The Future of Enterprise IT

From Systems of Record

to Systems of Engagement

SNW

October 10, 2011

Agenda The Future of Enterprise IT

• From Systems of Record

• To Systems of Engagement

• Implications for IT

• Implications for IT Vendors

Enterprise IT: The Current State Systems of Record are Largely Complete

• Transaction systems for global commerce . . .

• Financials, Order Processing, Inventory, HR, CRM, Supply Chain

• Mainframes, minis, client-server, PC, Internet-enabled, SaaS

• Drove three decades of investment

• Data centers everywhere

• OLTP and Business Intelligence were the key drivers

• Network seen as a transport mechanism only

• Y2K put the capstone on this trend

• Pulled forward a half decade of investment

• Enterprise IT has had to go through a long “digestive” period

• Focus in past decade has been on efficiency investments

IT Innovation: For the Past Decade

Enterprise IT

On Hold

Consumer IT

On Fire

Redefining IT for Consumers The Digitization of Human Culture

• Access

• Infinite content, no barriers to entry, no barriers to exit

• Communications are globally democratized

• Microsoft, Google, Facebook, Wikipedia, OpenTable

• Broadband

• Pictures, video, shopping

• Internet touches both the mind and the heart

• Skype, iTunes, YouTube, Hulu, Netflix, Zappos

• Mobile

• PC for the emerging markets

• iPhone and iPad set the bar in mature markets

• IM, email, camera, game, wallet, magazine. . . even a phone!

How will this impact enterprise IT?

Critical Question to Ask First

• Which describes your company better?

A. B-2-B, our goal being to have hundreds to thousands of

customers each paying us hundreds of thousands or

millions of dollars per year.

B. B-2-C, our goal being to have millions to tens of millions

of consumers each paying us hundreds of dollars per

year.

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B-2-B Ecosystems The Rise of Collaborative Business Networks

• Structure of business has changed

• OLD: Hierarchically organized integrated enterprises

• NEW: Business networks of specialized enterprises

• Business networks increase demand for

• Communication – Coordination - Collaboration

• Relationship management and trouble shooting

• This is a developed economy advantage

• Challenge: To engage with peers globally to solve problems

• Answers are not in Systems of Record

• They are in other people’s (and often other companies’) heads

B-2-B Ecosystems: Investing in Collaboration Systems of Engagement

• Collaboration burden falls on the middle of the organization

• Not front-line workers engaged in transactional workflows

• Not top executives engaged in strategic issues

• Need to invest in “IT for the middle tier”

• In-the-moment empowerment through Systems of Engagement

• Broad and easy access to Systems of Record on demand

• Systems of Engagement must meet four key design goals:

• Mobile to be in the moment

• Social to share facts and insights with others

• Ad Hoc because that’s how issues emerge

• Real Time because that’s when issues get resolved

Systems of Engagement for B-2-B

• Enterprise Facebook

• Enterprise YouTube

• Enterprise Search

• Enterprise App Store

• Enterprise Twitter

• On demand conferencing

• Global presence detection

• Mobile access to everything

• Social content management

• With more revolutionary

applications to come . . . .

Who knows

energy and

speaks

Chinese?

Who is the VP

Operations in

Client X?

How is the

quarter

coming?

I need to talk

to Harry—

where is he?

What got

decided at the

last project

meeting?

Can you do a

demo for the

field?

Let’s make sure

everyone fills out

the budget the

same way!

Let’s get

everyone

together now!

Let’s look at

the data and

get Sherry to

walk us thru it

This is the realm of

“consumerization”

Digital B-2-C Launching a New Offer On-Line

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VIRALITY ACQUISITION

ENGAGEMENT MONETIZATION

Starter

Motor

B-2-C Ecosystems Connecting with Consumers Digitally

• From Analog Atoms to Digital Bits

• Physical goods still need—and want—retail stores

• Digital goods do not

• Digital disintermediation puts stores out of business

• Moving the Moment of Choice

• P&G: The First Moment of Choice

• P&G: The Second Moment of Choice

• Google: The “Zeroth” Moment of Choice

B-2-C Ecosystems Engaging with Consumers Digitally

• From Transactions to Interactions

• Automate the context (including the transaction)

• Engage at the core (all along the life cycle)

• Keep these two imperatives separate

• From Command & Control to Participation

• Social media is not directly under anyone’s control

• Must be present, relevant , and vulnerable

• Very tough culture change

B-2-C Ecosystems Acquiring Consumers Digitally

• Data is the driver

• Everything you need to know is on-line somewhere

• But these are tiny needles in massive haystacks

• Must find and activate them before prospect moves on

• No time for people to be in the loop

• Master data meets metadata

• Public cloud meets private cloud

• In-memory algorithms rule

Systems of Engagement for B-2-C

• Collaborative filtering

• Behavioral targeting

• Personalized transactions

• Location-based services

• Predictive analytics

• Machine learning

• Fraud detection

• Multi-channel engagement

• Near-field transaction processing

• And lots more to come . . .

Birds of a

feather flock

together!

Now that’s

what I like!

Lucky you

added that

extra inventory!

Rats, foiled

again

No more plastic!

Who’s in the

market today?

Timely!

It just seems to

get smarter!!

Just the way I

like it!

The Challenge is Where to Begin Use Moments of Engagement as a Focal Point

• Every customer-facing strategy is made or broken during a

handful of moments of engagement—what are yours?

• What person or system represents you in these moments, and

how effective are you at meeting the new expectations?

• Where could you introduce systems-of-engagement capabilities to

amplify your company’s power at these specific moments?

Do not sponsor this as an IT-only initiative

Co-innovate with Line-of-Business partners

Pilot at the point of greatest return

• Systems of Record create efficiency

• Impossible to do global commerce without them

• Focus on cost, quality, and contractual commitments

• Systems of Engagement create effectiveness

• Create compelling consumer interactions on line

• Focus on user experience, response time, time to closure

• Correct architecture

• SOEs operating on top of and in touch with SORs

• This is where the evolution in infrastructure comes in

Systems of Record + Systems of Engagement The Future of Enterprise IT Architecture

The Evolution in IT Infrastructure Consumerization Will Drive the Next $1Trillion

Morphing the Stack

Business Process Consulting

Transaction Applications

Business Intelligence

Web Application Infrastructure

Systems Management Infrastructure

Database

Operating System

Servers

Storage

Data Network

High-Performance Microprocessors

Business

Layer

Compute

Processes

Compute

Engines

Mainframes

Document-based Collaboration

Desktop Environment

The Current Infrastructure The Systems of Record Stack

High-Performance Microprocessors

Document-based Collaboration

Business Process Consulting

Transaction Applications

Business Intelligence

Web Application Infrastructure

Systems Management Infrastructure

Database

Operating System

Servers

Storage

Data Network

Business

Layer

Compute

Processes

Compute

Engines

Mainframes

Desktop Environment

Real-Time Analytics

Mobile Application Infrastructure

Public/Private Cloud Management

Infrastructure as a Service

Mobile Clients

Apps

Live Collaborative Sessions

In-Memory Caches

Voice/Data/Video Network

User Experience Design

An Evolution in Infrastructure Morphing the Stack

Virtualization Platforms

Low-Power Microprocessors

Apps

Real-Time Analytics

Mobile Application Infrastructure

Public/Private Cloud Management

In-Memory Caches

Infrastructure as a Service

Business

Layer

Compute

Processes

Compute

Engines

Live Collaborative Sessions

Mobile Clients

Voice/Data/Video Network

The Future IT Infrastructre Delivering the Systems of Engagement Stack

User Experience Design

Virtualization Platforms

Low-Power Microprocessors

Two Different Trajectories

User Experience Design

Apps

Real-Time Analytics

Mobile Application Infrastructure

Public/Private Cloud Management

In Memory Caches

Virtualization Platforms

Voice/Data/Video Network

Infrastructure as a Service

Live collaborative Sessions

Mobile Clients

Low-Power Microprocessors

Business Process Consulting

Transaction Applications

Business Intelligence

Web Application Infrastructure

Systems Management Infrastructure

Relational Data Management

Operating System

Servers

Storage

Data Network

High-Performance Microprocessors

Mainframes

Document-based Collaboration

Desktop Environment

Consolidated Suites

for

Optimization

Best of Breed

for

Differentiation

Systems of Record Stack Systems of Engagement Stack

Recap The Consumerization of Enterprise IT

• From Systems of Record

─ Still required—but with much easier access

• To Systems of Engagement

─ The new playing field—must be present to win!

• Implications for IT

─ Engage with LOB—don’t leave home with them!

• Implications for IT Vendors

─ Put on your track shoes!

gmoore@geoffreyamoore.com

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