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1 www.stki.info 972 9 74 444 74 Israel + Zion, Bnei Moshav All Rights Reserved @STKI Office of the CIO Trends Galit Fein EVP & Senior Analyst Strategies for the Web & Office of the CIO

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Page 1: Oracle Presentation

1www.stki.info972 9 74 444 74 Israel +Zion,BneiMoshavAll Rights Reserved @STKI

Office of the CIOTrends

Galit FeinEVP & Senior Analyst

Strategies for the Web &

Office of the CIO

Page 2: Oracle Presentation

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Two Faces of the CIO

CIO function # 1

• Manager of

internal IT

CIO function # 2

• CEO of external IT

Page 3: Oracle Presentation

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MEGA IT Trends 2008

IT spend (inc. outsourcing) remained flat

Higher standards dictated by new regulations

Greater demand for IT services but limited resources

Increasing number of small projects & its interaction

Page 4: Oracle Presentation

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IT is an Integral Organ of the Business

Contribution to achieving business strategy

29%

Available & accurate info

14%

Business processes

improvement57%

The most important IT responsibility

Source: STKI

Page 5: Oracle Presentation

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IT support in the business strategy is less effective

Poor transparency between management & ITO

Lack of IT standardization & methodology

Unproductive use & waste of human resources &

IT assets

Projects failures rate is too high

Org. that lack OTC complain of:

Page 6: Oracle Presentation

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Overwhelming demand for IT services

Projects, requests, CR, maintenance are managed by

out-dated, non-integrated tools

Status of requests is not available in real-time

Unable to detect & expose problems & malfunction in

early stage

IT that lack OTC complain of:

Page 7: Oracle Presentation

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Why do we need Office of the CIO?

OTC ensures that every decision has optimal

strategic value in relation to cost & risk

With OTC, business managers will better understand:

• Strategic impact of investment decision-making

• Cost of IT services

Page 8: Oracle Presentation

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Objectives of the PMO

IT Plan Development

Demand Management

Budget & resource management

Tools

Availability of information

Post-implementation audits:

• Accompany the implementation

• Ensure successful system-use

Continuous improvement

Page 9: Oracle Presentation

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Your Text hereYour Text here RO

I

Alig

nm

ent w

ith

Str. O

bje

ctiv

es

Cost

IT Plan Development

StrategicChange

The

Organization

Run

The

Organization

Regulatory

Risk & compliance

Management Competitive

advantage:

New products,

services, new

markets

IT-enabled

business projects:

Cost advantage

customer satisfaction,

productivity

improvements

Running IT

:operations

IT services

catalogue with

costs & SLA

13% 33% 54%

Page 10: Oracle Presentation

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IT Portfolio Trends

In short term: Run the Org. spend will see some decline

from further efficiencies

In long term: Run the Org. spend will stabilized

Efficiencies in infrastructure & better ITG will enable

firms to reduce the % of IT spend on sustaining the

current systems from 70% to 50%

Page 11: Oracle Presentation

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Demand Management

Screening

• Customer representative, system manager…

Pre-agreed criteria

Evaluation & prioritization:

• Compare “apples to apples”

• Avoid redundancy

Financial awareness

Page 12: Oracle Presentation

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Budget Management

Budget Allocation

IT budget distribution between Business Units according

to their strategic goals:

• Business Unit responsibility

• Operations get their own budget for the maintenance

Resources allocation between Business Units according to

their strategic goals :

• Control of business demands

• Internal loan between LOBs

Page 13: Oracle Presentation

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Budget Allocation - Recommendations

Save part of resources for IT flexibility:

• New regulation

• Unexpected business activity

Unplanned demand will be executed on account of

planned demand

Page 14: Oracle Presentation

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Budget Management & Control

Collecting data to show costs of services

Service catalogs:

• Chargeback

• Alternatives

When IT prices its services, IT can benchmark services

against outsourced alternatives to drive further

efficiencies

Page 15: Oracle Presentation

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Planning vs. Execution – Why?

Planning vs. execution assessment:

• Actual demands’ status

• High maintenance systems

• Business Unit resources exhaustion

Page 16: Oracle Presentation

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Planning vs. Execution – How?

Develop annual plan based on hours spent per task

• Incidents, maintenance, development

Not attendance clock!

Reporting enforcement through executives’

dedication

Page 17: Oracle Presentation

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How do you define project success?

Israel

Clients Satisfaction

19%ROI11%

Cost29%

Schedule30%

Other 11%

Usage, Bugs in production, Reusability

Source: STKI

Page 18: Oracle Presentation

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Software Tools

IT managed either manually, through spreadsheets, or

through an array of standalone tools

ITG tools help the organization:

• Visualize the demand for IT services & new initiatives

• Prioritize financial investment & human resources

ITG automation helps to enforce standards & practices

• Access is limited to permitted users only

• Efficient demand workflow confirmation

Page 19: Oracle Presentation

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ITG Tools Evolution

ERP for IT

Standalone

tools

Text

Demand mngt

Project & portfolio mngt

Financial mngt

Resource mngt

IT process mngt

Reporting

Individual

project mngt

Page 20: Oracle Presentation

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STKI Israeli PositioningL

oc

al S

up

po

rt

Market Presence

Not a technological positioning

Refers only to Israeli market

Focused on enterprise market (not SMB)

Not an STKI recommendation

Market Presence (X)

• Market share - existing and new sales (more emphasis)

• Mind share (how user organizations perceive vendors)

Local Support (Y) – is influenced by (X)

• Experience & technical knowledge, localization, support, number and kind of integrators

Vendor A

Vendor B

Page 21: Oracle Presentation

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PPM- Positioning of the Israeli MarketL

oc

al S

up

po

rt

Market Presence

Enterprise

MID-Tier

This analysis should be used with its

supporting documents

Vendors to Watch:

PS Next

CA

HP

Compuware IBM

Microsoft Primavera

Page 22: Oracle Presentation

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PPM Tools & Integrators in Israel

22

IntegratorsNew Clients 07’Clients

CA, Proceed (Calanit

Carmon)

Ministry of Tourism,

Clalit, Leumi Card,

SunDisk

Clarity (CA)

HP, TaldorPartner, Motorola,

MatafProject & Portfolio

Center (HP)

MatrixCompuware

Changepoint (Matrix)

IBMBAW,EPM, RAM, RD

Composer (IBM Q4 08)

AvivMercava, IDFPrimavera (Aviv)

MSPIAIMenoraRequirement &

Release mngt (MSP)

Xioma, MSP, Eshed

Signifer

Visa CalBank Discount,

Menora, TevaPS Next (Xioma)

Matan, Orantech

Tefen, Proceed

MalanPPS (Microsoft)

Matan, Orantech, Tefen,

Neway, Pnina Zinger,

Proceed

Orbotech, Bank Leumi,

Coca-Cola, Tnuva,

Strauss-Elite, IAA

M-system, Leumit, IAI,

Lotem, Bezeq,

Mekorot, Tel Aviv

Municipality

EPM (Microsoft)

Page 23: Oracle Presentation

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PPM Tools & Integrators in Israel

SAP RPM (resource & portfolio mngt) – IAI, Bank Hapoalim,

Maaz, DSW, Cellcom, Bezeq, Bazan, Navy, Taas, Amdocs, Barom, Merkava

TimeMaker (time & task mngt)– Mirs

ERG Timesheet (time estimation mngt) - Cellcom

Page 24: Oracle Presentation

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PMO Israeli Trends

From standard project mngt to ITG processes

ITOs are currently increasing its PMO

Majority of organizations examine ITG tools

ITOs are looking for:

• Ultimate ITG tool

• Process automation using existing tools

• Improving budget control by integrating work plan to ERP

PMO staffing ratio depends on organization maturity:

Page 25: Oracle Presentation

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:OTC Process ImplementationRecommendations

Receive recognition from executive mngt:

• Decision-making, budget & resources

Standardization of processes

Drawing conclusions:

• Project mngt, alignment with business strategy

Use of consultants:

• Less resistance toward external involvement

Page 26: Oracle Presentation

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:ITG Tools ImplementationRecommendations

The process should be simple as it involves only a few

users

Focus on 2-3 critical KPIs

Choose user friendly system

Short term ROI

Implement module by module

Page 27: Oracle Presentation

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Office of the CIO pays off

Even though establishment of the OTC takes 2-3 years, it

has a valid business justification

OTC helps firms to achieve:

• Greater return on IT investments

• Higher customer satisfaction from IT

Page 28: Oracle Presentation

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IT Service Desk

Highly competitive & mature market

Continually growing staff & number of transactions

IT SD as full-service provider:

• Cost mngt - call-reduction strategies, automation

efforts, service delivery alignment with defined

service levels)

• Proactive management

• Appropriate performance metrics

ITIL

Page 29: Oracle Presentation

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IT Service Desk –

Positioning of the Israeli MarketL

oc

al S

up

po

rt

Market Presence

Enterprise

MID-Tier

This analysis should be used with its

supporting documents

IBMVendors to Watch:

CA

HP

SysAid

Microsoft

BMC

Pivotal

SAP

PeopleSoft

Siebel

IT HD

Modules

Page 30: Oracle Presentation

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IT Service Desk Tools

Selected Installations in Israel

IntegratorsNew ClientsClients

CA, Ness, Malam,

MSP, Cabao

Shabas, Rafael, IsracardComverse, 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

CA*

Matrix , Xor

-

Zim, Malan, IGS, MED Nautilus, Malam,

Kneset, NDS, Social Insurance, Uniliver,

Creo, Intel, Motorola, Summit Design,

Polycom, Cellcom- eng. HOT-eng. Partner -

eng

BMC*

HP, Xor-

IDF, Netafim, Shaam, Open University,

Orbotech, Tower Semiconductors, Haaretz*HP

ConsistAfrica Israel, Mei-Eden, AIG,

Electra, McCann Erickson,

Diesenhaus unitours, Flash

Opal Networsks, Liveperson,

Hertz, Psagot Ofek,

Rav-Bariach, Marvell, Dan, Jonson &

Jonson, Highway 6, Omrix, Wintegra, Sami

Shimon College, Minicom, Litcom

*SysAid

*ITIL compliant

Page 31: Oracle Presentation

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IT Help Desk Modules from CRM packages

IntegratorsNew ClientsClients

20 Partners, including:

Matrix-Effect, SIT,

Advantech, Team,

Malam, Eyron, We!,

Netwise, Bynet SW,

Yael, Avaya….

Visa, Cellcom, Eldan,

Ministry of Education

Ministry of Finance, Malan, Israeli

Navy, Intel, Prime MinisterMicrosoft

CRM*

(*ITIL complaint)

ONE1Tadiran, Negev Ceramics,Orad

Super-Pharm, Bat-Yam Municipality, Exlibris, Systematics, Panorama, Telmap,

Ericom,FGG Radvision, Gilat, Maccabi,

Shahal, Ritalix, Globs

Pivotal

Ness, IBM, EDS, Advantech

BazanCoca Cola, Paz, Isr. GovernmentSAP

Matrix-

Ministry of Foreign Affairs, Mamram,

BezeqPeopleSoft

Taldor, IBM

-

Tnuva, Visa, Golden Pages, Bank

LeumiSiebel*

Page 32: Oracle Presentation

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Executives are enforced to accurate & verified financial

info

Periodical review of the processes used to ensure

compliance with regulatory

Internal controls are regularly assessed for effectiveness

The Sarbanes-Oxley Act (SOX)

Page 33: Oracle Presentation

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What is the SOX for IT?

SOX implications have huge impact on the ITO

The role of CIO & ITOs will evolve under SOX

IT departments can expect much closer scrutiny

Need for enterprise risk management & governance

Timely & accurate info enabled & sustained by a blend of

process, quality, & governance

Page 34: Oracle Presentation

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Process:

Developing process to improve

efficiency & IT service delivery

Quality control:

Build metrics to follow up

performance & improvement

Governance:

Establishing oversight measures

Consultants: HMS, One, SecOz,

Spider, Taldor, Tulip

Process

ITIL

Maturity models

– CMM , PMM

Quality control

ISO 9001

Total Quality

Management (TQM)

Six Sigma

Governance

COBIT

:FrameworksCommon

Enterprise Risk Mngt

Page 35: Oracle Presentation

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Best Practices vs. Innovation

STRATEGIC IT

• Strategic functions drive

the company’s dollar, stock

value, & competitive

advantage

Office of the CIO

Portfolio mngt…

TACTICAL IT

• Tactical functions simply

keep the business up &

running on a day-to-day

basis:

COBIT

CMMI

ISO

ITIL

Six Sigma…

Best

Practices

Innovation

Page 36: Oracle Presentation

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No single process/governance

framework will effectively

represent every organization

No single framework covers the

complete territory

Leverage & aggregate best practices

The combination of process

methodologies will provide a more

complete view of IT’s operational/

support processes

ITIL COBIT

ISOCMMI

Six Sigma

What’s the Best Practice Framework?

Page 37: Oracle Presentation

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COBIT

Developed by the Information

Systems Audit and Control

Association (ISACA): A set of

identified control objectives

4 high-level domains (e.g.,

planning & organization)

34 sub domains (e.g., manage

human resources)

318 control points designed to

provide assurance that certain

objectives will be achieved

Israeli ISACA is translating

COBIT to Hebrew

High-level governance & control

framework

COBIT align with the COSO finan.

framework - recommended for

compliance with SOX

Checklists for assessing IT controls

& effectiveness

Ensures that controls & security

are in place

Control Objectives for Information & Related Technology (COBIT)

Page 38: Oracle Presentation

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ITIL

Initiated by the UK government’s

(CCTA) Central Computing &

Telecommunication Agency

Provides best practices for

delivering IT services

ITIL v.3 (5 books) refines the

notion of IT service

ITIL v.2 core tenants were divided

between service support &

service delivery; these are now

combined

IT Infrastructure Library (ITIL)

Process is the linchpin to

delivering consistent services at

a reliable level of quality

ITIL primarily focuses on IT

operations where 80% of IT

budgets are spent

Page 39: Oracle Presentation

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ITIL v.3 - 5 Books

Service Strategy

Service Design

Service Transition

Service Operation

Continual Service

Improvement

Page 40: Oracle Presentation

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ITIL Israeli Trends

Business started to realize the importance of the ITIL

Customers started to demand vendors ITIL compliance

in RFP (especially HD & outsourcing vendors)

Main reasons to enter ITIL:

• IT services improvement

• Regulations:

Companies which incorporated ITIL processes reported

better compliance with SOX, BazelII…

Bottom-up demand

Page 41: Oracle Presentation

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ITIL Adoption Trends

About 10 enterprises has already implemented some ITIL

processes

Industries with highest % of usage:

• Finance, Telecom & High-Tech

Increasing interest, but no actual investment

ITIL courses & training: HP, John Bryce

ITIL lead consultants (alphabetical) & selective examples: • CA: Ministry of Foreign Affairs

• EMC: Amdocs, Cellcom

• GalanTech- ITIL training; Amdocs; IEC; Petah-Tikva municipality

• HP- Pelephone, Ministry of Justice

• I-til consulting - Bank Leumi, Zim

• XOR - Bank Hapoalim; Bank Leumi

Page 42: Oracle Presentation

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COBIT tells you what to

monitor & control

Higher-level business

value framework

ITIL describes how to

implement

Lower-level service

performance

framework

The ideal configuration - a combination of both frameworks:

• ITIL measures internal technology efficiencies

• COBIT interprets them in the context of business value

The latest versions of these frameworks integrate

with each other

COBIT & ITIL

Do they affect each other? Yes!

Page 43: Oracle Presentation

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ISO

ISO- framework for information

security management

ISO/IEC17799:2000 lays out a

process for securing those

services & addressing legal

requirements

Developed by the

International Organization for

Standardization & the

International Electrotechnical

Commission

ISO specifies best practices for

security in 12 areas & offers

guidance on such topics as

protecting personal data,

internal information, &

intellectual property

International Organization

for Standardization (ISO)

Page 44: Oracle Presentation

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Importance of:

Unified Framework Responsibility

Frameworks are tied to each other

Different frameworks handled by various orgs roles:

• Accountants, CIO, CTO, QA managers, CISO, etc.

Responsibility of all frameworks MUST be unified:

This translates itself

to greater efficiency &

resource saving

Page 45: Oracle Presentation

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Risk & Compliance Mngt

Information TechnologyInfrastructure Library

Framework for informationsecurity management

Control Objectives for Information & Related Technology

CobiT

ITIL

ISO

Reference

framework for

governing IT &

compliant with

SOX

Page 46: Oracle Presentation

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Source: Bain & Company (Mng. Tools 2007)

Outsourcing: one of the top 10 most used mngt tools,

however, below average satisfaction

Management Tools - Ranking

Page 47: Oracle Presentation

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Outsourcing WW Trends

Outsourcing will continue to be recession-proof

Recent turmoil in credit markets will selectively slow

outsourcing in the financial services sector

Global multi-shore & multi-provider outsourcing will

become more the norm than the exception

Capital expenditure avoidance will become a key driver

for increased demand for outsourcing & BPO

Page 48: Oracle Presentation

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Outsourcing Model

Evolution or Equilibrium?

Outsourcing model has been changed

1/3 of deals were total IT function, especially with SMBs

Rest of deals were of transferring processes & specific

fields to outsourcer:

• Infrastructure

• Help Desk support

• Application Mngt

Selective outsourcing

67%

Comprehensive

outsourcing 33%

Source: STKI

Page 49: Oracle Presentation

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Selective Outsourcing

Israeli Trends

Comprehensive outsourcing

• Loss of Flexibility

• Increased Risk

• Loss of Internal Expertise

Selective examples:

EDS: Kneset

HP: Tower

Malam – Team: Dan

Ness: Tadiran Appliances

Selective outsourcing

• Vendor Competition

• Shared Objectives

• Core Competencies

Selective examples:

EDS: Alvarion, Ports & Railways Authority

HP: Navy, Telrad

Malam-Team: Shlomo Group, Phoneix

Ness: Teledata, Applied Materials, UTI

Page 50: Oracle Presentation

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Outsourcing Israeli Trends

Outsourcing market will continue on steady mature

growth

Net increase in the outsourcing market

Public sector demand will continue to grow

Decline in mega-deals (number & volume)

Most of the activity will be happening in SMBs

Page 51: Oracle Presentation

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Pace of new contract has slowed during 2007

More sophisticated customers who conduct thorough

feasibility study

End of vendors’ “suicidal prices”

A few major WW outsourcing contracts are being brought

back in house:

Prudential, Selfridges, Sainsbury…

Advertisement of disagreements & problems

in contract between Mey-Eden, Mataf, Harel…

Page 52: Oracle Presentation

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Outsourcing Israeli Trends

Customers

Most orgs. succeed in achieving their objectives, but in

general they feel indifferent about the results

Companies generally have difficulty to evaluate vendor

capabilities & outsourcing outcomes

Companies are choosing vendors with proven abilities to

deliver services according to SLA

Clients changing preference: smaller contracts~1-5 years

Re-biding vs. renewals: resulting in less stability

since the contract & checks take time to accomplish

Page 53: Oracle Presentation

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Multisourcing

Multisourcing still hasn’t passed the reality test

Multisourcing demands the complete mngt of operation &

providers

Mngt of operation & providers requires large

managerial mechanism

Managerial boundaries must be specified

Multisourcing demands a critical mass since providers

have lesser profit margins when it comes to

smaller contract

Page 54: Oracle Presentation

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Outsourcing Israeli Trends

Vendors

Highly competitive market with increasing no. of

vendors

Main players:

• Ness, EDS, Malam-Team, IBM, HP

New players are entering the IT sector:

• Bynet , Taldor

Page 55: Oracle Presentation

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Main Factors for Failure of Outsourcing

Management lack experience of outsourcing

Management lack skill of writing & negotiating

outsourcing contracts

The outsourced work is difficult to standardize

Quality did not meet expectations:

• “80:20” bubble burst

Page 56: Oracle Presentation

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Major obstacle for successful outsourcing

ITOs are dissatisfied with the methods used for

measuring vendors’ performance

ITOs still struggle with metrics design & implementation

ITOs mostly rely on the vendor's estimation

The problem of measurement pertains not only to

outsourcing but also to the overall operation of a firm

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For what reasons have you considered

insourcing?

5%

18%

16%

26%

26%

28%

51%

3%

13%

12%

13%

21%

24%

61%

Other

Communication problems

Change in strategy about outsourcing

Customer dissatisfaction

Service levels not met

Cost saving not realized

Have not considered insourcing

2008 2007Source: Cutter

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What kinds of tasks are you currently outsourcing or planning to outsource?

18%

38%

61%

79%

18%

49%

64%

78%

Other

Help Desk Support

Maintanance

Development

2008 2007 Source: Cutter

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Tactical IT vs. Strategic IT

STRATEGIC IT

• Strategic functions drive the

company’s dollar, stock value

& competitive advantage:

Business development

New system development

Product marketing support

Sales force automation

Business & IT alignment

R&D

TACTICAL IT

• Tactical functions simply keep

the business up & running on

a day-to-day basis:

Infrastructure maintenance

Service Desk

QA/Testing

Printing

BPO

Security

ERP

Outsourcing In-House

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Highly competitive & mature market

Most of the activity will occur in SMBs

Service packages including HD tools:

• The focus should be on service instead of tools

Main players & Selective Examples:

Calanit-Carmon: Isracard;

Malam-Team: Tel-Aviv municipality; EDS: Alvarion;

Taldor: “Computer for Every Teacher” project;

Yael: Tyco

IT Service Desk Trends

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QA/Testing Management

Rapidly growing field

Acknowledging the advantage & cost saving by

outsourcing: the transition from PS to outsourcing

Israeli near shore:

• Main Player: Matrix (Talpiot)

• Malam (Ma’alot)

• Ness (EDC)

• Aman (Tehila)

Offshore: Eastern Europe, Far East, Palestinian authority

Main Players: Ness & Tescom, Malam-Team, Matrix, Tesnet,

Tact Computer System

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Security Outsourcing

Security outsourcing is a growing trend

Increasingly regulated, intensive & expensive field

From firewalls to setup & maintenance of most security

systems

Expert service providers:

• Economies of scale: quality security staff

• Cost saving: No longer have to pay high-level

technical staff to monitor security around the clock

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Professional Services / Temps Israeli Trends

Professional services growth has narrowed

In-sourcing trend as part of management perception,

despite being cost saving

Opposite trends in private versus public sectors

Need for flexibility & specific proficiency:

• Demand on professional niche experts (BI, SQL, Security,

Oracle Applications, etc)

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IT Staffing Metrics

Insourcing45%

Greater Use23%

Unchanged32%

PS as Percentage of IT Staff

Source: STKI

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Professional Services / Temps Israeli Trends

ITOs prefer fixed prices (overtime hours, sick pay, miluim)

Transparency with suppliers to prevent paradoxical situations

(where employee earns more than his/her employer)

PS Advantages

Employee’s preservation (training, professional support,

excursions, pay increase, high mobility)

FTE Advantages

Employee’s sense of belonging

Cost saving

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IT roles % expecting to increase hiring:

WW Trends

24%

28%

40%

Project management

Help Desk

Programming/system development

Source: CIO Insight

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20%

31%

31%

45%

55%

Help Desk

Architecture & planning

Security

Project management

Programming/system development

2008

IT roles % expecting to increase hiring:

Israeli Trends

Source: STKI

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Training Management

Recession will narrow the training & implementation market

growth

The investment of 5-10 training days of employees

Increasing need for management & service skills courses

Main topics: .NET, MF, J2EE, security

Gathering momentum: ITIL, PMI, SOX, virtual communities

Main Players:

Matrix, Ness, Sela Group, Emet, Malam-Team, YANA Group

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Increased28%

Decreased22%

Unchanged50%

Annual Training Allocation per IT Employee

Source: STKI

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Web Evolution

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Web 2008 – an “Enterprise” Issue!

Web 08’ tools, technologies, & concepts help business find:

• New customers

• Retain existing customers more effectively

• Provide products & services at higher profit margin

Strategic IT

Web 2.0

Business

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Where is your company stands with regards

to Web 2.0 technologies?

Social Networks

RSS

Wikis

Video over the Web

Deployed

Testing

Not on radar screen

45% 24% 32%

20% 40% 40%

26% 21% 53%

9% 25% 66%

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My company considers consumer technology for

potential business uses

Agree27%

Waiting 68%

Disagree5%

Consumer technology (social networking, video games, iPod)

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Self-Service Israeli Trends

Not an innovative concept

Most orgs. are planning to invest into customer self-

service improvement:

• Cost saving

• Improved customer satisfaction

Disadvantage: lack of customer sense of belonging

Start Self-Service

Build product simpler

version

Effective Internet

search engine

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Virtual Worlds

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Questions that must be examined:

What is a virtual world? / Second Life?

Why are millions of people joining VW?

What value does a VW provide?

What are its real potentials & risks?

How can one make money in a VW?

Will VW affects & influences our personal, social, &

professional life, like today’s Web?

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Virtual Worlds

Examples (over 200 worlds): Second Life – Microtransactions, subscription ($9.95 per month)

World of Warcraft - Software, subscription,

microtransaction ($14.99 per month)

Club Penguin – Subscription ($5.95 per month)

Barbie Girls - Product sales

ActiveWorlds – Subscription ($69.95 per year)

Google Lively

There - Subscription

MultiVerse

Vast Park

Metaplace

Entropia Universe

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Economy

Reuters

Banking and credit

Stock markets

• SL Capital Exchange (US, 20 listings)

• World Stock Exchange (Australia, 15 listings)

• VSTEX (Italy, 7 listings)

• Ancapex (US, 3 listings)

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Second Life

40,000 concurrency (at any time)

450,000 active users (last 7 days)

1.4 m active users (last 2 months)

10.6 m total accounts

2 m assets created per day

35 TB of user-created data

800,000 unique items sold or traded

per month

500 events per day

Land of SL 2 Million M^

Total User Hours (millions)

Source: Linden Lab

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Currency: Linden$

LindeX exchange operated by

Linden Lab

• Buy: USD $.30 transaction fee

• Sell: 3.5% transaction fee

• 270 L$ =$1 USD

Monetary policy

US$ Spent by Users (in Millions)

US $ Exchanged on Lindex (in Millions)

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Virtual World, Real Money

SL’s First Millionaire:

Anshe Chung (Ailin Graef) -

the virtual land baroness

• In period of 2.5 years

• Initial investment 9.95$

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Virtual World, Real Business

Information points – interactive & dynamic online

resource or brochure

Front offices or HD - customer service

“Shop fronts” & online sales - customer product

experience

Meeting venues - meetings & collaborative activities

Seminars & conferences

Advertising - products /services promotion

Product demonstrations - potential customers

Recruiting

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Virtual World, Real Business

IBM

Cisco

SUN

PreenIntel

Adidas Store

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Virtual World, Real Business

Scion, Toyota's youth-oriented brand, has sold (2H07)

about 200 computer-generated cars in Second Life

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Museum & Art

International Spaceflight Museum Computer History Museum

Art Gallery

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Tourism

Images of Sweden

Interactive Dublin map

Tourism destinations promotion - real places & activities virtual experience

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Education & Training

Education – interactive courses with students

Training - simulation, role-play games

Princeton Science Friday American Cancer Society Relay for Life

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Advisory/Analyst firms

H&R Block Island

BDO Stoy Hayward

KAWG&F (Baltimore MD CPA firm), CPA Island

Accenture

STKI

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Community

Campaign HQs Davos protest

Government, politics & collective action

Sweden Embassy

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Galit FeinEVP & Senior Analyst

Strategies for the Web &

Office of the CIO