New Directions in Application Strategy: Opportunity and Implications

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New Directions in Application Strategy
Opportunity and Implications

• Gail Holmberg, former SVP CIO, Bally Total
  Fitness
• Michael Hugos, CIO at Large
• SIM, Chicago Chapter
• January 15, 2008

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Gartner 2008 CIO survey
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Gartner 2008 CIO survey
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No one ever got fired buying IBM

• Are there any safe answers anymore?

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Application Strategy is Situation Specific

• Catch-up
• Leverage previous investment
• Competitive advantage
• Functionality vs. cost savings
• What is your risk tolerance timeline?
• Immediate
• 12 24 months
• 3 to 5 years
• More than 5 years

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Application Strategy Risk

• Hidden costs
• Project delivery
• Bleeding edge
• Integration capability
• Delivery of business benefits
• Security and controls
• Ongoing support and costs
• Ability to keep up with business change
• Technology obsolescence
• Vendor disappearance

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What Approaches Challenge Traditional Solutions
such as ERP and Outsourcing?

• SaaS
• Open Source
• Web Services and SOA
• Agile Programming
• Consumer Electronics

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Can CIOs Keep Their Jobs and Advocate Forward
Looking Application Strategies?

• Expand the risk assessment to consider the risk
  of future business barriers created by technology
• Discuss which technology solutions are becoming a
  commodity and how that impacts TCO comparisons
• Describe the trade-offs between 80 and simple
  vs. 100 and complex
• Predict technical obsolescence and vendor
  disappearance
• Always consider the impact on security and
  controls
• Emphasize that systems integration capabilities
  are key

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Is IT a Profession or a Utility?

• Does IT matter is it a competitive advantage?
• Efficient 24/7 operation of existing systems is
  no longer a competitive advantage its a given!
• Companies can outsource operation of existing
  systems and provisioning of new infrastructure
• Large hardware and software vendors become
  computing utilities offering greater efficiencies
• Company IT groups focus on development of new
  systems and continuous adjustment of
  infrastructure
• Agile IT enables companies to earn additional 2-4

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Company and Alliance Partners
Data Center Operations
Helpdesk Support
SaaS Applications
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Agile Strategy Case Study

• Doing Business in Real Time
• Old-line candy company selling through
  traditional retail channels
• Relentless pressure on profit margins
• People see opportunity to sell designer
  chocolate and related items in cozy storefront
  setting
• Company decides to quickly market test idea by
  opening a few stores
• Need systems support in 90 days!
• Consider TCO of solution lease/buy sunk costs
  scalability flexibility
• You are the CIO...

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Agile Strategy Case Study (cont.)

• Doing Business in Real Time
• Concept is a success
• Accelerate rollout of new stores what next?

Server Virtualization
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Agile Strategy Case Study (cont.)
App Servers
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Lessons Learned

1. Web portals provide unified user interface by
   replacing different system screens with standard
   web-based GUI
2. New systems use SOA to combine legacy/package
   components with small chunks of new code favor
   Robust 80 Solutions
3. SaaS enables fast implementation on a
   pay-as-you-go basis
4. Split systems processing between server/grid
   platforms and legacy hardware - host new system
   features and databases on server/grid platforms
5. Centralize and consolidate servers through
   virtualization
6. Retire legacy systems as it becomes cost
   effective to replace them with server/grid based
   systems
7. Continuous incremental change - no Big Bang
   projects!