It Ceo View 2010 09 17


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Helps companies understand how technology drives companies forward.

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It Ceo View 2010 09 17

  1. 1. A Business Leader’s Discussion of Technology Using Technology to Transform Business Giving you the ability to compete and win September 16, 2010
  2. 2. 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 2
  3. 3. • 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 • Virtualization • Help you make better decisions. • Sourcing Options • Open Systems This is a high level / top down discussion • ERP • It could lead to 1,000 sub-topics and hours of conversation. • It is meant to whet your appetite, not quench your thirst. 3
  4. 4. The way we think about technology is changing 1969 Today Difference Today there is more Capability 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 Cost based on consumer price index. An inflation of 494.5% In 1969 Data Processing Control security consisted of concrete block buildings and steel gates. Security is much more complex today.
  5. 5. Improvements in capacity, capability, quality, speed, and convenience Albums and 45’s 8 Tracks Cassettes Ipod Nano CDs BoomBoxes Transistor Radios Smaller Radios Radio, video and the 16GB will store about 4,000 songs. 5
  6. 6. Advances in communications
  7. 7. Advances in Transportation
  8. 8. 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.
  9. 9. 1) Business Focus Factors that influences a company’s success or failure
  10. 10. 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 & Control information Business Leadership Leadership Team Technology is an enabler supporting all aspects of business
  11. 11. Business Focus Which companies effectively use technology? 11
  12. 12. Business Focus Technology as a People Enabler Effective processes and procedures Financial Stability and ROI Leadership Team Employees 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. 12
  13. 13. Business Focus Technology as a Product or Service Epic Corporate Battles Word Processing Personal Computers Vs. Vs. Instant Photography Movie Delivery Vs. Vs. Vs. Full Function Phones Electronic Books Vs. Vs.
  14. 14. Business Focus Technology as a Product or Service Hardware Superstores Vs. The Creative Destruction Process Bleeding Edge Leading Edge Continuity 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
  15. 15. Business Focus The gears of business and the impact of IT Sub-standard Utopia In significant need of repair Running at optimal performance Technology People Leadership Leadership People Technology 15
  16. 16. 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 management routines. 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 positive direction.
  17. 17. 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 17
  18. 18. Business Focus Business Value Company A Two 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? 18
  19. 19. Business Focus Section Recap America has been able to compete on a global scale because of her people, ingenuity and productivity. 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? 19
  20. 20. 2. Current State of Technology
  21. 21. Current State of Technology Entering a new era Sensors Eras of IT Development Internet Personal Computers Mainframes 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s FROM TO Centralized with a limited Distributed with number of components thousands of intelligent components People using computers to handle routine Computers communicating processes with computers with people overseeing. 21
  22. 22. Current State of Technology Building Blocks of Evolution Eras of IT Development Sensors Internet Personal Computers Mainframes Cheap Sensors 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s Each era builds on advances from the previous era. Intelligent Devices (with smart chips) Advances in Advances in Data Management Business Intelligence Advances in Advances in New Development Telecommunications Messaging – (ESB Architectural Concepts (Fiber, Wireless, 3G/4G, hardware and software, (SOA, Java) SIP (VoIP)) Unified Communications) 22
  23. 23. Current State of Technology Proliferating older concepts Antiquated architectural concepts and technologies Aging computer systems are a lot like antiquated cars. 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.
  24. 24. 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 stressed networks. • Government Regulation - Errors will occur and some will be blown out of proportion, This will result in government’s desire for increased regulation. 24
  25. 25. 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.
  26. 26. 3. Internal View Things you need to know to improve success
  27. 27. Technology and your business Business Acumen SIZE / COMPLEXITY IMPORTANCE OF TECHNOLOGY Technology supports business (e.g. ERP) Basic desktop Technology runs the packages will do business (e.g. Banking, Insurance) 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?
  28. 28. 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) Microsoft Dynamics) • Blog, Tweet • Microsoft SharePoint • Email Marketing (Constant • Websites (Dreamhost, GoDaddy) Contact) Human Resources Customer Service Workplace Automation • HRIS • 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 ControlPanelGRC 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. 28
  29. 29. Technology and your business Options and Decisions In-house vs. Cloud Options Cloud Option In-House Option Platform as a service Software as a service Application Layer Your company retains responsibility for Your company uses a Consists of the purchased or in-house developed applications 3rd party service business specific software Provider for both the application as well as all infrastructure 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 (hardware, operating and operating to as “Pay by systems, data storage), Infrastructure layer. the Drink”). telecommunications, and people. 29
  30. 30. 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) 30
  31. 31. 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 management processes. 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. 31
  32. 32. Technology and your business Building in Quality Quality is a measurement of “Dependability” and “Defects” (number and severity) Dependability Number of Defects/ Incidents Downtime per Availability % Downtime per year Sigma Percent Percentage week DPMO 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 32
  33. 33. 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? 33
  34. 34. 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? 34
  35. 35. 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. With Without 35
  36. 36. 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. 36
  37. 37. What are your challenges & concerns?
  38. 38. Appendices
  39. 39. 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 Society (HIMSS). Selected Accomplishments: – 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 development costs. – 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. 39