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Three trends that are reshaping IT, Three trends that are reshaping IT, business, and our livesbusiness, and our lives
IT Trends and DirectionsIT Trends and Directions
ConclusionsConclusions
Three major trends are shaping the future of business and ITThree major trends are shaping the future of business and IT
• The New Economy is transforming the oldThe New Economy is transforming the old
– A loss of power for sellersA loss of power for sellers
– The power of communities comes to businessThe power of communities comes to business
– From dot.com to dot.bomb to ? -- the hype and the realityFrom dot.com to dot.bomb to ? -- the hype and the reality
• Ubiquitous Computing is unfoldingUbiquitous Computing is unfolding
– Profound effects on enterprise supporting infrastructureProfound effects on enterprise supporting infrastructure
– The wall between work and personal lives is crumblingThe wall between work and personal lives is crumbling
• The risks and rewards of IT have never been higherThe risks and rewards of IT have never been higher
– Spending will climb past 10% of revenues on averageSpending will climb past 10% of revenues on average
– IT leader becomes a business leaderIT leader becomes a business leader
– IT will be increasingly focused outside the enterpriseIT will be increasingly focused outside the enterprise
– Coming technologies to watch, to try, and to exploitComing technologies to watch, to try, and to exploit
– Be prepared for the ASP vendor implosionBe prepared for the ASP vendor implosion
Increased consumer
expectations
Increased consumer
expectations
Shortereconomicproduction
runs
Shortereconomicproduction
runs
Reducedbarriersto entry
Reducedbarriersto entry
Moreperfect
information
Moreperfect
information
Collapse ofdistanceand time
Collapse ofdistanceand time
Emergingglobal
middle class
Emergingglobal
middle class
Customerfocus
Customerfocus
Mass customization
Mass customization
“Retreat”of
government
“Retreat”of
government
Shorter strategycycles
Shorter strategycycles
Shorterproductcycles
Shorterproductcycles
Morecompetitors
Morecompetitors
The Transformation of BusinessThe Transformation of Business
SocietalSocietal
TechnologicalTechnological
PoliticalPolitical
Economic Economic
EnvironmentalEnvironmental
ManagerialManagerial
A B2B e-marketplace is an enterprise that brings buyers and sellers within a particular industry, A B2B e-marketplace is an enterprise that brings buyers and sellers within a particular industry, geographic region or affinity group together for the purpose of commerce. It provides content, geographic region or affinity group together for the purpose of commerce. It provides content, value-added services and — often, but not always — commerce transaction capabilities It is a value-added services and — often, but not always — commerce transaction capabilities It is a market intermediary.market intermediary.
3,950
45 145 403 953
2,188
7,297
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1998 1999 2000 2001 2002 2003 2004
E-Marketplace EC
All Other EC
WW B2B E-Marketplace Growth
USD Billions
E-Marketplace and B2B E-Marketplace and B2B ForecastForecast
Horizontal• CommerceOne MarketSite
• Ariba
• MRO.COM
• MYSAP.com (MRO)
Vertical• Automotive supplier exchange
• Chipcenter.com
• PlasticsNet
Enterprise-Specific• Neoforma
• Shell
• Kraft
Public• E-Vis.com design collaboration
• I2 Trade Matrix supply-chain collaboration
• MySAP.com Marketplace business application integration
Enterprise-Specific• Celestica/MatrixOne/Aspect
contract manufacturing
• Adaptec/Extricity supply-chain integration
• Lockheed/PTC collaborative product development
E-Commerce C-Commerce
B2B ExchangesB2B Exchanges
What Others Like You Also LikeWhat Others Like You Also Like
Enduring Transient
Traditional Communities: Selected by People
Emerging Communities: Discovered by Technology:
FamilyHobbies/ Sports
GeographyWork
Medical
Education
Project
Issue
Task
Purchase
Entertainment
Collaborative Filtering
Expert/Knowledge-Communities
Rating-Communities
Group Purchasing
Automated Hyperlinking
ContentAnalysis
C-Commerce and CommunitiesC-Commerce and Communities
Transaction efficiency
More information and transparency
More liquidity and choice
Capacity meets demand —> more competitive prices
Interoperable interfaces
Virtual organizations
Common terminology
Reshaped trade structures
Economies of scale and scope
Communities Knowledge sharing
“E”
M&A
Who will have the power? Where is your attention?
--> The UI, infomediaries?Low switching costs
The Investor’s Hype CycleThe Investor’s Hype Cycle
TechnologyTrigger
Peak ofInflated
ExpectationTrough ofDisillusion
Slope ofEnlightenment
Plateau ofProfitability
Dot-Com ShareFall-Out
Dot-Com Shake OutCash burn means debts
EuropeanIPOs 1999
U.S. Xmas1998
U.S. IPOs1997/8
Dot-ComStarts
InternetWWW
Equity Times Debt Times
Mergers/buyouts of dot-coms
managed by M&A
Economies of scale pay off:
globalization of dot-coms and VCs
Post-NetBusinesses:
Hybrid models
“dot.com” is Best
1990-96 1999 2000 2002 2004 2006
Visibility
Dot-coms survivors bought by B&M
Positive Cash Flow
dot
Ubiquitous ComputingUbiquitous Computing
2001
1960
2040
Concept invented at Xerox PARC by Mark Weiser
Thousands of people per computer in 1960s going to thousands of computers per person in the future
We have crossed the Rubicon -- now past the 1:1 level
Technology For Ubiquitous Computing• Connectivity -- wireless leaves on wired tree• Follow-me profiles and data access • Device-insensitive access• Computers disappear into the environment• Location-awareness
MostUsers
ManyUsers
SomeUsers
FewUsers
Today
Most Users
Many Users
Many Users
Most Users
2005
MostUsers
User Access — Uncontrollable?User Access — Uncontrollable?
Problems• Security exposures• Support complexity• Multiple formats
Standardized Chaos
User . . .• needs vary, so do
the best device• buys device• picks which to
carry and when• switches from
device to device
Recommendations• Support the edges• Plan for diversity
Infrastructure TrendsInfrastructure Trends
““Supranet”Supranet”
Independent work
Mobile/fully digital
Reliance on paperand location
Office = LocationBandwidth rulesVisual interfacesPhysical environment
Office = ConnectionUbiquitous accessStandardized interfaceService-based
Office = AttentionWearable or mobile devicesWireless connectivityInstant-on
Office = CommunityVirtual communitiesWorkflowMonitoring and access
Need for Supervision
Office 2010 - The Wall Comes Office 2010 - The Wall Comes DownDown
TelecomTelecom 12.7012.70 $10.4K$10.4K 7272InsuranceInsurance 9.429.42 17.4K17.4K 6767Fin./BankingFin./Banking 8.668.66 19.1K19.1K 7676ServicesServices 6.476.47 7.1K7.1K 7878Retail/WholesaleRetail/Wholesale 4.544.54 3.1K3.1K 7373HospitalsHospitals 4.534.53 1.7K1.7K 7272UtilitiesUtilities 3.863.86 5.6K5.6K 7777TransportationTransportation 3.303.30 1.4K1.4K 7777ManufacturingManufacturing 2.992.99 4.1K4.1K 7676
Total IT Spending as aTotal IT Spending as aPercent of RevenuePercent of Revenue
IT Spending IT Spending % % RevenueRevenue
Central IS Central IS Budget Per Budget Per EmployeeEmployee
IT Baseline/ IT Baseline/ InfrastructureInfrastructure
as % IS Budgetas % IS Budget
Key Technology Key Technology DiscontinuitiesDiscontinuities
S/360S/360MainframeMainframe
PC-PC-Client/Client/ServerServer
Web-Web-InternetInternet
19701970
10.0%10.0%
Accelerating Business Accelerating Business Unit SpendingUnit Spending
North AmericaNorth America
Western EuropeWestern Europe
Asia/Pacific Asia/Pacific (Dev.Economies)(Dev.Economies)5.05.0
002010201020002000199019901980198019601960
Functional Head Functional Head Operational Operational
ManagerManager
Manage IT Manage IT Department Department
Provide InfrastructureProvide Infrastructure Manage vendorsManage vendors
VisionaryVisionary Technology Technology
OpportunistOpportunist
CIO RoleCIO Role
Evolution of CIO Role and Evolution of CIO Role and Enterprise GovernanceEnterprise Governance
KeyKeyResponsibilityResponsibility
BusinessBusinessInputInput
Major Major TasksTasks
System System ObjectiveObjective
Leadership Leadership
Mainframe Era:Mainframe Era:Conventional PlusConventional Plus
Web-based Era:Web-based Era:Hybrid, EmergentHybrid, Emergent
Distributed Era:Distributed Era:Transitional, ShiftingTransitional, Shifting
Automate for Automate for EfficiencyEfficiency
Advisor on Advisor on ‘How to’ ‘How to’ Not ‘What to do’Not ‘What to do’
Alert Line-Mgmt. to Alert Line-Mgmt. to IT Investment IT Investment OpportunitiesOpportunities
On-Time delivery On-Time delivery Reliable operationsReliable operations
Deliver on Deliver on PromisesPromises
Strategic PartnerStrategic Partner Expectation ManagerExpectation Manager Technology AdvisorTechnology Advisor
Align IT with Align IT with BusinessBusiness
Access to the Access to the Executive Invited Executive Invited ‘Seat at Table’‘Seat at Table’
Reduce Business Reduce Business Process Cycle-timeProcess Cycle-time
Set Direction and Set Direction and Secure Benefits Secure Benefits from “Selective” from “Selective” OutsourcingOutsourcing
Member of Member of Executive Team or Executive Team or Assumed ‘Seat’Assumed ‘Seat’
Jointly Develop Jointly Develop Bus./ IT Model; Bus./ IT Model; Leverage Leverage Extra-structureExtra-structure
Drive Channel Strat. Drive Channel Strat.
Define Office-of-the Define Office-of-the Future; Lead effort to Future; Lead effort to Customer-centricity Customer-centricity
Integrate Client/ Integrate Client/ Supplier Value-ChainSupplier Value-Chain
Adapted from Ross & Feeny
E-Business Addresses the E-Business Addresses the Complete Business EcosystemComplete Business Ecosystem
TheBusiness
Supplier
Supplier
Adviser
Intermediary CustomerE-Marketplace
Virtual or Nodal Structures
Manufacturing
Fulfillment
Marketing
Trough ofDisillusionment
Slope ofEnlightenment
Plateau ofProductivity
Maturity
TechnologyTrigger
Peak of Inflated
Expectations
Visibility
ASPs
Speech Recognition
Smart Cards
Micropayments
Digital Ink
Biometrics
Enterprise Portals
Audio Mining
Jini
xDSL/Cable Modems
Wireless Web
Voice Portals
XML
Quantum Computing
Voice Over IP
BluetoothJava
Language
Peer-to-Peer
Location-BasedComputing
KeyWill reach the “plateau” in:
Less than two years
Two to five years
Five to 10 years
More than 10 years
X
X
X
X
X
Technology, Hype, and MaturityTechnology, Hype, and Maturity
Service ProvidersService Providers
DemandManagement
DemandManagement
TCO vs. Monthly Cash FlowTCO vs. Monthly Cash Flow
Rampant M&A
Activity
Rampant M&A
Activity
Buy vs. RENTBuy vs. RENT
FinancialFinancial StaffingStaffing
IT Skill ShortageIT Skill Shortage
EscalatingSalaries
EscalatingSalaries
High StaffTurnoverHigh StaffTurnover
BroadCompetitionfor SimilarSkill Base
BroadCompetitionfor SimilarSkill Base
ASP DriversASP Drivers
Business/ Market
Business/ Market
Extend the Business Boundaries
Extend the Business Boundaries
The Needfor SpeedThe Needfor Speed
Software asa Service
Software asa Service
Can’t Be Held BackBy the Legacy IT
Can’t Be Held BackBy the Legacy IT
Service ProvidersService Providers
ASP TrendsASP Trends
ExplosionExplosionExplosionExplosion
ConsolidationConsolidation
ASP RevenueASP Revenue
Cost of ASPCost of ASPservicesservices
RestructuringRestructuring
19981998 ‘‘9999 ‘‘0000 ‘‘0101 ‘‘0202 ‘‘0303 ‘‘0404 ‘‘0505
MarketMarketInitiationInitiation
‘‘0606
NumberNumberof ASPsof ASPs
RecommendationsRecommendations
Adopt, where appropriate, New Economy techniques Adopt, where appropriate, New Economy techniques and technologies to transform your enterpriseand technologies to transform your enterprise
Adapt enterprise infrastructure, applications, Adapt enterprise infrastructure, applications, processes, policies, and culture to the coming processes, policies, and culture to the coming realities of Ubiquitous Computingrealities of Ubiquitous Computing
Apply business values and skills to reshape the Apply business values and skills to reshape the enterprise while managing risks such as changing enterprise while managing risks such as changing technology and the implosion of ASP vendorstechnology and the implosion of ASP vendors