NOTICE: Proprietary This material is proprietary to R S Tipton, Incorporated and shall not be used,...

NOTICE: Proprietary

This material is proprietary to R S Tipton, Incorporated and shall not be used, reproduced, copied, disclosed, transmitted, in whole or in part, without the express consent of R S Tipton Incorporated.

© 2002 R S Tipton, Incorporated All rights reserved.

Some portions © 2002 SBI and Company

Top 10 Mega-Issues in IT

Robert S. TiptonManaging Partner

R S Tipton, IncorporatedEffectiveness Coaching: Business; IT; Real-Life

1041 W. Dry Creek Rd.Littleton, CO 80120

[email protected]

Differentiation

risking

competing

failing

leading

Efficiency

R S Tipton, Incorporated© 2002 All rights reserved P2

Agenda• #1 Looking for Leadership in All the Wrong Places

• #2 Vision: Some Neat Looking Charts and Graphs

• #3 The “Easy” IT Money Has Already Been Spent

• #4 Vendors Love Revolutions in Technology

• #5 Coming to Grips (Gripes?) About e-Business Reality

• #6 Collaborative Commerce: Undergarments Exposed

• #7 Wireless: Full of Hot Air?

• #8 Web Services: “The” New, New Thing?

• #9 Get Smart: Leverage Existing IT Assets

• #10 Business-Competent IT Leaders

• #11 The Last Bullet


1Looking for Leadership in All the Wrong Places


Looking for Leadership in All the Wrong PlacesEconomic / Social / Technology Leadership

• Economic Leadership? Greed is a deadly sin…– One CEO after another succumbing to “5th amendment” protection– Massive lack of trust in institutional integrity

• Social Leadership? Pump up, pierce, tattoo, “reality?”– Jerry Springer? Brittany Spears? MTV? Fear Factor? Ooh.

• Technology Leadership? No gravitational pull– PCs -- empowered end-users– Client / Server -- must connect to the corporate data– Y2K -- no ignoring that!– Dot.com -- lemmings literally running up each other’s backs to jump off the cliff– Now what?


Looking for Leadership in All the Wrong Places“Dancing with the Bear”

• Recognizing that true leadership comes from within, and not from a book, a class, a CD or a TV show– End the paralysis– Stop looking outwardly– Be accountable and move forward

• HUGE difference for IT decision makers– No “wave” to ride– No safety in lemming-like decisions

> 1988 -- no one got fired for recommending IBM> 1998 -- no one got fired for recommending an e-Business strategy

• Conflagration in the IT industry– Large, destructive fire -- burns everything to the ground– True leadership will emerge, and the cycle will repeat itself


2Some Neat Looking Charts and Graphs


EDP Reduce Costs /Control Processes

EmpoweredIndividuals

InterconnectedOrganizations

InterdependentEnterprises

SymbioticEconomies

Host/Terminal

Legacy

Transition Architecture

The New Architecture

BusinessGap

Technology andCulture GapClient/Server

e-Business

SCM / APS / CRM

IT’s Evolutionary Path


Fundamental Philosophy >Share >"Profitable mix" >Change rules >Networking

Environment > Certain growth > Cyclic> Changing

conditions

> Globalization> Japanese

dominance

> Internet speed> Online value

creation

Critical Analysis

Experience Curve

Portfolio Management

Competitive Strategy

"Real Time" Strategies

Attractiveness

Strength

Value Impact

Resource

Change

Value Creation Velocity

Network Breadth

60s/70s 90s/00s70s/80s 80s/90s

Implications Gain Scale Diversify Risk Innovation Community

ll

ll

l l l l l l

Cost ($/Unit)

Volume

Changing Times in Management Science> As the “Interconnected” Economy takes hold of the fundamental economic paradigm, prior

tenets are giving way to a “New Era of Strategic Management.”


3The Easy IT Money Has Already Been Spent


The Easy IT Money Has Already Been SpentTechnology Binge Hangover

• Panacea-based buying is done– Client / Server-based bill came due– Y2K: appropriately a non-event– Dot.bomb collateral damage

• ROI-based decisions are back in fashion…– What can IT do to support the business?

> Internal excellence> Operations optimization

– Technology platform optimization and IT investment protection– Business leaders understand implications of technology spending now…

• Resume building tactics of IT staffers a thing of the past– Job hopping? Please…– Holding companies hostage for bigger raises? Hmmm… Not that I see.

> Too many people hired at 1998/1999 wages


Source: AMR, CIBC, Gartner

The Easy IT Money Has Already Been Spent> Rational business based buying patterns will characterize 2002 / 2003

Project Characteristics

• Duration 3-6 Months, No more than 12 months

• Returns Hard returns 12 month paybacks

• Buyers Signoff at the highest levels Executive suite relationships needed

• Solutions Business process optimization led Get more value out of what we already have

• Price Continued strong downward pressure

• Risk Caution regarding less proven technologies Incremental -- not replacement Caution using new vendors


The Easy IT Money Has Already Been SpentBack to the Basics -- ROI-based IT Staffing

• Lessons learned…– Too much reliance on highly paid, “whiney” tech heads is a bad thing– Business needs to leverage technology, not the reverse

• Better technologies need to fill the gaps– Software development

> Factory, assembly from component parts

– Systems / network administration> “Lights-out” technology architectures> Server-based computing> Massive shift in access appliances

– Who’s responsible for IT? Hey, the business!– Outsourcing / ASPs / Contracted resources

• Much more emphasis on solutions rather than technologies


The Easy IT Money Has Already Been Spent> It’s not as if “no” money will be spent…

Sources: IDC, GIGA, AMR, ML

Services

ERP

APS

CRM

eCRM/Portals

EAI

Operations Excellence

Integrated Marketing

Growth

4%

6

4

4

8

10

-

Comments

• Upgrades, extending modules, better use most likely

• New installs still happening in mid-market

• Performance oriented, linked to process improvement

• Continued growth

• More performance oriented less marketing

• Added functionality, content/data management

• Targeted on specific business improvement area

• Enterprise architecture related

• Performance improvement, cost reduction

• Site redesign, marketing campaign specific


4Vendors Love Revolutions


Vendors Love Revolutions

Hardware / Software / Services:

• Leverage R&D

• Sell new products

• Grow their businesses

Don’t chase technology just for technology’s sake

• This is ultimately a failed strategy for your business and your career

Preserve what works, augment with new

• Have courage AND vision

• Don’t throw the baby out with the bath water...


Technology Speed Bumps

• Remember These?– CASE– Artificial intelligence– Mainframe downsizing– Pen computing– Virtual reality– Client / Server– Components and frameworks – Thin client– Dot.com

• What About These?– Wireless– Web services


5Coming to Grips (Gripes?) About e-Business Reality


The “Old” New EconomyImpatient, Insistent, Internet

• No time for planning -- 3 months was an “internet” generation...

• “Good Enough” replaced refinement– Time to market was critical path, not perfection

Become an e-Business or file for e-Bankruptcy…

• e-Business is the beginning of a completely new age of business; as profound as the move to an industrial economy and lifestyle from the agrarian.

> IT is a disrupter of business process> Treat your assets as liabilities> Cannibalize or be eaten> Don’t be “amazon’ed!”

– Don’t be afraid of the 800 lb. Gorillas, be VERY afraid of upward leaping monkeys...


The New “Old” New Economy ;-)

Huge switch of context just in 12 months:

• From Gee Whiz to ROI-based decision making

• Speed to market replaced with smart business decisions

• Are we “making money” with e-Business?

• What’s the payback, and how long will it take to be realized?> History tells us there’s only ONE thing that drives a free market economy: Profit> We forgot about that for a couple of years during the “dot.com” boom years> Human nature changes much more slowly than technology> A digital signature is no substitute for a look in the eye and a handshake…

– Personal touch once again becoming differentiator> Many industries weren’t, and still aren’t “ready” for transactional transparency and inter-

business process integration


Another Way to Look at It… CISCO’s Disco…Wealth rewritten -- during 2000

• CISCO (on 3/27/2000) was the largest market cap company ($555B) -- they didn’t ship their first product until 1986...

• NASDAQ about 5200

• Day trading, Internet IPO, 5 Million more Millionaire households in the past 4 years -- a few less today…

Wealth rewritten -- during 2001 / 2002

• CISCO (on 9/9/2002) = $95B market cap -- just a LITTLE smaller…

• NASDAQ at about 1300

• GE -- March 2000, about $500B market cap, 9/9/2002 : $286B


CISCO’s Disco


Differentiation

risking

competing

failing

leading

Efficiency

New Promises, Old Realities98% of all businesses won’t succeed beyond 5 years…

• Markets can be created overnight

• Markets fail overnight

• Established brands can be at risk

• New threats surface every day

• New competitors are emerging

• New channels are born

• Leading means constant innovation

e-Business just compressed 20 years worth of entrepreneurial start-ups into 5 years

• Economic “Darwinism” on Crystal Meth


6Collaborative Commerce: Undergarments Exposed


Collaborative Commerce: Undergarments Exposed> Fewer Dollars to Spend Brings Added Pressure for Collaboration


Collaborative Commerce: Undergarments Exposed

Yes26%

No74%

Have you deployed a supply-chain management application?

Yes47%

No53%

If no, do you plan to do so in the next 12-18 months?

January 2002 Study

Yes15%

No85%

Yes28%

No72%

March 2001 Study

Source: Baird CIO Study


Collaborative Commerce: Undergarments Exposed> Collaborative commerce combines improving the effectiveness of customer / vendor touch

points with collaborative selling optimization.

Overall Collaborative Commerce Goal

The optimal deployment of people, technology and processes in order to maximize the interaction between an enterprise, its

customers and selling partners.

Company GoalCompany Goal

To actively engage and service customers in order to maximize the number of buyers, repeat buyers, and increase the size and quantity of each transaction.

Solution GoalSolution Goal

To automate collaboration between manufacturer or retailer and its customers or selling partners in order to make transactions as easy as possible for the end customers.


• Collaborative Commerce VisionAccelerator helps the organization prioritize transformation efforts by identifying areas that are most urgent and are likely to provide the greatest ROI

Collaborative Commerce Continuum Collaborative Commerce ContinuumPartner Information as a

Strategic Asset

Measure Partner Ongoing Value

Identify Partner Expectations

Align Strategy with Partner Value & Expectations

Integrate Across

Business Units

Manage the Partner

Experience

RatingsRatings

5 Leading4 Optimizing3 Practicing2 Developing1 Aware

5 Leading4 Optimizing3 Practicing2 Developing1 Aware

5

4

3

2

1

CurrentDesiredBest In Class

Collaborative Commerce: Undergarments ExposedCollaborative Commerce VisionAccelerator:

Source: SBI and Company



Source: SBI and Company



• Are You Ready for Some Collaboration? Yes, if you have…

– Significant supply chain complexity, inefficiency or opportunity

– A few trading partners that are critical to your business and have close

relationships with them

– A highly competitive environment with some industry players doing collaborative

commerce

– High costs for attracting and retaining customers

– The strategic objective to leverage a unique trading partner network for

competitive advantage

– A history of adopting and mastering new business models and technologies

– No fear of being “seen” in your underwear…


7Wireless: Full of Hot Air?


Wireless: Full of Hot Air?Lion’s share of opportunity is in the commercial sector

This chart shows only the numbers -- not the “spend…”

• Real ROI-based opportunities for business can be significant


Wireless: Full of Hot Air?

Wireless? What are we doing with it?

Really, it’s just another connectivity option

• New levels of convenience and function

• New opportunities for technical complexity and frustration!

Applications Devices ConnectivityMobile

MiddlewareIntegration

Points

• CRM

• SCM

• ERP

• Outlook

• Inventory

• Vertical

• Pocket PCs

• Laptops

• Palm OS

• Win CE

• RIM

• EPOC

• Wireless

• Wireline

• Dialup

• VPN

• RAS

• Data Sync

• Email Sync

• Systems Management

• Personalized Content

• Database Servers

• File and Web Servers

• Exchange, Domino, etc.


Wireless: Full of Hot Air?• Potential Benefits

– Increased sales / decreased costs– Improved customer service– Competitive advantage / Rapid ROI

• Potential Problems– Coverage: distances, network technology, geographies– Reliability: wired and wireless, sync vs. real-time– Standards: G3? G2.5? Bluetooth, etc.– Security: Oh, this is a fun one…– Speed: expectation management– Cost: feature creep, keeping up with the Joneses– Multiple devices, networks, integration points and applications

• Gotta Watch Human Nature as Well– Wireless devices have been successful when they provide a more convenient way

to do old things> Cell phones didn’t revolutionize human connection, etc.


8Web Services: “The” New, New Thing?


Web Services: “The” New, New Thing?

Amorphous, loosely coupled software stuff…• Loosely coupled, reusable software components that semantically encapsulate discrete functionality and are

distributed and programmatically accessible over standard Internet protocols.

• Whew! This is from The Stencil Group… It’s for programmers, that’s for sure, and the term Web Services is a problem…

Emerging Standards of a Conceptual Model

Layers of MaturityLayers of Maturity

• Business Rules

• Web Services Flow Language (WSFL)

• Universal Description, Discovery and Integration (UDDI)

• Web Services Description Language (WSDL)

• Simple Object Access Protocol (SOAP)

• Extensible Markup Language (XML)

• Common Internet Protocols (TCP/IP, HTTP, etc.)

• Business Rules

• Web Services Flow Language (WSFL)

• Universal Description, Discovery and Integration (UDDI)

• Web Services Description Language (WSDL)

• Simple Object Access Protocol (SOAP)

• Extensible Markup Language (XML)

• Common Internet Protocols (TCP/IP, HTTP, etc.)

Emerging

Core


Web Services: “The” New, New Thing?Software vendors and consultants LOVE this stuff

• Oodles of new stuff to worry about, including new tools and software needed to purchase– Oh, and then there’s the education curve, and the implementation requirements…– Again, many vendors (IBM, Microsoft, Sun, etc.) would love for Web Services to

become “needed by the market”

What about the ROI, though, buddy?

• Geez -- there’s that pesky need to justify technology again…– Real businesses aren’t running to Web Services in a big way

> Market conditions are causing companies to look inward, not outward> “Foundational” projects are back-burnered in favor of real returns, real quick> Collaborative commerce roadblocks hamstring B2B Web Services efforts

• Quiet acceptance, slow progress -- who knows?


9Get Smart: Leverage Existing IT Investments


Get Smart: Leverage Existing IT Investments

Looking for ways to produce REAL business value?

• Data warehousing projects can make IT departments into heroes– Keep your DBAs as far away as possible...– This is not rocket science, nor are we waiting for “finished” technology

> Excellent tools are available now

– Don’t attempt if IT is an expense category...> This is a strategic, ROI-based project> High cost of entry> Business benefits can be HUGE!

• Training on existing systems> Amazing how much institutional knowledge is lost as staff positions turn over…> Also, many are asked to do 1.5-2-3 jobs these days -- surviving, not excelling at anything> Training on what’s already there can bring massive savings to development budgets, and

shrink “back-logs” dramatically


Get Smart: Leverage Existing IT InvestmentsPoint Solutions in Integration

• Internal supply chain– Trust your own data -- operational excellence

> Procurement> Vertical integration

• Application integration– Desktop applications integrated with web applications– Document management solutions

• Server-based integration– EAI-lite

> No need for massive projects, hugely complex “solutions”> Link functions that need to be linked> Get in, get out, get on with your life

• EDI / XML / Industry Portals– Just do it. And soon.


Data

ExternalExternalDataData

Operational, Web-basedand Historical Data

ExtractionTransformationTransportation

Relational Tools

OLAPTools

Applications

Storing

FeedingUsing

Meta Data

Get Smart: Leverage Existing IT Investments


10Business Competent IT Leaders


Business Competent IT Leaders

Creating business results is the only thing

• Effectiveness versus Efficiency– .Net vs. J2EE perpetuates the wrong thing

• IT leadership for the business requires courage and decisiveness– Do you know how to support your business effectively?

• Mutual accountability is the first step toward “mature” IT solutions

IT management today means understanding business issues like never before

• Technocrats are unemployed

• Technology spending is scrutinized by everyone

• IT-savvy business leaders have been “burned before”


11The Last Bullet


The Last BulletBeware Siren Songs, Quick Fixes, and Analysis Paralysis

• Don’t replace “just say yes” with “just say no”– Business leaders need to continue to be bold -- and technology still represents

one of the best ways to improve productivity and reduce cost– Don’t hide behind impossible ROI– Remember, times of strife are also times of opportunity – Leadership is vital -- find it within

• Don’t underestimate the need for exceptional business processes and IT practices– Technology makes good and bad things happen faster

• Everything eventually digresses into reality– Business success needs vision, courage and capital– That’s been true for 10,000 years


The Last BulletBack to the Future

• Be Efficiently Effective, Not Just Efficient

• Non-IT Leaders Must Understand IT Risk/Reward Ratio– Security, Integrity, Reliability, Scalability -- each of these issues is just as important

as the “killer application”

• Understand Your Corporate Culture– Make incremental changes as needed– Understand that constant change is the only way to remain competitive today

Things Like e-Business Will Be Expectations

• Entrepreneurship 101 Still Applies– But beware and be aware of “where” it will be expected


Thank You

R S Tipton, IncorporatedEffectiveness Coaching: Business; IT; Real-Life

1041 W. Dry Creek Rd.Littleton, CO 80120

[email protected]

NOTICE: Proprietary This material is proprietary to R S Tipton, Incorporated and shall not be used,...

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