It procurement 2019 v3

Copyright@STKI_2020 Do not remove source or attribution from any slide or graph
RE-DESIGNING IT : TECHNOLOGY PROCUREMENT
PINI COHEN

Traditional IT procurement principles
• Look at the whole picture & plan
• Budget is planned according to goals
• Long term relationship & deals
• Big deals that include many items
• Discount for large & long-term quantity/deal
• Ownership of SW / HW
• Look for alternatives is top priority

But now:
• There is no big picture
• Goals is reached according to budget
• Technology & projects last less
• No ownership of SW & HW
• Harder to find alternatives
• Many small deals = more work for
technology procurement!!

Agenda
• Technology last less
• Microservices architecture
• Fail fast business philosophy
• Agile software development
• New budgeting
• Shorter project lifetime
• Opensource

The fast-changing
technology:
Hadoop example
• Presentation from 2016 not relevant anymore

Replacing Mapreduce and HDFS

“Technology last less” implications on
technology procurement:
• Long term deals are irrelevant and
might hurt the organization

Microservices architecture and polyglot
Source: http://martinfowler.com/

9
Microservices
Business agility Combine several
technologies in
the same project
Better scale,
more robust
Runs in
containers
Might cause
latency

Microservices implications on technology
procurement
• Polyglot XX = Many small deals =
more work for technology
procurement!!

Fail fast business philosophy

“Fail Fast” implications on technology
procurement
• More “try and buy” deals Many small
deals = more work for technology
procurement!!

DevOps
01 02
03
04
05
Deploy &
implement
Define requirements
based on customer
metrics
Design system & test
outcomes with
customer metricsAgile development
& test with
outcome metrics
JOB TO BE
DONE
DESIGN
PRODUCT
PROTOTYPE
& TEST
DEVELOP THE
PRODUCT
FRUITION
Outcome-Driven
Development®Product
strategy
Problem
definition
Product
prototype
Deploy
ment
Maintain
Implementation
& Training
TIM Methodology®Define market/
product strategy
based on unmet needs
Agile development
alone
(without management
support and LoB full
involvement) can’t
bring the real
change that the
organization needs this will be explained during
the session on
“organizational & IT
initiatives”
13

Agile Project Management - Overview
Analysis
Code
Test
Implement
Analysis
Code
Test
3 6 9 12
36912
14
Source: Cutter
Source: cutter

Agile team
• All needed for current
sprint – working together

Good enough vs. Grandiose

What stops
cloud native
development?
• Process is not done right (skip DT, skip
LEANprototype, aim for features instead of
goals, etc.)
• InfraOpsSec stops the cloud platform
• Business is not part of the dev process
• Outdated budgeting yearly plan and
evolution from “projects” to
“products”(explained during “organizational
& IT initiatives”)
• Midrange managers jeopardize the move
17

Customer Centric (Digital Transformation) IT Budget
InnovateIT Budget
40%
Cost Reduction &
efficiency
Customer facing
projects uncertainty
60%
Run the
Business
Run the
Business
Run the
Business
Many new tech,
small projectsInnovate
IT budget and strategic planning
process are too slow, inaccurate, and
high resource demanding for agile
reality:
• Annual budget – not relevant
• Poor ability of pricing new tech projects –
buffers
• Demand and portfolio mng are complex,
high resources demanding, mostly manual
and excel based processes
Once the budget is approved, changes are made -
AND it's a good thing!

All traditional KPIs must be changed!!!
IT will continue to measure project’s time/ cost/ scope
As long as management continue to require it
Outcome-driven (Agile) ProjectsTraditional Projects (Waterfall)
FixedEstimated
PartofContractFlexible
VALUE
DRIVEN
Scope
Costs Time
Business value VS Outdated KPIs
PLAN
DRIVEN
Scope
Costs Time
False sense of control
focus on reporting
Constantly changing scope of work
Product has o clear definition of what has to be delivered.
Customer needs evolve over time, and products must evolve
accordingly

Agile development implications on
technology procurement:
• There is no big picture – hard to plan
= different way of budgeting

Project set up time comparing to project
lifetime
initiation
Environment
setup
Create In use
initiation Environment setup Create In use

Project set up time comparing to project
lifetime
• When life-time is shorter – setup time has higher impact
• What about choosing & setting up alternative that is not the
“natural selection”? Much less appealing!!
• It is safer to be on the main-stream than before
• Finding alternative is harder

Opensource projects
technology dependencies
• Harder to find alternatives

Current technology procurement
• There is no big picture (agile)
(bucket-based budgeting)
• Many small deals (microservices)
• No ownership of SW & HW
• Harder to find alternatives (opensource
dependencies, shorter project life – no
time for specific integration)

Other issues:
• Discount for future purchase is
big risk (technology might not
be needed anymore!!)
• Its hard to predict cloud budget
• From CPU to container-based
procurement
• Its more important than before
to be safe on the “mainstream”
– harder to be “creative” in
procurement

‫דיון‬
•‫לאן‬ ‫טכנולוגיות‬ ‫רכש‬?‫בפתיח‬ ‫שהוזכרו‬ ‫התופעות‬ ‫מורגשות‬ ‫כמה‬ ‫עד‬?‫איזה‬
‫רכש‬ ‫בתהליכי‬ ‫לבצע‬ ‫ניתן‬ ‫שינויים‬?‫שינוי‬ ‫לאשר‬ ‫שצריכים‬ ‫הגורמים‬ ‫מהם‬
‫רכש‬ ‫בתהליכי‬?‫תחת‬ ‫החיים‬ ‫ציבוריים‬ ‫ארגונים‬ ‫מתמודדים‬ ‫כיצד‬"‫חובת‬
‫מכרזים‬"?‫החדשים‬ ‫האתגרים‬ ‫עם‬ ‫להתמודדות‬ ‫ורעיונות‬ ‫טיפים‬.
•‫הטכנולוגי‬ ‫ברכש‬ ‫השינוי‬ ‫את‬ ‫מרגישים‬ ‫אתם‬ ‫כמה‬ ‫עד‬?
•‫טכנולוגי‬ ‫ברכש‬ ‫שינוי‬ ‫בצעתם‬ ‫האם‬?
•‫טכנולוגי‬ ‫ברכש‬ ‫לשינוי‬ ‫רעיונות‬
•‫ענן‬ ‫רכש‬ ‫של‬ ‫בנושאים‬ ‫כללי‬ ‫דיון‬,‫מיקרוסופט‬,‫אורקל‬VMWARE ,‫אחסון‬,
‫שרתים‬,‫תקשורת‬,SAP , SF,‫וכד‬'.
•‫ב‬ ‫ניסיון‬ ‫יש‬ ‫האם‬-BYOL‫ענן‬ ‫לסביבות‬
•‫יכול‬ ‫וכיצד‬ ‫האם‬/‫חליפיים‬ ‫בפתרונות‬ ‫לקוחותיו‬ ‫את‬ ‫טכנולוגית‬ ‫לאתגר‬ ‫צריך‬

Cloud Native
IT
procurement
27
Pini Cohen
STKI CTO
pini@stki.info

It procurement 2019 v3

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