Investment and ROI- An IT Decision Maker s Perspective on Broadband

Transcription

1 Investment and ROI- An IT Decision Maker s Perspective on Broadband Doug Busch Vice President Chief Information Officer Intel Corporation May 21, 2003

2 Agenda Corporate Usage Profiles Return Investment Strategies Key Needs

3 Corporate Usage Profiles Enterprise B2B Customer Campus Distributed Facilities Campus Supplier Mobile Employees Campus Data Centers SOHO Consumer

4 Corporate Usage Profiles File Transfer Interactive Transactions Streaming Data Enterprise Distributed Facilities B2B Customer Guaranteed Quality Best Efforts Schedulable On Demand Campus Mobile Employees Campus Data Centers Campus SOHO Supplier Consumer Short term Variability Medium Term Variability Long Term Variability

5 Agenda Corporate Usage Profiles Return Investment Strategies Key Needs

6 Return = Business Value Easy Business Case Cost of Doing Business Mature Competitive Capability Business Process Effectiveness Team Effectiveness Difficult Business Case Individual Effectiveness High Innovation

7 Measurement Key Issues How do I measure productivity improvement? Valuation Individual productivity improvement just means they can go home earlier Investment alignment Investments and benefits are disconnected Accumulating value ignored Institutional Amnesia

8 Institutional Amnesia Information System Lifecycle Value/yr $ Payback Period Unrecognized Value Cost/yr $ Develop Deploy Sustain Retire

9 Productivity Measures Capabilities: Remote data transfer: 25 char/sec Months of programming; manual analysis Report typed multiple times High cost graphic arts Hardware: IBM 360 storage: $35/MB IBM Selectric Typewriter: $4k Typesetting system: $15k Copy Camera: $10k

10 What Would It Cost to Give Up , Remote access Cell phones, Notebooks SCM, ERP, CRM Word processing, spreadsheets, graphics CAD tools Photo Editing Laser Printing

11 What Is It Costing to Do Without Wireless networks & seamless mobility Unconstrained network capacity for: Global collaboration tools Business analytics???

12 Agenda Corporate Usage Profiles Return Investment Strategies Key Needs

13 IT Demand Drivers: Demand for IT Solutions Help Enable Growth! Help Improve Margins! Help Reduce Fixed & Variable Costs! IT Budget Company Revenue Growing Flat Declining

14 Business Value vs. Spending $ Value Typical ROI Measurement For Project 1 Value (per Unit Time) Grows Over Time As Use of System Matures Sustaining Spending Total Sustaining Cost Capped by Budget Sustaining Cost (per System) Declines Over Time: Continuous Improvement Development Spending Development Projects Time

15 Investment Dilemma Cost Increased Operational Complexity Slower TCO Improvement Reduced Investment Business Risk Management Aging Technology Base Capability Gaps

16 What is This? 2003 will be the tipping point for widespread wireless networks First, because it has become easy to use. And most important, it's a bottom-up phenomenon of people trying it, liking it, and demanding it. Cap Gemini Ernst & Young Map of Manhattan Island, NY Public Internet Project ~ 85% of our employees have notebooks. We gain huge productivity advances by providing notebooks to anyone who wants one. Deloitte & Touche

17 Worldwide Wireless Hotspot Growth 7K 17K 37K 65K 98K 144K Source: BWCS Ltd We invested $9 mil to bring WLAN to 35k users. We estimate $6.1M return/ year; therefore payback after 18 months Microsoft 100% 80% 60% 40% 20% WLAN Penetration of Worldwide Mobile PC Installed Base Professional Mobile PC 0% Source: Gartner Group, 2002

18 Investment Dilemma Proactive IT investment in wireless and broadband allows Strategic, architectural network planning Economy of scale in procurement Operational flexibility Business Continuity/Disaster Recovery benefits Competitive opportunities Business Process, Team, Individual effectiveness opportunities Improved user / customer satisfaction But Benefits are diffuse across corporation Benefits are often incremental rather than quantum-step Initial investment barrier is often high

19 Agenda Corporate Usage Profiles Return Investment Strategies Key Needs

20 Key Needs Connecting Benefit and Cost Usage-based billing inside the Enterprise Variable capacity models Usage-based billing by Service Providers Cannot impose a prohibitive unit cost penalty Variability at several time scales Regional Bottleneck Removal Geographic constraints limit usability of bandwidth in Global companies

21 Wireless and Broadband Investment is central to Innovation