http://www.gartner.com/newsroom/id/1897514Gartner Executive Programs' Worldwide Survey of More Than 2,300 CIOs Shows Flat IT Budgets in 2012, but IT Organizations Must Deliver on Multiple PrioritiesSurvey Shows CIOs are Using Technology to "Amplify" the Enterprise IT organizations will have to deliver on multiple priorities without an increase in their IT budget, as CIO IT budgets are expected to be flat, increasing just 0.5 percent, with declining IT budgets in North America and Europe, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs. The worldwide CIO survey was conducted in the fourth quarter of 2011, and it included 2,335 CIOs, representing more than $321 billion in CIO IT budgets and covering 37 industries in 45 countries. The Gartner Executive Programs report, "Amplifying the Enterprise: The 2012 CIO Agenda" represents the world's most comprehensive examination of business priorities and CIO strategies."Technology's role in the enterprise is increasing. This does not mean, however, that the role of the IT organization is increasing," said Mark McDonald, group vice president for Gartner Executive Programs and Gartner Fellow. "CIOs concentrating on IT as a force of operational automation, integration and control are losing ground to executives who see technology as a business amplifier and source of innovation. Effective leaders use technology, which includes IT, to strengthen the customer experience and eliminate costly internal distortions. They are using technology to 'amplify' the enterprise.""In the face of continued economic uncertainty and government austerity, business strategies call for a combination of growth and operational efficiency. As reflected in the 2012 CIO Agenda survey findings, effective leaders see customers as the key factor in both of these strategic components, with the customer experience their focal point in reconciling potentially conflicting goals," Mr. McDonald said. "Present economic conditions may tempt CIOs to force IT back into cost-cutting mode, but senior executives expect technology — and this includes IT — to address the tough challenges by amplifying enterprise strategies and operations."CIO's increasingly see technologies such as analytics/business intelligence, mobility, cloud and social in combination rather than isolation to address business priorities. Changing the customer experience requires changing the way the company interacts externally rather than operates internally.Analytics/business intelligence was the top-ranked technology for 2012 (see Table 1) as CIOs are combining analytics with other technologies to create new capabilities. For example, analytics plus supply chain for process management and improvement, analytics plus mobility for field sales and operations, and analytics plus social for customer engagement and acquisition.Table 1Top 10 CIO Business and Technology Priorities in 2012Top 10 Business PrioritiesRankingTop 10 Technology PrioritiesRankingIncreasing enterprise growth1Analytics and business intelligence1Attracting and retaining new customers2Mobile technologies2Reducing enterprise costs3Cloud computing (SaaS, IaaS, PaaS)3Creating new products and services (innovation)4Collaboration technologies (workflow)4Delivering operational results5Virtualization5Improving efficiency6Legacy Modernization6Improving profitability (margins)7IT Management7Attracting and retaining the workforce8CRM8Improving marketing and sales effectiveness9ERP Applications9Expanding into new markets and geographies10Security10Source: Gartner Executive Programs (January 2012)Sixty-one percent of enterprises responding to the survey say they will be improving their mobile capability over the next three years. The majority have a mobility strategy that calls for becoming a market leader in their industry — so there will be significant competition as everyone seeks to be "above average" in its industry.Overall, CIOs rank growth as their top priority — despite tough economic conditions and future uncertainties. They are particularly attentive to attracting and retaining customers and to creating products and services.Meeting business expectations for increased growth, reduced cost or a transformed customer experience normally involves a significant increase in IT resources. Forty-six percent of CIOs reported that their CIO IT budget would increase from 2011 to 2012 in terms of actual spending. The average firm in this year's survey will see a modest budget increase of between 2 and 3 percent.On a global weighted average basis, CIO IT budgets are anticipated to be essentially flat for 2012. These investments are strongest among enterprises in Latin America (with a 12.7 percent IT budget increase) and the Asia/Pacific region (with a 3.4 percent increase), while investments are weakest among the largest enterprises in North America (decreasing 0.6 percent) and Europe (down 0.7 percent). Larger organizations, those with IT budgets more than $500 million, have continued to cut their IT expenditures, offsetting modest growth in the rest of the survey population."The 2012 Gartner CIO Agenda survey results show that CIOs believe that the customer experience is the greatest opportunity for IT-enabled innovation," said Dave Aron, vice president and Gartner Fellow. "As business executives see the potential of technology to transform customer channels and the customer experience, their view of technology has leapfrogged conventional ideas of IT."Technology is playing an increasing role in enterprise growth, innovation and operational performance while technology's definition now incorporates new combinations of traditional IT systems, consumer devices and their respective services."Applying technology as part of amplifying the enterprise reflects both the changing nature of business strategies, and executive expectations about the role of technology in realizing those strategies. Amplifying products, services and operations requires an enterprise to strengthen the customer experience and send clearer market signals," Mr. McDonald said. "Mobility, social media, information and analytics can be used to re-imagine the customer experience, as well as sales and service channels. These technologies do more than automate or administer processes; they are the processes and the sources of value."About Gartner Executive ProgramsMore than 4,000 CIOs and senior IT executives are members of Gartner Executive Programs, an exclusive organization combining the shared intelligence of the largest IT executive community in the world with customized access to Gartner insight and resources. Executive Programs help IT executives and their teams grow their enterprises, fuel competitive advantage and operate more efficiently. Additional information about Gartner Executive Programs can be found on Gartner's website at www.gartner.com/exp.Gartner CIO Leadership ForumsMark McDonald will provide additional insight into the role of the CIO at the Gartner CIO Leadership Forums taking place March 5-7 in London and March 25-27 in Scottsdale, Arizona. Gartner CIO Leadership Forums offer an interactive, workshop-centric experience to exchange ideas and receive actionable guidance from prominent CIOs. Gartner experts and senior executives from leading technology providers. For more information on the London Forum, please visit http://www.gartner.com/technology/summits/emea/cio-forum/index.jsp. For more information on the Scottsdale Forum, please visithttp://www.gartner.com/technology/summits/na/cio/index.jsp.
The legacy modernization ecosystem is growing. Many hardware, software, and service providers see an opportunity to provide value in this market.
Leonard Munyua, CIO at Simba Corporation - Legacy modernisation and adequate ERP implementation
Leonard Munyua CIO – Simba CorporationLegacy modernisation and adequate ERP Implementation
Agenda• Simba Corp• Legacy Modernisation• ERP Implementation – The Simba Story
Who we are • Simba Corporation, is a major player in Kenya’s motor industry, has for over four decades been known for sales, spares and service of Mitsubishi and Fuso brands under Simba Colt Motors. • It also represents the BMW brand in East Africa under the Bavaria Auto Ltd. and the Mahindra brand under the Xylon Motors Ltd. • The company also offers leasing solutions, vehicle rental solutions (under Simba Vehicle Rental Ltd., the sole Avis Rent-a-Car franchise holder in E.A) and innovative fleet management solutions (under Africa Fleet Management Solutions Ltd.) • The corporation has also diversified into the hospitality and real estate sectors inter alia.aaa
Legacy Modernisation• Why?• Fact: – Most organizations with mainframe-based systems spend about 75 percent of their development resources simply to maintain existing applications, which leaves only 25 percent of their development resources for innovation. Effecting a 25-percent reduction in maintenance costs means that investment in innovation will be doubled.
Legacy Modernisation - The CIO’s Dilemma• As Mike Gilbert describes it―The CIOs Dilemma, the challenge is in achieving the right balance between managing the short-term issues of cost and complexity while at the same time investing in the future. Which legacy systems should be replaced and which should be extended? How do we get the right balance between cost pressures and strategic business needs?
Source: Gartner Executive Programs (January 2012) Gartner Executive Programs Worldwide Survey - 2012 Top 10 Business Priorities Ranking Top 10 Technology Priorities Ranking Increasing enterprise growth 1 Analytics and business intelligence 1 Attracting and retaining new customers 2 Mobile technologies 2 Reducing enterprise costs 3 Cloud computing (SaaS, IaaS, PaaS) 3 Creating new products and services (innovation) 4 Collaboration technologies (workflow) 4 Delivering operational results 5 Virtualization 5 Improving efficiency 6 Legacy Modernization 6 Improving profitability (margins) 7 IT Management 7 Attracting and retaining the workforce 8 CRM 8 Improving marketing and sales effectiveness 9 ERP Applications 9 Expanding into new markets and geographies 10 Security 10
Key choices• The key choices in legacy modernization are: – Application extension – Migration – Redevelopment – Replacement• Fundamentally, business has four choices when considering application modernization: – Ability of the application to meet current and (-) future business needs – Ability of the application to offer a business differential – Total cost of ownership of the application.
Modernisation strategy framework• Even though there is the option to ―Do Nothing,‖ invariably this option only delays a project because the pressure to modernize builds over time. Most often the choice is between:• Application migration—run existing applications on a lower-cost platform.• Application replacement—substitute an off-the-shelf package for existing functionality.• Application redevelopment—redevelop applications that offer high business value but that cannot be extended easily to meet new business needs.
Modernization Roadmap (Strategy)• The above strategies can be applied to each application or even to application components.• Legacy modernization is not a one-size-fits-all strategy. It is quite possible to employ one strategy or a combination of strategies. There are essentially three steps in determining the right approach for your organization and application portfolio:• Application portfolio analysis• Partner selection and validation• Implementation
Application Portfolio Analysis, Assessment, and Discovery• This initial phase is perhaps the most important, and spending time in this early phase can save much time later on.• It is important to understand the value of existing assets to the business, the need for strategic investment, and the current total cost of ownership of the system before a clear strategy can be envisioned. Without clear direction at this phase, a modernization strategy may founder.
Assessment• A key part of the application portfolio analysis is the process of mainframe portfolio assessment.• This process builds a picture of the data, applications, and operational flow on the mainframe that can be used to determine modernization candidates.
The Discovery Process• The discovery process is designed to assess findings and to perform a detailed analysis of one or more mainframe applications identified during the assessment as candidates for extension, migration, replacement, or redevelopment.• Many of the major systems integrators have established practices to help you perform this analysis. In addition, many smaller organizations have a specialist focus in this area.• Evaluating what’s right for your application portfolio is the starting point for your legacy modernization road map.
Partner Selection and Validation• When selecting a partner solution provider, consider the size and resource focus of the organization you are considering. That is not to say that the biggest is necessarily best.• What is crucial is proven success. Choose a partner that has already achieved success for an organization similar to yours.
Implementation• Develop a joint plan that puts you, and not the partner, in control.• Create milestones and proof points that let you evaluate early on whether you are on the right track.• Ensure that the individuals assigned to manage the project have the appropriate experience. Outline clear criteria and timing for a ―go‖ or "no go‖ decision.
The Simba Story• 5 businesses running different applications• 1 goal – to consolidate all operations• Quite typically, developed a diverse computer environment over many years. Custom business applications ran different platforms. The company supported 5 major applications each with its database.• We needed to reduce complexity in order to reduce operational costs—the redundant costs of maintaining so many environments.• The diversification business strategy
The Simba Story• Our Modernisation Strategy = – application replacement & application integration• Some of the businesses required a total replacement due to the operational limitations the legacy applications had.• Some of the businesses still had some areas where some of the legacy systems were performing as expected.
ERP Implementation• Business Solution Mapping• Evaluated ERP solutions from two vendors for one year• Each had it’s own demo program with the individual business units on the offerings of the ERP• We then did an evaluation Matrix across all the business lines and units and scored each accordingly.• Obtained references from the Principles for their partners
Conclusion• Organizations today understand that if they are not evolving to more modern infrastructures they are falling behind. A legacy modernization strategy is crucial for maximizing the value of your existing investment in applications, reducing the total cost of ownership of those applications, and developing the agility to bring IT investments into alignment with business imperatives.• Legacy modernization provides many choices and can take several forms, including application integration, application replacement, application migration, and application redevelopment.• Finally, selecting the right platform and the right partner solution provider are crucial to a successful outcome.
What do we want the business to feel on the business applications
Technology in support of Re-alignment• CIO’s unique position within the company allows them to understand the company values and business drivers hence anticipate and respond to its requirements. It is with this in mind that they should strive to rapidly exploit innovative technologies to make their customers and their clients working lives easier and more efficient.