why it does not matter in exponential organizations

Why IT does not matter in Exponential Organizations*

Srini Koushik Chief Technology Officer

© 2016 - Magellan Health * Based on Exponential Organizations by Salim Ismail 1

The world is changing rapidly around us

© 2016 - Magellan Health 2

Sharing Economy

Capital looking for investments

Rising costs of Healthcare

Volatility in Asian Economies

LAN – WAN - PAN

Bluetooth and BLE

LTE & 5G

Loons, Drones, Satellites

Longevity

Capital looking for investments

Digital Natives & immigrants

Eco-friendly and Green

Connected Home & Mobility

Quantified Self

3-D Printing

Natural Language Processing

Smart Everything

Miniaturization

Quantum Computing

Moore’s Law

The velocity and intensity of these shifts is increasing

© 2016 - Magellan Health

1940 1950 1990 2001 2009 2016

3

Causing structural and seismic shifts in the global economy

•  Only 55 of Fortune 500 companies from 1955 are on the list in 2015

•  The average lifespan of an Fortune 500 company is 15 years (down from 67 years)

•  At this rate in the next 10 years 200 of the companies in the current Fortune 500 will no longer be on that list


The Exponential Organization (ExO)

An Exponential Organization is one whose output (or impact) is disproportionally (10x) larger than its peer

because of the use of innovative organizational techniques that leverage exponential technologies



ExOs are built around a Massive Transformative Purpose (MTP)

The Massive Transformative Purpose (MTP) is the higher, aspirational purpose of the organization, capturing the hearts and minds of those both inside and (especially)

outside of the organization.

Think Different

We organize the world’s information

Leading humanity to healthy, vibrant lives

6


ExO’s are enabled by key capabilities

DASHBOARDS Manage ecosystem effectiveness

EXPERIMENTATION Quick, effective and externally focused

AUTONOMY Empower employees and partners

SOCIAL Real-time, Bidirectional, Informal Networks

and Social Technologies

INTERFACES Open and Loosely Coupled

STAFF ON DEMAND Hire key skills, rent others based on demand

CROWDSOURCING Engage the external ecosystem in core business processes

ALGORITHMS Unique, differentiated, insight driven algorithms

LEVERAGED ASSETS Leverage assets, use scale to drive costs based on demand and usage

ENGAGEMENT Build capabilities by engaging and Integrating across the ecosystem

7

Ability to create and own new content

Engage community by inviting them to Binge

Watch

Netflix Challenge on Kaggle

Run multiple experiments and A/B

tests to customize experiments

Algorithms that track viewing habits and increases viewership

Multi-sided platform that makes watching content easy

Internal dashboards that help Netflix manage content & infrastructure to deliver optimum performance.

Netflix aims to be the World’s entertainment distribution platform

Cloud based infrastructure and

content delivery


Staff on Demand

Community &

Crowd Algorithms Leveraged

Assets Engaging Platform Interfaces Experiment Dashboards Autonomy Social

Use of social technologies to

engage employees in ideas

8

9

Focus of ExOs

Customer Centric

Build the Ecosystem

Valuable Experiences

Leveraged Assets and Resources

ExO

Appleized Engaged Context sensitive Cloud & Crowd



How do traditional IT organizations fit into ExOs?

Relationship Management

Specifications

Solutions Development

Service Support

Staffing and Supplier Management

IT Financial Management

Security and Risk Management

Enterprise Architecture

Cor

e A

ctiv

ities

Su

ppor

t A

ctiv

ities

Va

lue

Add

ed

Act

iviti

es IT Portfolio Management

IT Support – Facilities etc.

1.  Standardization

2.  Centralized Control

3.  Specialized Skills

4.  Agile Methods

5.  Automation

6.  Efficiency

7.  Outsourcing


This model was designed for “Turn of Century” problems

Today’s IT Playbook

11

Exponential IT represents a significant departure from today’s IT


Consumer

Products

Closed Ecosystem

Standardization

Application Centric

Platforms

Co-creator

Open Ecosystem

Mass Customization

Data Centric

Full-stack skills Specialized Skills

Cloud & Smart Sourcing Own assets & Outsource

1

2

3

4

5

6

7

12

Exponential IT needs a new set of Plays

Adapted from Lean Startup created by Eric Ries


BUILD

MEASURE

LEARN

1.  2P HIT & Smart Creatives

2.  A portfolio of Experiences

3.  Lightweight Integration

4.  Agile Insights

5.  Build @ Web Scale

6.  Platform Thinking

7.  Active Ecosystem Engagement

13

Ideas

Pla@orms Data

Smart Creatives – People & System

Excerpts from http://www.slideshare.net/ericschmidt/how-google-works-final-1

APTITUDE: Desire to perform

ATTITUDE: The Ability to Learn

ADAPTIVE: Willingness to Change


DRIVE: What makes them tick?

LEAD: How they Lead

LEARN: How they learn

TEAM SIZE: 2 Pizza Teams

TEAM MAKEUP:

Horizontally Integrated

AUTONOMY: How they Operate

Talent Leaders Team

14

BUSINESS (VIABILITY)

PEOPLE (DESIRABILITY)

TECHNOLOGY (FEASIBILITY)


Importance

Freq

uenc

y

Low High

Low

H

igh

Experience Design

+ +

15

Secure – Simple – Context Aware

Trad

itiao

nl

New

Data Lake

ODS & Sources ETL EDW

Derived (Transformed)

Discovery Sandbox EDW

Streaming

Unstructured Data

Various Sources

Reporting, BI Extracts

Data Science Data Discovery Reporting, BI,

Extracts

Agile Insights – New supply chain of data


Lightweight Integration

Stateless Micro Services Secure Cloud based APIs

Scalable and Extensible

Cohesive Services

Loosely Coupled

Data at Rest

Data in Motion

Data @ Rest Orchestration & Compensation


Secure Web Scale Computing

Business Architecture

Cloud Native Architecture

Continuous Delivery

DevOps Engineered Security & Defense

Cloud Native ITSD&M


Platform Thinking

Producer ecosystem

SaaS

Enterprise Customers

Service Providers

MULTI-SIDED

PLATFORM

Deliver signature experiences Value is derived from the ecosystem - Network Effect Business model delivers value to all participants – Win-Win Open and Interoperable – Easy to connect to Consumed as a Service Value derived from content & network

Consumer ecosystem

Legacy Systems


20

Active Engagement


Technology Platform Collaboration tools Social Media User ratings Multi-modal access Easy to access and use

Digital Channels

Partner Ecosystem

Metrics & Learning

Customer Ecosystem

Social Media

IT

Consumers as Co-creators Customization of features Decide what to consume Information on usage Transparency on charges Engagement in platform design

Producers of Content APIs and interfaces Service Levels and Compensation Branding IP Sharing Revenue and sharing model

Growth Plan & Metrics Engagement metrics Stage gate measures A-B Testing Scan competitive models Alternative plans for Pivot

1

2 3

4

•  Every industry will be transformed by ExOs

•  Smart Creatives and Adaptive Leaders power ExOs •  ExOs focus on delivering a secure, seamless, context aware and

differentiated experiences

•  ExOs view technology and data as a competitive differentiator

•  Traditional IT will need to be revamped to support an ExO

Conclusion


Srini Koushik Srini Koushik is Chief Technology Officer of Magellan Health. Previously he was President and CEO of NTT Innovation Institute, a Silicon Valley-based startup focused on building platforms for today’s Digital Businesses . He is also the founder and CEO of Right Brain Systems LLC. Srini has 27 years of experience as Programmer, Architect, CTO, CIO and P&L owner at Fortune 100 Companies including IBM, HP and Nationwide. Srini is an Open Group Distinguished Certified Architecture profession leader. He has published several articles, holds three patents, and co-authored a best-selling book, Patterns for e-business, in 2001. He was elected to the IBM Academy of Technology, and was named an IBM Distinguished Engineer in 1996. He was also named an Elite 8 CIO by Insurance and Technology, a Top 25 CIO by Infoworld, a Top 10 All-Star in the financial services industry by TechDecisions, and a Computerworld Premier 100 Technology Leader in 2014. Srini holds a bachelor’s degree in physics from the University of Madras, a master’s degree in computer science from the University of Bombay, a master’s degree in business administration from Ohio State University, and has completed executive education courses from both the MIT Sloan School of Management and Stanford University. Srini enjoys skydiving, hang gliding and other extreme sports. He is currently working on learning to play the guitar. He enjoys traveling and has been to 55 countries and wants to visit the other 140 countries in his lifetime.
