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ManagingITinthe21stCentury TheCIOAgenda BMC sSoftwareForum 5thNovember 2002GianlucaMarcellino gianluca marcellino Accenture2002 Today sCIOfacesanumberofkeychallengesinplayinganincreasinglycriticalrolewithinthecorporation Source AccentureCIOsurveys ManagecostsinadifficulteconomyCloselyintegratewiththebusinesstoenablemeasurableresultsIncreaseITefficiencyandeffectivenessthroughadoptionofleadingpracticesLaunchspecificinitiativestocreatenewvalueUnleashthevalueofemergingtechnologiesMitigatesecurityrisksEnsurebusinesscontinuityEnableenterpriseintegrationOperateathigherlevelsofinfluenceandresponsibilitywithintheenterprise TopCIOChallenges Accenture2002 TheseCIOsareincreasingtheirinfluenceonthebusinessagendabygettingthefundamentalsrightwhiledrivingtocapitalizeonopportunitiestocreatenewvalue TransformingITTowardsGreaterValueCreation BusinessValueCreation FunctionalLevel ExecutiveLevel Sporadic LowerValue Sustained HigherValue CIOInfluenceonBusinessAgenda Accenture2002 Achievingtheproperalignmentrequiresconsiderationoftheassettypesdrivingvalueandchangesoccurringwithinthefirmorindustry PhysicalAssetIntensive IntellectualPropertyIntensive LowerChange HigherChange PrimaryAssetsthatDriveValue Industry FirmRateofChange ITStrategyAlternatives Processknow howManufacturingPlantsDistribution Transportation Productorserviceknow howRelationships IntellectualProperty IPRelatedtoPhysicalAssets PhysicalAssets Relationships RapidshiftincustomerneedsDisruptivechangecausedbygovernmentregulationorcompetitionNewtechnologieschangingtheindustryvaluechain economicsorproduct serviceofferings HigherChange Gradualevolutionofcustomerneeds competitivelandscape governmentregulation technologiesandsuppliers LowerChange PhysicalAssetIntensive IntellectualPropertyIntensive Accenture2002 Primaryissues opportunities andITstrategiestobeevaluatedmayvarybasedonacompany spositioningwithrespecttothesefactors PhysicalAssetIntensive IntellectualPropertyIntensive LowerChange HigherChange PrimaryAssetsthatDriveValue Industry FirmRateofChange ITStrategyAlternatives NewopportunitiestocapturevalueHighneedforcollaborationanddataintegrationPushtounlockrevenuepotentialofIPassets PushtounlockrevenuepotentialofIPassetsHighneedforcollaborationanddataintegration PressuretominimizecostsacrosstheenterpriseIncreasedscrutinyonITinvestmentopportunities ChangingmarketplacedemandsContinuousneedfornewcapabilities ResponsiveSolutionProviders NewMarketDevelopers Efficient PredictableOperators InformationOptimizers Accenture2002 ITSpendingMix CostReductionStrategy KeyCharacteristics ITSpend Time Historical ResultsofStrategy ImplementationofcostreductionITStrategy Onehighpotentialopportunityfor Efficient PredictableOperators istoexecuteastrategythatrepositionsITtoeffectivelydelivercapabilitiesandservicesatareducedcost Targetoverallcost reductioninITspendingFocusnewcapabilitiesondeliveringthehighestbusinessvalueExecutequickhitITcost reductionopportunitiesWellpositionedtopursuefurtherITeffectivenessandefficiencyopportunitiesHavearoadmapforsuccessinplacetoguideinvestmentdecisions ResponsiveSolutionProviders NewMarketDevelopers InformationOptimizers Efficient PredictableOperators Accenture2002 ResponsiveSolutionProvider ITorganizationswilllikelybenefitfromcarefulconsiderationofsourcingoptionsastheymanagerateofcapabilitydevelopmentandoverallcost NewMarketDevelopers Efficient PredictableOperators InformationOptimizers ResponsiveSolutionProviders Accenture2002 InformationOptimizers shouldevaluateopportunitiestoadoptnextgenerationtechnologiestoenhanceefficienciesandgaincompetitiveadvantages BusinessStrategy ProcessE ProcessD ProcessC ProcessB ProcessA ProcessF ITStrategy Network AcceleratethemigrationofenterprisenetworkstoNextGenerationEnterpriseNetwork NGEN solutions Platform Consolidatedatacenterresources servers storagesolutions byexploitingopenstandardsandconvergencetrends StandardizePlatformsacrosstheenterprise BalanceEfficiencyandEffectiveness Security Fosterintegratedandon goingsecuritymanagementprocessesthataddressthelandscapeofsecurityissuesincludingpeople policies andtechnologies Anticipateandaccommodateemergentworkingmodelsandtools Operations Migrateyourinfrastructureorganizationfrombeingbuildersandoperatorstobecomingarchitectsandservicemanagers Movefromthecostsideofledgertovalueside ApplicationEnablingInfrastructure EnterpriseEnablingInfrastructure Standardizeservicesandintegrateinfrastructuresolutionsacrosstheenterprise Balanceagilitywithefficiency KeyMessagesonInfrastructure ResponsiveSolutionProviders NewMarketDevelopers Efficient PredictableOperators InformationOptimizers Accenture2002 For NewMarketDevelopers significantvaluecanlikelyberealizedbyexecutingastrategythatrepositionsITtorapidlydelivernewbusinesscapabilities NewITcapabilitiesidentifiedthatdeliverincreasedbusinessvalueIdentifyquickhitITdiscretionarycost reductionopportunitiesEffectivegovernanceinplacetoeffectivelyallocatefundstohigh valueITcapabilitiesWellpositionedtopursuefurtherITeffectivenessandefficiencyopportunitiesHavearoadmapforsuccessinplacetoguideinvestmentdecisions ITSpendingMix NewBusinessGrowth FocusedStrategy KeyCharacteristics Time ITSpend Historical ResultsofStrategy ResponsiveSolutionProviders Efficient PredictableOperators InformationOptimizers NewMarketDevelopers ImplementationofNewBusinessGrowth focusedStrategy Accenture2002 Identifyinghownewandexistingtechnologyenablesthebusinessstrategy Reducingtechnologycosts Managingenterpriserisks DeliveringtechnologybusinesssolutionstomaximizeROI IncreasingShareholderValuethroughTechnology Accenturebelievesthatshareholdervaluecanbeincreasedthroughinvestmentsintechnologyinfourprimaryareas Accenture2002 Identifyinghownewandexistingtechnologyenablesthebusinessstrategy Reducingtechnologycosts Managingenterpriserisks DeliveringtechnologybusinesssolutionstomaximizeROI ITStrategy InfrastructureRationalization IncreasingShareholderValuethroughTechnology TechnologyVisioning ITTransformation Sourcing SecuritySolutions BusinessContinuity DisasterRecovery AccentureDeliverySuite EnterpriseIntegrationSolutions IntegratedSolutionsDelivery usingSDM ServerConsolidationStorageConsolidationNextGenerationNetworksWindows2000 XPMigrationDataCenterConsolidation MethodsToolsArchitectures NET J2EE CustomERPSupplyChainCRMBusinessIntelligence ITTransformationBusinessApplicationsOutsourcingTechnologyInfrastructureServicesWindowofService DesktopManagementHardware SoftwareProcurement EnterpriseIntegrationWebServices AccentureoffersafullsuiteofservicestoassistCIOsinincreasingshareholdervalue Accenture2002 23 Appendix Accenture2002 AligningbusinessandITtocreateincrementalvalueManagingtheratiobetweendiscretionary non discretionaryspendingSystemsdevelopmentstandardizationEnterpriseapplicationstandardizationEnterpriseapplicationintegrationEnterprise wideviewofITcostsandresourcesMatrixstaffing competencymodelSourcingalternativeselectionsStrongenterprise widevendormanagementIntegratedapproachtoriskmanagementDefineddecisionmakingmodelBalancedlevelofITcentralizationanddecentralizationbasedonbusinessneedsBusinessvalue orientedbalancedscorecardCoordinatedarchitecturemanagementapproachInfrastructurerationalization consolidationTechnologylifecyclemanagement 8 ImplementationofleadingpracticefundamentalslaysthefoundationforCIOstofocusonthecreationofadditionalbusinessvalue SelectedLeadingPracticeFundamentals ITFocusAreas ITShop Activities StrategyDevelopmentandPlansSolutionDeliveryandManagementAsset ResourceManagementandSourcingManagementandGovernanceArchitectureandInfrastructureManagement Project specificrequirementsplanningBudget basedprojectprioritizationProject programmanagementApplicationportfoliomanagementProject functionalviewofcostandresourcesProject orientedstaffingmodelAdhocvendormanagementAdhocsecurityanddisasterrecoveryAd hocapproachtodecisionmakingITdistributedacrossbusinessITactivities orientedscorecardMinimalarchitectureLimitedinfrastructurestandardsDefinedusersupportapproach Accenture2002 9 ThehighestvaluecreationopportunitiesdrivenbyITareprimarilycompany specificandalignedwithbusinessstrategyandindustrydynamics ITValueCreationinCompany IndustryContext BusinessValueCreation FunctionalLevel ExecutiveLevel Sporadic LowerValue Sustained HigherValue CIOInfluenceonBusinessAgenda ITShop Activities ITasBusinessEnabler LeadingPracticeFundamentals BeyondTheFundamentals ITasBusinessValueCreator CompanyStrategy IndustryContext Accenture2002 ITStrategyAlternatives ResponsiveSolutionProviders NewMarketDevelopers Efficient PredictableOperators InformationOptimizers 12 CIOscandevelopcompany specificITagendasthroughunderstandingboththeirpositionwithrespecttoITstrategyalternativesandtheiruniquebusinessstrategy ElementsofBusinessStrategyandIndustryContext ITAgenda SourcesofCompetitiveAdvantageDifferentiatedproduct serviceofferingsLowcostpositionNatureofunderlyingassets physicalvs IntellectualpropertyApproachestoValueCreationToplinegrowthOrganicvs Acquisitions divestituresExistingvs NewmarketsEfficiency effectivenessBusinessprocessesacrosstheextendedvaluechainBusinessintelligenceAssetutilizationAssetintensityreductionUnlockvalueofintellectualproperty Accenture2002 13 CIOscanstrengthentheirITagendathroughtechnologyinvestmentsandnewmanagementapproachesthatenhancebusinesscapabilities BeyondtheFundamentals ITFocusAreas SelectedLeadingPracticeFundamentals BusinessgrowthenablementstrategyBusinesscostreductionstrategyTechnologyadoptionstrategyGlobalintegrateddeliverymodelBusinessandcustomerinsightEnterpriseIntegrationBusinessprocessviewofcostsGlobalintegratedsourcingstrategyEnablevariablecostsUnlockvalueofintellectualpropertyRisk valuesharingwithintegrateddeliverypartnersNextgenerationarchitecturesandtechnologies Proactivebusiness ITalignmentBalancebetweenDiscretionary Non discretionaryspendingOffshoredevelopmentSystemsdevelopmentstandardizationEnterpriseapplicationintegrationEnterpriseapplicationstandardizationEnterprise wideviewofITcostsandresourcesMatrixstaffing competencymodelIntegratedapproachtoriskmanagementStrongenterprise widevendormanagementDefineddecisionmakingmodelBalancedlevelofITcentralizationanddecentralizationbasedonbusinessneedsBusinessvalue orientedbalancedscorecardCoordinatedarchitecturemanagementapproachInfrastructurerationalization consolidationTechnologylifecyclemanagement StrategyDevelopmentandPlansSolutionDeliveryandManagementAsset ResourceManagementandSourcingManagementandGovernanceArchitectureandInfrastructureManagement Accenture2002 18 OutliningyourspecificITagendarequiresanassessmentofstrategicgoalsandanunderstandingofyourcompany spositioningwithrespecttoITstrategyalternatives BusinessValueCreation FunctionalLevel ExecutiveLevel Sporadic LowerValue Sustained HigherValue CIOInfluenceonBusinessAgenda ITShop Activities LeadingPracticeFundamentals TransformingITTowardsGreaterValueCreation ITasBusinessEnabler ITasBusinessValueCreator ResponsiveSolutionProviders NewMarketDevelopers Efficient PredictableOperators InformationOptimizers ITStrategyAlternatives ITAgenda InitialAssessmentFrameworks Accenture2002 19 Therelativevalueofspecificopportunitiesmaydependonyourcompany spositioningwithrespecttoITstrategyalternatives ITValueCreationOpportunities Accenture2002 Identifyinghownewandexistingtechnologyenablesthebusinessstrategy Reducingtechnologycosts Managingenterpriserisks DeliveringtechnologybusinesssolutionstomaximizeROI IncreasingShareholderValuethroughTechnology 21 AccenturerecommendsapragmaticapproachtodevelopaninitiallistofITinvestmentopportunities Consideryourcompany spositionwithrespecttoITstrategyalternativesAssesscurrentperformanceagainstITfundamentalsDetermineoverallITspendinglevelsandestablishallocationsbetweendiscretionaryandnon discretionaryspendingAssessemergingtechnologiestounleashbusinessvalue EvaluateallITinvestmentprojectsunderwaythroughoutthecompanyAnalyzecurrentinfrastructureandplannedcapitalpurchasesforconsolidationandreductionopportunitiesAssesssourcingalternativesandidentifyopportunitiestoincreaseserviceanddrivedowncost DevelopaninitiallistofhighvalueITinvestmentopportunitiesforfurtheranalysisIdentifyopportunitiestostandardizedevelopmentandconsolidateapplicationsImplementatechnologylifecyclemanagementprocess Understandyourcompany sbusinesscontinuityandsecurityrequirementsAssesscurrentrisksandidentifyquickhitsandinitiativestomitigatebusinessimpacts AssesscurrentITcapabilitiesagainstleadingpracticefundamentals SummaryofProposedApproach 24 Accenturerecommendsaproactiveplantocapit
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