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Industry Evolution & Impact on Enterprise IT Strategy, Operating Model & Organizational Development Tom Fountain Global CIO, Bunge Ltd.

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Presentation on theme: "Industry Evolution & Impact on Enterprise IT Strategy, Operating Model & Organizational Development Tom Fountain Global CIO, Bunge Ltd."— Presentation transcript:

1 Industry Evolution & Impact on Enterprise IT Strategy, Operating Model & Organizational Development Tom Fountain Global CIO, Bunge Ltd.

2 Agenda IT Vision & Strategy Industry Evolution Impact on Enterprise IT 2

3 IT Vision: “Smart Operations” – Converting Intelligence into Recognized Business Value 3 IntegrationIntelligenceOptimizationOrchestration Customer Partner Supplier Internal Data Information Knowledge “Select an Optimal Business Response from among Valid Alternatives” Customer Partner Supplier Internal Identify Alternatives Trade-Offs w/Constraints Select Optimal Response “Develop insight into the past, present, and future behaviors of Business Assets” “Acquire timely and complete information upon which we can act” “Manage the Actions of Internal and External Assets to Deliver Value” Trading Crushing/Refining Logistics Orig. / Distrib. “Run Plants with Optimal Balance of Production, Maintenance, Capital Expansion, and Safety” “Identify Pricing Mis- Alignment and Exploit with Risk-Adjusted Strategies” “Comprehend Market Conditions and Exploit with Aggregation, Scale, and Global Reach “Match Supply / Demand with a Balanced View of Transportation Options, Market Pricing, and Operational Risk ” Sense Analyze / Optimize Respond Smart Operations “Smart Operations” – The Optimized Execution of Managed Business Processes Enabled by Value Chain Integration and Business Intelligence

4 IT Mission: “Improve the Speed, Cost, and Quality of Business Decisions, Transactions, and Processes” (IT v2.0) 4 Time IT Value to the Business Operations (Service Level Achievement) Cost (Total Cost of Ownership) Business Value (Return on Investment) Innovation & Growth (New Products, IT-enabled Services, New Business Models, etc ) IT v1.0 IT v2.0 Expand the IT Mission through People, Process, & Technology Transformation Current IT Position Future IT Position

5 Enterprise Architecture: Mapping Core / Context 5 IT Must Re-Think Core v Context, Delivery Model, Architecture, Integration Infrastructure Applications Process / Data Integration / Collaboration Core Systems & Services Built or Bought & Integrated by Enterprise IT Elements may be Cloud-based Context Systems & Services Bought & Integrated by Enterprise IT Often Cloud-hosted Enterprise IT: Owns the Stack Alignment with Business Architecture Design Sourcing Integration Performance Mgmt Efficiency

6 Agenda IT Vision & Strategy Industry Evolution Impact on Enterprise IT 6

7 Evolution of the IT Industry 7 New Choices, New Players, and New Challenges Client/Server Web Time Cloud-based (Public, Semi-Private) Integrated Stacks (Single vendor – HW/SW) Best-of-Breed (Multi-vendor, Layer-by-layer) Mainframe Relationship with the Technology Provider Relationship with the Service Provider Over Time… We left a Single Vendor model to unleash innovation / competition Best-of-Breed drove the build-out of a world- scale industry Complexity of competing standards, integration challenges, expertise development, etc led to late / failed programs, high IT costs, and frustrated customers Cloud-based Service Providers enter the mix to deal with complexity, scale, and flexibility shortcomings of Best-of-Breed Integrated stacks make a comeback as multi-layer integration / optimization provides new price/performance opportunities and helps with operational complexity Today

8 Pros & Cons of these New Paradigms 8 As Usual One Size Does not Fit All… Best-of-Breed Cloud-based Integrated Stacks ProsCons Accumulated Experience Vendor Competition Innovation on a layer basis Open Standards Scale Economics Variably priced services Low Upfront Investments Best-of-Breed Offerings at the Service Level Breakthrough Price / Performance Single Vendor responsibility Eliminates layer integration challenges Mismatched pace of change across layers Multi-vendor integration complexity Multi-vendor management complexity Security / Privacy Integration with Legacy Maturity of Offerings Lack of Pricing, Management, Tech Standards Potential Vendor Lock-in Potential Alignment Issues with Vendor Strategy Best Use Situation (?) Broad Deployment Need Low Cost / unit Manageable integration Negotiable Savings e.g. Web Servers Context System Modest Security (or less) Standard Functionality Highly Variable workload e.g. HR, AP/AR High Strategic Business Value (Core) High Performance / Security High Reliability Slower Pace of Customer Change e.g. High Performance BI

9 Vendor Offerings – Integrated Stacks 9 Cloud-like Characteristics in your own Datacenter

10 A Future View of the World??...Mix/Match Your Optimal Set 10 An Ecosystem of Capabilities within a Robust Operating Framework Infrastructure (IaaS / Private) App Services (ASaaS / Private) Applications (SaaS / Private) Data (DaaS / Private) Models (MaaS / Private) Analytical Svcs (BIaaS / Private) Environment Mgmt Svcs OptimizationSimulationReporting LogisticsWeatherFinancialEconometricCommodity CreditEconomicCompaniesRegulatoryMarkets HRISCRMERP CollaborationECMBPMB2B Network Storage Servers Model-BuildingAnalysis EngagementSecurityMgmt ToolsPricing GIS TradingFinanceLegal EAIIAMPortalSearch Integration Business Execution Svcs (XaaS / Private) Partner Performance Mgmt Business Process MgmtBusiness Activity Monitoring

11 Agenda IT Vision & Strategy Industry Evolution Impact on Enterprise IT 11

12 Opportunities 12 Organizational Development 1.Positions IT to meet with greater speed, driving improved IT Value Proposition and improved staff morale 2.Expanded Career Development opportunities through deeper business partnering 3.IT becomes the lead cross-functional integrator in the company Enterprise Strategy 1.Re-Architect the IT Operating Model and cost structure for maximum business alignment 2.Source deep and usable expertise / intelligence for critical business problems from a larger ecosystem 3.Capture Scale benefits for cost sensitive operations (large or small) Financial Management 1.Highly variable cost structure to maximize flexibility with smaller upfront investments (for cloud-based services) 2.Improved price/performance drives unit cost productivity 3.Expanded ecosystem of potential suppliers improves competition A Transformational Opportunity…IT must be prepared in all areas Technology Strategy 1.Position workloads to optimize alignment with a company’s specific price and performance needs 2.Capture scale for a full range of workload sizes 3.Services-based solutions increases flexibility and minimizes upfront investments (smaller throw-away cost)

13 Risks & Challenges 13 Organizational Development 1.Ability to develop necessary Staff Skills: Architecture, Solution Integration, Partner Mgmt, and Business Analysis 2.Change Management around Staff shifts to Solution Integration and Deployment v. Development 3.Further loss of Technological expertise base within a company Enterprise Strategy 1.Re-positioning IT as a Value Creator, prepared to lead key business focused programs 2.Industry / Vendor / Customer confusion and lack of alignment on standards will delay solution deployment 3.Emergence of de facto proprietary solutions will inhibit choice and integration / Fear of vendor lock-in Financial Management 1.Lack of industry standards / controls for pricing and consumption management 2.Cost Modeling / Forecasting for consumption-based external services 3.Insufficient cost structure visibility to accurately trigger workload re-positioning New Classes of Risk for IT including “Services” Integration & Strategy Alignment Technology Strategy 1.Cloud – Security & Integration…Integrated Stacks – loss of open standards and granular “control” 2.Poor Architecture choices limits flexibility to re-position workloads 3.Improper Sequencing of the build-out limits value creation and increases probability of throw-away

14 Strategies & Actions 14 Organizational Development 1.Baseline your staff’s skills and competencies…aggressively develop the required capabilities 2.Understand staff motivations and how to retain your key talent up front 3.Aggressively market both imports and exports of staff with business functions Enterprise Strategy 1.Plan, synchronize, and actively manage the key disciplines (People, Process, Technology, Services, & Financials) 2.Use multi-generational plans to highlight longer term dependencies and optimize sequencing 3.Maintain a deep understanding of the Industry, Players, Standards, Products, and Services Financial Management 1.Understand IT cost structure at a detailed level to match up with new Product and Service offerings 2.Educate yourself about emerging pricing models for products and services (Cloud, Virtualization, etc) 3.Understand business cost drivers, local profit margins, and cost/value thresholds of a satisfied customer A Proactive, Highly Business Aligned, & Industry-savvy Strategy Maximizes Probability of Success Technology Strategy 1. Understand and document your Enterprise Risk appetite 2.Understand and document your Enterprise price/performance requirements 3.Actively seek out and understand industry players strategy

15 Q & A 15 Help Me Think Smarter about the Future… Questions Please…

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