galit office of the cio trends 2009

1All Rights Reserved @STKI Moshav Bnei Zion, Israel +972 9 7907000 www.stki.info

Office of the CIO

Scenarios 2009

Office of the CIO

Scenarios 2009Galit Fein

VP & Senior AnalystOffice of the CIO Strategies

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All Rights Reserved @STKI Moshav Bnei Zion, Israel +972 9 7907000 www.stki.info2

My Topics



All will be covered in STKI Summit 2009



Presentation Agenda

11

22

Technologies Maturity Model 2009

33

Technologies categorization

Major changes in Office of the CIO

44

55

Considering alternative sourcing models

What are the most important OTC areas for 2009?


Technologies Maturity Model2009

Investmentto make money

Cut costs, Increase productivity

Investmentfor regulations

Commodity ITServices

Using Implementing Looking

Web 2.0

SOX for IT

Business Value

Market Maturity

Pure Business

Project

IT Project

Size of figure = complexity/ cost of project

Help Desk

PPM

Asset mngtProject mngt

Office of the CIO

Demand mng

Resource mng

Mobile for CEM

Mobile 4 internal needs


Technologies Categorization 2009

Investmentto make money

Investmentto cut costs &

Increase productivity

Investmentfor regulations

Commodity ITServices

Core &Operations

OptionalEnhancements

Business Value

Value Growth Transform

Non-Discretionally

Needed Enhancements

Low Risk High Risk

Incr

ease

Re

venu

esRe

duce

Cost

Expe

nses

SOX for IT

Web 2.0

Service Desk

Project Mngt

Asset Mngt

PPM

Mobile 4 CEM

Demand mng

Office of the

CIO

Mobile 4 inter. needs

Discretionally



Changes in Office of the CIO

Reduced IT spend:

• Move from Capex/Opex to cash flow mngt

• Move from non discretionary to discretionary

Maintenance mode:

• Less new project/technology

• Extracting value from existing investments

Need for new consumption & delivery models

Need to better IT portfolio mngt



Taking Advantage of a Downturn

Financial crisis has increased the attention to the

management of IT costs - cash flow is the KING

IT can’t afford bad decisions

Better prioritization, LOB cooperation, & resource

allocation increase IT capacity

Increased focus on Project & Portfolio Mngt

(PPM)

Contract renegotiations IT Business

CommunicationManagementMeasurement

Source: STKI 2005



Software Licensing

Stop constant, unnecessary upgrades

Cut maintenance contracts on mature or non-

critical SW. Take the risk & lower cost.

Cut back on SW proliferation - use these times

to create fewer, stronger standards & rationalize

licenses.

Re-negotiate perpetual licenses, if needed

(although some have better value than new

contracts).



From Business Burden…

IT IT Non-discretionary

Non-discretionary spendspend

• SW & HW maintenance• PS (Annual contracts)• Annual app maintenance

fees (% of license)• “Must” projects:

–end of life–upgrades 4 needed performance–operational BI –changes to existing apps



From Black Box to Transparent IT

ITIT

Open the BOX

Open the BOX

BenefitsBenefits

Better decision making IT alignment with

business strategy Better understanding of

IT costsRestrains demand Overspend prevention Updated projects’ status



Portfolio Evolution Matrix

Business prioritization/ Business alignment

NPV

1 2 3 4 5

1

2

3

4

5

The size of each bubble is proportional to risk/ IT complexity

The preferred project

Projects’ Size, Risk & Value



Non-Discretionary vs. Discretionary

What % of you total budget is devoted to Non-discretionary items –What % of you total budget is devoted to Non-discretionary items – infra, support & maintenance or Discretionary items - new capabilities? infra, support & maintenance or Discretionary items - new capabilities?

Source: CIO magazine "the State of the CIO" online survey 2008



From Non-Discretionary to Discretionary

Too often, cuts made only in

discretionary IT spending



Driving Innovation

By transforming the % of IT spending consumed by Non-discretionary By transforming the % of IT spending consumed by Non-discretionary ……

Application maintenance

Application innovation

Infrastructure maintenance

Infrastructure innovation

5%

30%

42%

Today

23%

72%

28%

In 3 years

15%

30%

45%

10%

45%

55%

In 3 years

15%

30%

45%

10%

45%

55%

Source: HP



What is Cloud Computing?

IT resources virtual assemble

Multi-tenancy

Real-time on-demand computing

Pay-per-use or subscription model

Cloud Computing

Client / Server& App Server

Platforms

Mainframe

Platforms

17

ASP

SaaS

Cloud SW

Company X

Company Y

Company Z

App.(Supplier portal1)

Application (CRM1)

Customized View 1

Customized View 2

Customized View 3

Company X Company Y Company Z

Customized application

Platform

Infrastructure

Data Center Virtualized Data Center

“Rent“app. tier

“Rent” Customized

app.

“Rent” Tenancy

agreement



Alternative sourcing model

• Automated Upgrades• Continuous Innovation• Better Usability/ Faster Over Time• More Secure Over Time



Types of Cloud Services

IAASIAASInfrastructure as a Infrastructure as a

ServiceService

PAASPAASPlatform as a Platform as a

ServiceService

•Servers / Storage / Networks

desktop apps (word & spreadsheet) via the Internet

Multi tenancy/Platform-Centric/User controls the data

Write your own application

Desktop as a ServiceDesktop as a Service

Cloud SWCloud SW



Cloud Computing Examples

IAASIAASInfrastructure as a Infrastructure as a

ServiceService

PAASPAASPlatform as a Platform as a

ServiceServiceDocs & spreadsheets

Desktop as a ServiceDesktop as a Service

SAASSAASSoftware as a ServiceSoftware as a Service



Why is it Cheaper? Economy of scale!

Google server farm Google server farm

WalMart productsWalMart products



Pricing



Most important OTC areas for 2009

PPM – Project & Portfolio mngt

IT Asset management

GRC – Governance, Risk and Compliance

Sourcing strategies



My Blog

galit office of the cio trends 2009

Economy & Finance

nondiscretionary items

risk value

better value

service cloud sw

cio mobile

discretionary maintenance

service desktop

cio strategies