Presentation, Capgemini Executive Club - Copenhagen

Andy Mulholland – Global Chief Technology Officer Capgemini

Capgemini Executive ClubBusiness and Technology come together in new ways

2© Copyright Capgemini 2011 All Rights Reserved

The key question for 2011

Don’t just ask what the role of the IT department in the Enterprise should be …

Ask what the role of Technology should be in the Business of the Enterprise


• End users autonomy or control – Apple, Web, SaaS

Security, risks, and extent of controls = new policies and training

• Services and Clouds – evolution or revolution

A finance issue; Capex v Opex; or operational issue; Public, Private or Hybrid

• Real-time Data and Social Networks

A huge benefit to be unlocked, or a further problem around Data

• What is meant by ‘at work’

If it’s not a physical place with fixed provisioned PCs• Book to Bill in an online world

Back-office processes extending and connecting externally• Collaborative Agile Business

The decentralised and constantly changing ‘edge of business’

This simple statement covers a lot of new issues!


2 31‘Innovation!’ What does it really mean ?

To create VALUE though a new market or product A game-changing move that provides sustained ‘first mover’ advantage

To change COST of production and size of available market

A break through in any element of the operation of an enterprise

For SERVICABILITY to secure existing and new customers

Where market or product cannot be innovated, service can be used

Defocusing and loss of Optimisation

The immediate and obvious challenge thatany change will bring to an Enterprise

Conway’s Law

Enterprises cannot change beyond the constraints of their communications

The three common forms of innovation

The barriers to innovation

BUT Change is inevitable

Innovation is about controlling the timing and basis of change to be advantageous to our own business


Affinity Club MBNAExclusive membership offering advantages for subs and loyalty

Pay-as-you-go SalesForce.com Replace a CapEx product with an OpEx service

Brokerage Century 21stMatch buyers and sellers for a fee on successful transactions

Premium PhotocopiersExpensive item free, creating a tied market for consumables

Bundling iPod / iTunesConstruct new proposition by simplifying complex transactions

Reverse Auction Elance.com Set high price and allow bidding downward

Crowd Sourcing WikipediaOutsourcing content construction in exchange for broader view

Reverse Premium iPodProvide low-cost consumables to sell high-margin product

Disintermediation WebMDUsing technology to deliver direct not through limited local source

Product to Service Hilti

Switch from selling a unit to providing units as a managed service

Fractionalisation NetJetsCustomer pays for a part of the product but gets full use when needed

Smart Devices VodafonePackage combinations of product and services to maximise market

Freemium SkypeBasic service is free and ubiquitous with premium chargeable

Standardisation MinuteClincLow-cost standardised solution instead of high-cost customisation

Leasing MachineryLinkRecycle expensive products through a managed lease

Subscription Club NetFlix Subscription fee creates a tied in customer base

LowTouch SouthWestLow cost, self service in place of high cost with high service

User Communities Angie’s List

Managed network for common interest with revenue by advertising

Negative Operation Amazon

Re-arbitrage the ‘sell and buy’ cycle to finance the trader

Source: Seizing the White SpaceHarvard Business Press by Mark W Johnson

Innovation - 19 Technology enabled ‘NEW’ Business Models


But there is also ‘Innovation’ in people and their attitudes

Traditionalist(55 - 65)

Boomers(45 – 55)

Gen X (30 – 45)

Millennials(18 – 30)

Training The hard way Too much and I’ll leave Required to keep me Continuous and expected

Learning style Classroom Facilitated Independent Collaborative and networked

Communication style Top-down Guarded Hub and spoke Collaborative

Problem-solving Hierarchical Horizontal Independent Collaborative

Decision-making Seeks approval Team informed Team included Team decided

Leadership style Command and control Get out of the way Coach Partner

Feedback No news is good news Once per year Weekly/Daily On Demand

Technology use Uncomfortable Unsure Unable to work without it Expected to be Intuitive

Job changing Unwise Sets me back Necessary Part of my daily routine

Source: Lancaster & Stillman (2003)


Six Different Roles now decide on how and where to use Technology

SmartBusinessModels

BusinessUsers &

Managers

CFO

BusinessProcess

OutsourcingCIO

CEOBusiness

Infrastructure


RelationshipManagement/DM 12%

Collaboration 43%

KnowledgeWork 38%

IT has been successfulIn its goal of automating

Processes !

In summary, the use of and value from people has changed…

BusinessProcesses 7%

But what about the rest?

Time Spent by Work Type


Value Creating

Cost Driven

Business Intelligence

ExternalWeb & Clouds

Internal Enterprise IT

Focused and strong signals

mixed and weak

signals

Transactions

External Conditions have become the ‘real’ issue

Source and copyright by Peter Evans-Greenwood, Unico pty

Billing &Collections

Sales Support

Operations

Opportunities

Events


Four major ‘zones’ of business use and technology

Interactional Services

State-less Loose Coupled

Shared Services


TransactionalApplications

State-full Close Coupled

SharedSources

Everything asa Service

Internal External

People Web Services

Applications Computers

Web 2.0 Services Cloud Services

Traditional IT Cloud Computing


Put together and the real challenges appear …

International Services


Shared Services


TransactionalApplications

State-full Close Coupled

SharedSources

Everything asa Service

Web 2.0 Services Cloud Services

Traditional IT Cloud Computing

Business Intelligence

Billing &Collections

Sales Support

Operations

Opportunities

SupportingPeople and

Expertise

SupportingComputers

and Systems

Internal External

Cost

Value


Internal External

Cost

Value

With the resulting conflicts in expectations …

IT Technologies

Automation and cost managementinternally and centrally forefficiency and regulatory

support

Cloud & Web Technologies

To create products and compete in external markets providing

differentiation and customisation for revenues and profits

How do we encourage decisionsupport and expertise sharing?

How do we control ‘Social’ toolsand Collaboration?

Can we support a wholly different business model?

Can we reduce costs by virtualisation and sharing?

Enterprise 2.0

So what are the real changes?The nine key points to grasp


Clouds – the correct and simple explanation!

The current final stage in the development of a technology revolution;1. The Internet – standardisation of connectivity2. The Web (1.0) – standardisation of content 3. Web 2.0 - standardisation of social interactions4. Clouds - standardisation of process elements

A shift from Client- Server Technology which is;Close Coupled; State full and Deterministic

To Browser-Cloud Technology which is;Loose Coupled; Stateless and Non

DeterministicThe result?

Its not possible to make an architectural drawing illustrating what system is connected to what system, how and for what, as a result;Connectivity and Functionality can only be shown to a specific Cloud


01 People, Real-Time Data and Process are the new focus


Microsoft Phone 7

Apple iPhone & iPad

02 Presentation and usability is radically different

Consumerisation of IT


User Interaction

Use

r Typ

e/W

ork

Type

Real-timenon-persistent non-searchable

03 How it is developed and deployed changes …

ContentSharingCollaboration

ConferencingAudio Videoon line meetings

TaskExecution

Content Publish

BusinessNetworking

Mobile

KnowledgeWork

43%

Collaboration38%

Relationship Management

12%

BusinessProcess

7%

MessagingSearchContentCreation

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Workflow


04 Who and where it is used in the Enterprise is new

SmartBusinessModels

BusinessUsers &

Managers

CEO

DecentralisedBusiness Technologies creating go-to-market

competitive capabilities enabling new revenues &

increased market access constantly changing open and interactive paid for from operating

budgets with direct cost allocation to demand

CIO

CFO

BusinessProcess

Outsourcing

CentralisedInformation Technology reducing internal operating

costs of running enterprise necessary for commercial

and legal governance stable and procedural closed and secure an overhead that must be

budgeted and recovered annually

PersonaliseAn Individual’s capability to choose their ‘tools’and how they wish to ‘Interact’ and ‘collaborate’

DifferentiateA Manager’s capability to build locally unique ‘differentiating’

capabilities both externally and internally to create revenue

Core CompetencesCommon, shared core processes that support each differentiated offer

above, and connect to transactional IT applications below

Comply (ERP, etc.)Traditional Enterprise Applications with organised procedures

and data integrity, keeping compliant business results


05 From tight couple computers to loose coupled people!

Clients Desktops Software PCs

Network

ApplicationsDatabases

ServersHardware

StorageMiddleware

BrowsersMashUpsDevices

Collaboration

NetworkAbstraction and policies

Information

Virtualised OperationsHardware

Storage

ServicesIntegration

SystemIntegration

Technology based Integration of the Systems through Enterprise Architecture

Computer and ApplicationsPUSH structured process data

People interact andPULL contextual information

The user and devices become the focus with management of ‘Services’ the new integration issue


06 Introduction of the Next Generation Data Centre

Next Generation Data Centre

Entire Data Centre acts as a single Resource not as a collection of individual resources

Servers, storage elements are all plug and play standardised units

No individual Operating Systems interfacing applications to hardware but a ‘cloud’ layer’ set of simple APIs interfacing Services to resources

Policy Management of Resources both own and external shared is key

Timeline showing Shift from support of Applications to support of Services

Shift from deterministic numbers of applications and systems to use of infinite resources and services

Re-Active toRequiredApplications

Optimised forOperationalOptimisation

Virtualised forOperationalFlexibility

Private Cloudto support growthin Services

Next Generation Data Centre

Choice of Applicationdictates O/Sand hardware

ConsolidationAnd RationalisationWith new tools

Virtualisation to improve efficiency in use of servers

Use of Cloud Middleware to support shift to ‘services’ on demand

Radical shift in requirements towards participation in a common environment with other data centres through hybrid clouds and new generation of users/devices


07 Rich Internet Applications change everything

Real-time interaction with and perception of surroundings


Centralisation for Efficiency

Automation of core Procedures

Cost Reduction

Recharged Overheads

Leverage of Enterprise resources

Data-driven Transactions

Computer and Application centric

Closed and Secure

Justification is COST reduction

08 It’s added a whole additional functional environment

External Market Optimisation

Provides local market differentiation

People Driven Interactions

Expertise with Collaboration

Open with Privacy

Extreme flexibility, frequent change

Direct Bus Unit Attributed cost

Services and Standards based

Value creation in sales/margins

Client – Server Information Technology

Web 2.0 and CloudsBusiness Technology

+


09 Smart Business in ‘White Space’ innovation is the goal

Adjacent BusinessActivities

White SpaceInnovation

DistractingInnovation

Core BusinessActivities

OrganisationalChange

Poor fit to currentOrganisation

Good fit to currentOrganisation

Existing CustomersWith existing products

Existing or New CustomersExtension to existing products

Product Change Source; Seizing the White SpaceHarvard Business Press by Mark w Johnson

Where to start?Core focus areas!


Constructing a focussed Action Plan

Review Portfolio & cluster by use

Ensure familiarity with using SOA

Re affirm effectiveness of existing BI

Front Office differentiation not Back Office automation!

Rethink Maintenance & invest strategically

Build a strong data management model

Re examine Knowledge management approach

Redefine role and responsibilities of ‘IT’

Evaluate Virtualisation for flexibility & Cost

Examine implications of Mobility

Examine data storage architecture

Recognise ‘enablement’ not control is needed

Consider Development Methodologies

Work on Architectural skills adopt TOGAF

Determine the use of unstructured data

Look to establish ‘fast track’ support

Utilise Offshore & Shared Service Centres

Re evaluate role of Middleware

Establish enterprise data governance policies

Re design relationship with business managers

Strengthen Network Capabilities

Identify critical processes & ownership

Evaluate the use of social networking tools

Really get to understand Cloud and Services

Re Examine all aspects of security

Define basic APIs to support ‘services’

Investigate and understand Social CRM

Construct an enterprise ‘leverage’ framework

Plan the new role of the data centre

Re visit all policies & operating procedures

Implement real-time decision support

Develop a RACI model to define relationships

Research emergence of new standards


Consider broader integration implication


Infrastructure Integration Intelligence Innovation

Headings are based on the Four Focus points principle of Ray Wang – actions are defined by Capgemini

Roundtables


Topics for roundtable discussions

Is this reality in your company?What are the challenges for you?How will you start the journey?

Presentation, Capgemini Executive Club - Copenhagen

Technology

new business modelssource

new market

edge of business

role of technology

new policies

new focus

different business model

new customerswhere market