The document discusses the relationship between technology and business. It argues that technology is no longer separate from business but is instead fully integrated and essential. The author notes that all major business challenges today require technological solutions. The document examines how to organize information technology departments and make IT strategic and operationally excellent to create business value.

1. Technology
is
Business
Business
is
Technology
Stephen
J.
Andriole,
Ph.D.
Thomas
G.
Labrecque
Professor
of
Business
Technology
The
Villanova
School
of
Business
Villanova
University
Wharton|
May
2014

2. So
Where
Are
We?
ü
“IT
Doesn’t
MaOer”?
ü
“IT’s
Time”?
ü
IT’s
a
Cost
Center?
ü
IT’s
a
Profit
Center?
ü
It’s
the
End
of
IT?

3. So
Where
Are
We?
ü
“IT
Doesn’t
MaOer”?
ü
“IT’s
Time”?
ü
IT’s
a
Cost
Center?
ü
IT’s
a
Profit
Center?
ü
It’s
the
End
of
IT?

4. We’re
Nothing
Without
IT
Let’s
Establish
Something
Immediately

5. ü
Disconnect
Everyone
from
email,
the
Web,
SoTware
ApplicaVons
and
the
Data
Bases
They
Use
All
Day
(and
Night)
to
do
Their
Jobs
(and
Live
Their
Lives):
See
How
Long
It
Takes
for
the
Help
Desk
to
Light
Up
with
Angry
Employees
Threatening
to
Do
All
Sorts
of
Unspeakable
Things
to
You
and
Your
Technology
Providers
ü
Then
Disconnect
Your
Customers
and
Suppliers:
See
How
Long
It
Takes
for
Revenue
to
Crash
ü While
OperaVonal
Technology
has
CommodiVzed,
Our
Dependence
on
OperaIonal
and
Strategic
Technology
is
So
Complete
that
It's
Impossible
to
Separate
Business
–
at
Any
Level
–
From
Technology
ü In
Fact,
All
of
the
Major
Strategic
Challenges
That
Companies
Face
Today
Cannot
Be
Solved
Without
Technology
We’re
Nothing
Without
IT

6. Finance
Sales
Strategy
InnovaVon
MarkeVng
Technology
Business
Used
to
Look
Like
This

7. Finance
Sales
Technology
InnovaVon
MarkeVng
Supply
Chains
Now
Business
Looks
Like
This
Technology

8. IT
Used
to
Look
Like
This

9. Now
IT
Looks
Like
This

10. We’re
Nothing
Without
IT
The
New
Reality

11. ü
How
Do
We
Make
IT
Work?
Ø
How
Do
We
Achieve
OperaIonal
Excellence?
v
How
Do
We
Organize
IT?
v
How
Do
We
Govern
IT?
v
How
Do
We
Source
IT?
OK,
Now
That
We’ve
Cleared
That
Up
…

12. ü
How
Do
We
Make
IT
Work?
Ø
How
Do
We
Create
Strategic
Value?
v
How
Do
We
Track
Our
Clients?
v
How
Do
We
Distribute
Our
Services?
v
How
Do
We
“Listen”
to
Our
Community?
v
How
Do
We
Exploit
AnalyVcs?
v
How
Do
We
Innovate?
The
Business
Value
of
IT

13. ü
Empirical
Research,
Especially
Technology
ForecasIng,
Technology
AdopIon,
Organiza-­‐
Ional
EffecIveness
&
Customer
SaIsfacIon
Data
ü
Best
PracIces
Data
(Gartner,
Forrester,
Etc.)
ü
Experience
as
CIO,
CTO,
SVP,
CEO,
Corporate
Director,
Consultant
&
Professor
ü
Some
(Clearly
Marked)
Opinions
The
Bases
for
Our
Discussion
…

14. How
Should
We
Organize
IT?
How
Should
We
Govern
IT?
How
Should
We
Source
IT?
OperaVonal
IT

15. OperaVonal
IT:
How
Should
We
Organize?
CIO/CTO
Business
Office
ü
Project
Management
ü
Vendor
Management
ü
IT
Finance,
HR
&
CommunicaVons
Infrastructure
ü
Networks
&
CommunicaVons
ü
Storage
ü
Devices
ü
Security
Admin
ü
Back-­‐Up
&
Recovery
…
ApplicaVons
ü
Back
Office
Plajorms
ü
Enterprise
ApplicaVons
ü
ApplicaVons
RaVonalizaVon
ü
Delivery
…
Architecture
ü
Enterprise,
ApplicaVons,
InformaVon,
CommunicaVons,
Hardware
&
Security
Architecture
Standards
ü
R&D
…
Business
RelaVonship
Management
ü
BPM
ü
Demand
Management
ü
Requirements
Modeling
ü
NegoVaVons
…
Finance
&
Procurement
IT
Governance
CommiOee
Audit
OperaVons
Strategic
Technology
ü
Business
ApplicaVons
ü
Business
Model
DisrupVon
ü
Emerging
Technology
OpVmizaVon
...

16. ü
The
Big
QuesVon:
FederaIon
Ø
65%
of
All
OrganizaVons
are
Feder-­‐
ated
v
PoliVcally
Popular
–
&
Unpopular
v
Shared
Governance
v
Higher
Cost
v
Agile
…
OperaVonal
IT:
How
Should
We
Organize?

17. OperaVonal
IT:
How
Should
We
Govern?
I
n
t
e
r
n
a
l
E
x
t
e
r
n
a
l
Hardware,
SoTware
&
Services
Providers
The
Enterprise
Partners
&
Suppliers
The
Crowd
Corporate
FuncVons
Business
Units
OperaVonal
Technology
Strategic
Technology
Emerging
Technology
ParVcipants
Technologies

18. OperaVonal
IT:
How
Should
We
Govern?
I
n
t
e
r
n
a
l
E
x
t
e
r
n
a
l
Hardware,
SoTware
&
Services
Providers
The
Enterprise
Partners
&
Suppliers
The
Crowd
Corporate
FuncVons
Business
Units
OperaVonal
Technology
Strategic
Technology
Emerging
Technology
ParVcipants
Technologies
Who
Owns
the
Matrix?

19. ü
Federated
OrganizaVons
Share
Governance
ü
Centralized
OrganizaVons
Control
Everything
ü
But
Both
Structures
Must
Acknowledge
the
Roles,
ResponsibiliVes
&
Power
of
Service
Providers,
Partners
&
Even
the
Crowd:
Gov-­‐
ernance
is
Now
Shared
Regardless
of
the
Internal
OrganizaIonal
Structure
OperaVonal
IT:
How
Should
We
Govern?

20. ü
Federated
OrganizaVons
Share
Governance
ü
Centralized
OrganizaVons
Control
Everything
ü
But
Both
Structures
Must
Acknowledge
the
Roles,
ResponsibiliVes
&
Power
of
Service
Providers,
Partners
&
Even
the
Crowd:
Gov-­‐
ernance
is
Now
Shared
Regardless
of
the
Internal
OrganizaIonal
Structure
OperaVonal
IT:
How
Should
We
Govern?
In
the
Age
of
ConsumerizaIon,
the
Pace
of
Technology
Change
&
CompeIIve
Pressures,
FederaIon
–
the
Shared
Control
of
Technology
–
Clearly
Makes
the
Most
Sense
(Centralized
Control
is
So
1990s)

21.
Cloud
Pla^orm
Web
2.0
Technologies
Outsourcing
SoTware-­‐
As-­‐a-­‐Service
Ultra
Thin
Clients
Web
Services,
SOA
&
APIs
Open
Source
SoTware
Hardware-­‐
As-­‐a-­‐Service
Web
3.0
Technologies
Corporate
Pla^orm
Web
1.0
Technologies
In-­‐Sourcing
Customized
&
Packaged
SoTware
Fat
Clients
ETL
&
EAI
Proprietary
SoTware
Data
Centers
Some
ERP,
CRM
&
NSM
1980
–
2005
2005
–
OperaVonal
IT:
How
Should
We
Source?

22. ü
CAPEX
à
OPEX/Buy
à
Rent:
The
Shi_
is
Well
Underway
ü
MigraVons
from
Internally
Hosted
ApplicaVons,
Data
Centers
&
Development
to
the
(Public/
Private)
Cloud
Ø Infrastructure
as
a
Service
(Email,
Data,
Storage)
Ø SoTware
as
a
Service
(ApplicaVons)
Ø Plajorm
as
a
Service
(Development)
OperaVonal
IT:
How
Should
We
Source?

23. ü
CAPEX
à
OPEX/Buy
à
Rent:
The
Shi_
is
Well
Underway
ü
MigraVons
from
Internally
Hosted
ApplicaVons,
Data
Centers
&
Development
to
the
(Public/
Private)
Cloud
Ø Infrastructure
as
a
Service
(Email,
Storage)
Ø SoTware
as
a
Service
(ApplicaVons)
Ø Plajorm
as
a
Service
(Development)
OperaVonal
IT:
How
Should
We
Source?
71% are Happy With Cloud ERP
83% are Happy With Cloud BI
91% are Happy With Cloud Infrastructure
Cloud = Future

24. How
Should
We
Track
Our
Clients?
How
Should
We
Distribute
Our
Services?
How
Should
We
“Listen”?
How
Should
We
Exploit
AnalyIcs?
How
Should
We
Innovate?
Strategic
IT

25. Strategic
IT:
OpportuniVes
Cloud
Architecture
Social
Media
Big
Data
AnalyVcs
BYOD/DIY
Interfaces
Thin/Wearable
Devices
IOT/IOE
LocaVon
Services
InnovaVon
Strategic
Value

26. ü
LocaVon-­‐Based
Services
Provide
Real-­‐Time
Client
Trails
Ø
Foursquare
(www.foursquare.com)
Ø
Loopt
(www.loopt.com)
Ø
Yelp
for
Mobile
(www.yelp.com/yelpmobile)
Ø
Neer
(www.neerlife.com)
Ø
SCVNGR
(www.scvngr.com)
ü
Listen
to
Them
24/7
in
Social
Media
Ø
Engagement
Ø
Lead
GeneraVon
…
Strategic
IT:
Tracking
Clients

27. ü
4
Screens|Always
On
ü
Shared
ApplicaVons
ü
DIY/Wearables
ü
Asynchronous
ü
AdapVve
ü
Mobile
…
Strategic
IT:
DistribuVng
Services

28. ü
4
Screens|Always
On
ü
Shared
ApplicaVons
ü
DIY/Wearables
ü
Asynchronous
ü
AdapVve
ü
Mobile
…
Strategic
IT:
DistribuVng
Services

29.
Web
2.0
(Technologies)
Social
Media
(CollaboraVon
&
Sharing)
Social
Networking
(B2B,
B2C,
C2C,
E2E
Networks)
Social
Business
Intelligence
(Analysis
of
Social
Data)
Strategic
IT:
Listening

30. Strategic
IT:
Listening

31. ü
Product
InnovaVon
ü
Brand
Management
ü
Market
Intelligence
ü
CompeVVve
Intelligence
ü
Customer
Service
ü
ReputaVon
Management
ü
Risk
&
Threat
Analysis
…
Strategic
IT:
Listening

32. ü
PredicVve
AnalyVcs
from
Social
Data:
Ø
Revenue?
Ø
ElecVons?
Ø
Corporate
Success/Failure?
Ø
Regulatory
Behavior?
Ø
Threats?
Ø
Crises?
Strategic
IT:
Listening

33. ü
PredicVve
AnalyVcs
from
Social
Data:
Ø
Revenue?
Ø
ElecVons?
Ø
Corporate
Success/Failure?
Ø
Regulatory
Behavior?
Ø
Threats?
Ø
Crises?
Strategic
IT:
Listening
Yes

34. Tweets
have
already
been
used
to
measure
movie
senVment
and
box-­‐office
revenue
with
amazing
accuracy.
Note
the
work
of
Asur
and
Bernardo
who
predicted
the
movie
“Dear
John”
would
earn
$30.71
million
at
the
box
office
on
its
opening
weekend.
It
actually
generated
$30.46
million.
For
the
movie
“The
Crazies,”
they
predicted
a
$16.8
million
opening:
it
generated
$16.07
million.
According
to
the
authors
of
the
NaVonal
Science
FoundaVon-­‐supported
study,
"we
use
the
chaOer
from
TwiOer.com
to
forecast
box-­‐office
revenues
for
movies.
We
show
that
a
simple
model
built
from
the
rate
at
which
tweets
are
created
about
par-­‐Icular
topics
can
outperform
market-­‐based
predictors.”
Strategic
IT:
Listening

35. Strategic
IT:
Listening
Engaging
with
Employees,
Suppliers
&
Partners
Engaging
with
Customers
&
CompeVtors
Listening
to
Employees,
Suppliers
&
Partners
Listening
to
Customers
&
CompeVtors
Internal
External
Passive
AcVve

36. Strategic
IT:
Listening
Engaging
with
Employees,
Suppliers
&
Partners
Engaging
with
Customers
&
CompeVtors
Listening
to
Employees,
Suppliers
&
Partners
Listening
to
Customers
&
CompeVtors
Internal
External
Passive
AcVve
Who
Owns
the
Social
Strategy?

37. ü
Big
Data
AnalyVcs
is
a
“Must
Have”
Competency
as
the
Volume
of
Digital
Content
Grows
to
2.7
zeOabytes
(ZB),
Up
48%
from
2012
&
the
DiagnosVcity
QuoVent
of
the
Data
Rises
ü
Over
90%
of
this
InformaVon
is
Unstructured
(Images,
MP3
files,
Videos
&
Social
Media)
–
Full
of
Rich
Infor-­‐
maVon,
but
Difficult
to
Profile
&
Analyze
(+
Exploding
Structured
Data
from
TransacVons,
Sensors
[the
IOT]
&
Other
Sources)
ü
Over
90%
of
All
Digital
Data
Has
Been
Generated
in
the
Past
2
Years
Strategic
IT:
AnalyVcs

38. Strategic
IT:
IBM
on
Big
Data
AnalyVcs
Content
TransacVonal
/
ApplicaVon
Data
Machine
Data
Social
Media
Data
Know
Everything
About
Your
Customers
Run
Zero-­‐Latency
OperaVons
Innovate
New
Products
at
Speed
and
Scale
Instant
Awareness
of
Fraud
and
Risk
Exploit
Instrumented
Assets
“Achieve
Breakthrough
Outcomes
by
Analyzing
Any
Big
Data
Type”

39. Solve
Share/Leverage
Structured
&
Unstructured
Data
…
Real-­‐Time
OperaVonal
&
Strategic
AnalyVcs
…
Contextual
Problem-­‐
Solving
…
Store
Analyze
InformaVon
Data
Knowledge
DBMSs
Oracle
IBM
MicrosoT
…
Data
Warehouses
Data
Marts
…
Knowledge
Repositories
&
Content
Managers
…
On-­‐Line
TransacVon
Processing
Querying
…
Real-­‐Time
Data
Mining
&
PredicVve
AnalyVcs
…
Knowledge
Mining,
Sharing
&
Publishing
…
Strategic
IT:
AnalyVcs

40. Solve
Share/Leverage
Structured
&
Unstructured
Data
…
Real-­‐Time
OperaVonal
&
Strategic
AnalyVcs
…
Contextual
Problem-­‐
Solving
…
Store
Analyze
InformaVon
Data
Knowledge
DBMSs
Oracle
IBM
MicrosoT
…
Data
Warehouses
Data
Marts
…
Knowledge
Repositories
&
Content
Managers
…
On-­‐Line
TransacVon
Processing
Querying
…
Real-­‐Time
Data
Mining
&
PredicVve
AnalyVcs
…
Knowledge
Mining,
Sharing
&
Publishing
…
Strategic
IT:
AnalyVcs
E.G.,
Mobility
+
LocaIon
Awareness
+
Social
Media
=
AnalyIcs

41. R&D
Networks
Security
Applications
Operations …
Strategic
Operational
Internal External
Applications
Management
R&D
Systems & Network
Management
Security …
Supply Chain Planning
& Management
Distribution
Channel Effectiveness
Partnerships &
Alliances …
Business
Process Modeling,
Management &
Reengineering
Business Activity
Management
Competitor Intel …
Customer
Profiling
Up-Selling &
Cross-Selling
Customization
Location-Based
Services …
Real-
Time
Strategic
IT:
AnalyVcs

42. ü
Internal
(Human/Financial/Facility
Resources)
ü
Social
Networks
(AcVve
&
Passive
Listening/Engagement)
ü
Partner
Ecosystem
ü
Crowdsourcing
…
Strategic
IT:
InnovaVon

43. Strategic
IT:
InnocenVve

44. Strategic
IT:
NineSigma

45. Strategic
IT:
More
OpportuniVes
Today
Cloud
Architecture
Social
Media
Big
Data
AnalyVcs
BYOD/DIY
Interfaces
Thin/Wearable
Devices
IOT/IOE
LocaVon
Services
InnovaVon
Strategic
Value

46. Lack
of
Con-­‐
sistent
Leader-­‐
ship
Support
Bad
Vendors
Styles/Biases
of
Managers
Lack
of
Skills
&
Competencies
Corporate
Culture
Landmines
People,
People
(&
People)
How
IT
Can
Go
Wrong

47. Lack
of
Con-­‐
sistent
Leader-­‐
ship
Support
Bad
Vendors
Styles/Biases
of
Managers
Lack
of
Skills
&
Competencies
Corporate
Culture
Landmines
People,
People
(&
People)
How
IT
Can
Go
Wrong

48. New,
Extended
Business
Models
New,
Integrated
Technology
Perfect
Synergism
&
Total
Interdependence
What’s
Next?

49. MulV-­‐Purpose
Crowdsourcing
Real-­‐Time
AnalyVcs-­‐Based
Sales/
MarkeVng/Services
ConVnuous
Supply
Chain,
DistribuVon
&
Sales
TransacVon
Processing
MulV-­‐Focus
Freemiums
Real-­‐Time/
ConVnuous
AucVoning
SubscripVon-­‐
Based
Product
&
Service
Delivery
All-­‐Lingual
24/7
On-­‐
Line/Off-­‐Line
Global
TransacVon
Processing
Digital/Organic
InterconnecVvity
for
Profiling/Sales/
MarkeVng/Service
LocaVon-­‐Based
Sales
&
Service
Intelligent
Augmented
TransacVon
Processing
New,
Extended
Business
Models

50. Public/Private/
Hybrid
Cloud
CompuVng
Open,
Hybrid
&
Proprietary
Architectures
Social
Networking
&
Social
Media
Real-­‐Time
BI
&
All
Data
AnalyVcs
BYOD
4+
Screens
VirtualizaVon,
SimulaVon,
Gaming
&
Augmented
Reality
Smart,
Networked
Wearable
Devices
Internet
of
Things
&
Everything
(IOT/IOE)
Real-­‐Time
LocaVon-­‐
Based
Services
Quasi-­‐
&
Fully-­‐
Automated
Intelligent
Systems
New,
Integrated
Technology

51. Business
&
Technology
Is
…
ü SynergisVc
ü Interdependent
ü MulV-­‐DirecVonal
ü Inseparable
ü Virtual
…
New,
Extended
Business
Models
New,
Integrated
Technology
New
Form
&
Content
of
“Business”

52. What
to
Do
Tomorrow
…
ü
Rent
as
Much
Technology
as
Possible
ü
Go
BYOD,
Thin,
Mobile
&
Wearable
ü
Exploit
Big
Data
AnalyVcs
ü
Mine
Social
Media
ü
Keep
Technology
Open
&
AgnosVc
ü
Know
Where
Everyone
Is
ü
Track
&
Deploy
"Ready"
Technology
ü
Crowdsource
ü
Federate
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Assess,
Refresh
&
Relocate
Technology
Talent

53. We’re
Nothing
Without
IT
Just
Remember
…

54. Technology
is
Business
Business
is
Technology
Thank
You!
Stephen
J.
Andriole,
Ph.D.
Thomas
G.
Labrecque
Professor
of
Business
Technology
The
Villanova
School
of
Business
Villanova
University
Wharton|
May
2014