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OUTSOURCING
IT OUTSOURCING

APPLICATION DEVELOPMENT


ROLE OF IT IN BUSINESS
BUSINESS TRANSFORMATION
Learning Objectives


At the completion of this
session you will be able to:
• Explain the disruptive influence of
  technology
• Describe how the role of
  Information Technology has evolved
  over the years
• List the key features of Information
  Technology that have enabled it to
  become a catalyst for change
• List some examples of business
  transformation through IT

                        Learning Objectives
Topics Index


1
    Introduction: Technology as a disruptive force in
    business                                            In this session we are going to:
    Evolving Role of Information Technology             • Understand how Information
2                                                         Technology has transformed
                                                          entire industries and enabled
    Enabling characteristics of Technology
                                                          completely new ways of
3                                                         doing business

4   Dell: Leveraging technology for a new business
    model

5   Ebay: Taking the bazaar to every home


6   Summary




                                         Topics Index
Introduction: Technology as a disruptive force in
1
    business
                                                        In this section we are going to:
2
    Evolving Role of Information Technology             • Look at a few examples of
                                                          the disruptive influence of
                                                          Technology and understand
3   Enabling characteristics of Technology                the trends behind it

4   Dell: Leveraging technology for a new business
    model

5   Ebay: Taking the bazaar to every home


6   Summary




        Introduction: Technology as a disruptive force in business
Encyclopedia Britannica
• Encyclopedia Britannica was the
  market leader in the home
  encyclopedia industry

• In 1990, the company had sales
  of USD 650 million from its print-
  bound edition

• In just 5 years, sales of the print-
  bound edition dropped by almost
  80%!




     Introduction: Technology as a disruptive force in business
Newspaper Classified
  Advertisements

• For a long time, Classified
  Advertisements was a significant
  share of newspaper revenues

• The US Newspaper classified
  advertisement revenue peaked at
  USD 16 billion in 2005

• By 2009 (in just 4 years) this
  number dropped by 70% to just
  USD 5 billion in 2009


  Introduction: Technology as a disruptive force in business
Emerging trends as Disruptors




Emerging technology trends can disrupt entire
industries by enabling new ways of doing business
      Introduction: Technology as a disruptive force in business
Emerging trends as Disruptors




               • The democratization of technology

               • The democratization of information

     Introduction: Technology as a disruptive force in business
The democratization of technology & information


                                        • Personal Computers
                                          have become more
                                          affordable due to the
                                          drop in their prices
                                          and more useful due
                                          to increase in their
                                          capability

                                        • The explosive
                                          growth of the
      These trends
      have enabled                        Internet has made
      businesses to                       information sources
    reach consumers                       and services
    in new and more                       accessible for
      powerful ways                       consumers


         Introduction: Technology as a disruptive force in business
Encyclopedia Britannica



      The drop in          Players like
      prices and           Encarta gave
      increase in          away the CD-
      capacity of CD-      ROM edition free
      ROMS created         with Personal
      competition for      Computers. The
      the                  print-bound
      encyclopedia         editions cost
      industry.            almost US                 The market for
                           $2,000.                   the print-bound
                                                      edition shrank
                                                          almost
                                                        overnight!



     Introduction: Technology as a disruptive force in business
Classified Advertisements

       • A company called Craigslist started
         FREE online classified
         advertisements

       • With personal computers and the
         Internet reaching a large number of
         people, the reach of Craigslist
         became large enough to be
                                             The newspaper
         attractive to advertisers             classified
                                                      advertisement
                                                      market shrank
                                                         almost
                                                        overnight!


     Introduction: Technology as a disruptive force in business
Thomas Friedman on Globalization




     Introduction: Technology as a disruptive force in business
Introduction: Technology as a disruptive force in business
1

    Evolving Role of Information Technology                      In this section we are going to:
2
                                                                 • Look at how the role of
                                                                   Information Technology has
3   Enabling characteristics of Technology                         evolved over the years

4   Dell: Leveraging technology for a new
    business model

5   Ebay: Taking the bazaar to every home


6   Summary




                   Evolving Role of Information Technology
Ganesh Natarajan on the Role of IT




         Evolving Role of Information Technology
Evolving Role of IT – Recap


               Localized Exploitation – automate a part
                         of a business process


               Cross Functional Integration – automate
                  business processes and functions


               Network Reconfiguration – Integrate a
                      network of businesses


              Business Scope Redefinition – IT solution
               itself can become a product or service


          Evolving Role of Information Technology
Technology will not solve all problems!




        Evolving Role of Information Technology
Technology enabled revenue growth is the new mantra



 • Traditionally IT has been tasked with
   improving profitability by driving cost
   reduction
 • C-level executives, particularly CEOs now
   expect IT to improve top-line by driving
   revenue growth
 • Therefore IT is now a participant and leader in
   business strategy and planning


         Evolving Role of Information Technology
Introduction: Technology as a disruptive force in business
1
                                                                 In this section we are going to:
2
    Evolving Role of Information Technology                      • Understand the key features
                                                                   of Information Technology
                                                                   that have enabled it to
3   Enabling characteristics of Technology                         become a catalyst for change


4   Dell: Leveraging technology for a new business
    model

5   Ebay: Taking the bazaar to every home



6   Summary




                        Enabling characteristics of Technology
Enabling Characteristics of Technology



                                  Mass
                             Personalization




                 Mass
             participation                     A truly global
            through online                     marketplace
             communities




             Reach and Speed have enabled:

           Enabling characteristics of Technology
Introduction: Technology as a disruptive force in business
1
                                                                 In this section we are going to:
2
    Evolving Role of Information Technology                      • Discuss how Dell Inc.
                                                                   transformed the Personal
                                                                   Computer market through
3   Enabling characteristics of Technology                         the use of technology


4   Dell: Leveraging technology for a new business
    model

5   Ebay: Taking the bazaar to every home



6   Summary




              Dell: Leveraging technology for a new business model
DISCUSSION




How has Dell transformed the computer
retail industry?




       Dell: Leveraging technology for a new business model
The Dell Way – key questions



                 What did the traditional personal computer
                 retail industry look like?


               What opportunity did Dell recognize?

          What were the key differences in
          Dell’s approach?



                             What role did technology play in
                             enabling Dell to exploit the opportunity
                             and transform the market?

        Dell: Leveraging technology for a new business model
The Dell Way – Summary


The five tenets of the direct model Dell adopts
are:
  –Most Efficient Path to the Customer
  –Single Point of Accountability
  –Build-to-Order
  –Low-Cost Leader
  –Standards-Based Technology


Dell has applied the efficiencies of the Internet to
leverage this model

         Dell: Leveraging technology for a new business model
Introduction: Technology as a disruptive
1
    force in business
                                               In this section we are going to:
2   Evolving Role of Information Technology    • Look at a few examples of
                                                 the disruptive influence of
                                                 Technology and understand
3   Enabling characteristics of Technology       the trends behind it


4   Dell: Leveraging technology for a new
    business model

5   Ebay: Taking the bazaar to every home


6   Summary




                   Ebay: Taking the bazaar to every home
DISCUSSION




How has ebay used technology to
transform the auction industry?




       Dell: Leveraging technology for a new business model
The ebay model – key questions


                                           What did the traditional auctions
                                           industry look like?
What could one buy and sell
through auctions?

                                                       What opportunity did ebay
What role did technology play                          recognize?
in enabling ebay to exploit the
opportunity and transform the
market?




                       Ebay: Taking the bazaar to every home
The ebay Story – Summary


Ebay’s mission is to create the “world’s
largest online marketplace”.
The core principles are:
• Create a large user-base around the
   world
• Create an environment of trust
• Foster a strong sense of community
• Sense of Fun!
ebay has used the reach and efficiency
of the Internet to achieve its objective



                  Ebay: Taking the bazaar to every home
Summing Up


Technology can help transform a business or an entire
industry

Technology enables such transformation due to its reach,
speed, and cost efficiency

Businesses must constantly evaluate emerging technology
trends to think of new ways of doing business

The CIO must participate in business strategy and planning


                 Ebay: Taking the bazaar to every home
References


• Amazon.com CTO writeup on AWS:
http://gigaom.com/2010/02/01/amazon-cto-werner-vogels-on-
amazon%E2%80%99s-web-services-startups-and-innovation/
• The CIO’s opportunity to transform transformation:
http://www.pwc.com/us/en/technology-forecast/winter2010/cios-
opportunity-to-transform-transformation.jhtml
• The Power of IT in business tranformation:
http://ezinearticles.com/?The-Power-of-Information-Technology-
in-Business-Transformation&id=2477661
• Rethinking IT and business transformation success:
http://www.zdnet.com/blog/projectfailures/rethinking-it-and-
business-transformation-success/8957
Thank You

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Role of IT_ Transformation

  • 1. OUTSOURCING IT OUTSOURCING APPLICATION DEVELOPMENT ROLE OF IT IN BUSINESS BUSINESS TRANSFORMATION
  • 2. Learning Objectives At the completion of this session you will be able to: • Explain the disruptive influence of technology • Describe how the role of Information Technology has evolved over the years • List the key features of Information Technology that have enabled it to become a catalyst for change • List some examples of business transformation through IT Learning Objectives
  • 3. Topics Index 1 Introduction: Technology as a disruptive force in business In this session we are going to: Evolving Role of Information Technology • Understand how Information 2 Technology has transformed entire industries and enabled Enabling characteristics of Technology completely new ways of 3 doing business 4 Dell: Leveraging technology for a new business model 5 Ebay: Taking the bazaar to every home 6 Summary Topics Index
  • 4. Introduction: Technology as a disruptive force in 1 business In this section we are going to: 2 Evolving Role of Information Technology • Look at a few examples of the disruptive influence of Technology and understand 3 Enabling characteristics of Technology the trends behind it 4 Dell: Leveraging technology for a new business model 5 Ebay: Taking the bazaar to every home 6 Summary Introduction: Technology as a disruptive force in business
  • 5. Encyclopedia Britannica • Encyclopedia Britannica was the market leader in the home encyclopedia industry • In 1990, the company had sales of USD 650 million from its print- bound edition • In just 5 years, sales of the print- bound edition dropped by almost 80%! Introduction: Technology as a disruptive force in business
  • 6. Newspaper Classified Advertisements • For a long time, Classified Advertisements was a significant share of newspaper revenues • The US Newspaper classified advertisement revenue peaked at USD 16 billion in 2005 • By 2009 (in just 4 years) this number dropped by 70% to just USD 5 billion in 2009 Introduction: Technology as a disruptive force in business
  • 7. Emerging trends as Disruptors Emerging technology trends can disrupt entire industries by enabling new ways of doing business Introduction: Technology as a disruptive force in business
  • 8. Emerging trends as Disruptors • The democratization of technology • The democratization of information Introduction: Technology as a disruptive force in business
  • 9. The democratization of technology & information • Personal Computers have become more affordable due to the drop in their prices and more useful due to increase in their capability • The explosive growth of the These trends have enabled Internet has made businesses to information sources reach consumers and services in new and more accessible for powerful ways consumers Introduction: Technology as a disruptive force in business
  • 10. Encyclopedia Britannica The drop in Players like prices and Encarta gave increase in away the CD- capacity of CD- ROM edition free ROMS created with Personal competition for Computers. The the print-bound encyclopedia editions cost industry. almost US The market for $2,000. the print-bound edition shrank almost overnight! Introduction: Technology as a disruptive force in business
  • 11. Classified Advertisements • A company called Craigslist started FREE online classified advertisements • With personal computers and the Internet reaching a large number of people, the reach of Craigslist became large enough to be The newspaper attractive to advertisers classified advertisement market shrank almost overnight! Introduction: Technology as a disruptive force in business
  • 12. Thomas Friedman on Globalization Introduction: Technology as a disruptive force in business
  • 13. Introduction: Technology as a disruptive force in business 1 Evolving Role of Information Technology In this section we are going to: 2 • Look at how the role of Information Technology has 3 Enabling characteristics of Technology evolved over the years 4 Dell: Leveraging technology for a new business model 5 Ebay: Taking the bazaar to every home 6 Summary Evolving Role of Information Technology
  • 14. Ganesh Natarajan on the Role of IT Evolving Role of Information Technology
  • 15. Evolving Role of IT – Recap Localized Exploitation – automate a part of a business process Cross Functional Integration – automate business processes and functions Network Reconfiguration – Integrate a network of businesses Business Scope Redefinition – IT solution itself can become a product or service Evolving Role of Information Technology
  • 16. Technology will not solve all problems! Evolving Role of Information Technology
  • 17. Technology enabled revenue growth is the new mantra • Traditionally IT has been tasked with improving profitability by driving cost reduction • C-level executives, particularly CEOs now expect IT to improve top-line by driving revenue growth • Therefore IT is now a participant and leader in business strategy and planning Evolving Role of Information Technology
  • 18. Introduction: Technology as a disruptive force in business 1 In this section we are going to: 2 Evolving Role of Information Technology • Understand the key features of Information Technology that have enabled it to 3 Enabling characteristics of Technology become a catalyst for change 4 Dell: Leveraging technology for a new business model 5 Ebay: Taking the bazaar to every home 6 Summary Enabling characteristics of Technology
  • 19. Enabling Characteristics of Technology Mass Personalization Mass participation A truly global through online marketplace communities Reach and Speed have enabled: Enabling characteristics of Technology
  • 20. Introduction: Technology as a disruptive force in business 1 In this section we are going to: 2 Evolving Role of Information Technology • Discuss how Dell Inc. transformed the Personal Computer market through 3 Enabling characteristics of Technology the use of technology 4 Dell: Leveraging technology for a new business model 5 Ebay: Taking the bazaar to every home 6 Summary Dell: Leveraging technology for a new business model
  • 21. DISCUSSION How has Dell transformed the computer retail industry? Dell: Leveraging technology for a new business model
  • 22. The Dell Way – key questions What did the traditional personal computer retail industry look like? What opportunity did Dell recognize? What were the key differences in Dell’s approach? What role did technology play in enabling Dell to exploit the opportunity and transform the market? Dell: Leveraging technology for a new business model
  • 23. The Dell Way – Summary The five tenets of the direct model Dell adopts are: –Most Efficient Path to the Customer –Single Point of Accountability –Build-to-Order –Low-Cost Leader –Standards-Based Technology Dell has applied the efficiencies of the Internet to leverage this model Dell: Leveraging technology for a new business model
  • 24. Introduction: Technology as a disruptive 1 force in business In this section we are going to: 2 Evolving Role of Information Technology • Look at a few examples of the disruptive influence of Technology and understand 3 Enabling characteristics of Technology the trends behind it 4 Dell: Leveraging technology for a new business model 5 Ebay: Taking the bazaar to every home 6 Summary Ebay: Taking the bazaar to every home
  • 25. DISCUSSION How has ebay used technology to transform the auction industry? Dell: Leveraging technology for a new business model
  • 26. The ebay model – key questions What did the traditional auctions industry look like? What could one buy and sell through auctions? What opportunity did ebay What role did technology play recognize? in enabling ebay to exploit the opportunity and transform the market? Ebay: Taking the bazaar to every home
  • 27. The ebay Story – Summary Ebay’s mission is to create the “world’s largest online marketplace”. The core principles are: • Create a large user-base around the world • Create an environment of trust • Foster a strong sense of community • Sense of Fun! ebay has used the reach and efficiency of the Internet to achieve its objective Ebay: Taking the bazaar to every home
  • 28. Summing Up Technology can help transform a business or an entire industry Technology enables such transformation due to its reach, speed, and cost efficiency Businesses must constantly evaluate emerging technology trends to think of new ways of doing business The CIO must participate in business strategy and planning Ebay: Taking the bazaar to every home
  • 29. References • Amazon.com CTO writeup on AWS: http://gigaom.com/2010/02/01/amazon-cto-werner-vogels-on- amazon%E2%80%99s-web-services-startups-and-innovation/ • The CIO’s opportunity to transform transformation: http://www.pwc.com/us/en/technology-forecast/winter2010/cios- opportunity-to-transform-transformation.jhtml • The Power of IT in business tranformation: http://ezinearticles.com/?The-Power-of-Information-Technology- in-Business-Transformation&id=2477661 • Rethinking IT and business transformation success: http://www.zdnet.com/blog/projectfailures/rethinking-it-and- business-transformation-success/8957