The Brave New World – Why we need to Change the IT Game! April 2008 Eddie Short, Vice President, Global Leader Business Information Management "Companies don't fail because they do the wrong things; they fail because they continue to do what used to be the right things for too long". Group CIO, Nokia CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 2 The ongoing Technology (R)evolution creates significant opportunities for organisations to transform themselves Vast opportunities for new value and innovation • ‘Externalisation’ of technology in which information and services become available to anybody and anything, inside and outside the organisation. • Choosing the areas to excel and differentiate, driven by the increased ability to collaborate and share information and services. • Creating a continuous mode of interaction with the outside world, sensing and responding to arising opportunities. Freeing ourselves from current constraints and obstacles • • • • Standardising and simplifying business infrastructure. Consolidating existing processes and systems. Replacing and rationalising legacy solutions. Creating new levels of flexibility and manageability. The convergence creates significant opportunities where technologies are driving a step change in the business models of our clients. CE v6.3 © 2008 Capgemini - All rights reserved Technology Consulting 2008 Launch 3 But for many this is fundamentally disruptive and it is clear that is no longer ‘business as usual’ in many organisations… Increasing business competition, globalization, standardization, commoditization, amount of information & change Generation Y for whom technology is a normal life skill Convergence of communications, content, media, games, and devices at home and at work New competitors, new markets, and new products Technology acceleration of Internet, Web 2.0, SOA, Semantics, Knowledge, and many other technologies CXOs are seeing fundamental change; but the majority are not getting the support they to harness the opportunity from the IT organisation CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 4 When thinking about this there are obvious examples to quote in the Consumer/Web 2.0 world But in fact the impact in the business to consumer and business to business world will be just as/if not more fundamental CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 5 An example of this is the game changing activities of Toyota in the North American car market Major “Web 2.0 Technology” initiatives are being driven outside-in or top down, and not from the IT department CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 6 So the game has changed – CRM for example! "Classic" CRM is no longer viable - a one dimensional corporate interaction that provides processes, services and technology to the customer facing departments - sales, marketing and customer service. It is time to recognize that there is a customer ecosystem that provides empowered customers, who are increasingly interested in making their own choices, in how they interact with companies that they do business with. That means that not only does the company need to provide the goods and services, but the tools and culture to make the experience of that customer one of paramount and unparalleled value to that customer and thus to the company in return. Source - Wikipedia CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 7 In Capgemini we have identified seven fundamental game changing Technology factors From transaction to interaction You experience Open standards and service orientation Process- Thriving on-the-fly on data Sector-as-a-service Invisible infostructure This TechnoVision 2012, gives our considered opinion of the major opportunities and challenges facing our clients. CE v6.3 © 2008 Capgemini - All rights reserved Technology Consulting 2008 Launch 8 Behind this are 17 key Technology building blocks… Real-time Real-Time Business business Process process Control control Real-time Integrated integrated Business business Intelligence intelligence Smart Business business Networks networks Packaged Sector // sector Segment segment Solutions solutions iPodification Mashup Mash-up Applications applications Sensing Networks networks Social Collaboration collaboration Tools/ / tools Wikinomics SoftwareSoftware as a Service as-a-service Jericho style Style Security security Mastered Data data Management management Composite Applications applications Role-based Role Based User portals user Portals Utility Business infrabusiness Infrastructure Free agents Agents Nation nation Googlefication Rich Internet Applications applications But, discussing these would be the topic of a longer conversation…. CE v6.3 © 2007 2008 Capgemini - All rights reserved TECHNOVISION 2012_INTERNAL UK BCS – Changing VERSION.PPTX the Game 9 These factors are impacting the biggest business drivers that the organisations we work with have today. Business drivers Business drivers Financial Services Institutions CE v6.3 Manufacturing Government and Public Sector Retail Telecom, Media & Entertainment Energy, Utilities & Chemicals Growth agenda / differentiation Innovation & customer Building citizen-centric organisations Supply chain efficiency Convergence to integrated service companies Customer demands for services New competition through crossborder offers Business model change Budget pressures Customer centricity Digital supply chain Ageing infrastructure Increased customer and investor sophistication Globalisation Public security Cost removal Audience-driven business model Asset utilisation New products Compliance Risk management improvement Cost management Ageing population Cost of operations Increased demand for compliance & risk management Network unbundling Market consolidation Reduction of CO2 and other gases © 2007 2008 Capgemini - All rights reserved TECHNOVISION 2012_INTERNAL UK BCS – Changing VERSION.PPTX the Game 10 “Web 2.0 is not IT as we presently define the term, or more importantly perhaps the role of the IT department and that has led to much of the current debate as to the future of the CIO, a role created to manage the IT wave of business process automation". Andy Mulholland, Group CTO, Capgemini CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 11 Where this fits in - the decision makers and the basis of the decisions within our clients are changing! Competitive Advantage VALUE Innovative Technology Understanding the value to the business Who is empowered and And knowledgeable? Strategic Operating decision Who decides and why? CEO TECHNOLOGY Cost Containment Changing the Game by Business Model Innovation CIO Applying Technology to reduce IT operating costs Upgrading Applications to reduce Business administration costs IT department decides & approved on costs metrics Technology Focus BUSINESS Business Manager decides & approved on costs metrics COST Business Service Focus Increasing CXOs are driving decision making and many CIOs (are at risk of) have less authority in the decision making process CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 12 New models for Innovation are required if ‘your’ IT is to help your organisation drive the change Think of Peter Drucker’s 7 Models for Innovation CE v6.3 Capgemini Consulting Global CIO Survey 2008 The Role of the IT Function in Business Innovation © 2008 Capgemini - All rights reserved 13 BCS – Changing the Game Innovator vs. UK Operator? Web 2.0 - Using People and Expertise to drive change and Transformation The game is changing, but in many organisations CIOs are struggling to balance the competing demands CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 14 New Governance models are required to bring the Personalisation of the Web 2.0 world, whilst maintaining the Compliance of the Corporate world Pressure for Business Change Personalize An Individual’s use of the capabilities of Web 2.0 Differentiate A Business Manager’s Customizable Solution Organize The use of SOA to achieve cohesive executions Comply The Enterprise Transactions and Data; ERP and Legacy Applications Who Needs What? And Why? Pressure for IT Stability All together this creates a very significant opportunity but where is UK Plc in preparing itself for this? CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 15 Too often, IT and the IT department have relied on the power of individual gurus and subject matter expects Leadership In the new world success will not come from individual geniuses, but from collaborations across organisations, industries and ecosystems… CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 16 Conclusions – Three fundamental factors are at play! 1. People - have changed their relationship with Technology, • it is now an accepted part of many people’s ordinary lives, and it is people as consumers that have driven the new generation of Web 2.0 technologies, and now expect to use these same capabilities in their workplace. 2. Globalisation - the challenge of with whom, where, and when, shall an Enterprise needs to do business in markets that are increasingly open and therefore more competitive. • These changes have introduced new competitors, new markets and new business models all of which combine to offer new opportunities and threats. 3. Technology - has driven these two changes; but not ‘Information Technology’ as we know it, • CE v6.3 Instead it is a new generation of people centric technology based around the architecture of the Web, mixing Information and Communication Technologies, ICT. © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 17 Virtual Worlds (such as Second Life) address Globalisation, bringing together People and the new Technology, to deliver… CE v6.3 © 2008 Capgemini - All rights reserved UK BCS – Changing the Game 18