The 4 Zones ModelFreeing IT’s future from the pull of its past

CIO Solutions Gallery KeynoteSeptember 10, 2019

A Tale of Two Stories at Microsoft

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The Legacy Mindset About IT IT’s past• 40-50% of CEOs and Boards still see IT as a cost

center not a revenue generator

• Less than 20% of companies are using digital technologies to advance their business strategy

• IT spends 80% of its resources and budget on running the business and only 20% on changing the business

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IT Business Value Creation IT’s future

• How does IT create business value?

• Does IT have the necessary skills and capabilities to deliver that value?

• What could disrupt or dilute that value?

• How can IT increase or enhance that value?

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Enterprise IT Organizational ModelThe 4 Zones: Maximizing the Business Value of IT

DisruptiveInnovations

SustainingInnovations

IncubationZone

TransformationZone

PerformanceZone

ProductivityZone

Mission Critical

EnablingIdentify, test and validatenext generation products

and services

Enable the scaling ofmaterial net

new businessrevenues & profits

Provide user-centric tools, services and solutions to improve the

competitive performanceof core businesses

Provide secure & stable SORs

Optimize SOR maintenance costsIdentify and unlock

trapped value

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Definitions

• Systems of Record – The Backbone for Transaction Management

• Systems of Engagement – The Platform for User Experience

• Systems of Intelligence – The Lifeline for Future Innovation

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IT Maturity Model – Where Is IT in 2019?What’s already been done? What still needs to be done?

Getting Started: Step One IT Resource Allocation Assessment

• Document allocation of all existing IT resources & budget into the 4 zones• % allocated to maintaining systems of record

• Productivity Zone – Run the Business• % allocated to creating & deploying systems of

engagement & systems of intelligence• Performance Zone – Change the Business

• % allocated to identifying, testing and validating new technologies

• Incubation Zone – Run & Change the Business• % allocated to new business or acquisitions

• Transformation Zone – Change the Business

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4 Zones Resource Deployment Model

DisruptiveInnovations

SustainingInnovations

IncubationZone

TransformationZone

PerformanceZone

ProductivityZone

Mission Critical

Enabling10% of FTE’s

5% of Vendors

Research & Development

10% of FTE’s0% Vendors

CEO & Board of Directors

60% of FTE’s 20% of Vendors

Operating Businesses

20% of FTE’s75% of Vendors

Support Functions

Getting Started: Step Two Trapped value recovery & redeployment exercise

• Provide secure and stable IT infrastructure and insure all systems are in compliance with industry standards and regulations

• Deploy the Trapped Value recovery process to optimize the costs of maintaining the company’s Systems of Record:• Modernize• Consolidate• Outsource• Retire

• Identify and unlock trapped value in legacy systems that can be redeployed in Systems of Engagement and Systems of Intelligence

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Trapped Value Recovery Some core questions to ask

• Where is the trapped value in your company today?

• How can you identify and unlock this trapped value?• Eliminate or consolidate Systems of Record• Replace Systems of Record• Simplify Systems of Record• Better leverage Systems of Record

• How can you redeploy this trapped value against critical new digital investment priorities?

• Where is the new value going to come from these new digital investments?

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Trapped Value Recovery – ICANN Use Case

Recovered budget and resources will be reallocated tohigh value change the business projects and initiatives

Business Segment

Total Services

Stay Consolidate Retire:Includes Technical Debt

Projected Recovery FY19

Projected Recovery FY20

CommunityCollaboration

41 21 16 4 $450,000 $550,000

ContractedParties

19 9 5 5 $350,000 $250,000

Technical Services

21 12 7 2 $170,000 $150,000

Staff Operations

45 36 6 3 $140,000 $310,000

IANA/PTI 23 10 9 4 $185,000 $240,000

Totals 149 88 43 18 $1,295,000 $1,500,000

IT Maturity Model – Where Do We Want To Be in 2020?Who will lead this effort? When should it begin?

Getting Started: Step Three Trapped Value Redeployment: Investing in New Digital Technologies

Core Question: To What End?

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Cloud

Mobile

Analytics1

Social

Analytics2

Custom Apps

Future Tech Company as a Service

Platform as a Service

AI & Machine Learning

Stakeholder Communities

Systems of Intelligence

Systems of Engagement

Systems of Record

IT Investment Portfolio The Four Zones: Maximizing the Business Value of IT

DisruptiveInnovations

SustainingInnovations

IncubationZone

TransformationZone

PerformanceZone

ProductivityZone

Mission Critical

Enabling

Some questions to considerIs the current weighting of IT investments by

zone aligned with Corporate/Business Unit goals and priorities ?

Do we have the appropriate risk reward ratio across the IT investment portfolio?

Are we delivering the desired ROI from our portfolio of IT investments?

New Product Development InvestmentsTime to Market & Throughput Investments

Disruptive Technology InvestmentsAcquisition Integration Investments

Customer Engagement InvestmentsRevenue Generation Investments

IT Productivity InvestmentsTechnical Debt Reductions

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Go-To-Market - Kevin Product Enablement - Joti Cloud - Joti

Post Sales - TBH Web - Nalini G&A - Jeff

Sales and Marketing• Sales Motion• Direct + Channel• CPQ• Customer Engagement

Product Development• New Products• Product Upgrades & Enhancements• Security• ITOA• Systems Maintenance

New Cloud Strategy• Initial Cloud Product & Service Offers• Migration From On Premise To Cloud

Customer Experience• Customer Success• Customer Support• Renewals

Web Strategy and Growth Plan

• Web Upgrades & Enhancements• Additions Web Services

Functional Support Groups • Finance• HR• Legal• Contract

Splunk BizApps Internal Business Partner Support Use Case A organizational design to allocate Biz Apps resources to support six distinct internal business partner groups

Splunk BizApps: Use CaseA Day in the Life of a Business Partner Program

Basic Idea: Develop an ongoing dialogue between BizApps and its internal business partner teams to better align our future investment priorities with their critical business outcomes.

• What is currently making it difficult for you and your team to achieve your desired business outcomes?

• What can BizApps do to better enable your critical business capabilities?

• What new products and services are Splunk customers asking for?

• What new digital technologies could disrupt our current customer relationships?

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Getting Started: Step FourBuilding a new PMO process

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DisruptiveInnovation

SustainingInnovation

MaterialRevenues

EnablingInvestments

INCUBATIONZONE

TRANSFORMATIONZONE

PERFORMANCEZONE

PRODUCTIVITYZONE

Staging Area

INFRA MODEL

BU

S M

OD

EL

Taming Project DemandThe Hackett Group Study Results

• Over the past two years, top performers reduced the percentage of project requests by 44% compared to peers

• Top performers green-lighted 38% of project requests vs. 69% for their peers

• Growth in project volume at top performers averaged 19% vs. 39% for peers

• Resources to service project demand rose 5% at top performers vs. 19% for peers

• Top performers delivered 66% of their projects on time vs. 45% for peers

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Project PrioritizationSome core questions• Are they sustaining innovations or disruptive innovations?• Are they enabling systems productivity and cost optimization?• Are they increasing business unit performance and revenue growth?• Are they enabling business model transformation?

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Demand ManagementSome core questions

• Should we do it? Does it align with and support critical business outcomes?• Can we do it? Do we have the relevant skills, capabilities and capacity to achieve the

outcome?• Did we do it? Do we have the right metrics to measure the achieved outcome vs.

the desired outcome?

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Justification/Benefits

IT Project Worksheet FedEx Use Case

Project Timeline (Proposed)

Estimated Costs

Cost Savings

Incremental Revenue

Competitive Advantage

Improve Customer Experience

Supports Strategic Project

Legal & Regulatory

Improve Service

Other

$

Expected Project Outputs

Example 1: Reduction of Technical Debt

Example 2: Migration from on premise to the Cloud

Resources

Example 3: Enable customers to engage on mobile devices

Example 4: Increase speed to market and throughput

Performance Zone Project: Anything that supports the day to day operation of one of the organization’s business units.

Productivity Zone Project: Projects that support the 24 hour operational cycle such as production support, environment management, post load support, and defect fixes.

Incubation Zone Project: IT driven projects that that provide future business value, IT infrastructure improvements, or reduces cost on maintaining systems of record.

Launch

Project Name & Description

Concept

Definition

Planning

Developm

ent

T-Shirt Sizing:

XS <100 hours

S = 500 hours

M = 1000 hours

L = 2000 hours

XL = 5000 hours

XXL = 10000

Business

Technical

Please define your project in one of these three project types.

T-Shirt Size your project. The business representative should fill in the Business estimate, the IT counterpart should provide technical sizing. XS, S & M projects should go through the RST process while L, XL & XXL projects should first go to the Quarterly Strategy Forum

If there is a regulatory need or desired deadline, state that here by moving the project phases into the appropriate Quarter to meet the deadline.

Please quantify the project justification and benefits here.

Please add estimated cost and the resource needs here if available.

At the time of project completion, what are the expected outputs.

Instruction page

3rd QTR FY 14

4th QTR FY 14

1st QTR FY 15

2nd QTR FY 15

3rd QTR FY 15

4th QTR FY 15

1st QTR FY 16

2nd QTR FY 16

3rd QTR FY 16

4th QTR FY 16

Tie to Corporate Initiatives/Objectives: Please state any tie to corporate objectives here.

Contact Information

• Peter D. Moore• President• Wild Oak Enterprises LLC• 310-395-2476• pdmoore@woellc.com

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