand with the IT Capacity Scorecard 3. Manage Business Stakeholders with the Stakeholder Satisfaction Scorecard
  7. 7. 10 Technology Business Management Definition A practical, applied discipline for maximizing the value of the IT services investment portfolio by enabling technology leaders and their business partners to collaborate on business aligned decisions. Relying on transparency, TBM defines a foundation for managing supply and demand by enabling financial and performance trade-offs needed to optimize run-the-business spending and improve change-the-business investments. Focused On Running IT As A Business
  8. 8. 11 The TBM Council COLLABORATE Create a network of technology executives who are passionate about the Council’s mandate and will openly share their points of view and key learnings EDUCATE Synthesize, publish and promote a cross-industry framework and practical tools used to establish TBM as a professional management discipline BENCHMARK Create openly available benchmarks for technology leaders to assess their adoption of the TBM framework and work products TBM Council Mission:
  9. 9. 12 “To serve equally our members and our profession by synthesizing TBM best practices into a professional and recognized discipline for technology leaders.” TBM Framework TBM Summits The TBM Council CIOs Establishing TBM as Standard TBM Book TBM Framework TBM Index TBM Summits
  10. 10. 13 TBM Framework Developed by TBM Council board and principal members Emphasizes optimization of investment portfolio (Run the Business vs. Change the Bussiness)
  11. 11. 14 TBM Disciplines 3 How can we use transparency to alter behavior and drive cost and quality trade-off decisions with our business partners? 3 1 What adjustments can we make to our organization to more effectively manage the supply and demand of our services? 1 2 How can we get meaningful perspectives of our technology costs, investments, capacity and performance? 2 4 How can we confidently translate business expectations into an accurate technology plan, in turn safely reducing excess capacity? 4 How do I create and sustain a performance-driven culture that continuously improves value delivery. 5 5 Find the TBM Index at http://bit.ly/TBMindex
  12. 12. 15 TBM Disciplines 1 How can we continuously improve the unit cost of our technologies and services while keeping cost and quality in proper balance? 1 2 How can we better focus our time and resources on the services, applications, technologies and vendors that drive the most value? 2 3 How can my business partners and I be sure that we’re investing enough in the right projects and services? 3 4 How can we enable our business to “pivot” more quickly to differentiate offerings, exploit market- driven innovations, and capitalize on new opportunities? 4 OVERARCHING GOAL: Optimize run-the-business costs and better fund change-the-business investments. 5 5 Find the TBM Index at http://bit.ly/TBMindex
  13. 13. 16 TBM Index Number of Responses Questions Weighted Scores Level 1 Level 2 Level 3 Foundation 14 4.3 8.6 10.0 Understand / Benchmark 6 5.7 15.7 20.0 Transparency 3 4.0 14.7 20.0 Planning 7 8.9 17.1 20.0 Optimize Cost 6 .8 4.6 5.0 Rationalize Portfolios 5 1.8 3.8 5.0 Innovate 4 1.3 4.4 5.0 Transform 4 .8 3.1 5.0 Culture 4 3.5 9.5 10.0 Total 53 <31.2 <81.6 >=81.6% Based on the scoring model, organizations can be classified as Level I, II or III maturity:  Level I: 0-31.1% Organizations with some services defined/published, GL-based cost management, basic allocation of costs, annual baseline budgeting, etc.  Level II: 31.2%-81.5% Those with some higher-level services defined/published, mostly GL-based cost management, more advanced allocation of costs, annual budgeting with quarterly or monthly forecasting and reviews, etc.  Level III: 81.6%-100% Those with complete portfolio of services defined/published, more mature costing of services, consumption-based allocation to business partners, demand-based budgeting, service choices, etc. Scoring Approach Scores are captured by industry
  14. 14. 17 TBM Index 61% 50% 52% 69%64%40% 36% 47% 69% Average Scores (Large Companies)
  15. 15. 18 TBM Index 61% 50% 52% 69%64%40% 36% 47% 69% Average Scores (Large Companies)
  16. 16. 19 Another Way of Looking at TBM Engineering & Operations Deliver and support products and services on-time and on-quality Sales / Account (Business Relationship) Management Work with customers to understand their needs, position the right products/services and ensure their success Marketing (Office of the CIO) Understand your market, define your unique value proposition and strategy Product Management (Service Owners) Define and manage products/services to profitably satisfy customer needs Finance Enable effective resource planning and governance to meet business goals and objectives
  17. 17. 20 Primary Driver behind TBM Nine times in ten, CIOs tell us their biggest reason for adopting TBM is the need to free up resources for innovation.
  18. 18. 21 Support the Business CEO’s Hierarchy of IT Needs Does Not Crash Does Not Embarrass Does Not Cost Much Keeps Business Happy Extends Into New Businesses Creates New Industry Define New Frontier Expand the Business Get Fundamentals Right Increases Revenue Optimize Business Processes Decreases Costs Increases Efficiency CIO’s Innovation Sweet Spot Source: Innovation Strategy & Mandate Workshop Overview, Info~Tech Research Group, Jun 2013 The CIO and Innovation
  19. 19. 22 IMPORTANT Source: “Determining the Right Level of IT Operational Spending”, Gartner EXP, October 2012 How much Money?
  20. 20. 23 Two Major Problems Components and Communication But what if the customer wants…
  21. 21. 24 Transparency Gartner Source: “Key Concepts in IT Financial Management: Funding, Costing, Pricing and Chargeback”, Gartner April 2012
  22. 22. 25 Chargeback or Show-back: Allocation Methods Basic Allocation methods:  Subscription  Allocation  Usage Source: “Key Concepts in IT Financial Management: Funding, Costing, Pricing and Chargeback”, Gartner April 2012 Transparency
  23. 23. 26 Transparency Chargeback or Show-back: Strengths & Weaknesses Source: “Key Concepts in IT Financial Management: Funding, Costing, Pricing and Chargeback”, Gartner April 2012
  24. 24. 27 Transparency Chargeback or Show-back Source: “Make a Smooth Transition to Service Pricing”, Gartner June 2012
  25. 25. 28 Transparency Chargeback or Show-back Source: “The Strategic Road Map for IT Service Optimization”, Gartner November 2012 process-optimizing, and then, service- optimizing
  26. 26. 29 Gartner Source: “The Strategic Road Map for IT Service Optimization”, Gartner November 2012 IT as a Service
  27. 27. 30 Source: “The Strategic Road Map for IT Service Optimization”, Gartner November 2012 IT as a Service
  28. 28. 31 Service Pricing What does internet access cost? Hardware: •Redundant Firewalls •Redundant Routers •Redundant Core Switches •IPS / IDS Hardware •Monitoring (Orion) Servers •Content Filtering Appliances •Content Filtering Report Servers •DNS Servers Software: •Firewall Security Software licensing •Content Filtering Software licensing & Report Services •Orion Monitoring Software licensing •DNS Software (Unix and Wintel) Data Center Facilities Contracts: •Redundant Internet Service Providers: 1.TW Telecom 2.VPLS (this is a fail-over service) •IPS / IDS monitoring Service •Redundant WAN Circuit Contracts •Redundant Firewall Maintenance Contract (HW and SW) •Redundant Routers Maintenance Contract HW and SW) •Redundant Core Switches Maintenance Contract HW and SW) •Content Filtering Maintenance Contract •County ARIN IP and BGP AS Services Depreciation: •Firewalls - Hardware and software Depreciation associated •Routers - Hardware and software Depreciation associated •Core Switches - Hardware and software Depreciation associated •Monitoring - Hardware and software Depreciation associated •Content Filtering - Hardware and software Depreciation associated Other CEOIT Services: •Contracts & Procurement Management •Resource Management •Financial and Cost, Budget Analysis •Billing Processing Labor: •Network Engineering Labor •Security Engineering Labor •Availability Management Analysis •Capacity Management Analysis •Incident Management (Service Desk) •Change Management •Management
  29. 29. 3232 Service Pricing What does internet access cost? Hardware: •Redundant Firewalls •Redundant Routers •Redundant Core Switches •IPS / IDS Hardware •Monitoring (Orion) Servers •Content Filtering Appliances •Content Filtering Report Servers •DNS Servers Software: •Firewall Security Software licensing •Content Filtering Software licensing & Report Services •Orion Monitoring Software licensing •DNS Software (Unix and Wintel) Data Center Facilities Contracts: •Redundant Internet Service Providers: 1.TW Telecom 2.VPLS (this is a fail-over service) •IPS / IDS monitoring Service •Redundant WAN Circuit Contracts •Redundant Firewall Maintenance Contract (HW and SW) •Redundant Routers Maintenance Contract HW and SW) •Redundant Core Switches Maintenance Contract HW and SW) •Content Filtering Maintenance Contract •County ARIN IP and BGP AS Services Depreciation: •Firewalls - Hardware and software Depreciation associated •Routers - Hardware and software Depreciation associated •Core Switches - Hardware and software Depreciation associated •Monitoring - Hardware and software Depreciation associated •Content Filtering - Hardware and software Depreciation associated Other Services: •Contracts & Procurement Management •Resource Management •Financial and Cost, Budget Analysis •Billing Processing Labor: •Network Engineering Labor •Security Engineering Labor •Availability Management Analysis •Capacity Management Analysis •Incident Management (Service Desk) •Change Management •Management
  30. 30. 33 Service Description Service Catalog Internet Service Provider
  31. 31. 34 Service Costing Service Pricing Direct Indirect Service Cost What are some of the types of costs in each “bucket”?
  32. 32. 35 Service Costing eBay example: Digital Service Efficiency http://dse.ebay.com/
  33. 33. 36 IT as a Service eBay example: Digital Service Efficiency http://dse.ebay.com/
  34. 34. 37 TBM Council Status
  35. 35. 38 Questions and Answers

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