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Jeff's journey to a Digital Business

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Jeff Brightlight (37) is a Divisional CIO at $15B Fictious Ltd. As requested by the Board Jeff and his team embark on a journey towards a Digital Business. They discover the importance of adjusted governance and delivery models, a cross-domain leadership platform, progressed talent development, and a fit-for-purpose IT landscape. For the latter part Jeff has himself updated by his Enterprise Architect Anton d’Entamico on AWS, SAP HEC, SAP S/4HANA 1511, Central Finance (cFin), SAP MDG, and SAP HCP. What's the role of sexy Cindy, assistant to the Board? Will Fictious survive as a business in the Digital arena and, will Jeff win his much-desired CIO of the Year award...?

Published in: Leadership & Management

Jeff's journey to a Digital Business

  1. 1. 11 Jeff’s Journey to a Digital Business www.ensead.com| info@ensead.com | +31 (0) 6 11 76 75 21 Mendel Koerts Director at ENSEAD Advisory V2.1
  2. 2. 2 Disclaimer While every precaution has been taken in the preparation of this deck, ENSEAD Advisory assumes no responsibility for errors or omissions, or for damages resulting from the use of the information contained herein. The opinions expressed herein are subject to change without notice. Trademarks SAP® is a registered trademark of SAP AG, Germany. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. © 2016 – ENSEAD Advisory MENDEL KOERTS is the founder of ENSEAD Advisory and Associate Director with Gartner Consulting. As an Enterprise Architect he has specialized in IT Strategy, Architecture, and Governance, predominantly SAP related. Opinions expressed in this deck are strictly his own.
  3. 3. 3© 2015 – ENSEAD Advisory Jeff C. Brightlight Divisional CIO Fictious Ltd.
  4. 4. © 2015 – ENSEAD Advisory 4 4 – 6 April, 2016 Jeff is still jet-laggy, but one term still resonates in his mind… Digital, Digital, Digital…
  5. 5. IT may not matter, but Digital does. Jeff is convinced of that. Gurus… MNM ‘IT doesn’t matter’, so… (N. Carr, 2003) ‘Business Technology’! Forrester Research et al (2007) But ‘in the Digital world, previously impossible solutions become viable’, (Negroponte, MIT, 1995) And ‘the Digital world needs architecture’… (Rijsenbrij, Radboud University, 2004) 5© 2015 – ENSEAD Advisory
  6. 6. Jeff’s colleague Charlie Longroad presents on disruptive change
  7. 7. The Apple of cars - bought unseen 115,000 times. • 350 km range • Software downloadable • Autopilot
  8. 8. Diageo and Thinfilm Unveil the Connected "Smart Bottle" “You Can't Wait … Your Friends Will Get an Alert Once You Open Their Gifts …” Sources: Diageo and Thinfilm sites, Gartner
  9. 9. The team realizes the Digital Business's first wave is now…
  10. 10. © 2015 – ENSEAD Advisory 10 Welcome to the Digital Wild West, where opportunities come and go quickly, and winning or losing has meaningful consequences for the business.
  11. 11. Jeff’s team at least defines Digital Business and decide on a PoC Digital Core “… creating value at the new frontiers of the business world, creating value in the processes that execute a vision of customer experiences, and building foundational capabilities that support the entire structure, through Digital Technologies…” 11© 2016– ENSEAD Advisory Source: McKinsey Anton d’Entamico as an Enterprise Architect will lead the Digital Core Proof of Concept, based on S/4HANA 1511.
  12. 12. Source: the Guardian ‘Hey Jeff, extra meeting with Bill VanDeBoard. Tomorrow, 7:30 am…’ Some time later…
  13. 13. 13© 2015 – ENSEAD Advisory Over dinner with old colleagues Jeff felt as if they were speaking Babylonian…
  14. 14. “When we at Fictious talk about Information Management, we talk about (big) data stuff…” 14© 2016 – ENSEAD Advisory
  15. 15. 16© 2015 – ENSEAD Advisory “High volume, velocity and/or variety of information assets that demand new, innovative forms of processing for enhanced decision making, business insights or process optimization.”
  16. 16. Jeff explains how the Fictious strategic planning cycle drives the Portfolio The IT Program & Project Portfolio at Fictious is maintained: • By annual top-down strategic planning to (re-)align with business strategy, and • By adding bottom-up input coming from the operational level 17© 2016 – ENSEAD Advisory Strategy Execution Planning
  17. 17. 18© 2015 – ENSEAD Advisory Good morning Seff! I assume you have seen today’s newspaper…? Source: the Guardian
  18. 18. 19© 2015 – ENSEAD Advisory Thursday, 7 April, 2016
  19. 19. 20© 2015 – ENSEAD Advisory And you Seff, you need to come up with our Digital Business Model next week. Capice? Source: the Guardian
  20. 20. Anton d’Entamico, Enterprise Architect “Talk to SAP…” Charly Longroad IT Strategist “Remember Xavier?” Patricia Portillo IT Portfolio Manager “Scaled Agile!” Jeff consults his team, the Office of the CIO © 2016 – ENSEAD Advisory
  21. 21. 22© 2015 – ENSEAD Advisory Hazzo Plettau Account Executive “We have a superduper Z-SIMPLE solution for you but first upgrade Z/390 to T/5!” © 2016 – ENSEAD Advisory
  22. 22. 23© 2016 – ENSEAD Advisory …???... ANTON!! After that meeting, Jeff was caught staring out the window for hours, rumor says.
  23. 23. Overall Project Status ‘PoC Digital Core” • Project Summary – Project progressing as per the plan – Well-balanced mix of internal and external resources – Relevant findings for strategizing the Digital Core • Track Cloud alternatives – Both Public and Private Cloud alternatives • Track Central Finance – Suite on HANA (SoH) with Simple Finance (sFin) 2.0 stable – Final Sprint completed • Track Sourcing & Procurement (S2P) – S/4HANA 1511 with embedded SRM installed. Buggy – Burndown rate better than expected • Issues – S/4HANA documentation says there’s no HCM anymore in 1511. When checking the system it actually is. Another PoC required e.g. for SFSF? Overall Project Status: Project Confidence: Project Status Project Timeline Sprint Sprint Sprint SprintSprint Sprint Sprint Sprint Kick off PoC Cloud alternatives Central Finance PoC PoC Sourcing & Procurement 24© 2016 – ENSEAD Advisory
  24. 24. Activities Performed Track Status Cloud – Private cloud provider selected - SAP HANA Enterprise Cloud (HEC), Platform-as-a-Service (PaaS) – Public cloud provider selected - Amazon AWS. Infrastructure-as-aServ ice (IaaS) – Installation of 3 SAP HEC-based instances completed: • Suite on HANA (ECC6.07), • sFin2.0 add-on • NW GW w/ Fiori Front-End Server 2.0 • Series of financial Fiori apps • SLT, DMIS, AIF3.0 – Amazon AWS-based installation completed (1 instance), sized at 50% of HEC • S/4HANA 1511 SP1 • Embedded NW GW w/ Fiori Front-End Server 2.0 – SAP HEC connected via VPN, AWS is not Activities Planned – Feed results back into Digital Core Strategy Findings – SAP HEC took 2,5 months to complete versus 2 weeks for Amazon – Installation costs differ a factor 10 – Run cost differ a factor 10-15 – HANA database on AWS crashed after SP1 import – Securing the connections time-consuming Track Status: Track Confidence: 25© 2016 – ENSEAD Advisory PoC Digital Core
  25. 25. Activities Performed Track Status cFin – SAP HEC based Suite on Hana connected to internal ERP source system via SLT – Basic configuration of Finance done – Decided not to use MDG for master data mapping – Mapping tables maintained for financial master data – Installed missing components DMIS and AIF – Real-time replication triggered by new posting gotten to work – Working on issues with intitial load, which does not go via SLT Activities Planned – Feed results back into Digital Core Strategy – Update ERP Roadmap accordingly Findings – Customization of S/4HANA is business as usual, no suprises – Central Finance functionality not stable – Getting Fiori apps to work requires special expertise – Fiori apps for Finance mostly working okay Track Status: Track Confidence: 26© 2016 – ENSEAD Advisory PoC Digital Core
  26. 26. Activities Performed Track Status S2P – Basic configuration of Finance done – Basic configuration of HCM PA and OM done – Master Data created – Configured entire Procure to Pay process in 3 weeks – Connection to external catalogue established – Working on issues with the Fiori apps – System restored because of compatibility issues with notes Activities Planned – Feed results back into Digital Core Strategy – Update ERP Roadmap accordingly – Decide on joining S/4HANA customer care program Findings – Back-end integration of SRM into S/4HANA was done reasonably successful by SAP – Entire software components appear missing (MM_PUR_REQ) – Interaction between front-end and back-end very buggy, 1511 SP2 will contain ~5000 notes – S/4HANA Analytics best suited for reporting on data in S/4HANA database, but can’t replace the Corporate Data Warehouse Track Status: Track Confidence: 27© 2016 – ENSEAD Advisory PoC Digital Core
  27. 27. Watermanagement IoT voorbeeld © 2015 – ENSEAD Advisory 28 Anton also went to a cool session on Digital Water Management http://www.slideshare.net/tbroek/saphcp-iot-for-watermanagement
  28. 28. Patricia, can we do our meeting via Skype? © 2016 – ENSEAD Advisory
  29. 29. • Often costs more than expected • Often takes longer than expected • Often differs from what was expected Delivering Enterprise Applications has its known challenges… Patricia Portillo © 2016 – ENSEAD Advisory
  30. 30. • Freeze budgets • Freeze timelines …and focus on a working product. • Freeze quality Which is why we… Patricia Portillo © 2016 – ENSEAD Advisory
  31. 31. Agile projects only form one part of responsive IT organisations… 32 • Fights with Support & Operation teams over resources, especially scarce ones • Fights with business over project priorities and time-to-market for changes or fixes …which is why Fictious is to scale up Agile! • Fights with Support & Operations teams over locked objects and transports © 2016 – ENSEAD Advisory
  32. 32. PortfolioProgramAgileteam Jeff feels Scaled Agile may work for Enterprise Applications. How about Digital?
  33. 33. ‘And uhm, Jeff, what exactly is a (digital) business model? I got confused,’ Patricia asks http://www.slideshare.net/Scheelh/value-based-management-presentation-at-sapphire-2010 ?? Business Model as per Value Based Management, von Rosing et al. © 2016 – ENSEAD Advisory
  34. 34. Jeff explains his learnings from a recent course on (digital) business models A business model can be broken down into the following elements: • A customer value proposition that fulfils an important job for the customer in a better way than anything competitors offer; • A profit formula that lays out how the company makes money delivering the value proposition, and; • The key resources and key processes needed to deliver that proposition. 35© 2016 – ENSEAD Advisory https://hbr.org/product/reinventing-your-business-model/an/R0812C-PDF-ENG http://www.businessmodelgeneration.com/canvas
  35. 35. Jeff leaves him a voicemail As per Anton’s suggestion Jeff called Xavier, who runs an Advisory company © 2016 – ENSEAD Advisory
  36. 36. Hi Jeff - You must be aware that Digital Business is really the ultimate Business IT alignment effort. Be sure the “speed of change” is reflected in your IT Architecture just as well as in your IT Governance Model. Let us set up a videoconference to discuss further. info@ensead.com Re: Digital @ Fictious Jeff soon receives a mail from Xavier and reads it on his way to his monthly IT department briefing. © 2016 – ENSEAD Advisory
  37. 37. ‘I wanted to work with Fictious because I have some marvellous ideas on new Digital offerings. It mixes 3D, IoT, all from the cloud. Now, where will I fit in the creation of a Digital Business Model for Fictious??’– question asked during IT department briefing. 38 Well, Jeff…? © 2016 – ENSEAD Advisory
  38. 38. Then, Jeff realizes good ideas are not bound to strategic planning cycles… 39© 2016 – ENSEAD Advisory Empower people to act.
  39. 39. Jeff realizes the Fictious strategic planning cycle misses an essential step The IT Program & Project Portfolio at Fictious will now be maintained: • By annual top-down strategic planning to re-align with business strategy • Bottom-up input that comes from the operational level, and • From the middle-in to explore market developments 40© 2016 – ENSEAD Advisory Strategy Execution Planning Oops, almost late for his videoconference with Xavier!
  40. 40. 1. How well do you know where change is occurring? 2. Do you know which customer journeys matter? 3. Are your teams collaborating across functions? 4. Do you have a disciplined ‘test and learn’ approach? 5. Are your budgets tied to progress? 6. Do you have mechanisms to challenge ideas? 7. Are your people empowered to act? 8. Is your IT operating at two speeds? 9. Are you coordinating a portfolio of initiatives? Source: McKinsey Anton Jeff Patricia Xavier
  41. 41. 42 Xavier suggests to shift to ‘platform thinking.’ Source: Gartner
  42. 42. With Bill’s question in mind, the first focus is on the Business and Leadership Platform Source: Gartner Leadership Platform: • Leadership as a team sport • Influence over control • A culture of leadership • Ecosystem leadership Business/value platform: • Platform business models • Two-sided business models • Open business models
  43. 43. Based on his session with Xavier, Jeff presents his thoughts to the Board 44© 2015 – ENSEAD Advisory Jeff suggests the Board is to empower a Leadership Platform for Digital Business.
  44. 44. 45© 2015 – ENSEAD Advisory Cool, finally we can play a bit! So currently you feel you are on your own out there… but with like ten mates it becomes a platform. Interesting… GO AHEAD JEFF! Let me in, let me in!! Source: the Guardian
  45. 45. The Leadership Platform conducts creative design workshops to think up Digital offerings 46© 2016 – ENSEAD Advisory Many creative ideas were thought up... Source: GroupMapping
  46. 46. Shaving foam just-in-time, in collaboration with market challenger… 47© 2015 – ENSEAD Advisory
  47. 47. “Fictious will improve brand loyalty and reduce supply chain costs by on-line publication of 3D scans in the form of .stl files for 3D printing, accompanied by guidelines for filaments and printer types. Also a moderated community will be created to share tips and tricks. A partnership with 3Dhubs.com will be forged to train and certify 3D printshops.” 48© 2015 – ENSEAD Advisory 3D parts
  48. 48. 49© 2015 – ENSEAD AdvisoryCommunity solar power with battery replacement
  49. 49. Jeff realized that in order to act swiftly, a series of delivery issues need to be tackled Source: Gartner Current delivery issues: • Time to market too long • No means to experiment • Releases resulted in down-time • Business priority changes are noted too late, requirements misunderstood • Strategic planning and budgeting cycles address yesterday’s world • Innovative technologies are not reviewed for business potential Xavier suggests these measures: • Two-speed capability to explore and exploit • Fast-track to allow dynamic refactoring that hardens and scales • Fast-track experiments with smaller vendors
  50. 50. ‘Two-speed IT’, Xavier says, ‘is one crucial delivery concept to avoid chaos.’ Safe-track Fast-track Reliability Goal Agility Price for Performance Value Revenue, Brand, Customer Experience Waterfall, V-Model, High-Ceremony IID Approach Agile, Kanban, Low- Ceremony IID Plan-Driven, Approval-Based Governance Empirical, Continuous, Process-Based Enterprise Suppliers, Long-Term Deals Sourcing Small, New Vendors, Short-Term Deals Good at Conventional Process, Projects Talent Good at New and Uncertain Projects IT-Centric, Removed From Customer Culture Business-Centric, Close to Customer Long (Months) Cycle Times Short (Days, Weeks) Sprinter Marathon runner IID = iterative and incremental development Based on Gartner
  51. 51. Jeff calls Anton: ‘Enterprise Architecture to ensure consistency of the two speeds! Safe-track architecture Fast-track architecture Based on McKinsey and Gartner Experiment and fail faster Robust and reliable service Daily or weekly releases Quarterly releases Allows for instant creation and deployment of applications across channels, promotes auto scalability Ensures the ability to upgrade applications with zero down-time, harnesses automation so some processes can be scaled up Release management Agile prototyping Enterprise Architecture has to ensure consistency of two speeds
  52. 52. Jeff concludes that this again influences his portfolio planning process… Safe-track + Fast-track = 53© 2016 – ENSEAD Advisory Top-down Bottom-up Strategy Execution Planning Strategy Execution Planning Two-speed IT Based on Gartner Strategy Execution Top-down Bottom-up
  53. 53. ‘And all this has consequences for your people’, Xavier continues his story Source: Gartner Xavier elaborates on the HR impact: • Continual talent innovation • Drawing digital talent from beyond IT and even enterprise borders • Experimenting with more dynamic, opt- in structures and cultures • Viewing vendors as digital inhibitors / accelerators
  54. 54. Jeff informs HR about the skill set that needs to be developed over the next year 55© 2016 – ENSEAD Advisory
  55. 55. And he Yammers: ‘Where do you fit in the creation of our Digital Business Model?’ • As an IT leader, you could fit in the cross-functional Digital leadership platform to work on new business models, fed by bottom- up input from newly hired talent • As an IT manager, you ought to drive implementation of advanced delivery mechanisms and build a two-speed IT architecture • As an IT professional you will understand our strategic context and feed your ideas to the Digital leadership platform • As an IT Architect you will flesh out the constructs of Digital Business in the context of your area of focus, like IT Security 56© 2016 – ENSEAD Advisory Based on Gartner Inspired by the question asked during the IT department briefing, Jeff writes:
  56. 56. ‘Gladly, we’re already looking into technology issues’, Jeff informs Xavier. Source: Gartner Jeff’s already exploring: • Highly modular, open information and technology architectures • Postmodern ERP / Digital Core • Cloud / XaaS Current technology issues: • On-premise Enterprise Applications running out of maintenance • Most are tightly integrated • Data is duplicated across applications • Security breaches were reported lately • Connectivity and bandwidth issues • Mobile devices not managed properly • BI is synonym to reporting • Outdated storage technology • Many complaints about user experience
  57. 57. ‘Hey Jeff… Just overheard some incredible news…!!!’ Source: the Guardian FIRED!!
  58. 58. Digital is Big Business JEFF BRIGHTLIGHT CIO of the YEAR 2016 2016 Source: CIODAY.nl
  59. 59. 60© 2015 – ENSEAD Advisory My journey to a Digital Business CIODAY presentation by Jeff C. Brightlight Chief Digital Officer @ FictiousDigital Ltd.
  60. 60. Jeff begins with explaining how the journey towards a Digital Business started … • Challenged and learned from exemplary disruptive Business Models • Arrived at a definition as of how Fictious would see Digital Business • Had the Board call for Digital offerings • Created a Digital Leadership Platform • Conducted creative design workshops and invited unusual suspects to join, like a psychologist and an artist • Assessed Digital-readiness and actioned accordingly 61© 2016 – ENSEAD Advisory In short, he elaborates on how FictiousDigital:
  61. 61. …and how he has been driving the internal Digital Business Transformation… • Vulnerability of current business model • Preparedness of all the Leadership • IT talent acquisition and talent development approach • Agility of IT delivery mechanisms and governance constructs, and • The current state of our information and technology architecture 62© 2016 – ENSEAD Advisory Jeff explains how the transformational journey of FictiousDigital started by assessing how Digitally-ready we were, like
  62. 62. … by introducing and incrementally perfecting ‘platform thinking’ across the board • Trained all IT staff in Digital • Implemented a revised Planning and Portfolio Management process • Moved to two-speed IT, with Enterprise Architects responsible for coordinating • Scaled up Agile • Strategized the Digital Core and HCP • Started to work with vendors as digital inhibitors / accelerators • Empowered all employees to blow the whistle on Digital 63© 2016 – ENSEAD Advisory Some of the actions in IT … ‘In the Digital world, previously impossible solutions become viable’ (Negroponte, 1995)
  63. 63. www.ensead.com| info@ensead.com | +31 (0) 6 11 76 75 21 Empower your employees to blow the whistle on Digital. Get yours, send a mail to info@ensead.com
  64. 64. Want to read more? © 2016 – ENSEAD Advisory 65 • Key take-aways SAP TechEd 2015 • https://www.linkedin.com/pulse/key-take- aways-sap-teched-2015-mendel-koerts • 9 must-knows before implementing SAP Simple Finance. Uhm... now S/4HANA Finance... • https://www.linkedin.com/pulse/9-must- knows-before-implementing-sap-simple- finance-sfin-koerts • Agile SAP - contradiction in terms? • https://www.linkedin.com/pulse/agile-sap- contradiction-terms-mendel-koerts
  65. 65. 66 QUESTIONS TO JEFF? www.ensead.com| info@ensead.com | +31 (0) 6 11 76 75 21

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