A Business Leader’s Discussion of Technology
Using Technology to Transform Business
Giving you the ability to compete and win
September 16, 2010
What is Your Comfort Level with Technology?
When you think about technology, which picture best describes your feelings?
1 2 3
Drowning Treading Water Surfing
• Social Media Class Objectives
• Cloud Computing
• Business Intelligence
As a business leader, this will:
• Software as a Service
• Highlight areas you need to be thinking about
• Voice over IP
• Improve the quality of your conversations
• Help you make better decisions.
• Sourcing Options
• Open Systems
This is a high level / top down discussion
• It could lead to 1,000 sub-topics and hours of conversation.
• It is meant to whet your appetite, not quench your thirst.
The way we think about technology is changing
1969 Today Difference
Today there is more
computing power in an
I-Phone then there was in
the Apollo 11 space ship.
An item purchased in
1969 for $250, would
cost $1,486.23 in 2010
based on consumer price
index. An inflation of
In 1969 Data Processing
security consisted of
concrete block buildings
and steel gates. Security
is much more complex
Improvements in capacity, capability, quality, speed, and convenience
Albums and 45’s 8 Tracks
Transistor Radios Smaller Radios
Radio, video and the
16GB will store about
Advances in Healthcare
The devices being introduced into the
healthcare industry are truly amazing, but the
storage and management of data is still in
the dark ages.
Regulations have been passed (e.g. ARRA,
HITECH) that will influence the evolution of
the healthcare technology industry.
1) Business Focus
Factors that influences a company’s success or failure
Business Focus Priorities and Concerns
Right Products Motivated and Dedicated Superior Customer Financial Stability
and Services Employees Experience / ROI
Public Image and
Sales & Marketing
Risk Management &
Technology is an enabler
supporting all aspects of business
Business Focus Which companies effectively use technology?
Business Focus Technology as a People Enabler
Agility and the Ability Are your greatest Providing the
Technology Mission, vision, Customer
to compete and win asset and they
Provides the tools strategy, plan, and Centric
need to be
that enables your principles. Focus
Right Products “Engaged” and
and Services people. “Enabled”.
Your biggest challenge is acquiring, motivating, retaining, and enabling the right people.
• Technology improves productivity and allows you to do more with less
• Technology provides standards and quality
• Technology handles mundane activities that improves job satisfaction
• Employees want to work with the latest tools that increases their expertise and skills.
Business Focus Technology as a Product or Service
Epic Corporate Battles
Word Processing Personal Computers
Instant Photography Movie Delivery
Vs. Vs. Vs.
Full Function Phones Electronic Books
Business Focus Technology as a Product or Service
The Creative Destruction Process
Causes for Divergence
Commodity Trends………………e.g. – I-Phone4
Government Regulations……….e.g. – Banking Reform Package
Business Trends…………………e.g. – Management Structure (e.g. centralized vs. de-centralized)
New Standards………………….e.g. - Ethernet, TCP/IP, FDDI, Broadband, 2G, 3G, 4G
Technology Advances………….e.g. - (Records, 8-Track, Cassette, MP4, CD, IPOD), Digital Photography
Business Focus The gears of business and the impact of IT
In significant need of repair Running at optimal performance
Business Focus Evolving or Regressing
Downward Spiral Upward Spiral
1) Technology 2) Company lacks
1) Technology 2) Company integrates
and competition vision and plan for
and competition strategy and planning
keep advancing. evolving systems.
keep advancing. into ongoing
6) IT costs
continue to 3) Projects 6) IT costs
increase, are formed are reduced 3) Projects
leaving less to address leaving more are formed
money for business money to to address
modernization short term further grow immediate
and other focus. and simplify and long
needs. your systems. range goals.
5) Systems age 4) Solutions have
and become limited shelf life 5) Systems provide 4) Implemented
more complex and build upon greater business solutions satisfy
with greater older concepts value and agility with business needs
redundancy. and reduced complexity while evolving
technologies. and redundancy. systems in a
Business Focus Striving for Optimal Performance
Measuring “Optimal Performance”
• Business Value – Does it meet business needs
• Efficiency – Work performed relative to cost
• Quality – Up time and number/severity of defects
• Risk – Impact if certain events occur
• Flexibility / responsiveness – Ease of change
Business Focus Business Value
companies in Both allocate But they get
the same the same dramatically
industry of percent of the different
similar size corporate business value.
and annual Company B budget to Why and what is
revenue. technology. the impact?
Business Focus Section Recap
America has been able to compete on a global scale because of her people, ingenuity
How well are you served by your current technology?
Are you prepared to compete on a global scale?
Have you done things during the downturn that will allow you to prosper in the future?
What obstacles have been in your way?
Current State of Technology Entering a new era
Eras of IT Development
1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s
Centralized with a limited Distributed with
number of components thousands of intelligent
People using computers
to handle routine Computers communicating
processes with computers with people
Current State of Technology Building Blocks of Evolution
Eras of IT Development Sensors
1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s
Each era builds on advances
from the previous era.
(with smart chips)
Advances in Advances in
Data Management Business Intelligence
Advances in Advances in
Telecommunications Messaging – (ESB
(Fiber, Wireless, 3G/4G, hardware and software,
SIP (VoIP)) Unified Communications)
Current State of Technology Proliferating older concepts
Antiquated architectural concepts and technologies
systems are a lot like
If you put $2,000 worth of repairs into a $600 car, you still have a $600 car.
If you make an expensive upgrade, at some point you will have to convert to a new car and it may not be
compatible. System conversions are very expensive and introduce risk.
Disclaimer – If you’re not planning on being in business in a couple of years, you can disregard this slide.
Current State of Technology Looking Forward
• System of Systems – Technology will be viewed as systems consisting of
interconnected systems. This will result in a massive increase in interconnections
• Data Tsunami – Massive growth of data (projected at nearly 50% per year, a
significant % in Healthcare).
• Business Intelligence - More data and more automation needs greater advances in
how to interpret the data.
• Business Process Management - More emphasis is needed on adapting technology to
the business (business process workflow management).
• Customer expectations – Customers demand for accuracy will increase while
tolerance will decrease.
• Virtual Workplace - advances make it easier to work anywhere (increasing flexibility &
reducing office expenses).
• Increased Telecom Traffic – High Resolution capabilities will continue to tax already
• Government Regulation - Errors will occur and some will be blown out of proportion,
This will result in government’s desire for increased regulation.
Current State of Technology Section Recap
If technology is like a fast moving train, when do you get on?
Doing nothing is more expensive than doing the wrong thing.
The best time to act was 5 years ago. The next best time is now.
3. Internal View
Things you need to know to improve success
Technology and your business Business Acumen
SIZE / COMPLEXITY IMPORTANCE OF TECHNOLOGY
business (e.g. ERP)
Basic desktop Technology runs the
packages will do business
No need The business is
for technology technology (RIM)
QUESTIONS TO ASK
What type of business is it? (e.g. Service,
Distribution, Communication, Manufacturing)
What is your company’s mission, and objectives?
How is your competition using technology?
Technology and your business Capabilities by business function
General Business Solutions
Marketing Sales Document Archival
• Desktop Publishing • Customer Relationship Mgmt
• Social Media SEO • Enterprise Content Mgmt (EZ
(ACT, MS CRM, Salesforce,
• Business Intelligence Publish, Durpal, Joomla)
• Blog, Tweet • Microsoft SharePoint
• Email Marketing (Constant
• Websites (Dreamhost, GoDaddy) Contact)
Human Resources Customer Service Workplace Automation
• Application Tracking • Interactive Web-sites • Go to Meeting
• Online Training • VRUs • Dimdim
• Intranet sites • CRM
• Document Mgmt • Customer Interaction Tracking
Business Systems Analytics Mobile Devices
• ERP Options (SAP Oracle, • Voice over IP
Microsoft) • Business Intelligence (IBM • IPhone or Blackberry
• Quickbooks, Peachtree Cognos) • Business Communication Mgmt
• Audit Control – SymSoft, SAP
These products have become commodities, providing great benefit at a limited investment.
Many are offered as “Software as a Service” (SaaS), eliminating in-house IT costs.
Technology and your business Options and Decisions
In-house vs. Cloud Options
In-House Option Platform as a service Software as a service
Your company retains responsibility for Your company uses a
Consists of the
purchased or in-house developed applications 3rd party service
software Provider for both the
application as well as
Infrastructure Layer components.
Consists of facilities Your company uses The service provider
Your company retains a 3rd party service
(building, power, cooling, Normally charges
responsibility for provider for some
security), computers for usage (referred
acquiring, maintaining or all of the
and operating to as “Pay by
systems, data storage), Infrastructure layer. the Drink”).
Technology and your business Options and Decisions
1) Buy vs Build – Prevailing wisdom is to buy not build (Unless software is your business, or you
need customization to differentiate your company from your competition).
2) Extent of Customization – Do you adapt the software to your business or adapt your business
to the software. Most sophisticated software packages include a great deal of flexibility
(reports, screens, data elements) without significantly code changes.
3) Standardization - Policies and procedures should be implemented to ensure quality and
consistency in the IT operation and development functions. (Diversity is great in your
employees, but is a drawback with your technology).
4) Balance between Business and Technology – Allowing business areas to make technology
decisions provides flexibility but can create ongoing support nightmares and high costs.
5) Sourcing Options – Making the wrong sourcing options (e.g. full time employees, contractors,
out sourcing, third party vendors) can be extremely expensive if the wrong decisions are
made. Careful analysis and due diligence is recommended.
6) Governance – Having a formal governance body and process is strongly recommended
especially in in the areas of project funding and architecture. This places decision making
where it belongs with key business leaders.
7) Virtualization – Virtualization can have significant long term benefits, but can be difficult to
implement and enforce. Products like VM Ware and power VM allow better utilization of
computer resources (processors, data storage)
Technology and your business Pitfalls and Challenges
1. Security / The criminal element – Criminals through-out the world are trying to penetrate your
firewalls (intrusion control) or steal data that leaves your organization (encryption). This can have
catastrophic impact on your company.
2. Disasters and Business Continuity Disaster Recovery – What would be the consequence and how
long could your business operate if your systems / data were unavailable? Does your disaster
recovery plan protect against a devastating regional disaster? Are your backups maintained in a
different part of the country?
3. Managing disparate patchwork of hardware / software - Most systems are made up of a variety of
in-house developed and purchased hardware and software components from a variety of different
vendors and eras. This results in a significant amount of complexity and redundancy, that is
extremely expensive to enhance or maintain and presents considerable risk.
4. Performance / latency – Many things can impact performance (e.g. placement of data, amount of
data transmitted, telecommunication). Are you performing stress / volume tests to ensure service
level agreements are maintained?
5. Project Scope Creep – Lots of enhancements make sense, but are you willing to jeopardize critical
project budgets and timeframes. Success is dependent on strict project management and change
6. Experienced Resources - Are your people educated on the more efficient technologies and
procedures? Are they moving your company forward or vested in the status quo.
7. Proliferating use of older antiquated architectural concepts and technologies – Older concepts and
technologies are slower and more costly. Begin migrating away from them as soon as possible.
Technology and your business Building in Quality
Quality is a measurement of “Dependability” and “Defects” (number and severity)
Dependability Number of Defects/ Incidents
Availability % Downtime per year Sigma Percent Percentage
90% ("one nine") 36.5 days 16.8 hours level defective yield
95% 18.25 days 8.4 hours 1 691,462 69.00000% 31.00000%
98% 7.30 days 3.36 hours
2 308,538 31.00000% 69.00000%
99% ("two nines") 3.65 days 1.68 hours
99.9% ("three nines") 8.76 hours 10.1 minutes 3 66,807 6.70000% 93.30000%
99.99% ("four nines") 52.6 minutes 1.01 minutes 4 6,210 0.62000% 99.38000%
99.999% ("five nines") 5.26 minutes 6.05 seconds 5 233 0.02300% 99.97700%
99.9999% ("six nines") 31.5 seconds 0.605 seconds
6 3.4 0.00034% 99.99966%
• Quality has significant impact on corporate success (corporate image and customer satisfaction)
• It involves “Application Development” processes (project management, Quality Assurance, and change management)
as well as the ongoing “Operational” processes (incident tracking, system monitoring).
• Quality Assurance is complex and requires individuals with a quality control mindset. In includes testing as well as a
“Clean-Room” approach. It is considerably cheaper to identify and correct defects early in the development life cycle.
• Begin by building a dedicated QA team and implementing ITIL operating procedures. If you need more accurate
results, you might consider “System Monitoring” tools, “Mirrowing and Redundancy”, and Six Sigma.
Warning: This is an area you could use professional help
Technology and your business The role of the IT Department
Roles of IT
• Tactical Manager - (keeping the ship afloat)
• Strategist - (understanding the business and how technology can help)
• Educator and Diplomat
• Industry Knowledgeable
• Technology Expert
• Business Process Expert
• Facilitator - requirements definition (JADs)
• Change Agent – (People Change Management)
Questions you should be asking
• What is your relationship with your CIO/CTO?
• Do they have a seat at the table?
• Are IT activities aligned with the business plan?
• Do they have the skills needed to move the company forward?
• Was your IT staff built around your current hardware / software products?
• If 75% of CEO’s mind is focused outward, what % should the IT department be?
• What percent of your IT staff is forward focused and are they adequately educated?
Technology and your business Where are you getting guidance?
Internal Managed Services & Solution Audit Firms Big Name IT Technology
Staff Point Solutions Providers Consulting Firms Research
Things to consider
Careful “due diligence”
• Cost is suggested
• Knowledge and Experience
• Access to “Think Tank” information
• Motive – Are they pushing their propriety solution
• Customer Base
• Who is conducting / facilitating all these entities?
Technology and your business Need for a Strategy and Plan
Think big, start small, act now
People are your greatest assets and one of your biggest expenses. They will carry your company
into the future (either in a positive or negative way).
If you have a vision and plan and effectively communicate it, you will be amazed at the results.
Corporate Focus Closing Words of Wisdom
• Technology is critical to your success and it has become an exceptional bargain.
• Doing nothing is more expensive than doing the wrong thing. Your competition is
evolving and if you aren’t you’re losing ground.
• There are still many pitfalls and you want to avoid them.
• Having a vision, strategy and plan is of utmost importance.
• Don’t keep building upon older infrastructure.
• Simplify then automate.
• Make sure you have the right technology expertise.
• Give IT a seat at the table.
Appendix Richard Hissrich Profile
Richard Hissrich is the owner and president of RH Consulting, Inc. Mr. Hissrich has over 35
years of IT experience with fortune 500 companies in the financial, manufacturing and
technology consulting industries. He held a wide variety of leadership and strategic planning
positions aimed at addressing company’s highest priority focus areas (e.g., modernization
planning, business/technology strategy, quality assurance, testing, sourcing options, release
management, development methodology, expense reduction). Rich is a member of the Institute
of Management Consultants (IMC) and the Healthcare Information Management Systems
– Developed the processes and procedures that allowed a financial institution to implement release management.
This resulted allowed the company to handle higher volumes of annual application change with lower
– Planned and helped manage the Year-2000 Readiness test, which was largest and most complex testing effort
conducted by this financial company. This resulted in an almost flawless transition into the new century.
– Helped manage the evolution of a limited focus testing department into an enterprise quality assurance
organization supporting corporate-wide testing. This resulted in improved application quality and a reduction in
overall testing costs.
– Helped develop a 5 year technology modernization plan including a target state definition, a roadmap for
implementation, governance processes, and an education program. This resulted in increased business
functionality, reduced risk and ongoing incremental progress toward the desired target state.