The New Normal

The New

NormalExplore the limits of the digital world

Peter Hinssen

“If a man will begin with certainties,

he shall end in doubts.

But if he will be content to begin with doubts,

he shall end in certainties.”

Francis Bacon, 1926

“History doesn’t repeat itself.

But it rhymes.” Mark Twain

Dear reader,EMC is proud to offer you, as one of our privileged contacts, a first pre-publication of Peter Hinssen’s new book “The New Normal”.

The New Normal is about all the things we call ‘digital’, and the fact that in the digital revolution we’re probably only halfway there. The aim of the book is to explore the world of ‘digital’ once we’ve crossed this halfway point and show how the second leg of the digital journey will differ entirely from the first, which is now coming to a close.

In the book an analogy is being made between a swimming pool and the digital revolution. We are currently halfway across the water, we’ve waded through the first shallow end of the pool but our feet are still touching the ground. Now it’s time for us to explore how our attitude, expectations and behavior will change when we’re in the deep end of the pool.

Therefore, EMC has decided to develop an executive programme for CIO’s and IT managers centered around Peter Hinssen’s valuable insights in his new book ‘The New Normal’. Throughout the year you will receive additional large sections of Peter’s new book.

In addition, Peter Hinssen will also be hosting three interactive workshops exclusively for EMC contacts. These workshops will cover the following topics:

• Informationstrategy,orhowtogetahandleonyourinformation;• Infrastructureasadynamicasset,orhowtoprepareyourITassetsforyour

company’sstrategychanges;• ThevalueofIT,orhowtosetupanITportfoliotoassessthevalueITisbringing

to your company.

A full explanation on the workshops starts on page 30.

We hope you enjoy the read and look forward to seeing you in one/all of our workshops.This initiative is an integral part of the Cluster of Thoughts, an online meeting place for motivated high-level IT Managers (CEO, CIO,...) where they share and improve their knowl-edge in order to have a clear insight into all aspects of the role technology can play in their business strategy. The content is both general and technology specific on topics such as cloud computing, storage, back-up, recovery and archiving.

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The New Normal

The | 05 New Normal

The idea behind the New Normal is quite simple: “We’re halfway there”.

The New Normal is about all the things we call ‘digital’, and the fact that in the digital revolution we’re probably only halfway there. That means we have as much journey ahead of us as we have behind us, but the next part of the trip will take quite a different turn.

Our aim here is to explore the world of ‘digital’ once we’ve crossed this halfway point and show how the second leg of the digital journey will differ entirely from the first, which is now coming to a close.

The glass is half full, and this will drastically change our perception of technology. The next ten, twenty, thirty years will be marked by an ever increasingly digital world and society, but there will be some fundamental shifts in our behavior and our adoption of technology. The impact on businesses and the way they use the technology will be enormous.

How do we know that we’re halfway there? We don’t.

Justin Rattner is the Chief Technology Officer of Intel, the company that powers most of our computers with their Intel Chips. Justin is a ‘deep’ thinker, and observes and talks about periods of 40 years. His point of view is that we’ve now had just about 40 years of Information Technology, but as Justin says: “If you think the last 40 years of digital revolution were pretty amazing, think again. The next 40 years will blow you away, and will make the past 40 years look pretty tame.”

Pretty bold statement, but then again, they’re in the business of selling tomorrow’s technology. The future is being made in their labs this very moment, so he should know.

Don’t be alarmed. This is NOT a booklet on how great and wonderful the digital future is going to be. On the contrary.

HalfwayWe’re at the halfway mark in the digital revolution. What will happen when we cross this point?

What will happen is that digital will become the New Normal. During the past thirty years or so, our lives have become more and more digitized, and the moment has arrived that we’re passing the halfway mark. From now on, digital is the norm. Everything we do from now on, will have one common characteristic: we will EXPECT things to be digital.

• This is a statement on how our perception changes when digital is just ‘normal’. How we will expect things digital always to work, and will have zero tolerance for digital failure.

• How we will crave human contact in a world where most interactions between organizations will be digital, and where analog might actually see a revival.

• How we will need to change the way we market to consumers once the world is fully digitized and the user is in control of information consumption.

• How IT departments will have to adapt to a society where they are no longer the introducers of hot new technology, but the catcher-uppers. They will struggle to keep up with the technology that their employees find completely natural and are using in their homes.

The second leg of the digital revolution won’t be a walk in the park. As a matter of fact it will be much more difficult to really stand out as an organization. In the first half it was simple: using technology was a novelty and gave you an edge. In the New Normal, access to technology is a commodity, and you will have to focus on other skills in your organiza-tion to differentiate yourself.

If I would use one analogy, it would be the swimming pool. If the digital revolution is the complete pool, I guess it would be safe to say that you’re halfway across the water. You’ve waded through the first shallow end of the pool, you’re now fully submerged, but your feet still touch the ground. But there is no certainty you will make it through the deep end.

Let’s explore the deep end of the digital pool. Please jump.

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The New Normal Digital is the new Black

The | 07 New Normal

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It ain’t Kansas anymore. It’s Silicon.

F i r sT h a l F s e co N d h a l F

Technology is a NoVelTY

Technology is scarce

Digital is a diFFereNTiaTor

Digital is an adJecTiVe

Technology is WorK

Focal Point is BUsiNess

Digital Marketing is iNNoVaTiVe

It’s about TechNoloGY

Technology is a side activity

Technology is the NorM

Technology is a coMModiTY

Digital is a MUsT

Digital is a TriVial

Technology is liFe

Focal Point is hoMe

Digital Marketing is MaiNsTreaM

It’s about being cleVer

Technology is a core activity

The | 09 New Normal

Society has clearly gone digital

Probably the best way to see this is to observe the changes in our home environment. Ten years ago, you typically had better technology at work than at home. Today, you have much better technology at home than at work.

If I had walked into your house ten years ago, and asked you to ‘show me THE computer’;typicallyyouwouldhavegotupandproudlyshownmeyourcomputer.During the next ten years, it would have been handed down from the older to the younger generation. When I grew up it was clothes that were handed down, in this generation it was technology.

But if I were to walk into your house today, and ask to see ‘THE computer’, it would be your thirteen year old who would jump up and proudly show the ‘fastest and coolest computer in the house’, because they need the power to play ‘World of Warcraft’. When that won’t do anymore, they hand it over to the older generation of brothers and sisters, and eventually you end up with something on which you can do your home banking. In just ten years there has been a total reversal of power in our living rooms.

Technology in the home has become both a necessity, and a status symbol. When you’re invited to friends or family for dinner and you walk in, and in the living room you still see a bulky old-style ‘fat’ television, you immediately think: “There must be a serious problem in this household”. We WANT to show off our plasma screens, wall-size LED televisions, and perhaps our new OLED displays. Technology is a status symbol.

But technology has also become a necessity. Five years ago when the Internet malfunctioned and I had no internet access at home, I was the only one in my family to grunt and be annoyed because I had to wait until the next morning to read my emails. Whereas today, if I come home and the ‘Internet is down’, there is a hostile posse waiting for me when I take off my coat, screaming and hollering because they can’t access their mail, MSN, Facebook or Twitter. in just five years, the main users of technology in my household have become my children, not me.

10| The New Normal

I saw a recent survey in Australia on the ‘necessities in life’. They asked hundreds of (young) Australians what they thought were the most important ‘necessities’. Top two answers were 1. A Car, and 2. Airconditioning. Not surprisingly, because you don’t get very far in Australia without a car or airco. But the remaining items in the top 10 lists were things like iPods, Laptops, Facebook, High Speed Internet, Mobile Phones and Flat Screen TVs. As a sign of the times, on the top ten list of the absolute ‘necessi-ties in life’, Food didn’t make it.

So, we’re crossing the halfway mark. Technology is not about work anymore, but about home, the personal and our ‘lives’.

My history with technology dates back more than thirty years to when my father came home with one of the very first Pong games. We had no idea what it was, but when he hooked it up to the TV, and it showed the black tennis field, and the two white sticks left and right with the ‘pong’ ball going across the screen I was hooked. But most of us don’t have such a long digital history. Most of us are still digital immi-grants.

We’re entering a world where analog really is the exception. I like the simple test to distinguish between a digital native and a digital immigrant. You put a camera on a table and just ask “What is this?”.

A digital immigrant like myself would say, “Well, that’s a DIGITAL camera”, whereas a digital native like my children would say: “Well, that’s a camera, of course”. The reality is that my kids have never SEEN an analog camera in their lives.

The more we use the adjective ‘Digital’, the more antiquated we sound. When Digital becomes the New Normal, the adjective digital just loses all meaning. Maybe we should just stop using the word digital altogether, because it’s a clear indication that we’re still deeply anchored in the first leg of the journey.

It’s also about expectations. When I walk into a train station, or a hotel, or a confer-ence area where I get free Wi-Fi, I feel pretty good about it. I’d be genuinely happy and say: “Wow, great! Free Wi-Fi!” However, when walking into a hotel that does NOT have free Wi-Fi, my kids react as if we’ve just taken them to the worst place on earth: “What? No Free Wi-Fi? What a dump!”. Regardless of the luxury or surroundings, “the place is crap”, if there’s no free Wi-Fi.

The | 11 New Normal

“It’s a camera, of course.”

WORK=

the brief period during the day where I use

OLD TechnOLOGy

12| The New Normal

The | 13 New Normal

We’re seeing the same with our employees. Technology is a commodity. Technology is not work. Technology is life. Just a couple of years ago, our employees had the best technology at work. They got their laptops, desktops (remember those?), cell phones and internet access from work. Today, they have better computers at home that at work, they have faster internet access at home than at work, and they have much cooler cell phones personally than the ones we give them.

This is causing a bit of trouble for the IT folks. In just a couple of years, IT departments have turned from being ‘dispensers of cool stuff’ into ‘dispensers of really old boring grey stuff’. Before, when we handed out a new computer and cell phone to a new employee on their first day of work they used to say “Thank you’. Now when we provide them with a laptop and phone they look at us incredulously as if to say “You don’t think I’m going to be seen on the street carrying THAT around do you?”

The generation Y, people born after 1978, are the most affected. This is the first genera-tiontolivetheirlivesinadigitalworld;theylive,breatheandthinkdifferentlyabouttechnology. For them, technology is life, not work like for previous generations. They wake up with technology and go to sleep with technology, and as a matter of fact, their definition of WORK is: “That brief period during the day when i still have to use old technology’.

We’ve crossed the halfway point, and there is no going back. We can’t put technology back into that little box called ‘work’ anymore, technology has become life and life has become technology. Digital IS the New Normal.

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The New BattlefieldsThere are constantly new battlefields of course.

Take mobile for example. Relatively speaking, Mobile has been around ‘forever’. The mobile phone was invented in 1973 by Dr. Martin Cooper, then working for Motorola. On April 3, 1973, he was the first person ever to make a call on a handheld cell phone prototype, in front of reporters and passers-by on a New York City street.

Since then, things have been exploding like crazy. We’ve long passed the point where mobile phones were a novelty: in Europe, including Russia, there are more mobile phones than human beings today. But the interesting thing from a behavioral point of view is that since mobile phones have become a commodity, we now take them for granted and demand that they always work. We hate the fact that we might not have reception in an elevator, or in a basement. We hate getting an interrupted service during a call. We hate it when we don’t have ‘all the strength bars’ on our mobile phone. That’s because we’ve passed the halfway mark in mobile.

Throwaway mobile phones have become popular for party-goers who don’t want to scratch their regular mobile phones. They are prepared to lose them, and just use another. Mobile phones have become fashion statements, status symbols, but above all a commodity. A kid with a mobile phone in school was a rarity just ten years ago, now it’s rare to see a teenager without a mobile phone. Ten-year olds without mobile phones will soon be social outcasts.

When the iPhone was introduced it was a revolutionary mobile experience because it was a great device, but the real zinger was the introduction of the App Store and the possibility to actually be able to download and run any kind of application right from your mobile phone. The first half of the revolution was about the digital devices, whereas the second part is about digital services.

The New Normal is about the transition from hardware to services, from devices to functionalities, from exception to commodity, and how behavior towards technology is changing.

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We WON’T look at the now. The now is boring. I can’t stand the ‘2.0’ thing anymore. If I hear 2.0 one more time I’m going to throw up. And we don’t want to insult your intel-ligence by talking about 3.0 and 4.0. Please.

What we want to do is take it to the limit. Let’s take this ‘digital’ thing all the way to the edge and see where we end up. In the words of Meatloaf (another thing I don’t want to hear anymore): “We’re gonna go all the way tonight”. Let’s explore the world that we will live in when we fall into the New Normal, and see what happens when we take the New Normal to the limit. Let’s explore how our attitude, expectations and behavior will change when we’re in the deep end of the pool.

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2.03.0

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The | 17 New Normal

Let’s explore how our behavior and expectations

will change when we’re in the deep end of the pool.

18| The New Normal

... the upgrade of our corporate website is going to cost me close to half a million, while my 13 year old nephew built the website of his school

last weekend on open source. explain to me...

... i can’t find anything in our brand-new document management system, and particularly why i had to spend over an hour retrieving a document i had put there myself, when i can go onto Google and find

aNYThiNG in less than three seconds? explain to me...

... i can book a flight online in two minutes flat, and it takes me almost an hour to input my expense account statements in these horrible saP

screens? explain to me...

... i can buy a printer in the shop round the corner for under $200, have it here in fifteen minutes, and when i use the corporate iT channels it will

take me two weeks and cost more than triple? explain to me...

Explain to me why...

The | 19 New Normal

Is it about IT?

What we will also do is examine the role of IT in the realm of the New Normal. In my previous book (Business / IT Fusion) I talked at length about the need for IT depart-ments to transform themselves and become much closer to the business. But here, we’re going even further. This will not just be about re-positioning IT, or re-thinking the role of IT, here we will examine the re-molding of IT into something completely different.Thisgoeswaybeyondthe‘DepartmentpreviouslyknownasIT’;itisaboutfundamentally disassembling IT, and putting it back together in a completely new shape and form. This book will be about defining what that ‘shape under the drape’ will be, and defining what will happen to IT when it becomes established as a pure commodity. We will redefine IT in the New Normal.

We’re already feeling the impact of commoditization in IT. Commoditization pressures are high, and it’s not just the employees who would rather just buy their IT kit them-selves and bring it to work. It’s the difficult questions that the (senior) executives are throwing at the IT department, and they all start with “explain to me why ...”

And that’s just the beginning. The power of IT evaporates when IT departments enter the New Normal. The detrimental effect Kryptonite had on Superman is nothing compared to the way the New Normal is melting the power of IT departments. In the first leg of the digital revolution, IT had a very strong power base, since business depended on the ability of IT to guide them through the possibilities offered by tech-nology. But in the second leg that’s gone forever. The choice for iT departments is to either melt away, or adapt and reshape to reflect the new realm.

Today we still have armies of trained ‘builders’ in our IT departments, people that were absolutely necessary to construct our IT systems in the first leg. Like the armies needed to build the pyramids, but that remained idle once they had been built. We built IT systems that had to last forever (or so we thought at the time), but now we need IT that is capable of turning on a dime and which helps business be flexible and agile.

Don’tthinkthatthisisapassingphase.ThispressureonITisn’ttransitional;it’sheretostay. It’s the New Normal of IT.

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The four I’s

Clever business will anticipate the necessary changes, and will dismantle the old IT and transform the way we think about technological innovation. In this book we will talk about the four I’s that will be the four pillars on how to rethink technology: Informa-tion, Intelligence, Integration and Innovation.

information

Yes. IT stands for Information Technology. In the first part of the revolu-tion we focused on the T part: Technology, while in the second half we need to focus clearly on the I aspect: Information. Today we’re swamped with information, drowning in it. As the old John Naisbitt wrote in his

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“We will be drowning in information and starved of knowledge”

John Naisbitt ( 1982)

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great book MegaTrends in 1982: “We will be drowning in information, and starved of knowl-edge”. And he was damn right.

Today companies are overflowing with emails and documents, and are flooded with templates, folders and intranets, but nobody can find anything. Instead of becoming more productive as a result of all this technology, haven’t we become even less productive than before? In the first leg we focused on building a technological foundation to ENABLE knowledge workers to collaborate, but now we have to shift and build the skills, competencies and attitude to be more productive with information.

intelligence

How many databases does your company have? How much data do you handle? How accurate is the data, and how much is data and how much is real intelligence? We store zillions of data points, and the usual reaction in most boardrooms is: “Nah. The numbers are wrong.” We have more data than ever before, but we just can’t

seem to turn it into intelligence. We built databases so fast that we couldn’t see the wood for the trees. Then we built data-warehouses on TOP of the databases to make sense of the data. Then we didn’t trust those anymore either. We’ve piled system on top of system and have spent billions on capacity to STORE data, but that won’t work anymore in the second half. The second leg means a focus on INTELLIGENCE, not on storage of data.

integration

A company isn’t an island anymore. We’ve spent the last ten years buildingconnectionsbetweensystemsWITHINourorganizations;we’ll now spend the next ten years integrating our information with information OUTSIDE our organizational boundaries. While the

skill of the first leg of the journey was to build masterfully, the skill of the second is the capability to connect cleverly.

The | 23 New Normal

innovate

Probably the most important of the four I’s is the mindset we needtoadopt.It’snotabouttechnologyanymore;it’saboutbeingCLEVER with technology. It’s not about technology as such, but about technology enabled innovation. When access to technology becomes a commodity, we can’t differentiate any longer by using

technology. What we need to do is to develop the capacity to innovate WITH technology.

That’s quite a jump. That’s why the transition will be hardest on the old IT department. It’s about taking that quantum leap, evolving from High School to University, kicking off that first stage of the rocket and burning up the boosters in the second stage to escape the Earths’ atmosphere.

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The core question is: can your product or service

be digitized?

The | 25 New Normal

Bits and Atoms

Of course, some companies will be affected more than others. In his groundbreaking book “Being Digital” in 1995, Nicholas Negroponte coined the difference between “moving bits and moving atoms”. Some companies are almost purely BITS companies like banks, insurance companies and governments where the real assets are nothing but ‘bits’ of information stored and transported. Some companies still remain “atoms” companies who rely on moving real physical material around. The core question is: can your product or service that you offer be digitized?

What we’ve observed since Negroponte’s book is that some ‘BITS markets’ have been massacred. Just look at the massive changes we’ve seen in the media business1: the switchingofclassifiedadstoonlinevariantslikeCraig’sList;thesufferingofthemusicindustryduetoWebofferingsandmusicmanagementtoolslikeiTunes;andthecrushing effect online has had on television advertisement revenue.

The pure ‘ATOMS markets’ have had much less impact. If you run a coal-mine in Australia, or operate a quarry in Congo, the chances that you’ve been obliterated by the New Normal are much slimmer. But the interesting thing to observe is that most companies aren’t 100% bits or 100% atoms, but are somewhere in between. And the ‘Atoms to Bits ratio’ will affect WHEN the New Normal will hit you.

Take the travel industry. Sure there are plenty of atoms there: planes, hotel rooms, kero-sene and swimming pools. But the interaction pattern of travel companies with their customers has almost exclusively turned into a digital behavior pattern. The industry changed dramatically when the New Normal hit them. Today almost every customer will use digital technology to find out about a travel destination, will use the Internet to compare different offerings and will increasingly use digital means to reserve, book and pay for their trip, and give feedback on their travels. it’s an atom business all right, but the New Normal sure shook up the industry.

1 The Economist : “The year of the paywall” Newspaper executives had assumed (or, perhaps more accurately, hoped) that advertising revenue would gradually migrate

from print to the web, together with readers. The digital-revenue wobble threw that into question. Worse, newspapers are losing market share online, where advertising is moving away from banners and classifi eds andtowards search.

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When the New Normal hits a market like the travel industry, the impact can be devastating, also on the traditional ‘atoms’ parts of the business. In the travel sector, the ‘rhythm’ used to be very simple: 2 major releases per year. The travel companies produced a winter catalogue and a summer catalogue and the whole organization revolved around those two major peaks of activity per year. Once the sector hit the New Normal, the rhythm of two releases per year evaporated and the operations of the companies became 24/7 365 continuous operations.

The companies in the travel sector that were able to cope with the New Normal were those who repositioned technology not as a ‘side activity’ in the IT department, but who were able to position technological innovation as a CORE activity to allow them to lead the New Normal interactions with their customers and partners.

These changes aren’t IT related changes, they’re business related changes. It requires business attention and business oversight to make this happen.

The | 27 New Normal

Can you adapt?

So the question is: “Can you adapt?” Can you adapt to the New Normal, and can you do it quickly enough? Can you shift your mindset towards the realities of the New Normal?

Over time, the problem will disappear. In twenty years’ time, there won’t be a differ-ence anymore between a manager who ‘gets it’, and a manager who doesn’t do digital. But the transition phase between the halfway point, where digital becomes the New Normal in society, and the point where digital will become the New Normal in the boardroom will be a crucial one. It’s your responsibility to manage your company through those challenging years just beyond the half-way point. Your challenge to navigate your organization through the storm of the fresh New Normal.

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Onwards Ho

I want to conclude this booklet by congratulating you. You are at the crossroads of the digital revolution, and about to step into the great unknown. Our feet are feeling the curve of the pool dropping away below us, and we can ‘sense’ the attraction of the deep end of the pool. We feel the tug of the New Normal all around us, in society, in our family, in our colleagues who are being drawn into the realm where being digital is just being normal.

Please join us for three workshops that EMC and Across Technology are organizing this year. They will help you successfully cross the deep end of the pool.

I can only wish you a lot of luck on the second leg of the journey. May the New Normal be with you.

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Workshop 1

Information Strategy

We’ve been working in ‘Information Technology’ departments as long as we can remember, but what is your company’s ‘Information Strategy’ today?

Looking back over the last twenty years in IT, we’ve spent an enormous amount of resources and money on building information infrastructures for our companies. From email systems, to file servers, from intranets to document management systems, we have implemented tool after tool to serve the great hunger our knowledge workers have for information. But have we really cracked the productivity code with information?

The 4 fundamentals

‘Together’ Share

Collaboration

Store ‘Stuff’

Content

ReDuce QuerySearch DeDuce

Intelligence Knowledge

INFORMATIONINFORMATIONINFORMATIONINFORMATION

The | 31 New Normal

Perhaps our approach was wrong. The basic idea most of us applied was: “If we supply them with the right tools, and the right information systems, then we should see an increase in information productivity.” And that was plain wrong.

The reason is quite simple: information BehaVior changes FasTer than informa-tion sYsTeMs. So, instead of our focus on information systems, we should study the dynamics of our company’s Information Behavior, and deduce an Information Strategy. Instead of being the Information TOOL suppliers, in the New Normal our job will be to shape the Information Behavior within our organizations.

In essence, there are four fundamentals:

content. What we’re most familiar with, is the content part. This is the area in which we’ve tried to serve the needs of our employees to ‘store stuff’. Indeed, we must be able to file information, and be able to retrieve it, but that’s only the beginning.

collaboration. The second domain that is now rapidly accelerating in importance is the collaboration area. The wildfire of collaboration, communities, and communication tools that the web 2.0 phenomenon introduced, needs to be addressed internally as well. In the New Normal, this is no longer a side-aspect of information, but has become core.

intelligence. Content and Collaboration don’t mean a thing if we can’t find anything. Without a doubt, the ‘Googlization’ of society means that people have adopted search as their primary access to informa-tion. The quality of an information system will be determined by the user perception of the search capabilities. What we really want is not just a raw-power search, but an intelligent search through our infor-mation sources.

Knowledge. Finally, our ultimate aim is to build up not just a set of information sources, but to build up true knowledge within our organizations. The concept of ‘Knowledge Management’ is an old one, yet we never really saw it come to fruition. In the New Normal, it will be the core value around which we’ll build our Information Strategy.

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In order to get our heads around an Information Strategy for our companies, we have to focus on the basics: risks, costs and value of information. As the AIIM (Association for Information and Image Management, www.aiim.org) puts it: “The risks of misman-aging information are increasing exponentially”, but the core question remains: are the benefits of information management increasing accordingly?

We’ve had the pleasure of Moore’s law in IT that has doubled the capacity of tech-nology every 18 months, but what if the Information Value in our companies doesn’t grow with the technology?

For too long we’ve built silos and containers of information. But if we want to create true value, and explore the future of work in the New Normal, we have to shift gears from implementing information systems towards shaping information behavior.

In this workshop we help you get a grip on Information Value creation within your organization, and give you a practical approach to building an Information Strategy for your company. We help you examine the fundamental strategic information drivers within your context, help you apply that to building a roadmap for Information Value, providing you with a set of practical guidelines on how to implement your Information Strategy.

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Workshop 2

Infrastructureas a dynamic asset

The paradox in working with Information Technology is that when you define a strategy it is by definition long-term thinking, whereas the business requirements in terms of constant and ever increasing change, require you to be able to turn on a dime. Instantly. This puts a lot of pressure on IT to cleverly combine solidity and robustness as well as agility and flex-ibility.

The building of information technology ‘silos’ is long gone, but the new paradigm of using components, services and the adoption of a ‘plug-and-play’ or ‘snap-and-connect’ approach in IT is still in its infancy.

We’re in a transition phase. We’re going from build to buy to compose, and we will have to supply the business with a ‘fabric’ instead of architecture, we will have to service the business with a ‘dynamic’ approach instead of the traditional ‘static’ thinking in terms of architecture.

We’re living in the most interesting times in terms of IT. Thanks to virtualization, we can dynamically reallocate workloads to the different components in a datacenter. Above all, the concept of cloud computing has brought IT as a utility one step closer again.

The cloud is a good example. The cloud can be the biggest blessing in IT, but it can also be our worst nightmare. Every CEO and Business Executive is now reading about the potential of the cloud in everything ranging from airline magazines to glossy lifestyle magazines. But the question is not about the potential of the cloud, but about our role as IT: We can be the ‘Masters of the Cloud’, of the ‘Cloud Concierges’. It’s up to us.

This workshop is about the way forward in turning Infrastructure into a dynamic asset. How can we move away from the old concepts of architecture, and use new technologies such as virtualization and the cloud to really become a radically new partner for the business. How can we make architecture work in a business sense, and change our role accordingly to be a facilitator of business architecture instead of just minding the IT shop.

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Workshop 3

The value of IT

For too long, IT has been seen as a cost center. CIO’s are often not so well trained in proving the value of their work to the organization. High-profile failures of projects have further damaged the reputation of the IT department. This made the IT department as an ideal target of a cost-cutting center in the recent economical crisis.

Today things have changed. IT has become so critical a factor for a company’s success or failure that the role of the CIO is changing into that of a ‘new man’ who needs to juggle different sets of competencies. And also the way in which we calculate the value of IT is up for discussion.

A large number of studies and publications have challenged the value of IT: Nicholas Carr argues that companies spending a lot on IT actually get the lowest business benefits from their investments.

In fact the hard part is measuring and communicating the value of IT. The best way to calculate that value is by looking at the long term effects of IT investments on the overall business performance.

if we want to rethink iT, we have to rethink the iT budget. We have to move from budget thinking to portfolio thinking and use the dynamics of an IT portfolio to move towards an intelligent governance of IT. A budget is an exercise to add up all the projects that we have to do or want to do, and a mechanism to reach the total cost to do all these projects. A budget deals with costs.

A portfolio also has the costs and constraints of every possible project, but also has a clear indication of the value that this project can bring to the company. A budget deals with cost AND value.

In this workshop, we will take a look at the value your IT department is bringing to the company, and how you can convince your management how worthwhile your invest-ments have been. We will also help you move from IT budget thinking to IT portfolio thinking. How can we turn cost discussions on IT into value dialogues with the business?

Value-Risk map of the it poRtfolio

The sTraTeGY sUdoKU

What TYPE of investments do you make in IT, and WHERE do you apply them ?

low risk

medium risk

high risk

high return

medium return

low return

The | 35 New Normal

“Front end”shop

Window

“core”Brains

“operational”Processing

customer

Product

excellence

Run

Win

Change

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ValUe

Run Win Change

An entrepreneur, advisor, lecturer and writer, Peter Hinssen (1969) is one of Europe’s most sought-after thought leaders on the impact of technology on society and business. He is frequently called upon to lead seminars and consult on issues related to the adoption of technology by consumers, the impact of the networked digital society, and the Fusion between business and IT.

Furthermore, Peter has extensively researched the organiza-tional transition of IT units, the profile of the next-generation CIO and the profound shift in IT roles during a Fusion process.

Peter Hinssen is co-founder of Across Group and since 2000, he has been an Entrepreneur in Residence with McKinsey & Company. His passionate teaching approach makes him a popular executive faculty member of the London Business School (UK), TiasNimbas Business School (Netherlands and Germany) and Vlerick Leuven Gent Management School (Belgium).

In his previous book, “Business/IT Fusion”, Peter demonstrated how CIO’s need to move beyond Alignment and transform IT in their organization. He introduced the concept of Fusion, which turns CIO’s into business leaders, injects business savvy into the IT department, and transforms

IT into the organization everyone wants to work in. Fusion is about blending IT into the business, and is a recipe for business integration and innovation. Fusion is the Future of IT.

About the author

Peter Hinssen

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The Cluster of Thoughts is an online meeting place

for motivated high-level IT Managers (CEO, CIO,...) where they share and improve their knowledge in order to have a

clear insight into all aspects of the role technology can play

in their business strategy. The content is both general and

technology specific on topics such as cloud computing,

storage, back-up, recovery and archiving.

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