Office of the CIO Trends 2010

2010 STKI Summit
Mobile Trends & Office of the CIO

Galit Fein
EVP & Senior Analyst
Office of the CIO & Mobile Strategies
www.galitfein.blogspot.com

Presentation’s Agenda

Introduction

Use of new business models:
Smartphones, Social Networks, Web 2, Web 3
Your Text here Your Text here

Office of the CIO

Sourcing Strategies

Galit Fein’s work Copyright 2010 @STKI Do not remove source or attribution from any graphic or portion of graphic 2

IT Focus Transformation Introduction

Business
Operational Business
Competitive Advantage
Excellence Services & Support
& Innovation
“Run the Business” “Change the Business”
“Transform the Business”


•Available & accurate info •Align IT to business •Align IT to customers
•IT maintenance •Best solution for bus. needs •Business partner
•HW availability &uptime •IT portfolio mng of LOBs •Core business initiator
•Technical support demands •Transformation initiator

Galit Fein’s work Copyright 2010 @STKI 3
Do not remove source or attribution from any graphic or portion of graphic

On the desk of CIO Introduction

IT priorities for 2010 2010 priorities

50% Managing operational costs
46% Information security 42% Improving customer satisfaction

29% 39% Growing market share
Virtualization
37% Technology improvements
28% Mobility/mobile devices 36% Process improvements/service delivery

26% Your Text here Energy efficiency
28% Your products/services
New Text here

21% IT Governance

15% Top 3 ways IT will help the org.
Web 2.0
during the economic recovery
14% Social media applications
49% Reduce operational costs through
improved IT efficiency
13% Cloud computing
49% Increase org. productivity

39% Improve organizational processes

Galit Fein’s work Copyright 2010 @STKI Source: CDW IT Trend Release 4

Use of new models for business innovation
Agenda

Reasons for increasing use of mobile phones

Mobile Trends

What’s all this got to do with IT?

Mobile Banking


Mobile –
Main Theme
It’s not a leading edge –
it’s a necessity

Galit Fein’s work Copyright 2010 @STKI
Do not remove source or attribution from any graphic or portion of graphic 6

3.5 billion mobile users globally
Mobile
by the end of 2010



Y 2010 - Going Mobile Mobile

Reasons:



Going Mobile – Social Reason Mobile

Personalized
services, info, apps &

interfaces anytime

anywhere


Going Mobile – Technology Reason Mobile

 Improving Internet access
(free WiFi in some cities)
 More computing power
 Bigger & better screens
 FasterYour Text here
internet/data bandwidth Your Text here

 LBS/GPS
 VPN - secured communication
 VOIP - cheaper voice communication


Going Mobile – Economic Reason Mobile

 Decreasing cost of mobile devices & services - increasing
demand:
• Q1 2009: mobile phone market share fell 15.8% WW;
• However, smartphone segment gained 4% Source: IDC

 Increasing competition
 Emergence of new VAS:
• Mobile payments
• Health care delivery - telemedicine projects, mobile ultrasound & other
diagnostics
• Location based marketing
• Mobile social networks


Mobile Trends Mobile

 Mobile Internet
 Cloud Computing
 Content
Present
 LBS
 Social Your Text here
Networks Your Text here

 Mobile advertizing
 Augmented reality


Mobile Internet Mobile

Mobile -
first priority
to connect
to the Internet

Smartphone
Your Text here Your Textas a tiny PC
here

Convergence
of desktop &
smartphone
into one web


Cloud Computing Mobile

 Ongoing computing:
 everything is wired
 everything is moving to the
cloud

 From native programs sitting on
a hard drive (like Microsoft Office) to
web/cloud-based apps:
 end of native mobile app &
applications stores
 Android vs. iPhone?


Android – one of the fastest growing segments
Mobile
in smartphones
Android might take over iPhone, as its
cloud features embrace social web
better than Apple

Android smartphones
will increase rapidly:
Your Text here from 5% in 2009
Your Text here
to 12% in 2010

Source: Company data,
Goldman Sachs Research estimates


Content, content, content Mobile

 Content will be main service in the mobile package
• music, books, new & magazines, film & TV

 Free calls = Ads 2.0 + content services

 Commission from
all transactions
• just like a credit card


Location Based Services Mobile

Provision of exact, contextual info & services based on specific location

Mobility & location will change
how usersText here
Your & advertisers interact Your Text here

with the Web:
• Real Time Marketing
• Discount alert & real time
recommendations from where & when
it occurs


Social Networking Mobile

830MM Unique Users, +20% Y/Y; 188MM Total Minutes, +25% Y/Y, 10/09


Morgan Stanley


Facebook Mobile

 40 M Facebook status updates
a day by 400 M+ users; +137% Y/Y

 65 M people use Facebook on a
mobile device (450K Israelis)

 40% of consumers ―frended‖ a
brand on Facebook &/ or
MySpace
Source: Razorfish Digital Brand Experience Report 2009


Twitter Mobile

 58 MM users; +1238% Y/Y
Source: Morgan Stanley

 ~25M tweets per day
Source: GigaTweet 11/2009

 44% of consumers who
followed a brand on Twitter
did so for actual transaction

 48% of those who saw a brand
mentioned on Twitter did
research on that brand
Source: Razorfish Digital Brand Experience Report 2009


Google Buzz Mobile


Illustration by Claudio Munoz


Marketing by Social Network Mobile



Location-Based Social Networks through Mobile
Mobile
Real-time recommendations
based on your current
location using an app that
aggregates info from real-
time searches from social
sites, local ads & “limited
time” discounts on your
Your Text here mobile Your Text here


How do your customers perceive
Mobile
mobile ads?


Source: Cutter 2009


Traditional (Interruption) Marketing Mobile

Now can be filtered (digital cable recorder)



Permission Marketing Mobile

Do not push ads message to your consumers -
Let them to pull it from you!

The Crème Brulee Cart


The Crème
Brulee on
Twitter

9,854 followers

Real Time
advertisement


Get Social Mobile

90%

70%



Augmented Reality Mobile

Your hotel is only Historical sites
2 km away


Beatles Tour: Ringo, Paul, John,
George with YOU on Abbey
Road

More than just a Phone Mobile



Redefine your business Mobile

 Redefine every internal process & service to mobile:
• New value for customers
• Markets growth
• Operating costs reduction


It’s not about money –
Mobile
It’s about value!



Why do (some) IT keeping the Smartphone Mobile
out of the Enterprise?


Is your ITO Proactive or Reactive
regarding Smartphones?


Do you plan to purchase meaningfully (>10%) higher
number of smartphones in 2010 vs. 2009, and why? Mobile


Source: GS IT Spending Survey


Mobile

If you don’t like change, you are going
to like irrelevance even less!



Consumerization of IT Mobile

People craving for the best & newest technology

 End users will use the Smartphones anyway (38% growth in
2010) & increasingly drive this technology into the enterprise
Source: GS

 Although, Text here doesn’t make it very easy:
Your
Apple Your Text here

• iTunes on PC
• Exchange 2007
• Active Directory requirements

 It’s already a done deal – be ready & start now!


What’s all this got to do with IT? Mobile

 Secured info (even in personal devices)
 Protected data (lost or stolen phones)
 Business apps (ERP CRM, SFA)
,

Your Text here  Access to BI/Analytics here
Your Text

 Wireless access to:
• Email
• Internet/ Intranets
• Enterprise apps


It's All Going to Change Mobile

 E-mails  Web services
 Databases  Content mng systems
 Standalone apps  Sophisticated devices:
Smartphone, Kindle, iPad, Tablet,
 Dedicated networks Cell phone/ PDA, Mobile Video, etc
 High-speed networks


Mobile Banking Mobile
Banking

Do it. Now!


Mobile Banking vs. Online Banking Mobile
Banking


Source: MMA,
Mobile Banking
Overview, 01.2009


Customers Point of View Mobile
Banking

 People craving for real-time access & control of
their aggregated financial info
 37% would like to be able to interact with their
bank via their mobile Source: Sybase

 61% of 25-34 year-olds are interested in making
purchases with their mobile phones Source: Visa

 50% of Gen-Y will consider mobile as a criteria
when choosing a bank Source: Celent


Business Point of View Mobile
Banking

 New audience, new market, new business
model
 The ROI: Mobile Users contribute 13%
more to Profit & more satisfied Source: Huntington Bank

 Mobile clients – the client you want to keep
 Gen Y are pulling their parents into the
mobile space


Mobile
3 Possible Mobile Models: Banking

 SMS
• Easy, common in all devices,
affordable
• Catalyst to more banking
actions via mobile
 Mobile Your Text here
Downloadable Apps Your Text here
• Rich user experience, ability
to work offline
 Mobile Internet
• Familiar, supported by most Source: Mobile Marketing Association
devices, UI is an issue


Which of the following mobile banking services would Mobile
you be interested in if offered by your bank? Banking


Source: Sybase


Which mobile banking services would you Mobile
be willing to pay for? Banking


Source: Sybase


The 10 iPhone Finance Apps That Count Mobile
Banking

1. Bloomberg Mobile (Free)
2. Mobile Banking (Free)
3. PayPal (Free)
4. Loan Shark ($4.99)
5. TipulatorText here
Your (99 cents) Your Text here
6. Tiptap (Free)
7. PocketMoney ($9.99)
8. SplashMoney ($9.99)
9. Day Bank ($3.99)
10. Pennies ($2.99) Source: http://blog.mint.com


Mobile Solutions / Platforms – Partial list Mobile
Israeli
Product Name Description
Representative
Cellerium Client-side mobile applications Netwise
Transforming web content into mobile
Mintmark Netwise
web content
SMSwise SMS channel Netwise
MMIS (Matrix mobile info.
Platform for mobile solutions Matrix
Server)
Bank2go, Ultra Credit,
Mobile solutions developed on MMIS Matrix
Calldinator
Fiserv Money Mobile banking, mobile wallet Matrix
MAMA Interactive Information System One1 Mobile
Transforming web/app content into
MobileAware One1Mobile
mobile web content
Sybase Mobile Banking 365 Mobile banking Ness
Sybase Paybox Mobile payments Ness
Integrating enterprise applications with
Sybase Unwired platform Ness
mobile devices
mEnterprise Services, Enterprise Mobile services, Mobile
Galit Fein’s work Copyright 2010 @STKI Ideomobile 48
mHealth, mBankingnot remove source or attribution from any Banking solutions
Do Health, Mobile graphic or portion of graphic

Upcoming STKI round table Mobile



Office of
The CIO

Office of the CIO –
Main Theme
Jump on the bandwagon -
Real business value is there


Office of the CIO
Agenda

Office of the CIO Trends

Project & Portfolio Mng

PPM Tools

Service Desk


MEGA OTC Trends 2010 Office of
the CIO

 Slight exceed in IT Budget (back to 2008 level)

 Demand for IT will gradually expand

 Customer-facing & sales-supporting projects will be first
on the rise

 Need for new projects will return hiring mode into the

market


Demand for IT Office of
the CIO


Source: Information Week


2010 New Technology Investments OTC
Trends

Note: Mean average ratings
based on a 5-point scale,
Source: Information Week
where 1 is “investment will get
Analytics Outlook 2010
cut significantly” & 5 is
Survey of 360 business
“investment will increase
technology professionals
significantly”


OTC Trends – The Good News Office of
the CIO

 After 6 years of talking about OTC it’s actually happening!
• Mostly in Financial & Telecom sectors

 Financial crisis & budget reduction in 2009 forced better ITG:
• Increased focus on IT costs - efficiency increasing
• Business oriented CIOs understood the importance of ITG
• New regulations requested better transparency

 Most ITOs have examined & evaluated their ITG process &
tools


OTC Trends – The Bad News Office of
the CIO

 IT is still mostly viewed as a cost center
 Too many ITOs can’t calculate or prove that IT actually adds
value
 Need for improvement in all practices
(planning, demand, prioritization, resource & risk mng)

 No formal set of processes in place:
• Less than 20% of the organizations have a high commitment to
SLAs, EA, PMBOK, ITIL, COBIT, SOX, etc
 Large gap between what IT managers & business managers
think about IT contribution to the business


More IT managers than BU managers tend Office of
to believe IT delivers value the CIO


Source: Cutter


Misalignment Challenges Office of
the CIO

 IT was not regarded as a partner
 Technology decisions were made
without IT involvement, inc. purchases

Lack of transparency
Lack of BU commitment

 Consistent introduction of unplanned
work into an unmonitored IT portfolio
 Reactionary vs. strategy based decision
making


Office of
Establishment of Office of the CIO the CIO

 Need for a new department / expanding the existing one

 Unlike elsewhere, Israeli OTC / BRM are built under CIO
• Business oriented IT managers (mostly IT project managers)
• CIOs support & ownership

 OTC/ BRM responsibilities:
 Methodologies & WF definition, process marketing, IT budget
control & mng, PPM, tools evaluation, HR - resource allocation &
mng, QA, GRC…


What is the current status of OTC in your org? Office of
the CIO

Robust &
Automatic
17%

Establish
ment Expansion
Your Text here
54% 29%
Your Text here

Source: STKI


PMO vs. OTC Office of
the CIO

PMO - Project Mng Office OTC – Office of the CIO
 Project mng processes  Business needs definition
definition  IT/Business alignment
 Support in business referents  Overall perspective
 Accompany the project
 Value-focused IT spending
implementation  Business & technical risks
 Project Gantt control –  TCO calculation
milestones
 Project risk mng


OTC Staffing Ratio Office of
the CIO

 Average size of Israeli OTC department: 3-5

• ~1.5% of IT department (between 0.5% - 4%*)

• Compared to ~5-8% in global orgs

* in large enterprises, varies according to the maturity of IT
Governance in the organization


Essentials to consider Office of
the CIO
in OTC implementation

• Marketing of OTC process
• CIOs understanding, embracing & championing the
process
• Executive involvement & active support
• Financial & ―Osh" departments inclusion - appropriate funding,
good ROI, financial goals
• Acknowledging the need for funding of resource time
& appropriate tools to support the program
• Create a real partnership with your PPM vendor or with a ITG
consultant


OTC Myths Office of
the CIO

1. Takes many years until 1. You can see the actual
it shows a valid value business value after few
month only
2. Can build ―on the
2. Must be executives’
way‖ ownership & dedicated
3. PPM tools are not
Your Text here resources Your Text here
important 3. ITG automation provides the
essential transparency
4. Too much visibility is
4. When you are “underground”
bad for IT
no one notice your success
5. ITG consultants can’t either
understand your 5. Best practices & knowledge
business Galit Fein’s work Copyright 2010 @STKI
utilization 64

It’s all about right decision Office of
the CIO
making based on single source

Business Business
referent Financial Depart Executives Office of the CIO


Collect & inputs Check Approvals
requirements business Check project’s
objectives & content with a
project indicators budget & capacity


Transparency Office of
the CIO

 When everyone sees the same picture – IT strategic plan
based on project’s contribution to the business,
without political considerations

 Not every IT is ready for such a transparency :here
Your Text here Your Text

• BU can now follow after their requirements’ progress & IT
compliance with SLA


Ongoing Activity Report Office of
the CIO

 You can only achieve the real
transparency through hours spent
per task report

 OTC process & benefits marketing
with executives’ dedication it’s the
only solution for employee
resistance


PPM Framework Office of
the CIO


Source: Cutter


Capex vs. Opex Spending Office of
the CIO

$

Number
of projects

Regulatory Text here
Your Your Text here

Source: Cutter


“What if” analysis Office of
the CIO

Projects’ Size, Risk & Value

If your budget is 1M then your IT portfolio is…
If your budget is 3M then your IT portfolio is…

You can add your governance polices:
Your Text here • If the risk score is > thenText here
Your X

• If the project’s contribution score is < then Y
• If the Payback time is >then 2 years
• If the ROI is < then

1M 2M 3M 4M

Project Monitoring Office of
the CIO

 Commonly used set of metrics (budget, schedule, scope)

that does not always reflect the project’s contribution to
the business goals or org. success

 No post-implementation audits to ensure successful

system-use


CIO’s Dashboard Office of
the CIO

CIO’s dashboard should pull the real-time data from all
Help Desk

organizational systems


Source: MSP
72

OTC as a preparation for Office of
the CIO
IT Chargeback
 IT aim to stop acting as unlimited
resource:
• Difficult to allocate operational
budget
• Cloud computing model

 IT process mapping, transparency,
resource mng & dashboards will be
used as a platform for IT Chargeback


Upcoming STKI round table Office of
the CIO



PPM Tools Office of
the CIO

 About 10 ITOs implemented end-to-end PPM solution (Clarity,
MSP)
 Successful implementation – started in IT but today across all
BU
 New PPM player in the Cloud Computing model on Force.com
platform Text here
Your Your Text here

 Microsoft launches MS Project 2010 (EA), which promises to be
a full PPM solution & probably will bring to another market
awakening


PPM on-Demand Office of
the CIO

 There is almost no on-Demand PPM solution acceptance
in Israel:
• Psychological reason - PPM solution concerns all strategic
aspects of org. – financial, budgeting, strategic projects,
costs & clients
• Technological reason – integration difficulty in SaaS model
• Integrators did not offer it to customers


Benefits & Importance of OTC Office of
the CIO

 Greater transparency & communication re what IT is working
on for a business build on:
• Single (automated) source of truth
• Unified methodology
 Increased business satisfaction with IT
• BU haveText here feeling of involvement & ownershipText IT projects
Your a strong Your of here

• Sense of truth Business-IT partnership
• Better business & IT value
 IT delivery aligned with customers & business strategy
 IT became a core business initiator!


ITG/ PPM- Positioning of the Israeli Market Office of
the CIO

Vendors to Watch:
Compuware IBM Worldwide
Leader
CA
Enterprise
MSP
Local Support

New Player
Microsoft Text here
Your Your Text here

PS Next
HP

Approach This analysis should be used with its
supporting documents

Market Presence

Project Mngt - Positioning of the Office of
the CIO
Israeli Market

Vendors to Watch:
Compuware IBM Microsoft

Enterprise

CA
Local Support

Existing Israeli
experience in
Your Text here Your Text here project mng
PS Next
Worldwide
HP Leader

Primavera
This analysis should be used with its

Market Presence

Office of
PPM Tools & Integrators in Israel the CIO
Clients New Clients 09’ Integrators
Clarity (CA) Ministry of Tourism, Clalit, Orange, Teva, CA, Proceed
SanDisk, Jewish Agency,
Leumi Card Bank Hapoalim

MSP Menora, IAI, Tel-Aviv Cellcom, Phoenix, MSP, ONE1, PWC
Municipality, Ayalon-ins Leumit, Justice
CIO Dashboard: Random Department
Logic, IDF, Elbit

PPM (HP) Partner, Mataf, - HP, BDA
Motorola(Global)

Compuware Jacada (Global), Retalix - Matrix (Sibam)
Changepoint (Global)
(Matrix)
BAW,EPM, - IBM
RAM, RD
Composer
(IBM)


Office of
PPM Tools & Integrators in Israel the CIO


EPM (Microsoft) M-system, Leumit, IAI, IAA, Lotem, Orantech: Netafim, ECI, Navy; Matan, Orantech,
Bezeq, Mekorot, Tel Aviv Municip, Matan: Machteshim Agan,
Orbotech, Bank Leumi, Coca-Cola, Prime Minister, Maccabi Neway, PZ Projects,
*MS Project 2010 – Nice, Strauss-Elite PZ Projects: Min. of Foreign Proceed, Tefen
Launch @ 05/10 Matan: Alvarion, IAA, Better Place, Affers, Justice Department
Tnuva, Random Logic; Orantech: Tefen: Clal
Ceragon, Logic, AD Gency ,Sol gel ,
Rocar ,Playtech, Sandisk; KAKAL,
MODU, Kodak, RAD; Proceed: Malam

PS Next (Xioma) Bank Discount, Menora, Teva, Visa Bid Band Networks, IDE, Veraz, Xioma, Signifer,
Cal, BVR, Nova, Evogene, Leadcom Opgal, Teva Tech
Hazera Genetics Aman

Approach PPM Netafim EffectiveX,
on Force.com SalesForce.com
(EffectiveX)

Primavera Mercava, IDF, Intel Aviv
(Oracle)


Service Desk Service
Desk

 HD is viewed as an operational part of the IT, hence it has

gained top priority when it comes to cost reduction

 It was a year of examining, upgrading or switching of SD
tools

 Part of BSM perception – integrated with CMBD, Asset

mng, Identity mng, ESM


Service
PC Support Ratios Desk

• Support Per PC for FTE
Per FTE Service Second Third – Total
Desk Level Image Support
per PC
25 percentile 210 275 1368 100
Median 385 400 2000 160
75 percentile 458 635 3635 222

• Support per Employee for FTE Source: STKI

Per FTE Service Second Third – Total
Desk Level Image Support
per Empl.
25 percentile 200 250 1330 91
Median 300 404 1940 162
75 percentile 458 533 3467 185

IT Service Desk – Service
Desk
Positioning of the Israeli Market
Vendors to Watch: Microsoft
Altiris CA
SAP Worldwide
BMC
Local Support

Leader
HP
Enterprise
Siebel here
Your Text Your Text here
MID-Tier
IBM SysAid
Pivotal IT HD
PeopleSoft
Modules

This analysis should be used with its

Market Presence

IT Service Desk Tools Service
Desk
Selected Installations in Israel
Comverse, IAI, Discount, Elta, ECI, HOT, Motorola, Teva, Ministry of Justice, Ministry of CA, Ness, Malam,
CA Elbit, Mekorot, Osem, Phoenix, DSW, Bezeq Int, Beit Berl, Immigration, RASHAT, Teva Techmind
Israel Police, Tnuva, Central Bureau of Statistics, EL-AL, (Bar), Brom
Tamas, TASE, Ministry of Health, Tel-Aviv Municipality,
Herzelia Munic. Clalbit, Shabas, Rafael, Isracard,
Shupersal, 888, 9900, Bank Israel, Bank Hapoalim, Bank
Yahav, Mifal Hapais, Ministry of Justice, Ministry of
Defense, Yediot, Petah-Tikva Munic
Zim, Malan, IGS, MED Nautilus, Malam, Kneset, NDS, Comverse, Nice, IAI Matrix
BMC Social Insurance, Uniliver, Creo, Intel, Motorola, Summit
Design, Polycom, Cellcom- eng. HOT-eng. Partner – eng,
Sandisk
HPOV:IDF, Netafim, Shaam, Open University, Orbotech, Service Manager: NDS Aman, HP
HP Tower Semiconductors, Haaretz
Tefensoft: Clalit Health, Menora, Migdal, Prime Minister,
Hadasa, Machteshim, Maman, AudioCodes

Callmobile Aman, Bynet
Altiris
Symantec
Rav-Bariach, Marvell, Dan, Jonson & Jonson, Highway 6, Technion, Shila, Sugat, Consist
SysAid Omrix, Wintegra, Sami Shimon College, Minicom, Litcom, Gadot, Bezeq Int. AeroScout,
Ilient Africa Israel, Mei-Eden, AIG, Electra, McCann Erickson, Strauss, IKEA, Delek, Tempo,
Diesenhaus unitours, Flash Opal Networsks, Liveperson, 013, Tami4,Bank of
Hertz, Psagot Ofek, Coca Cola, Prisma, Beit Barel Jerusalem Leumi Mortgage ,
College, Ashdod Port Bituach Yeshir, Holmes
Galit Fein’s work Copyright 2010 @STKI Place, and many more 85

Service
IT Help Desk Modules from CRM packages Desk

Ministry of Finance, Israeli Navy, Intel, Matrix-Effect: Machteshim-Agan, 20 Partners, including:
Microsoft Prime Minister, Eldan Marlboro
Matrix-Effect, SIT,
CRM* EL AD: Judicial Authority Advantech: Eged, Shikunbinui,
Advantech, Malam-Team,
Malam-Team: TAU Amidar
(*ITIL complaint) Guardian: Baad15, Jewish Netwise, Bynet SW, Yael,
Matrix-Effect: Igud, Malan, Superpharm,
agency El-AD….
Ministry of Education, Cellcom, Visa Cal
Almog: Telmap

Bat-Yam Municipality, Exlibris, Systematics, ONE1
Pivotal Panorama, Telmap, Ericom,FGG Radvision,
Gilat, Maccabi, Shahal, Ritalix, Globs,
Tadiran, Negev Ceramics, Orad

Paz, Isr. Government, Bazan Ness, IBM, Taldor,
SAP Advantech

Ministry of Foreign Affairs, Mamram, Bezeq Matrix
PeopleSoft

Tnuva, Golden Pages Taldor, IBM
Siebel* Bank Leumi

Siebel CRM on-
Demand


Upcoming STKI round table Service
Desk



Outsourcing –
Main Theme
Outsourcing is not dead – it’s just changing
to a new form of sourcing 
CLOUD COMPUTING


Sourcing’s Agenda

Sourcing Strategies

Outsourcing Trends

Cloud Computing

Professional Services


Outsourcing Israeli Trends Sourcing

 In last several years outsourcing in Israel received bad reputation:
• Dramatic decline in number of new deals

 Together with successful outsourcing deals we witnessed a few
backsourcing deals, suppliers switching, scope reducing & deals that
didn’t meet the client’s expectations
• “Global outsourcer providers didn’t leverage methodologies which succeeded in the
world; outs. deal summed up in transferring employees from company A to company B”
Source: Israeli CIO

 In agile world with rising complexity in technology, the need for
outsourcing still exists it just requires some adjustments


What to Outsource? Sourcing

Outsource In-House
 TACTICAL IT  STRATEGIC IT
• Tactical functions simply keep • Strategic functions drive the
the business up & running on company’s dollar, stock value
a day-to-day basis:
Your Text here & competitive advantage:
Your Text here
• Infrastructure maintenance • Business development
• Service Desk • New system development
• Testing • Product marketing support
• Printing • Sales force automation
• BPO • Business & IT alignment
• ERP maintenance • R&D

Source: STKI 2007

Infrastructure Outsourcing Sourcing

 What about infrastructure mng?

 2009 was the worst year for Israeli infrastructure

 Cost reduction by commodity solutions is not

always the right decision for the business
 Serious problems in DC, disabled org. services &

demanded CEO’s involvement

 Increasing IT complexity combined with multiple

systems & interfaces resulted in loss of control


Critical Org. Function Sourcing

 As a result of disabling of key business processes :
• New regulations from Supervisor of Banks
• New insurance regulations

 Infrastructure is critical to business successText here
Your Text here Your

 I believe we will see some changes in infra operational
outsourcing model (IaaS)


Outsourcing is not dead – it’s just Sourcing
changing
From comprehensive outsourcing
(full IT) in early 2000 to selective
outsourcing on/off-premises
(tactical IT operations) through
offshore, hosting (real estate
rental) & utility computing
(computing on-Demand) to a new

form of sourcing  Private & Public

CLOUD COMPUTING

Cloud Computing Definition Sourcing

 Highly scalable IT resources — SW, CPUs, storage capacity available
as a service & whose usage is measured & billed per use:
• Computers & storage are housed in huge, offsite DC
 Internal cloud – onside DC

• Users don'there the computer / SW
Your Text own Your Text here
• Technology & infra behind the cloud are invisible

• Users pay for what they use, similar to electricity
• Available over the Internet as a service on Demand:
 SaaS, PaaS, IaaS…


Rent vs. Buy/ Install / Support Sourcing

 SaaS - not only standard app packages, but customized
app via new architectures over the Web
 IaaS:
• Public Cloud - for less than $1 a day you can rent servers from
Amazon, Yahoo!, or EMC
• Private Cloud – rent computing power from global/ local
outsourcer
 Probably the preferred model will be the combination of
public & private cloud


What's new? Sourcing

Centralizing computing power or utility computing is not new
even returns to the computer's roots (MF, Service Bureau), BUT
 Technology has matured & stabilized along with attractive
prices made the cloud model highly cost effective
 Multitenancy – customized services on unified infra

 Subscription pricing
 Remote services – Remote HD, backup data solution, DRP,
Outlook mng, access mng, etc.


Pros & Cons Sourcing


Galit Fein’s work Copyright 2010 @STKI Do not remove source or attribution from any graphic or portion of graphic
http://www.powerpoint-search.com/what-is-cloud-computing-ppt.html 98

Cloud Computing Offerings Sourcing

SaaS

PaaS


IaaS

DaaS


Professional Services Sourcing

 Compared to last year’s drop, PS market will grow due to IT
budgets & rise of new projects

 Israeli PS market experiences a minor earthquake due to:

• Price & PS working hours reduction in economic downturn

• Ministry of Finance tender
 PS paycheck transparency to prevent overcharged or low

quality WF


PS Salaries Distribution Sourcing

Low quality workers



And once again – is cheaper price Sourcing
the best solution?
 In recent years service providers gave huge discounts (up
to 60%) to win tenders
 ITOs set the price as the prime parameter in selecting
service provider, even though quality has its price

 Israeli market will move to COST+ model:
• Average market salary + service provider’s reasonable fee


Summary The End

Mobile – It’s not a leading edge – it’s a necessity

Office of the CIO - Real business value is there

Cloud Computing - a new form of sourcing


The End

Thank you!
Galit Fein

Blog: www.galitfein.blogspot.com
Twitter: GalitFein


Office of the CIO Trends 2010

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