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STKI Summit 2012Tell me and I’ll forget Show me and I may remember
Involve me and I’ll understand Galit Fein
VP & Senior Analyst
Office of the CIO
Office of the CMO
Market Trends
2012
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2
Agenda
MEGATrends
2012
Office of the CIO
IT Services and
Chargeback
QA,
Service Desk
Sourcing
Office of the CMO
Mobility
Social Media
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Israeli Enterprise 2012: Under Pressure
Enterprise
2012Global Economy Innovation
3
COM
PETI
TION
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1980’s - IT Department
BOOperations MIS
Infrastructure
DRP
Security
Back
Office
4
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1990’s - IT Department
BO
Infrastructure
Security
Transactions IT
manager
CFO
BackOffice
DRP ERP
5
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2000’s - IT Organization
Infrastructure
DRP
Processes
Security
BackOffice
BO CIO CFO
Sales
ERP
CRM
Web
site
6
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HR
2005 - IT Organization
Infrastructure
DRP
Processes
Security
BackOffice
ERP
CIO
CRM
HR
BO CFO
Sales
7
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HR
2008 - IT Organization
Infrastructure
DRP
Processes
Security
BackOffice
ERP
CIO
CRM HR
OCIO
PPM
BO CFO
Sales
8
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HR
2010’s – Technology & Information Systems
Infrastructure
DRP
Business Products
Security
BackOffice
ERP
BO
Technology
& IT VP
CFO Sales
CRM HR
OCIO
PPM
CMO
Mobile
Socialmedia
Analytics
BI
OR
CEO
9
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Capex increasing, Opex not decreasing
Time
Opex2:
5-10% decreaseon existed
Capex:
New businessdemandfor IT services
Opex1:
Last year capex x 15%$$
10
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How Can We Fill The Gap?
Time
Business demandfor IT services
IT Budget
$$
11
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IT Budget Trends
12
• Modest increase in IT budget -average rise of 3.7%
• IT Capex flattens at beginning
of year due to uncertainty
• Despite continued volatility,
IT staffing remains constant
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Meeting business expectations
IT has to:
• Create new platforms to support business innovation andgrowth
• To be competitive to new IT service models or be open to
use them
26%
17%
61%
48%Creating new products
Reducing
IT costs
IT’s ideal priorities
Satisfaction with IT’s effectiveness IT basic services
New ideas
Source: McKinsey 2012
13
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Capital Organizational Spending
Technology
Investments47%Other53%
14
Source: IDC 2012
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The Majority of IT total spending goes to Maintenance
Breakdown of Total IT Expenditure 2009-2012
Source: CIO Executive Board 2012
15
Innovation
Business opportunity
Maintenance
Mandatory
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If you can’t beat them…
Agile world – ability to respond on the fly to constant changes
in business requests
Small, cost-sensitive, more likely to be "disposable"
Resource: Cutter
Changing requirements
Poor estimation
Pressure from management
to accept unreasonable schedules
What are the main reasons for SW project overruns?
16
56%
17%
15%
IT Portfolio is
changing quickly due to changes in
competitive
conditions
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Changing Requirements AND Deliverables All the Time
17
A1
A2
A80
A7
A1
A13
A79
Business
requests
Sprint A
Detailed
Planning
A2
A3
B1
B2
P
R
I
O
R
IT
I
Z
A
T
I
O
N
Sprint B Previous requests AND
New business demands P
R
I
O
R
IT
I
Z
A
T
I
O
N
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Consumer Power
• End of IT monarchy:IT will be one of possible sources of development that
departments can use, and in many cases internal IT will compete
with outside contractors for specific jobs
• IT spending is gradually changing it’s guards - from ITO to
business departments
• Different areas such as: risk, mobile, HR, IT purchase leaks
to business departments
18
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Radical Change of IT - Efficiency and Agility
• IT can find itself nearly irrelevant, unless it becomes efficient ,
agile, and competitive with other market offerings
• IT should embrace the new models offered by cloud or serviceproviders, otherwise it will be replaced by them
• Lean IT
19
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What is Lean?
• Japanese automotive Industry developed Lean
manufacturing with a lead from Toyota and utilising theToyota Production System (TPS) factory.
• Maximize customer value by eliminating waste and
optimizing the existing processes in all aspects of a firm’sproduction activities: HR, vendor relations , technology,and the mngt of materials and inventory
• Doing more with less effort. Focus on your key processesin meeting customer needs with all muscles without any fator waste.
20
Source: http://www.hydspin.org/files/conf09/g_appa_rao.ppt
STKI modifications
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Customer VALUE and WASTE
• The purpose is to deliver VALUE that the customer needs
and is willing to pay for
• If it ain’t value, its WASTE
– Extra (unused) features
– Handoffs – Task switching
– Delays
– Defects / REWORK
– Partially done work / work in process
21
Source: AgileSparks
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Lean Benefits
22
Relentlessly focus on reducing non-value adding activities
Work Time(value add)
Cycle Time
Before
After
Wait Time(non value
add)
Cost/
Chaos
Same work
completed in less time
Cycle time
Requirements Design Development
Waiting Waiting Defect Fixing
FLOW
Avg time
3 weeks
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Anything that slows down development
• Inefficient manual steps to build/ install/ test/ release
• Not fixing broken build/tests
• Code Complexity (skipping refactoring, duplicate code,
coupling and spaghetti code, etc.)
• Code that not executed (but supported)• No documentation and leveraging
of knowledge
23
Source: AgileSparks
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Office of the CIO
24
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Office of the CIO penetration in Israel 2012
IDF
Goverment
Industry
Telecom
Credit Cards
Health
Insurance
Banking
92%
92%
73%
8%
8%
20%
20%
43%
8%
8%
27%
92%
92%
80%
80%
57%
OCIO
25
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MEGA IT Trends 2012
C o n s u m e r i z a t i o n
Real Time Predictive Analytics
IT Services
and Mobility
Context based
s o c i a l
26
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IT services and cost transparency
• By implementing OCIO tools and methodologies , ITOs achieved
greater business satisfaction with IT• BUs received greater visibility and control over their technology
budgets
• NOW, encouraged by better visibility and cloud models alternatives,
business managers do not want the technology cost to becomeoverhead cost or annual tax
• IT must sell and deliver cost based services
We deliver IT
27
From unresponsive corporate overhead
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From unresponsive corporate overheadto an agile business partner
All-you-can-eat buffet
• Everyone pays the same
price
• Food selections are driven by
the chef’s priorities
Fast-food restaurant
• Price is affordable
• Choices driven by market
demand
• Customers pay only
for what they consume
VS
28
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The new IT
Client/user
Packaged
Application
29
h d d h b k
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Why do we need IT Chargeback
30
• It helps organizations understand that IT is not free
• It gives BUs greater visibility and control over their
technology budgets
• It demonstrates the cost savings from shared services
• Demand for visibility in IT costs comes
from outside the ITO
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IT Chargeback Recommendations
1. Well-defined portfolio of IT activities along with output
in terms which are coherent to the customer
2. Start mapping types of
requirements which repeat themselves:
• BI reports
• Changes in GUI (field, color, etc.)
• Client differentiation
DRP
Upgrade
Server
31
“When we are no longer able to change a situation,
we are challenged to change ourselves”.
Victor Frankl
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Put It All Together: The IT Service Portfolio and Service Catalog
• Bundling:
A clear definition of what the
service entails, and how it relates
and integrates with others as a
service package
• Differentiation:
Multiple offerings at different
prices for different parameter
values, for items such as servicehours, availability and response time
32
• Value proposition:
Why should the business buy it?
• Competitive advantage:
Why should the service be bought
from internal IT?
• SLAs/reporting/performance
data
• Pricing and chargeback
• Exceptions and escalations
• Internal and external
benchmark data
A i IT S i C
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Ascertain IT Service Costs
Source: ITSM
Capex
One-time
expenses
COULD BE:
33
Hardware
Software
Installation costs
Customization costs
Training costs
C t M d l ith V i bl P i i E l
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Cost Model with Variable Pricing - Examples
Standard
service
definitions
Security
guarantees
Provisioning Performance
guarantees
AvailabilityHigh-level
description of
what the
service
provides
mission critical 24 x 7 with 4/9
uptime
delivery
business
critical
10 x 5 with 3/9
business
operational
administration
Help desk
support
34
C t M d l ith V i bl P i i E l
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Cost Model with Variable Pricing - Examples
Costs High-level
description of
what the serviceprovides
Equipment Cost of tech Help desk
support Software
Manager Labor
1st level support
2nd level support
Facilities
3rd party services
Email server Direct costs
Per-foot operating cost of
a DC
Indirect costs
Permanent IT staff Fixed
Temps Variable costs
35
IT Ch b k
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IT Chargeback
$X per month per gigabyte of network storage
Consumption
$Y per new PC set up and
configuration
Transactions:
$Z per phone number or network
port
Units or headcount
A base fee for IT overhead allocated,
according to a BU’s percentage of
total revenue or total employees
Allocation
36
OCIO i f B i IT l i hi
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OCIO comprises of Business-IT relationship managers
37
• All these ITG methodologies and new defined processes, SLAs, IT
chargebacks and service catalogs could be very confusing
• OCIO has important role in the communication with and the
support of BU
• Effective BRM must be a true hybrid of business
and technical orientation
• More than audit & reporting role - guidance
to BU heads on ways to improve efficiency
Office of the CIO
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Office of the CIO
• As decentralized as IT gets, one person should have the
visibility on the total spend, because there are a lot of placeswhere effort and resources can get duplicated and wasted if noone has the big picture
• Greater business partner responsibility - more businessleaders are willing to take primary responsibility for managingdelivery. BRMs consistently underestimate business partners'willingness to lead
• Engage business leaders in advance, to ensure effectivetechnology delivery that doesn't introduce inefficiency andunnecessary complexity or undermine IT strategy
38
OCIO is Very Busy
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OCIO is Very Busy
• IT Operations
• Project mng/ Development• QA/ Testing
• Vendors mng
• Legal/ Compliance
• Remote sites - DR/BCP• Critical Success Factors
• Key Process Indicators
• Controls in general
• Roll Out -
Does not end after project goes
live! OCIO must maintain charge
of employees knowledge and
usage of new system/ features
• BRM (Key Users)
• Budget plan• IT HR
• EA
• Procurement plan• Change mng
– ITIL-related
– Project-related
• Risk/ security mng
• Configuration Items:
– New ones that will be installed
– Existing ones that will be change
OCIO Responsibilities in Israel 2012
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OCIO Responsibilities in Israel 2012
29%
6%
13%
14%
26%
38%
62%
65%
82%
75%
85%
Other: App mng, training, config. Mng
HD
QA
HR
Enterprise architecture
Risk mng
Methodologies, processes & tools
IT budget mng
PMO
Selection, control and evaluation of IT…Strategic IT Plan
Source: STKI 2012 40
OCIO helps IT be Competitive Service Provider
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OCIO helps IT be Competitive Service Provider
Optimum
portfolio mixand projectevaluation
Investment decisions
translation into ITarchitecture and infra.
Service LevelAgreements
Chargeback Resource mng Project
Tracking
FormalTracking of
Business Value
Roll out
41
IT Project Rollout Plan Actual project mngt
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IT Project Rollout Plan - Actual project mngt
• Detailed Work Breakdown Structure with dates - milestones,
control gates, etc.
• GANTT charts showing dependencies and progress
• Human Resource Plan (Internal, Vendors, Customers)• Configuration Items:
New ones that will be installed
Existing ones that will be changed
• Purchase/procurement plan for required CIs
• Budget Plan
42
Employees knowledge and usage of new system/ features
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Employees knowledge and usage of new system/ features
• Communication Plan (Awareness, Meeting schedules)
• Project Change mngt Plan
• Security Plan
• Other aspects of project mngt based on your organization’s needs
What controls are needed to create a reasonable assurance of outcomes?
• Roll Out
Does not end after project goes live! OCIO must maintain charge of
employees knowledge and usage of new system/ features
43
PPM Tools
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Positioning of the Israeli Market
44
L o c a l S u p p o r t
Market Presence
Clarity
(CA)
MSP
Microsoft
Sciforma
Primavera
HP
Clarizen
Enterprise
Worldwide
Leader
SaaS Player
ITCC
New Player
PPM Tools & Integrators in Israel
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PPM Tools & Integrators in Israel
45
Integrators New Clients 11’ Clients
ProceedOrange, PelephoneMinistry of Tourism, Clalit, SanDisk,
Leumi Card, Harel, Jewish Agency,
Strauss, Bank Leumi
Clarity (CA)
CA, Orantech Teva, Bank Hapoalim
ONE1 Min.of the EnvironmentVisa CAL, BDOMenora, IAI, Tel-Aviv Munic. Ayalon-ins, Cellcom, Phoenix, Leumit,
Justice Department, Clal Bit, Bank
Igud, Delek, Paz, YES,
CIO Dashboard: Random Logic, IDF,
Elbit. iTeam (budget planning)
MSP
XiomaSignifer, Aman
HOT, ZIM, Isracard,
Machteshim agan eng.
Given Imaging
Bank Discount, Menora, Teva, Visa
Cal, BVR, Nova, Evogene, Leadcom
Hazera Genetics, Bid Band Networks,
IDE, Veraz, Opgal, Teva Tech
Sciforma
HP, BDA Mataf, Motorola(Global), LivePersonPPM (HP)
PPM Tools & Integrators in Israel
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PPM Tools & Integrators in Israel
46
IntegratorsNew Clients 11’ Clients
Matan,Orantech,
Neway, PZ
Projects
MS 2010Amdocs, Defense
Matan: Strauss, Tel-Aviv Municip.
Elta, Marvell
Orantech: Navy, Shabas, Teva R&D,
Sorek, Leumi Le’Mashcantaot
PZ Projects: Justice Department,
Elisra
M-system, Leumit, IAI, IAA, Lotem, Bezeq,Mekorot, Orbotech, Bank Leumi, Coca-
Cola, Nice, Matan: Machteshim Agan,
Prime Minister, Maccabi, Alvarion, IAA,
Better Place, Tnuva, Random Logic;
Orantech: Netafim, ECI, Ceragon, Logic,
AD Gency ,Sol gel ,Rocar ,Playtech,
Sandisk; KAKAL, MODU, Kodak, RAD; PZ
Projects: Min. of Foreign Affers; Proceed:Malam
EPM(Microsoft)
Approach,
SalesForce.com
NetafimApproach
PPM on Force.com
Clarizen Tnuva Clarizen
Aviv Mercava, IDF, Intel Primavera
(Oracle)
Matrix Jacada (Global), Retalix (Global) Compuware
Changepoint
that's IT ECI, Tama, Metro MotorITCC
Learning Training and Implementation
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Learning, Training and Implementation
47
Learning Training and Implementation Trends
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Learning, Training and Implementation Trends
As a result of:
Too many new systems
IT requirements flood
Employment high turnover
Generation gap Lack of control of new system’s implementation
48
Training and implementationare under HUGE focus
Does your organization measure the ROI generated
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by the new system?
Yes
42%
No58%
49
Source: STKI 2012
Learning Training and Implementation - Major Trends
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Learning, Training and Implementation Major Trends
• Gamification
• Video
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Video e Learning Next Generation Customer Care
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Video e-Learning –Next Generation Customer Care
http://blogs.wsj.com/speakeasy/2010/10/25/andy-grammers-keep-your-head-up-applies-choose-your-own-adventure-logic-to-music-videos/
Choose your next
choice on-the-fly
Video evolves according to choices made
Subject covered in
Shahar Maor’s presentation
Recommendations
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Recommendations
52
• Look for innovative ways to make SW training less boring
Clue: American test is BORING
• Gamification and Video trends serve as perfect training and
implementation tool
• If you invest massively in purchasing new SW invest a little more
to make sure your employees use it to the max
Subject covered in
Liza Bodogin’s presentation
Agenda
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Agenda
MEGATrends
2012
Office of the CIO
IT Services and
Chargeback
QA,
Service Desk
Sourcing
Office of the CMO
Mobility
Social Media
QA and Testing
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QA and Testing
54
QA & Testing Services - Trends
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QA & Testing Services Trends
• Becoming more important as a result of new regulations
and security requirements
• Major priority to cost reduction: by using Nearshore model
• Due to high competition - use of variety of tools and
methods:
Crowd testing, KDTpro, Practitest, Experitest, Perfecto Mobile
• In spite of clients' preferences for in-house QA, they’re
more willing to give vendor some scopes of work
55
QA & Testing Services - Israeli Market
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QA & Testing Services Israeli Market
• We can honestly say “goodbye” to independent testing
companies! We’ve tried, but we failed
• Majority of IT projects are using the same vendor for both
development and QA
• Clients consider using different vendors as a waste of time
and money
• Increasing interest in Cyber, mobile and cloud testing
56
Because of the scope and complexity of ITt ITO ft f il t d fi f l f t i
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most ITOs often fail to define useful performance metrics
Source:
Gartner 57
Resource mng, Talent mng & Capacity planning
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g, g p y p g
58
~44% of IT budget goes tomanpower
Capacity Planning
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59
• After considering maintenance and HD commitment – how
available are your resources? What are your bottlenecks?What skills do we lack?
• It’s not just a matter of matching project to the available
employee
• It’s about matching skills, experience & employee
availability to project requirements
Watch Out!
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• The share of employees and contractors reporting to IT
leaders has dropped more than 15% in 2011
• At the same time, more than a 1/3 of larger orgs report
increase in social media specialists, service architects,
technology brokers, and other new-to-world roles
• Use strategic plans, labor market analysis, an org. review,
and forecasting to create an action plan which include a
talent mng. strategy, outsourcing plan, and organizational/
job redesign plan
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Resource Management
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g
• OCIO gains the momentum, but real skills, capacity and
training are not treated well
• IT Talent and capacity mng - Identify emerging skills gaps
and role changes in traditional IT roles in order to prepare
for changes by strategic workforce planning
• Prepare internal resources to become brokers, not
providers, as the cloud enables externalization of manycurrent IT functions
61
IT Service Desk
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HELP!!!!
IT Service Desk - Trends
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• Service desk is the first to be cut down
• SPOC – HR, facilities, procurement request
• Standardization of products & services (ITIL)
• Proactive problem management
• SLA externalization
• Knowledge mng – make your tool work for you
• Self-Service is the KING!
63
Total Cost of Ownership
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64
• As the Level 1 resolution rate increases, the cost per call for Level 1 increases
• But the total cost per call, including Level 2 costs, declines
• The cost of resolution at level 2 is typically 5X to 10X greater than at level 1
Over Time
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• Clients become more savvy (Gen-Y)
• Users prefer using blogs, vendor and user online support sites,
and social networks to find answers instead of using service
desk portal
• Incidents’ complexity increase
• Total cost per HD call increase
Growing Call Volume
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• Rapid increase in call volume stretches already limited
resources, impacting customer satisfaction
• Changes are main reason for call-volume increase:
new HW, new app, new mobile device, etc
• Mobile devices need attention:
most orgs don’t support personal mobile devices neither
company-owned mobile devices
66
Reasons for Decrease in Support Incidents
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Outsourcing support
Remote tools
Nu of customers
Knowledge mng
Customer competency
IT HD staff competency
Self-Service
Infrastructure changes
9%
22%
26%
27%
30%
32%
33%
49%
67
Source: InformationWeek Analytics 2o11
Self-Service
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• Personal attention VS prompt answer
• User friendly systems – YouTube “How to…” examples
• IT HD phone call twice as expensive as Self-Service
• SW distribution
• Online catalog
• Higher Clients satisfaction
Measuring the Right KPIs
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Help deskmetrics still
relevant
• On hold times (contributes to customer satisfaction)
• Number of calls received (trend analysis andproblem identification)
• Call duration (knowledge deficiencies)
Metric focus is
on thecustomer:
• Customer satisfaction is KEY
• Meeting service level targets
69
Top Metrics for Service Desk
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Source: InformationWeek Analytics 2o11
Cost per Incident
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Source: InformationWeek Analytics 2o11
IT Service Desk – Positioning of the Israeli Market
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Positioning of the Israeli Market
72
L o c a l S u p p o r t
Market Presence
CA
BMC
Microsoft
HP
PeopleSoft
IBM
Altiris
Enterprise
Worldwide
BSM Leader
IT Help DeskModules from
CRM packages
SysAid
SAP Siebel
Pivotal
IT Service Desk Tools & Integrators in Israel
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Integrators New Clients 11’ Clients
CA, Ness,Malam -
Team,
Techmind
Ness (SaaS),Haartz,
Phoenix, Bank
Yahav, MOD
Comverse, IAI, Discount, Elta, ECI, HOT, Motorola, Teva,Elbit, Mekorot, Osem, Phoenix, DSW, Bezeq Int, Beit Berl,
Israel Police, Tnuva, Central Bureau of Statistics, EL-AL,
Tamas, TASE, Ministry of Health, Tel-Aviv Municipality,
Herzelia Munic. Clalbit, Shabas, Rafael, Isracard, 888,
9900, Bank Hapoalim, Mifal Hapais, Ministry of Justice,
Ministry of Defense, Yediot, Petah-Tikva Munic, Bank
Israel, Ministry of Immigration, RASHAT, Teva (Bar),Brom, Lotem
CA
MatrixMigdal, SCD,
012 - eng.,
Texas Instrum ,
Netvision eng.
Zim, Malan, IGS, MED Nautilus, Malam, Kneset, NDS,
Social Insurance, Uniliver, Creo, Intel, Motorola, Summit
Design, Polycom, Cellcom- eng. HOT-eng. Partner – eng,
Sandisk, Comverse, Nice, IAI, Better Place
BMC
Aman, HP HPOV:IDF, Netafim, Shaam, Open University, Orbotech,
Tower Semiconductors, Haaretz; Service Manager: NDS,
PlayTech, Shupersal
HP
Tefensoft: Clalit Health, Menora, Migdal, Prime Minister,
Hadasa, Machteshim, Maman, AudioCodes
IT Service Desk Tools & Integrators in Israel
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Integrators New Clients 11’ Clients
IBM, Addon,Ludan Bahai World Center,Edgar Real-estate,
Natgaz
Harel, Menora IBMTSRM
Aman, Bynet,
Netcom,
GlassHouse
Ormat Callmobile, IDFAltirisSymantec
IT Service Desk Tools & Integrators in Israel
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Integrators New Clients 11’ Clients
Consist (300 Israeli clients)
Opgal
Madanes Insu Shlomo Sixt
Caesar stone Magic Cal
auto West galilee collage
Lageen Logic
Motorola Safe city Gitam
BBDO Danya-cebus Tower
Semiconductor Tcpoit
Keshe TV
FedEX WIX חסוי- Fibernet
Sapir collage Albar Intel
Labs Dash El-Al Sec Div
Diplomat Holon Muni Rokar
Tiny love IDC NOVA IMDsoft
Tmura The Council for
Higher Education Imperva
Netformx Ashot Ashkelon
Eged Tour EnvironmentalServices Company Ltd. (ESC)
Shirbit
Jonson & Jonson, Highway 6, Omrix, Wintegra, Sami Shimon
College, Africa Israel, Mei-Eden, AIG, Electra, McCann Erickson,
Diesenhaus unitours, Opal , Flash Networsks, Liveperson, Hertz, Psagot
Ofek, Coca Cola, Beit Barel College, Ashdod Port, Technion, Shila,
Sugat, Gadot, Bezeq Int. AeroScout, Strauss, IKEA, Delek, Tempo, 013
Netvision, Tami4 ,Bank of Jerusalem Leumi Mortgage , Bituach Yeshir,
Holmes Place, Ashot Ashkelon, Netformx, Fishman, Hospital-
Nahariya, halman aldubi, Eged Tour, Zoglobek, Madanes, Tempo, Beeri
print, Lubensky, Shlomo Sixt, Excellence, Elul, Ophir optronics,
Realcommerce, Nextcom, Fritz, LR Group, Israel Ports, Magicsoftware,
Cal auto, West galilee collage, Maabarot Products, Haifa Port,
PharmUp, Lageen, ICQ, Logic, Tambur, Kamada, The Nation Traffic,
Elcam, Carmel container systems, Brightsourceenergy, Kavim, Gitam
BBDO, Rishon Lezion Muni, Dania sibos, Baran group, Tower
Semiconductors, Bee Group, Betterplace, Keshet TV, Leumi Card,
FedEX, WIX, Optier, Tahal, TGS, Palram, Sapience, Orca, UPS, Beeper,
Intel labs, Mivtach Saimon, Albar, EMC, Tel-o-Fun, Dash, EL-AL Sec,
Sapir collage, Diplomat, Hulon Muni, Shlomo Insu, conduit, Hadssa
hospital , Tradenetworks, Ceragon, Rokar, Celtro, National library, IDC,Nova, Ambar, Mediamind, UTI, Barzilay Hospital, Afimilk, David
Intercontinental, Hertz, Isrotel, IKEA, IMsoft, Tmura, polymerlogistics,
shastovich, , Imperva, Haifa university, mashcal, Tel-hai collage, IBI,
D&B, and many more
SysAid
IT Help Desk Modules from CRM packages
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Integrators New Clients 11’ Clients
20 Partners, including:
Matrix-Effect, SIT, Advantech,Malam-Team, Netwise, Bynet
SW, Yael, El-AD….
Ministry of Health,
Shikun & Binui,
TOTO, Osem, College
of Management
Ministry of Finance, Israeli Navy, Intel, Prime Minister,
EldanAdvantech: Eged, Shikunbinui, Amidar, Volcani Center,
Lavi
EL AD: Judicial Authority, Ministry of Transport, Court
Malam-Team: TAU
Guardian: Baad15, Jewish agency
Matrix-Effect: Igud, Malan, Superpharm, Cellcom, Visa
Cal, Machteshim-Agan, Marlboro, Ministry of Education
Almog: Telmap
Microsoft
CRM
ONE1Bat-Yam Municipality, Exlibris, Systematics, Panorama,
Telmap, Ericom,FGG Radvision, Gilat, Shahal, Ritalix,
Globs, Tadiran, Orad, Maccabi, Negev Ceramics
Pivotal
Ness, Taldor, Advantech, Valueplus _
Paz, Isr. Government, Bazan, Bank Hapoalim (modul) SAP Matrix _Ministry of Foreign Affairs, Mamram, Bezeq PeopleSoft
Taldor, IBM Tnuva, Golden Pages, Bank Leumi Siebel(Siebel CRM
onDemand)
Service Wise Yad HanadivSalesForce
Outsourcing Trends
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Outsourcing
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• In recent years the number of comprehensive and infra
outsourcing new deals significantly decreased ,except for public sector, SMB and some niche areas
• On the other hand - successful examples of existing clients,
who recently had revaluated and renewed their
outsourcing contracts (with a lot changes)
• Disappointment from conventional outsourcing for failingto meet client expectations
78
State of World Wide Outsourcing is NOT better
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2010 2011 2012 25%
35%
Applications Outsourcing
Infrastructure Outsourcing
Source: CIO Executive Board 2012
PMO DB admin. Testing/QA Voice
commun.
Network Help Desk App
Mainten.
App
Develop.
25%36% 39% 40% 41%
47% 47%52%
Percentage of Org. Allocating More than 20% of Total IT Spending to Outsourcing 2011
Products and Services in IT
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Traditional
Outsourcing
Bought Services
Owned Products
Outsourcing transforms into Cloud Computing
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Traditional Outsourcing
Your own assets
Resources control
Fix price
Location does matter
Vendor monitoring SLA based
Minimal ability to change theterms of the contract
Cloudy Sourcing
Multi-tenant, sharedresources
Outcome focused
Usage-based pricing
Location-agnostic
Automated provisioning,
self-service requesting
Cloud computing
81
Three Approaches to Cloud Deployments
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Control | SLA | Specialization | Security | Agility | Price Advantage | Access | Elasticity
Public
• Designed for a market, not asingle enterprise
• Open to a largely unrestricteduniverse of potential users
• Customers buy at specific levelof abstraction (server,application, platform)
• Single-vendor or multi-vendor
Multiple unrelatedenterprises (shared)
Hybrid
• Enterprise’s cloud services
portfolio includes both private
and public cloud services• Some specific services are
delivered in a combination of public and private models (e.g.,private cloud “bursting to” a
public cloud service)
Virtual and physical (non-cloud) resources and
applications
D.I.Y.
Private
• Designed for, and accessrestricted to, a single enterprise
(or extended enterprise)• An internal shared resource, not
a commercial offering
• IT Org is the “vendor” of theshared/std service to its users
Resource
Isolation
Single enterprise/ extended enterprise
(dedicated)
Source: IDC
5 types: Enterprise Clouds
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Change is Coming
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40.0
45.0
50.0
Today
24 Months out
Traditional IT
(Internal) we own
and manage the
hardware, software
and IT staff
Outsourced IT/ASP
3rd party owns
hardware, runs IT
staff, software
ownership is mixed
Enterprise Private
Cloud
(Internal)
virtualized, dynamic
resource pools
deployed and
managed in house)
Hosted Private
cloud
(External)
Hosted/managed by
3rd party, dedicated
to the use of my
company
Public cloud
(External)
subscription
software services
delivered over
internet
S o u r c e : I D C ' s N o r t h A m e r i c a n C
l o u d S u r v e y ,2 0 1 1
n= 6 0 3 ( D i r I T a n d a b o v e ) T o t a l s s u m t o1
0 0 %
Please estimate how much of your company's IT budget (inc. server, storage, network infrastructure, desktops and
devices, IT staff, infra. middleware, and applications), will be allocated to buying and managing these different types of
IT products and services.
+2%+3% +4% +3%
-14%
Anticipated budget
dedicated to OUTSOURCED
IT cloud by 2013 = 52%
84True multi-sourcing is becoming a reality at many firms 84
Utility Computing at Predictable Price
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CIOs are willing
to make sizablebets, but they
need guidance:
which workloadsare most “SaaS
ready“
how they should
best prioritize theirspending and IT
resources to takeadvantage of cloud
Utility/cloudcomputing
assets
rentableinfrastructure foron-premisesapplications
Firms who wantsome benefits of SaaS (reducedfixed IT costs)
but need tomaintain their ownapps ecosystem for
businessperformance needs
85
Cloud Benefits and Challenges
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Source: IDC 2011 86
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• People Outsourcing
87
Staff Augmentation
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• IT will always use some Staff Augmentation for flexibility
and scalability
• Private sector reduce Staff Augmentation but the trend
still exists especially in public sector, in ITOs with strong
trade unions and Short term professionals
• “ Hashkalizazia”
of Staff Augmentation market
88
NearShore - Trends in 2012
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• Majority of ITOs will at least consider NearShore (NearSite)
model to reduce costs in 2012• NearSite model invention for better control
• Few clients complain re high turnover and knowledge
preserving in orthodox nearshore
• Work tariff rates are slowly on the rise
• Existing clients usually expand their scope of work
• Hot topics: BI, Web and mobile development and testing,
cloud and automation testing
X-Shore…
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Near-site
Scope
Time
Quality
Cost
Caution! Fix Price Ahead!
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Price reduction race
כ"סהבדיקותפיתוחניתוחמורכבותרכיב
108פשוטמסך 162בינוני
324מסובך
שאילתא 28.5פשוט
42.75בינוני
85.5מסובך
ח"דו
29.5פשוט
44.25בינוני 88.5מסובך
ממשקים
108פשוט
בינוני
216
432מסובך
'מנהלי פר 1Mכ"סה
What is missing?
Evaluating the risk
91
Client / Vendor tug of rope
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Vendor
Client
• Takes the project in spite of
“losing” prices
• Hopes to get new business
• Wants the client to be happy
• Moves to other pricing models
• Chooses service provider by lowest price
• Doesn’t take the risk element into account• Gets use to receive free requirements
• Ready to pay for additional work to a
certain limit
92
Chronicle of a IT project foretold
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Temps
Underpriced
High profit
93
New type of client/ vendor relationship
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• Service provider has to make money
• Sometimes you can’t avoid the conflict – choose an arbitrator
agreed on both sides
• Relationship between the parties is more important to theproject’s success than price, performance and the terms
• Less profit, less “home” vendors, more work
94
Vendor/Client revenue asymmetry
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License
Development
Testing
Delivery Day 1
Hatmaa
Testing
Rollout
Investment Expenditure
Time & Materials Fix Price
SOW RFPSLAFix
Vendor/Client revenue asymmetry
Maintenance
95
Staff Augmentation – Pros and Cons
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Source: TheMarker and STKI
Thank You And Hope You Enjoyed!
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Here you can find the latest version
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