IT Resources Review to Overcome Crisis

IT Resources Review to Overcome Crisis มน อรด ดลเชษฐ ปร ธานกรรมการนโยบาย ICT มหาว ทยาละยศร ปท ม ปร ธานกรรมการซอฟต แวร ปาร คปร เทศไทย Organized by: Co-sponsor by: Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan 1

The Preamble The New Enterprise ICT Strategy Model IT Soft Assets Reuse of Information Reuse of Functions/ Processes The Edge New Applications IT Competency IT Resources Community, Participatory & Collaboration On demand/utility based Cloud computing IDC/IT Services Corporate ICT Strategy Source: zdnet 2

Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan Build software for reuse to save cost The 2.0 Development Platform allows to decouple software stacks; software system is divided into layers which are physically independent but are logically connected through a service layer Use Programming in large for processes Use Programming in small for functional logic Use open API or web services to connect them 3

The Heart of Service Oriented Architecture IBM Template Users Applications PC Web Application Ajax Client Mobile Application Portal 1. Processes Services 2. Composed Services 3. Basic Services Business process model Service Components Resources and IT Assets Inventory Legacy Claims Control Database ร บบแผน บร หารโครงการ Auto แล งบปร มาณ Claims System Home ร บบงาน Claims System CRM Life ร บบ Insurance HRD Claims Business Partner edocument Claims System Software Design for Reuse Reused components in the form of Resource For example: a set of employee s attributes is the resource to a client The client communicates with the resource through the URI/URL with REST protocol (HTTP GET, PUT, UPATE, DELETE, etc.) Resources are associated with an software object called Service or Web Service that execute the GET, PUT, UPDATE, DELETE, etc. action to form the Resource 4

Software Design for Reuse The representation of resources can be HTML, XML, JSON, RSS/ATOM, etc. Other operational logic is in the client program ; a non-gui program can itself be a reused component The Presentation (HTML-based) is separated from the application logic; it can be easily customized. The application logic can also be made reusable We are using the Mashup model to build business applications with reusable components across the SOA reference architecture Software Design for Reuse GUI Presenta tion Application logic Web service Resourc e Resourc e Resourc e Resourc e 5

Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan Extend software instead of modifying to save cost Use the new design architecture for software system extension; we offer software customization through extension rather than modification Use for Situational application to answer an immediate need Use for data mashup with both internal and external data sources 6

Extend the Edge of Enterprise IT Hub and Edges The traditional transaction-focused applications (Hub---transactional apps), ERP, HRM, SCM, etc. A new generation applications that has interaction as its goal (Edges---web 2.0 apps) Enterprise information widget, Resource based application, situational application, mashups, new generation web application, mobile application, etc. The IT Wheel The new kind of Situational Applications The output of The traditional systems Source: Capgemini 7

Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan Lower the investment through collaboration and use external resources From now on, more or more enterprises are digital connected Businesses can scale through collaboration with the digital connected partners; to share (people, information, service system, etc.), and using external resources Software asset and information are the main target for sharing 8

We need the following talents SOA-aligned Process Modeling RPC-SOAP Web Services REST (Resource-HTTP) Web Services Web 2.0 features (RSS/Atom, Mashup, Widgets, etc.) RIA (Ajax, Dojo, Silverlight, etc.) Mobile clients (Android, IPhone, etc.) New programming models (Ruby on Rails, PHP, Groovy & Grail, JavaScript, etc.) Enterprise system programming (Java, C#, etc.) Etc. Lower the investment through collaboration and use external resources Software Community through a social website aiming at: A platform for users and developers to participate in software design and development It is referred as Participatory design which is an approach to design that attempts to actively involve the end users in the design process to help ensure that the product designed meets their needs and is usable (Wikipedia) Businesses can share software solutions and component through this social website 9

Why do we need the Software Community? Let s look at first Gartner s 2008 Prediction: Mashup & Composite Apps. By 2010, Web mashups will be the dominant model (80 percent) for the creation of composite enterprise applications. Web Platform & WOA. Web platform are emerging which provide service-based access to infrastructure services, information, applications, and business processes through Web based cloud computing environments. Social Software. Through 2010, the enterprise Web 2.0 product environment will experience considerable flux with continued product innovation Social software technologies will increasingly be brought into the enterprise to augment traditional collaboration. New Trend in Using IT Line-of-business managers of today are needing information of all kind to assist their day to day decision making as well as to capture business opportunity through the new kind of social network driven by SOA and Web 2.0 methodologies In the past, central IT worked with all the big systems; line-ofbusiness managers did not have any access to IT or tools themselves The new advent of software technologies such as mashup, RSS/ATOM, and many others, line-of-business managers start demanding their access to different kind of data both in-house and external They require Web-based applications and Rich Internet Applications that work in tandem with the secured backend systems through integration within the Service Oriented Architecture (SOA). 10

It is the Long Tail Market The characteristic of the expected solutions: Very personalized They are Micro-vertical solutions They are situational applications They are good enough software quality Short time to deliver Very low cost It is for the massive market The only way to succeed is through the community-base development or participatory development; this is why we need the Software Community How Software Community works? To involve end users to actively participate in software development by providing and reviewing requirement Developers offer and/or develop the needed solutions through the website; solutions can be reuse components based on REST web services, RPC-SOAP web services, and others Systems integrators can evaluate the software solutions and acquire to incorporate into their own projects The Software Community is a Community of Practices, CoP where members participate in exchanging idea and knowledge 11

IT outsourcing Due to the complexity of ICT, it becomes more and more costly to maintain internal ICT specialization Businesses emphasize more on Business-ICT alignment, specialists with knowledge of both Business and ICT are scarce ICT activities are the first to be outsourced by most of enterprises from now on Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan 12

Innovative services to scale up business Build digital connections to reduce the transaction cost, example: Use the Internet to connect to customers and suppliers; switch transactions to the electronic means as much as possible Gain economics of scale on customers through the Internet, example: Extend your sales activities to the outsiders (your IS must be open and standard) Work with other through the value chain Innovative services to scale up business Make your non-service business to include service offering, for example: Instead of distributing office product only, you can include maintenance service and outsourcing service through your network Instead of selling computer system, you sell accounting service on your machine; or offer situational application expertise bundled with your product 13

Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan Execute the Customer centric approach to retain customers and increase revenue Customer centric approach is Service Oriented ; it requires ICT infrastructure You must design your business strategy around Delivery Channel: How you connect your offerings to your customers Brand: How you express your offering s benefit to customers Customer experience: How you create an overall experience for customers 14

The Customer-centric approach Source: Seizing the white space, Tekes, 2007 Delivery Finance Channel Brand Customer Experiences Business Model Value Network How you connect your offerings to your customers How you express your offering s benefit to customers How you create an overall experience for customers How the enterprise makes money Enterprise structure and value chain The Customer-centric approach Design of a service system must take the following into consideration: The customer is the new reference point IT as the services factory The Internet as the key distribution channel 15

The customer is the new reference point The customer becomes the reference point for strategy and innovation Customers are more informed and more demanding Opportunities for new, information-driven business model Customers make little distinction between goods and services; customers wants compelling experiences and reward companies that provide those experiences IT as the services factory IT capabilities are critical in service innovation because of the potential to productize (i.e., make more repeatable) the innovative service concepts IT is the production department of the services era in mush the same way factories and machines were for the goods era 16

The Internet as the key distribution channel If IT is the factory of the services, then the Internet is the trucks and roads The Internet is used to directly create innovative new services, or to reconfigure their value chains Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan 17

Value the future, the Service-based Economy This is about Services that are influenced by the Digital connected infrastructure. Through Digital connected it creates network effect that created economic of scale; we referred to it as Digital connected scaling (DCS) DCS proposition: Quality and productivity of Services with assumption 1) Accumulation effects of DCS, 2) Network effect and 3) Ecosystem effect. Value the future, the Service-based Economy DCS model requires digitization of service systems along each of the four dimensions: customer, provider, resources, and value propositions (society). DCS concerns with: Build digital connections to reduce the transaction cost and cycle time Gain economics of scale on customers, providers, knowledge /resources, and value propositions (society) Develop business design for concurrent integration of applications and application domains (along the value chain) Grow the global knowledge economy by the provision of DCS to service sector and no-service sector 18

Value the future, the Service-based Economy Value the future, the Service-based Economy 19

The New Opportunity The IT service business depends on rapid acquisition and deployment of knowledge The services business is a knowledge business; method is captured, reusable knowledge Expertise and capability is at the heart of the services business, but profitability is dependent on leveraging assets, expertise and innovation. Client businesses are evolving rapidly into virtualized, componentized, and hybridized business ecosystems. Believe in surviving the crisis Build software for reuse to save cost Extend software instead of modifying to save cost Lower the investment through collaboration and use external resources Innovative ICT services to scale up business Execute the Customer centric approach to retain customers and increase revenue Value the future, the Service-based Economy Elaborate IT plan to align with Business Plan 20

Elaborate IT plan to align with Business Plan IT plan are in alignment with business plan when business objective are enabled, supported, and stimulated or influenced by information technology strategy Based on the business strategy, how can IT optimally deploy technology to transform the business We need the use of IT to create strategic advantage and competitive advantage quickly The alignment of IT and Business Strategy Using the Strategic Alignment Model; the model is defined in terms of four fundamental domains of strategic choice business strategy information technology strategy organizational infrastructure and processes information technology infrastructure and processes Source: IBM 21

Strategic perspective Domain anchor-----area that provides (drives) the change forces applied to the domain Domain pivot-----problem area being addressed Impacted domain----area being affected by a change to the domain pivot Apply the strategic alignment framework Competitive potential IT is used to enhance the business strategy Technology potential IT is used to enable new business strategy Service level potential Tightly integrate IT environment; ability to deliver IT products and services The strategy execution IT has no influence on business thinking 22

Competitive potential perspective source: IBM Business strategy IT Strategy Organizational infrastructure and processes IT infrastructure and processes The Technology Potential Perspective source: IBM Business strategy IT Strategy Organizational infrastructure and processes IT infrastructure and processes 23

The Service Level Perspective source: IBM Business strategy IT Strategy Organizational infrastructure and processes IT infrastructure and processes The Strategic Execution Model source: IBM Business strategy IT Strategy Organizational infrastructure and processes IT infrastructure and processes 24

Apply the strategic alignment framework Competitive potential IT is used to enhance the business strategy Technology potential IT is used to enable new business strategy Service level potential Tightly integrate IT environment; ability to deliver IT products and services The strategy execution IT has no influence on business thinking; it is used to support the existing business strategy (most common method) The Conclusion During the economical crisis most of CEOs (assessed by IBM) agree that businesses must be differential, agile, and efficient ; businesses must be careful to invest, ICT in particular. The most practical approaches are: Reuse existing IT asset in conjunction with applying new technology Avoid piling up overhead by considering external expertise Avoid ICT asset investment by considering external ICT services Consider extending into the Service domain Consider the Outside-in strategy with the Customer Centric approach Make sure that the IT Plan is aligned with the Business Plan 25