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Confidential | Copyright © Larsen & Toubro Infotech Ltd. Role of Quality in Changing Business Environment.

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Presentation on theme: "Confidential | Copyright © Larsen & Toubro Infotech Ltd. Role of Quality in Changing Business Environment."— Presentation transcript:

1 Confidential | Copyright © Larsen & Toubro Infotech Ltd. Role of Quality in Changing Business Environment

2 Agenda Confidential | Copyright © Larsen & Toubro Infotech Ltd. 2 2 3 4 1 Current Environment - Economic Downturn Core Industry Trends Service Landscape Key IT Market Trends 5 Delivery Framework & Quality Process

3 Agenda Confidential | Copyright © Larsen & Toubro Infotech Ltd. 3 2 3 4 1 Current Environment - Economic Downturn Core Industry Trends Service Landscape Key IT Market Trends 5 Delivery Framework & Quality Process

4 The Dynamics of Our Current Economic Cycle Economic Health 20022003200420052006 2008  Economy repairing from dot com correction  Weakness in corporate earnings  Interest rates low  Equity valuations low  Bank M&A activity low and at a valley in pricing multiples  Economy begins recovery  Corporate earnings strengthen due to low interest rates  Interest rates begin to rise  Asset & housing valuations rise  Bank M&A activity accelerates, pricing increases  Economy is fueled by strong corporate earnings and excess liquidity  Bank earnings at historic levels of profitability  Yield curve flattens and eventually inverts  Asset quality at pristine levels until 2007 sub-prime woes  Bank M&A activity is robust and a “sellers’ market” at a peak in pricing  Creative financing reaches many sub-prime home buyers  The housing weakness will slow economic growth  Bank M&A activity has softened dramatically during 2009  Housing market will continue to decline in 2008 and possibly through 2009 Near-term Projections 2007  Economy has been dragged into a recession as the declining housing market affects the American consumer 2009 Source: Hovde  Elevated fuel cost will hamper transportation companies and ultimately consumer prices Confidential | Copyright © Larsen & Toubro Infotech Ltd. 4 We are here

5 Expected global slowdown in 2009 Confidential | Copyright © Larsen & Toubro Infotech Ltd. 5

6 Agenda Confidential | Copyright © Larsen & Toubro Infotech Ltd. 6 2 3 4 1 Current Environment - Economic Downturn Core Industry Trends Service Landscape Key IT Market Trends 5 Delivery Framework & Quality Process

7 Confidential | Copyright © Larsen & Toubro Infotech Ltd. 7 Summary of Sector Outlooks 2009 SectorIndustry OutlookCredit Outlook AutoNegativeStable to Negative ConstructionStableStable to Negative CementStable to Negative Fast Moving Consumer Goods PositiveStable FertilizerStable Gems & JewelleryNegativeStable to Negative Non-Ferrous MetalsStable to Negative Oil & GasStable to Negative PaperStable PowerPositive to StableStable

8 Agenda Confidential | Copyright © Larsen & Toubro Infotech Ltd. 8 2 3 4 1 Current Environment - Economic Downturn Core Industry Trends Service Landscape Key IT Market Trends 5 Delivery Framework & Quality Process

9 Confidential | Copyright © Larsen & Toubro Infotech Ltd. 9 Global IT Purchases – Region vs Category

10 Confidential | Copyright © Larsen & Toubro Infotech Ltd. 10 Service Opportunity The 15 largest IT Markets in 2009, ranked by size

11 External IT services spend continues Source: Gartner’s IT Forecast Analysis, Worldwide * IT Services = core outsourcing and other external services spend Business IT Spending – Worldwide 0 5 10 15 20 25 30 35 2005200620072008200920102011 Internal Spending Software Hardware Tele comm. IT Services* Percent of Spend 11 IT Service Sector expected to grow for year 2009 to 2011 Confidential | Copyright © Larsen & Toubro Infotech Ltd.

12 12 Measures to mitigate & Opportunities New Delivery Models - Collaborative Improve the Quality Systems & Audit process Enhanced productivity – Tools, Accelerators Improved utilization of resources – Process improvement Process Benchmarking and reducing system in efficiencies

13 Agenda Confidential | Copyright © Larsen & Toubro Infotech Ltd. 13 2 3 4 1 Current Environment - Economic Downturn Core Industry Trends Service Landscape Key IT Market Trends 5 Delivery Framework & Quality Process

14 Confidential | Copyright © Larsen & Toubro Infotech Ltd. 14 IT Service Landscape Consultant - Specific Customer problem solving Customer - User of Services SW Vendor - Application Software Development Technology Vendor - Development and Production of HW, OS, DB… Systems Integrator - Software Implementation - Systems Integration ISP, NSP - Internet connectivity provider Telecommunication - Data (voice, video, text) transfer provider ASP/Outsourcer - Application Operation - Application Services providing Technological Infrastructure Operator - Operation of servers, disk arrays…

15 Agenda Confidential | Copyright © Larsen & Toubro Infotech Ltd. 15 2 3 4 1 Current Environment - Economic Downturn Core Industry Trends Service Landscape Key IT Market Trends 5 Delivery Framework & Quality Process

16 Delivery Model Evolution & Challenges 1960s Data Processing Bureau 1970-80s In-house Development 1990s ERP Applications (SW License Model) 2005 Application Services (Software-as-a-service, Utility computing) The end of 90s-2004 Traditional Outsourcing Increasing Complexity of requirement User Perspective −Cost of IT Projects - Traditional model leads to high TCO and is associated with significant risks −Complexity of Business Systems such as ERP in operation complexity, customization etc −Fast rate of Technology −High Demand on IT Specialist −Traditional Outsourcing – not able to benefit the TCO Provider Perspective −Varying requirement across Geography and user requirement −Stagnation on licensing but increase in service requirement −Demand of IT Specialist and cross training as per requirement −Technology driven Delivery Models and associated Quality process 16

17 © prof. Voříšek 17 Basic Types of Service Delivery Business process outsourcing (BPO) Complete (complex) IT requirement Selective IT Service Models −Application service (ASP) −Process outsourcing −Resource outsourcing −Infrastructure −Application development Business factors importance New Delivery Models by Gartner −Business process utilities (BPUs), Infrastructure utilities (Ius), Storage as a service, Grid computing, Communications as a service (CaaS), Utility computing, Capacity on demand, Remote management services, SaaS (Software as a Service), Web platforms, Community source, Software streaming, Software-based “appliances” (SBAs) and User-owned devices.

18 Important business factors for change Business Factors −Standardization of business environment and globalization of enterprise applications - same application to all users −Service Level Agreements (SLA) provide legally enforceable guarantee Technology Factors −Emergence of Utility Computing −Role of Web services −And many more …. Conclusions −Collaboration of service providers in development and operation −Many variants of service delivery with different CSF and requires different SLA −Variant selection (sourcing strategy) has to be part of strategic management Requires Collaborative Delivery Models and Quality Tools 18

19 Customers Service Delivery Framework Software, Hardware Vendors and Service Providers IT Operations Application Delivery IT Security IT Security Service Management IT Planning IT Planning Project Management Quality System Quality System COBIT COSO IT Governance and Audit Management Systems Management Systems PMI Six Sigma Audit Systems SOX Deming Quality Systems Quality Systems CMM BS 1XXX ISO Process Frameworks Process Frameworks CSD MOF ITIL ASL TQM CMM – Capability Maturity Model BS - British Standards / ISO – International Organization for Standardization CSD – Gartner Consolidated Service Desk MOF – Microsoft Operations Framework ITIL – Information Technology Infrastructure Library ASL – Application Service Library TSO – Telecommunications Service Obligations COSO – Committee of Sponsoring Organizations of the Treadway Commission COBIT - Control Objectives for Information and related Technology SoX – Sarbaxy Oxley Compliance PMI - Project Management Institute TQM – Total Quality Management SAS – Statement on Auditing Standards 19 SAS XX

20 Wrap up and Conclusion Putting COSO, COBIT, and ITIL together COSO defines the high level policies of a well governed IT organization COBIT defines the control structures for evaluating the organization conforms to COSO policies. ITIL defines the practices that will satisfy the COBIT controls. ISO, BS, SAS, CMM defines the quality process to satisfy the delivery framework Quality Tools commonly used are Cause-and-effect diagram, Check sheet, Control charts, Histogram, Pareto chart, Scatter diagram, Stratification. New tools are Affinity Diagrams, Interrelationship Diagrams, Tree Diagrams, Matrix Diagrams, Matrix Data Analysis, Process Decision Program Charts and Arrow Diagrams Advantage of New tools are display information in intuitively helpful ways, structure group work and analysis, promote non-linear thinking and can be used with the “old” tools 20

21 Key Success Factors COBIT/ ITIL/ COSO Guidelines for Best Practices Provides the theory but not the process Education is an important component Guidelines for Best Practices Provides the theory but not the process Education is an important component Technology - Service Providers Provide the technology that enables and automates the process Repeatability, compliance and notifications Implement processes impossible without technology Provide the technology that enables and automates the process Repeatability, compliance and notifications Implement processes impossible without technology Process Use of right process that is applicable to the unique needs of the organization Training & Education Tool configuration Use of right process that is applicable to the unique needs of the organization Training & Education Tool configuration 21

22 Confidential | Copyright © Larsen & Toubro Infotech Ltd. Our Business Knowledge Your Winning Edge Thank you


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