TAKING CARE OF ‘THE BUSINESS’             Paul Monks      VIC.NET SIG, January 2013
FROM THE ECONOMYDOWN TO THE ENTERPRISE
“IT’S THE ECONOMY, STUPID”       Population, Participation, ProductivitySource: Clinton Election Campaign 1992; Intergener...
INDUSTRY SECTORSAustralia and NZ Standard Industrial Classification                 SectorA — Agriculture, forestry, fishi...
EVOLVING ECONOMIES     Source: Conditions of Economic Progress, Clark, 1940
A HUGE IMPACT ON (FROM!) MOST OF US         Source: Digital Disruption – Short Fuse, Big Bang, Deloitte, 2012
MANY SOURCES OF ONGOING TURBULENCE                           Political      Environ-                New                   ...
STRUCTURES AND STRATEGIES
THE SAME BASIC STRUCTURE/FUNCTIONS,     REGARDLESS OF SIZE/INDUSTRY                 Source: Competitive Advantage, Porter,...
WITH THE SAME BASIC GROWTH STRATEGIES           Market             New Product         Penetration          Development   ...
AND THE SAME BASIC TACTICS                                      Grow the Market /                                       In...
INFLUENCED BY TYPE OF PURCHASE     Low Involvement,       Low Involvement,       Informational        Transformational    ...
AND DISTRIBUTION CHANNEL EMPLOYED• Business to Consumer (B2C)   –   Producer → Consumer   –   Producer → Retailer → Consum...
AND UNDERPINNED BY FUNDAMENTALLY THE         SAME TECHNOLOGIES          Source: Adapted from Ovum’s ‘IT Reference Model’, ...
MODERN BUSINESSESEMBRACING CHANGE
NO ORGANISATION IS AN ISLAND                  Company                      Value  Collaborators                  Customers...
NEWER VIEWS OF BUSINESS MODELS        Source: Business Model Generation, Osterwalder et al, 2010
BASED ON DIFFERENTIATION        Source: Blue Ocean Strategy, Kim & Mauborgne, 2005
CAPITALISED UPON BY NEW ENTRANTS                   Source: Zynga Business Model Canvas
AND CALLING FOR A HOLISTIC VIEW OF      TECHNOLOGY ALIGNMENTBusiness Architecture             Solution Architecture       ...
THE CHANGING ROLE OFTECHNOLOGISTS
NO TECHNOLOGY IS ‘STRATEGIC ’  “IT did not need to beinvolved in the purchasing         decision”  Source: Drivers of Clou...
REALLY JUST REMOVING COMPETITIVE DISADVANTAGE                                                              Upgraded 2 Year...
DIGITAL STRATEGY –             EVERYTHING OLD IS NEW AGAIN!Umm… invest in                                                 ...
SO WHAT?• A Matter of Perspective  – It’s never been easier for new entrants to scale up  – Incumbents have never been so ...
SO WHAT?• IT is critical for modern businesses, but in a different way  to where the focus has been previously   – Organis...
RECOMMENDED READING•   Positioning: The Battle For Your Mind (1981)•   Getting To Yes (1981)•   What They Don’t Teach You ...
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Taking Care of 'The Business'

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What they don't teach you at Harvard 'Computer Science' School! With the rise of Social Media, Mobility, Digital Marketing, Cloud Services, BYOD, etc!, our business stakeholders are more aware and in tune with technology than ever before – indeed many are even empowered to make technology purchasing decisions themselves. But to effectively deliver the business benefits these technologies promise, we technologists equally need a good understanding of business, and how best to apply new technology in the context of a particular organisation, such that we can all can arrive at the best outcome. This session is in essence a whirlwind MBA, providing the frameworks necessary to better appreciate business from a technologists perspective, and to communicate with business stakeholders more effectively. We’ll look at industry sectors, business models, supply chains, business strategy, market segments, distribution channels – relating this back to how technology underpins each aspect of business, and how major platform pieces and on-prem, cloud, and hybrid architectures are key in enabling modern businesses and strategies.

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Taking Care of 'The Business'

  1. 1. TAKING CARE OF ‘THE BUSINESS’ Paul Monks VIC.NET SIG, January 2013
  2. 2. FROM THE ECONOMYDOWN TO THE ENTERPRISE
  3. 3. “IT’S THE ECONOMY, STUPID” Population, Participation, ProductivitySource: Clinton Election Campaign 1992; Intergenerational Report 2002, Treasury/Ken Henry
  4. 4. INDUSTRY SECTORSAustralia and NZ Standard Industrial Classification SectorA — Agriculture, forestry, fishing and hunting PrimaryB — MiningC — ManufacturingD — Electricity, gas and water supply SecondaryE — ConstructionF — Wholesale tradeG — Retail tradeH — Accommodation, cafes and restaurantsI — Transport and storage TertiaryJ — Communication servicesK — Finance and insuranceL — Property and business servicesM — Government administration and defenceN — Education ‘Quarternary’O — Health and community servicesP — Cultural and recreational services ‘Quinary’Q — Personal and other services Source: 1292.0 ANZSIC 2006, Australian Bureau of Statistics
  5. 5. EVOLVING ECONOMIES Source: Conditions of Economic Progress, Clark, 1940
  6. 6. A HUGE IMPACT ON (FROM!) MOST OF US Source: Digital Disruption – Short Fuse, Big Bang, Deloitte, 2012
  7. 7. MANY SOURCES OF ONGOING TURBULENCE Political Environ- New Entrants Economic mental Existing Supplier Buyer Compet- Power Power ition Legal Substitute Social Products Technology Source: PEST(LE) Analysis, ???; Competitive Forces, Porter, 1979
  8. 8. STRUCTURES AND STRATEGIES
  9. 9. THE SAME BASIC STRUCTURE/FUNCTIONS, REGARDLESS OF SIZE/INDUSTRY Source: Competitive Advantage, Porter, 1985
  10. 10. WITH THE SAME BASIC GROWTH STRATEGIES Market New Product Penetration Development (Existing Product, (New Product, Existing Markets) Existing Market) Market Diversification Development (New Product, (Existing Product, New Market) New Market) Source: Corporate Strategy, Ansoff, 1965
  11. 11. AND THE SAME BASIC TACTICS Grow the Market / Increase Usage Win Competitors Market Penetration Customers Win New Buyers / Improve Productivity Repeat Purchasers Reduce Costs New Product Extend Product Line Outsource Development (Up/Down/Side) OperationsIncrease Sales Convert non-users Redeployment of Capital Reduce Investment Base Market Enter new Innovation, Divestment, development segments Unrelate Diversification Enter new geographies Related Develop new products for new Diversification related markets Source: Adapted from ‘Products and Strategies’, Brownlie, 1985
  12. 12. INFLUENCED BY TYPE OF PURCHASE Low Involvement, Low Involvement, Informational Transformational (Detergent, Fuel, (Snacks, Soft Drinks, Credit Cards, Pet Fast Food, TV Shows, Care, Basic Foods) Computer Games) Low Risk, Low Risk, Self Commodity Expression High Involvement, High Involvement, Informational Transformational (Whitegoods, Loans, (Fashion Clothing, Insurance, Advice, Cars, Motorcycles, Computers, Medical) Cosmetics, Holidays) High Risk, High Risk, Self ‘Commodity’ Expression Source: Marketing Communications, Rossiter et al, 2005
  13. 13. AND DISTRIBUTION CHANNEL EMPLOYED• Business to Consumer (B2C) – Producer → Consumer – Producer → Retailer → Consumer – Producer → Wholesaler → Retailer → Consumer – Producer → Agent → Wholesaler → Retailer → Consumer• Business to Business (B2B) – Producer → Industrial User – Producer → Industrial Distributer → Industrial User – Producer → Agent → Industrial User – Producer → Agent → Industrial Distributor → Industrial User• Services – Service Provider → End User – Service Provider → Agent/Broker → End User – Service Provider → Retailer → End User Source: Strategic Marketing, Reed, 2010
  14. 14. AND UNDERPINNED BY FUNDAMENTALLY THE SAME TECHNOLOGIES Source: Adapted from Ovum’s ‘IT Reference Model’, Ovum, 2012
  15. 15. MODERN BUSINESSESEMBRACING CHANGE
  16. 16. NO ORGANISATION IS AN ISLAND Company Value Collaborators Customers Source: The 5C Extensions to ‘Mind of the Strategist’, Ohmae, 1991
  17. 17. NEWER VIEWS OF BUSINESS MODELS Source: Business Model Generation, Osterwalder et al, 2010
  18. 18. BASED ON DIFFERENTIATION Source: Blue Ocean Strategy, Kim & Mauborgne, 2005
  19. 19. CAPITALISED UPON BY NEW ENTRANTS Source: Zynga Business Model Canvas
  20. 20. AND CALLING FOR A HOLISTIC VIEW OF TECHNOLOGY ALIGNMENTBusiness Architecture Solution Architecture Software Architecture Information Application Data Architecture Architecture Architecture / Interaction / Functional / Domain Design Design Design Security Architecture Infrastructure Architecture Every single piece (in both worlds) needs to be aligned and moving in the right direction! Source: Microsoft Business Architecture, Microsoft, 2006+
  21. 21. THE CHANGING ROLE OFTECHNOLOGISTS
  22. 22. NO TECHNOLOGY IS ‘STRATEGIC ’ “IT did not need to beinvolved in the purchasing decision” Source: Drivers of Cloud Adoption Survey, Host Analytics/Dimensional Research, 2012
  23. 23. REALLY JUST REMOVING COMPETITIVE DISADVANTAGE Upgraded 2 Years Ago 54% Upgraded 3 Years Ago 32% Upgraded 4 Or More Years Ago - 14% Source: Drivers of Cloud Adoption Survey, Host Analytics/Dimensional Research, 2012
  24. 24. DIGITAL STRATEGY – EVERYTHING OLD IS NEW AGAIN!Umm… invest in Err… move allcustomer channels and supporting functionsanalytics/intelligence and systems into the cloud or offshore Source: Digital Disruption – Short Fuse, Big Bang, Deloitte, 2012
  25. 25. SO WHAT?• A Matter of Perspective – It’s never been easier for new entrants to scale up – Incumbents have never been so entrenched in legacy• Custom ‘Commodities’ Hinder, not Help – Bespoke operations are now rarely a competitive advantage – customers tend not to care about nuance. – Most businesses care more about agility than costs.• Differentiation and competitive advantage now tends to be based in connected supply chains and effective market channels – Not ‘traditional IT’ for the ‘back office’ – The internet has only accelerated this trend
  26. 26. SO WHAT?• IT is critical for modern businesses, but in a different way to where the focus has been previously – Organisations will quickly become either ‘Yesterday’s Heroes’, ‘The Survivors’, or ‘The Value Masters’• To not only survive, but to truly create customer value, we must architect systems for engagement and collaboration – With both Partners and Customers – In ‘real-time’ wherever possible – Think Federated Identity, Cloud Service Bus, SaaS back-office apps, etc – If you don’t, guaranteed another organisation will…• You probably know how technology can deliver value better than your boss or ‘the business’ does – Probably just need to express things in a business context – In a software vendor or consultancy, it is double the fun
  27. 27. RECOMMENDED READING• Positioning: The Battle For Your Mind (1981)• Getting To Yes (1981)• What They Don’t Teach You At Harvard Business School (1984)• Influence: The Psychology of Persuasion (1984)• The Fifth Discipline (1990)• Leading Change (1996)• The Innovator’s Dilemma (1997)• The Tipping Point (2000)• Blue Ocean Strategy (2005)• The World Is Flat (2005)• Reinventing Project Management (2007)• Business Model Generation (2010)• Great By Choice (2011)

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