IT Governance presentation

1. Office of the CIO Israeli Market Galit Fein, VP & Senior Analyst www.galitfein.blogspot.comhttp://www.facebook.com/galit.feinhttp://twitter.com/#!/galitfein

2. Presentation’s Agenda

3. Office of the CIO

4. Primary Business Priority 2011

5. Primary IT Priority 2011

6. Disruptive Technologies Impact on IT Due to disruptive social & technology trends in recent years (facebook, mobile, cloud) - international analysts forecast significant IT reduction: “As activities devolve to business units, consolidate in business services, or move outside, in 5 years less than 25% of current IT headcount will remain” “As technology becomes ever more commoditized, the need for in-house IT resources will dwindle” “Cloud computing will undoubtedly reduce the need for IT staff “ Corporate Executive Board Jeff Relkin (Director of IT for Quadel) Lou Hablas (Director of IT for RZIM)

7. No! IT will Grow Ever-increasingusage of technology, data complexity, regulation demands and the need for strategic IT business innovation will drive IT to bring all of the disruptive technologies in house

8. Trends to Watch 2011 Office of the CIO v2 - IT is delivered as a Service Cloud Computing – almost there Multichannel– many channels one strategy Mobile- means mainstream Social Networks – Ready or Not

9. Technologies Maturity ModelOffice of the CIO Business Value Multi Channel Mobile Investment to make money Social Media IT Chargeback PPM IT Project Cut costs, Increase productivity IT Dashboard Pure Business Project Cloud PMO Mobile Work Force Measurement Size of figure = complexity/ cost of project Talent mng Service Catalog Help Desk Commodity IT Services Outsourcing GRC Tools Investment for regulations Using Implementing Looking Market Maturity

10. Strategic & Innovation IT ITO (and CIOs personally) must refocus on business strategy, innovation & business transformation

11. Office of the CIO v2 Mega Trends 2011 IT Dashboards/ BI – to show the value Measurement – business oriented IT KPIs IT (virtual) Chargeback – total transparency Businesstransformation - is not a technology at all, but a new way of doing business IT as a Business Change Initiator Business satisfaction with OTC led to expansion Transition from PPM (Project Portfolio Mng) to SPM (Service Portfolio Mng)

13. Faster realization of business benefits from new systems

15. Capex of today is the Opex of tomorrow The more projects (capex) we do today the more support (opex) we need to provide tomorrow The more we invest in “good” capex , the less we spend on “bad” opex. Relationship between capex and opex is not straightforward; but we cannot reduce opex after a boom in projects

16. New Initiatives vs. Running Systems Israeli IT Average Source: STKI Survey 2011

17. Office of the CIO No two orgs have implemented OTC in the same way - there is no agreement on what the OTC is No one way to do it – set of org. behaviors & processes Practices & methodologies to prioritize projects, tracking & managing resources

18. Technologies Maturity ModelOffice of the CIO Business Value Investment to make money PPM IT Project Cut costs, Increase productivity Pure Business Project PMO Size of figure = complexity/ cost of project Commodity IT Services Investment for regulations Using Implementing Looking Market Maturity

19. PPM Israeli Trends PPM gained much traction in recent years 24% of large ITOs invested in PPM tools, dashboards & methodologies Sustainable success & positive feedback from executives in a very short time! Most of ITOs have expended their OTC in 2010: Percent of OTC employees from entire IT department: ~3.65%(ranged from 0.5%-10%)

20. OTC Responsibilities Office of the CIO Round Table 2010

21. PPM Maturity PPM has come a long way, but is not mature yet No consistency between the various frameworks & what SW vendors say about PPM At least another 5 years before PPM starts to become as mature as ERP, CRM, SCM

22. ITG Portfolio Project Management Solution ניהול פרויקטים ופורטפוליו זה אקסיומה פתרון ייעודי עבור:PMO, מנמ"רים, מנהלים, יוזמי דרישות מנהלי פרויקטים , ראשי צוותים ומדווחים פתרוןPPM מבוסס Web, בכלי אחד מבוסס על PSNext מבית סייפורמה ניהול פורטפוליו הפרויקטים, משאבים, דרישות, כלי בקרה ודיווח, KPI מובנים טיפול בתעדוף יוזמות עסקיות ייצור תמונת-על של מערך הפרויקטים הצגת משמעויות הכנסת/דחיית פרויקטים ומשימות לתוכנית העבודה ניתוחי What If

23. How do you Know that your PPM Has Not Yet Matured? Lack of: User involvement Clear business objectives Firm basic requirements Formal methodology Reliable estimates Executive mgmt support – even when you believe that your PPM is ideal

24. PPM Maturity Levels 4. IT is a Business 3. Control Resource & budget mgmt, integration with other processes 2. Business engagement Automation & transparency IT alignment to the Business PPM practices, processes & staff allocation

25. Best Practices Effective OTC: reduces the endless listof business requirements to the few most-valuable projects, based on the strategic needs of the enterprise, market conditions, risk-reward calculations, budgetary constraints & architectural fit Provides analysis & recommendations to decision makers

26. STKI Survey 2011

27. Life Cycle of SW Development Source: STKI Survey 2011

28. Requirement Mgmt Attention Source: STKI Survey 2011

29. Demand Management Projects ROI, SW estimation, post-implementation/ major milestone reviews, SLAs

30. Trend to Watch:IT as a Service WW trend – OTC becomes embedded in business units Israeli trend: Most OTC report to CIO OTC shifts out to the business: Attention to large projects ROI estimation Running costs Post-implementation reviews, SLAs Service Catalog High business involvement + Service Catalog + Automation + Cloud trends = IT as a service

31. We are not there yet Data is scattered or focused on performance & process mgmt, not on costs IT components are too interdepended Applications delivered by shared resources Are you able to switch IT on & off on Demand Or even commit to availability levels?

32. IT Chargeback Cost transparency is essential for IT services success - centralized & integrated data (PPM, ITSM, HD, ITAM…) Internal IT systems VS cloud alternatives New product impact on IT costs Know your costs per transaction, cost allocation across business processes & services

33. Software Estimation NN The exact amount of: People, dollars & time needed New Initiative

34. Perennial Problem Despite a long history of SW projects: Project differences (language, quality of people, etc.) Measurement differences No standard method of project estimation Subjective estimation Effort estimation VS duration

35. Which methodology does your org. use for SW project evaluation? STKI Survey 2011

36. SW developers are not particularly good at estimating ~ 40% Q: What is the % of SW projects that are developed within 10% of the original estimated budget in the past 3 years? Cutter It’s not about overruns or over budget It’s about poor estimation capability!

37. Rapidly Changing World 74% - change requirements 46% - pressure from mngt to accept unreasonable schedules 32% - poor estimation Q: What is the main reason for SW project overruns in your develop. org? Cutter Shorter projects & Agile methodologies Improve SW estimation!

38. Service Catalog Example Source : MSP

39. IT Life Cycle Business/IT Office of the CIO Strategic/ ROI based requirements RFP/ SOW Vendor mng/SLA Develop/ Sourcing Demand/ Request mng Training Maintenance/ enhancement requests Project mng Implementation/ Testing PMO HD HR QA Retirement Maintenance Operations Asset mng The whole IT life cycle has to be integrated, synchronized & automated

40. Projects Re-prioritization Prioritize projects based on an initial value estimate & then re-prioritize based on remaining value The highest value driven requirements need to be prioritized early in each release

41. Infrastructure Projects Justification Difficult, if not impossible: infra upgrades instead of business processes improvements ROI: project’s cost is lower than the benefit realized people calculating benefits & costs differently It’s less about the hard numbers business value: Why do it now rather than later?

43. Project Management Office

45. Complexity & cost

46. Significant chunk of resources

47. Poor management

48. Few large projects

49. ROI, NPV, risk or regulation

50. Less than a half (<1/2) of resources

51. Rigorous reviewCompanies tend to have a decent handle on large projects, but they fall on the smaller ones

53. Bugs correction or training support Definition varies between companies Part of the “Capex/ Opex” game

54. Development Budget Distribution Source: STKI Survey 2011

55. Recommendation for handlingM&E 20% of OTCs say they manage all projects the same – Great or overstaffed? Gather them together into a larger project: Manage them with the same tool used by large projects - 54% use excel, HD, task tracking or small self-developed systems

56. Yes, you need to track the time spent on projects Allocating staff time to projects is crucial: real cost of keeping an application IT services catalog basis Transparency & credibility for project owner

57. PMO's everyday focus Projects & delivery management Projects evaluation, daily attention to schedule, risk, quality & cost metrics Crisis prevention Improvement of constant problematic processes, e.g. project estimation & performance

58. The PMO In Your Org. – Internal Employee Or Professional Service? Source: STKI Survey 2011

59. Lean PMO OTC v2 is questioning the depth of tracking the small changes required Cost/benefit: Accurate picture/ overhead mgmt It’s easy to get lost in the esoteric parts of PPM – what level of detailing do you need?

60. More = Better Due to rapid success & positive feedback from executives- increased attention to details: more metrics at more milestones more reviews more reporting on problems, issues and risks & on smaller & smaller variances from the plan

61. Resource Management & Capacity Planning

62. IT’s Mostly People IT Budget Allocation

66. Training & Implementation The training & implementation market gradually returns to his pre-recession size (end of 2011=2008) LMS – reduces the training costs & includes support for mobile & web users Stable retraining topics: .NET, J2EE, security, testing Increase in need for website optimization, digital & social media marketing, mobile

67. Training & Talent Management Employee’s preservation - investment of 6 training days a year Increasing demand for: Training & implementation of enterprise applications (Oracle, SAP, core…) Knowledge gap analysis survey General standard methodologies: PMI, ISTQB,ITIL Regulation methodologies: Agile, SOX

68. Main Players Matrix Ness Malam-Team ELAD ONE1 Taldor Emet

69. QA & Testing Steady & mature market in nature with a visible 6.25% growth in 2010 Cross sectors increasing segment, mostly in Telecom and Finance

71. QA Trends Increased focus on QA & testing, including acceptance testing

73. SW is an integral part of the org. services to customers

74. Regulation

75. Established methodologies (CMMI, ISO) (Insurance & Credit Cards) Source: STKI Survey 2011

76. Organization Position of QA Source: STKI Survey 2011

77. Profile of your testing personnel Rising interest in Israeli Nearshore due to their subsidization by the Gov. Source: STKI Survey 2011

78. Measurement

79. ITMeasurement Managing IT as a black box allow IT to be unmeasured according to business KPIs (the only department among all LOBs) Last year ITOs have started arranging this persistent untreated area IT measurement & control – the next stage after business satisfaction with IT transparency received by successful implementation of PPM tools How effective is my IT? Need to show economic feasibility

80. Difficulty in Measuring IT Efficiency High rate of changes in requests Benchmarks are almost inefficient in virtualization period Inefficiency of Service Catalog: Works only after accurate design impossible formula to calculate when put together with budget

81. Show Value for Money What's the value of 99.99% availability? Never, never, ever discuss cost apart from quality of service Focus your comments always on business outcomes - network availability is not a value metric Show value for money — the right services at the right level of quality at the right price.

82. Next Generation Metrics ITOs have made almost no progress in improving the maturity of their metrics programs A need for metrics that measures more than: on-time, in-scoop, on-budget performance Failure or success? Project was delivered on time but failed to meet its business requirement due to change-mgmt problems & user resistance The need to measure risk & business value: Post implementation ROI Business usage (Penalties for not using the product)

83. As IT Changes, So do the Metrics Source: Corporate Executive Board

84. Wrong Metrics, Wrong Decision

85. What ever the Model is,Stick to it!

86. Office of the CIO World Wide Trends Agiledevelopment is crucial in uncertain environments ITOs report more effective requirements mng by involving users in development, as early as possible in the lifecycle, to maximize adoption & enhance benefits realization

87. It’s not about the tool, but it’s important to define a toolset You can’t do PPM without systems - The question is which system fits your organization’s level of ambition & maturity. Source: STKI Survey 2011

88. PPM ToolsPositioning of the Israeli Market Vendors to Watch: Compuware Worldwide Leader CA Enterprise MSP Microsoft New SaaS Player Local Support PS Next HP Primavera Clarizen This analysis should be used with its supporting documents Approach Market Presence

89. PPM Tools & Integrators in Israel

90. PPM Tools & Integrators in Israel

91. IT Dashboard Despite large investments in PPM solutions & great satisfaction from them, some ITOs build, in addition, fully integrated IT dashboard on existing BI solution, for better data analytics.

92. IT Dashboard Example

93. OTC Summary OTC success depends on executive (business & IT) commitment It’s not about the tool, but it can not succeed without it When successfully implemented business is driven to adopt best practices

94. IT Service Desk Mature & highly competitive market Saturated vendor landscape with little tool differentiation High degree uniformity based on ITIL Renewed interest in large ITSM integration projects (CMDB, Asset mng, CM, Configuration mng ESM)

95. IT Service Desk Medium size ITOs turn to HD modules in selected CRM packages or SysAid We don’t see a lot of HD onDemand solutions

96. IT Service Desk – Positioning of the Israeli Market Vendors to Watch: Microsoft Altiris CA SAP Worldwide Leader BMC HP Enterprise Siebel Local Support MID-Tier SysAid IBM IT HD Modules Pivotal PeopleSoft This analysis should be used with its supporting documents Market Presence

97. IT Service Desk ToolsSelected Installations in Israel

98. IT Help Desk Modules from CRM packages

99. Sourcing Trends to Watch 2011 Comprehensive outsourcing deals volume decrease Shift to Cloud Computing Cloud Computing – not matured yet, but becoming a standard

100. Sourcing

101. Outsourcing Trends 2011 For the first time comprehensive outsourcing market in Israel has seen a decline (-15%) Dissatisfaction with the results in some conventional outsourcing segmentslead to backsourcingdeals: ITOs set the price as the prime parameter in selecting service provider Vendors didn’t meet the client’s expectations, nor achieve business transformation A need for better outsourcing management

102. The State of Cloud Computing is completely different Number of ITOs Using Cloud Services 67% 30% 18% Due to cost & speed InformationWeek Analytics 2011

103. Small Business most likely to be in the Cloud

104. Small Businesses vs. Enterprises PPM BI IaaS CRM VS. ERP Finance Gaining powerful and innovative applications May become outdated

105. Technologies Maturity ModelOffice of the CIO Business Value Investment to make money IT Project Public Cloud Cut costs, Increase productivity Pure Business Project SaaS IaaS PaaS Private Cloud Manage Scattered IT Commodity IT Services Public Cloud Testing *Size of figure = complexity/ cost of project Investment for regulations Using Implementing Looking Market Maturity

106. Cloudy IT Risks & Rewards BCM Risk Public Cloud Unauthorized Access Control BPaaS SaaS PaaS IaaS Private Cloud

107. Cloud Computing Taxonomy Source: Corporate Executive Board

108. Primary Drivers Datagrowing complexity & increasing volume New business requirements: self-service customer portals real-time BI Mobileapp stores users demand truly anytime anywhere access to their personal & business info Compliance community (GOV, pharma) clouds

109. GSA Picks Google Apps Mobile, device-agnostic, location-agile info workplace 50% savings of the cost of email over 5 years (cost of email on-premises vs. email in the cloud)

110. Cloud Trends Most ITOs seekthe scalability of cloud computing Cloud/Web platforms are already part of our personal life Cloud standards have not yet matured – but existing security, Web services, networking & protocol standards are all in use by clouds

111. Cloud Impacts on ITO IT Chargeback & cost transparency ITIL - need for standardization & service mgmt models Vendor Mgmt, integration & coordination per user per month 12 Mail services on Cloud

112. The Foundation of the Cloud Service Catalog - IT services ,components & performance need

113. Manage Scattered IT:Cloud Computing ITO seems to be reluctant about the ownership of the cloud as a part of enterprise technology Business will bypass IT if it doesn’t provide guidance Start with private cloud which operates solely for your org.- learn to operate a cloud environment

114. Cheap is Good Pay-per-use solution makes sense if : the unit cost of cloud services is lower than dedicated, owned capacity peaks demand industry Operational costs reduction: no maintenance, no upgrading downtime no endless support systems (antivirus, anti spam, firewall, servers, storage, etc…) Fast app deployment

115. What Top Factors are Likely to be in your Cloud Computing ROI Study? InformationWeek Analytics 2011

116. Do you have Cloud ComputingFormal Procedures in Place? SLA Integration Security Monitoring Continuity planning ROI analysis: cloud vs internal work

117. Public CloudAmazon’s Elastic Compute Cloud, Google’s App Engine & Microsoft’s Azure

118. Faith in Cloud About 150,000 of Google's Gmail users woke up Sunday morning to missing e-mails, contacts and chat histories. Will you trust such "cloud" services any less?

119. Battle of the Clouds Who will be the winner ? Illustration by Jon Berkeley

120. NearShore Increasing acceptance of nearshore models Rising number of nearshore providers Israeli ITOs do not like offshore but acknowledging the advantage and cost saving (up to 50%) by Israeli nearshore When nearshoreexists, it is highly used: 80% of the testing staff!

121. Nearshore Main Players Matrix (based on Jewish orthodox community) Galil Software (based on Arabic community) IROX(based on Jewish orthodox community) Ness (Beer Sheva center) Babkom centers(based on Arabic community) MIT(based on orthodox and Arabiccommunity) Malam-Team(Qualitest included, based on Jewish orthodox and Arabic community) Aman(based on Jewish orthodox community)

123. Top experts knowledge (BI,GRC…)– but only for a few hours