Continuing my blog coverage of the [Forrester IT Forum 2009 conference
],I finally catch up with some keynote sessions this morning. Here's my recap on the rest of the main tent general session keynote presentations from BP, Microsoft and CFIL.
- Dana Deasy, CIO and Group VP, Information Technology and Services (IT&S), BP
Dana presented "The gift we’ve been given – reinventing the IT organization". He is the CIO of BP, an energy company that made over 360 billion dollars selling oil and gas. In fact, it is the fourth largest company in the world, with 92,000 employees in more than 100 countries. Back in 2007, business was good but the senior management team felt that IT needed to be straightened out.Dana was brought in as a "fresh thinking" outsider, managing a group 4000 IT staff composed mostly of contractors, dealing with more than 2000 IT suppliers and more than 60 versions of SAP.
Dana presented the results of their IT makeover. In the first year, he was able to cut out 400 million US dollars from the IT budget, including the reduction of 500 people from the IT staff. He increased the employee/contractor ratio to 40/60, with plans to bring this up to 65/35 over the next year. He was able to get 1800 IT employees to perform a self-assessment to understand their strengths and weaknesses. He was able to centralize the IT leadership team, and deploy a common [ITIL] best practices implementation.
What did he learn from all this? Here were his top four "lessons learned":
- No time to dwell but know your facts
- Work in parallel to push the pace of change
- Listen but in the end take your own counsel
- Tell a compelling story to energize your employees and your leadership
- Chris Capossela, Senior VP of Information Worker Product Management Group, Microsoft
Chris presented "Uncovering Value in the Cloud and On Your Desktop", onhow Microsoft customers are taking advantage of the software they have already purchased.For example, Jamba Juice was able to use Microsoft SharePoint to cut down locating documents from 15 minutes to just seconds, reducing 10-15 hours per week for more than 500 managers. More importantly, they were more confident that document they found was the right one. This is often referred to as "one version of the truth." In another example, Tyson Foods was able to connect Microsoft Word to their SAP application, and have that then connect to their Microsoft SharePoint.
Chris was amazed that many Microsoft customers don't take advantage of all that is available to them.He gave four examples:
- Planning Services: If you buy an enterprise license to Microsoft products, you get planning services, from either Microsoft's own Microsoft Consulting Services or from thousands of Microsoft Business Partners. Only 8 percent of customers take advantage of this.
- Home Use Rights: For enterprise license customers, employees can purchase "home use rights" to use the Enterprise level of Microsoft Office software for only 10 US dollars, but only about 3 percent take advantage of this.
- Training: Many enterprise licenses come with 2-4 weeks of training vouchers, but only 40 percent take advantage of these vouchers.
- E-Learning: Microsoft also offers e-learning, which Microsoft customers can either have delivered from Microsoft's own hosted services, or they can get a copy of the E-learning materials hosted inside their own company firewall. Again, few take advantage of this.
Chris wrapped up his presentation by citing some examples of customers that migrated from in-house, on-premises collaboration software to Microsoft's "Exchange Online" and "SharePoint Online" cloud computing Software-as-a-Service [SaaS] offerings. The cloud versions of these software do not offer all the features as the on-premise versions, but Microsoft is working to close this gap.
(IBM offers similar cloud computing services for email and collaboration called [LotusLive])
- Gary Heil, Founder, [Center for Innovative Leadership]
Gary presented "Tough Times: Opportunity for Innovation and Corporate Makeover". He had some greatquotes intended to help people become better leaders, like this:
“Leadership failures do not usuallyresult from leaders not knowing what todo; rather these failures result becauseleaders fail to do what they know fullwell they should and must do.Most leaders never get fully comfortable withthe changes that they wish for theirorganizations.”
- Change the Conversation - employees want to have a compelling reason to change.
- Create a compelling description of the future - employees want a vision of where they are headed.
- Emotionally enlist employees in the cause - leaders are not remembered for their attributes, as much as the causes they stood for.
- Help me understand the business - employees often do not have information in context to act accordingly.
- Choose passionate - employees want to see leaders that are passionate and confident on the process and strategic direction.
- Create a To-Stop list - we all have "to do" lists, but perhaps you need a "to don't" list. In other words, a list of bad habits and practices you need to discontinue.
Gary indicated that trust must be given before it is earned. If a leader doesn't trust the employees, how do you expect the employees to trust the leader? When asking employees to change their behavior, or self-assess their own skills, a leader must emphasize "I mean you no harm." Otherwise,mistrust will undermine the intended results.
The keynote sessions the past three days have provided clear motivation to the CIOs and IT leaders in the audience to consider making the necessary changes, with impressive results and actionable advice.
technorati tags: IBM, FITF09, Forrester, Forrester Research, FORR, IT Forum, BP, Dana Deasy, Microsoft, Chris Capossela, LotusLive, Cloud+Computing, Gary Heil, CFIL
Well, I am back from Las Vegas, and had a pleasant [US Memorial Day
] holiday yesterday.
Today is Tuesday, and that means more IBM announcements! IBM announced that the DCS9900 now supports an intermix of SAS and SATA drives. The DCS9900 is purpose-built specifically for the High-Performance-Computing (HPC) and Video Broadcasting industries.
The system is a combination of 4U controllers and 3U expansion drawers. The controllers handle either FC or Infiniband attachment to host servers. The expansion drawers hold up to 60 drives each. With the new features of intermix, the following drives are supported:
- 7200 RPM SATA drives in 500, 750 and 1000 GB capacities
- 15K RPM SAS drives in 146, 300 and 450 GB capacities
The DCS9900 groups the drives into sets of 10, in RAID-6 ranks of 8+2P. IBM supports either 5, 10 or 20 expansion drawers to make a complete system. The maximum configuration would be 1200 drives of the 1000GB SATA drives, for a total of 1.2 PB in two frames. Each rank must be all the same type and capacity drive, but you can mix different types within the entire system.
The DCS9900 supports "Sleep Mode", an implementation of Massive Array of Idle Disks [MAID] technology, whereby each RAID rank can be either awake and spinning, or in energy-efficient standby mode. This makes for a more "green" storage system for data that is not accessed frequently.
For more details on the DCS9900, check out the[Announcement Letter].
technorati tags: IBM, DCS9900, MAID, FC, Infiniband, SAS, SATA, RAID-6, Sleep Mode, HPC, video broadcasting
Wrapping up my blog coverage of the [Forrester IT Forum 2009 conference
],I will put the rest of the track sessions I attended under the broadcategory of "market forces".
The track sessions were aligned by job role. Here are all the tracks:
- Track A: CIO
- Track B: Enterprise Architecture professional
- Track C: Application Development & Program Management professional
- Track D: Information & Knowledge Management professional
- Track E: Sourcing & Vendor Management professional
- Track F: Business Process & Applications professional
- Track G: IT Infrastructure & Operations professional
- Track H: Security & Risk professional
- Track I: Technology Product Management & Marketing professional
As an IBM consultant, I deal with all of these different kinds of professionals, so I thought I would try to attend a variety of sessions this week. Here are my notes from a few of these:
- Transforming IT for Lean Times: Organizational Structure
The Forrester analyst presented the concept of "Lean IT". This is not just a process to make IT skinny or marginal through commoditization. Rather, it is to meet business needs through differentiated services. Gone is the "one-size fits all" mentality. Lean IT can be used to streamline IT capabilities to enable employees to get their jobs done. Continuous improvement is done through a series of "Rapid Improvement Events" (RIE), a methodology known as "Kaizen Blitz".The focus is to reduce waste, including rework, firefighting, meetings, unnecessary reports and paperwork, working groups, and task forces. A common mistake is to reorganize departments before understanding the fundamental requirements, or make every employee use the same PC just to simplify the job of IT.
Traditionally, IT departments had three jobs. The first is Utility, to keep the lights on and systems running. The second is Productivity, to enhance existing systems and applications. The third is Innovation and Business Transformation.The problem has been that many IT leaders have been "IT Supply Managers" ensuring there is adequate supply of these. Instead, the Forrester analyst suggests redefining the role to one of "Demand Broker". Some companies have already done this. The CIO manages the demand for IT from Business Units, Business Processes, Information Workers, as well as suppliers, business partners and customers. As a demand broker, the CIO could then use these demands to optimize and prioritize IT resources.
- Why Tech will lead Economic Recovery
The current 5.7 percent drop in IT spending in 2009 during this global financial meltdown is actually similar to the drop in ITspending in 2001-2003. However, the Forrester analyst anticipates that IT spending will bounce back in 2010.His reasoning came from looking at past IT spending trends since the 1950s. He found four clear sequencesconsisting of 6-10 years of growth and investment in IT, followed by 6-10 years of refinement and digestionwhere business leaders try to make the most use of these investments. The four sequences of investment and growth are:
- 1959-1970 mainframes, automating high-frequency transactions
- 1976-1985 personal computing, empowering individual productivity
- 1992-2000 network computing, enabling e-business and the internet boom
- 2008-2016 smart computing, optimizing business results through flexible and responsive IT that incorporates awareness and analytics to solve new business problems.
He argued that this trend was already starting to show itself. There was an uptick in IT spending in 2008 before the financial melt-down, and he feels this is why the tech industry sector will drive the economic recovery in 2010. The top five industries that will lead the adoption of smart computing will be: Government, Healthcare and Life Sciences, Utilities, Education, and Personal Services. These represent 54 percent of IT spending in the US, and also represent a large portion of the US stimulus package.
Smart Computing can be summarized as the "Four A's":
- Awareness - instrumentation like RFID chips, sensors and video surveillance
- Analysis - intelligent recognition of patterns and finding anomalies
- Alternatives - identifying alternative responses
- Actions - dealing with threats or capturing opportunity
Smart computing in these industries reflects the need for more vertically-aligned industry-specific solutions.IBM is well-positioned in this area, having both the hardware, software and services for smart computing, as well as deep industry-specific expertise. Other industry-specific vendors, like General Electric and Siemens, have the vertical alignment, and are working to adopt smart computing. Meanwhile, Oracle/Sun and Microsoft are also investing in smart computing, and have the potential to develop more vertically-aligned industry-specific solutions. Other IT vendors will have a choice to make: stay horizontal or go vertical.
- ERP's Evolving Landscape: Impact for Application Professionals
Enterprise Resource Planning (ERP) software vendors are consolidating, with
the average ERP deployment 10 years old, triggering many to re-evaluate how
well the promises of ERP match the reality. On the positive side, ERP promised to reduce the total number of applications, provide somefinancial stability and integration, and for the most part the Forresteranalyst felt these promises were mostly met. However, in deploying newcapabilities, lowering TCO or establishing a partnership between vendorand client, ERP vendors got low marks.
Customers are now demanding more end-to-end solutions, especially withmore industry-specific functionality. Technologyadvances should be used to boost the business value. For example,ERP lags in SaaS adoption. Frequent upgrades to meet regulatory requirementscould drive stronger interest in SaaS deployments of ERP.
Customers would also like the end-user experience with the ERP to bemore role-based, with actionable insight and intelligent responses related to the user's job responsibilities. Hybrid ERP solutions that span deploymentacross on-premises, SaaS and managed hosting services might be neededto ease this transition.
- What You Should Know Before Signing a Contract with a Disaster Recovery Services provider
This session was less about RTO or RPO, and more about broader considerations.The leading disaster recovery service providers are IBM Business Continuityand Resiliency Services [BCRS], SunGard, ICM/UK, and HP. The Forrester analyst did not think HP was treating this as strategically as they could,and often are behind the scenes through other business partners.
Will this [oligopoly] continue? Theanalyst thinks there will be an increase in the number of disaster recovery service providers. Contenders includeTelcos like Qwest, AT&T, BT, and Verizon Business; SMB-focused firms like i365 and Venyu;and cloud computing IaaS providers like SAVVIS.
So what should you consider when putting out an RFP? Here were a few suggestions:
- Make sure there are schedules for all of your platforms (x86, Unix, System i and System z)
- Identify all fees, including "declaration fee" and "occupancy fee"
- Costs of Disaster Recovery test exercises, including how many, and their duration in days.
- How quickly you can access their facility after you declare the disaster
- Whether the provider has alternative Data Centers, depending on the scope of the regional disaster
- Evolving the 4 P's of Marketing to Grow Revenue in Emerging Markets
I was in IBM marketing for seven years. For those without marketing backgrounds, the 4 P's of marketing are product, promotion, placement and pricing. There is no "global" audience, eachcountry, region or locale has unique characteristics, and requires go-to-market (GTM) strategiesbe tailored to each situation. For example, in Russia, decision makers are more influenced byWeb sites and Industry magazines; in Europe, they are more influenced by peers and word-of-mouth;and in Latin America, direct sales force are most influential. In many countries, blogs are more influential than they are in the United States.
Companies of all sizes can do the right things. For example, IBM translates its materials into 31different languages. Meanwhile, 50-person [LogMeIn] has 17 million users because they have localized their offering, and even allow online purchase in local currencies. Third party consultants that knowthe local region may be needed to break into new geographies.
Certainly the opportunity is there. Worldwide, there are an estimated 9 million small businesses,and another 630,000 medium size businesses. These SMBs employ 22 percent of the workforce in Russia, 55 percentin Europe, and 80 percent in Japan.To reach them, you may need to explore new channels,such as government agencies, academia, non-government organizations (NGO), and trade associations.The traditional supply chain of vendor, distributor and reseller may need be redefined as a demandnetwork, with co-marketing programs, peer-to-peer relationships and shared knowledge resources.
IBM collaborated with the International Finance Corporation [IFC] tocreate the [SME Toolkit], a resource and online communityfor small and medium enterprises, translated and localized into several languages. IBM also workedwith Chinese government to select Wuxi, China as the location for its Cloud Computing center as partof the [Wuxi Tai Hu New Town Science and Education Industrial Park].
This was a great week! Lot's to digest and think about.
technorati tags: IBM, FITF09, Forrester, Forrester Research, FORR, IT Forum, Lean IT, RIE, Kaizen Blitz, smart computing, ERP, SaaS, Disaster Recovery, BCRS, GTM, NGO, IFC, SME Toolkit, Wuxi China
Continuing my blog coverage of the [Forrester IT Forum 2009 conference
],I will group a bunch of topics related to Cloud Computing into one post. Cloud Computing was a big topichere at the IT Forum, and probably was also in the other two conferences IBM participated in this week inLas Vegas:
The CIOs and IT professionals at this Forrester IT Forum seemed to be IT decision makers with a broader view. There was a lot of interest in Cloud Computing. What is Cloud Computing? Basically, it is renting IT capability on an as-needed basis from a computing service provider. The different levels of cloud computing depends on what the computing service provider actually provides. How do these compare with traditional co-location facilities or your own in-house on-premises computing? Here's my handy-dandy quick-reference guide:
|Cloud Software-as-a-Service [SaaS], Examples: SalesForce and Google Apps.||Yes||Yes||Yes||Yes||No|
|Cloud Platform-as-a-Service [PaaS], such as Google AppEngine, Microsoft Azure, or IBM's own [Computing On Demand].||Yes||Yes||Yes||No||No|
|Cloud Infrastructure-as-a-Service [IaaS], such as Amazon EC2, RackSpace.||Yes||Yes||No||No||No|
|Tradtional Co-Location facility, you park your equipment on rented floorspace, power, cooling and bandwidth.||Yes||No||No||No||No|
|Traditional On-Premises, what most people do today, build or buy your own data center, buy the hardware, write or buy the software, then install and manage it.||No||No||No||No||No|
A main tent session had a moderated Q&A panel of three Forrester Analysts titled "Saving, Making and Risking Cash with Cloud Computing." Here are some key points from this panel:
- Is Cloud Computing just another tool in the IT toolbox, or does it represent a revolution? The panel gave arguments for both. As a set of technology, protocols and standards, it is an evolutionary progression of other standards already in place, and an extension of methods used in co-location and time-share facilities. However,from a business model perspective, Cloud Computing represents a revolutionary trend, eliminating in some cases huge up-front capital expenses and/or long-term outsourcing contracts. PaaS and IaaS offerings can be rented by the hour, for example.
- An example of using Cloud Computing for a one-time batch job: The New York Times decided to build an archive of 11 million articles, but this meant having to convert them all from TIFF to PDF format. The IT person they put in charge of this rented 100 machines on [Amazon Elastic Compute Cloud (EC2)] for 24 hours and was able to convert all 4TB of data for only $240 US dollars.
- Cloud Computing can make it easier for companies to share information with clients, suppliers and business partners, eliminating the need to punch holes through firewalls to provide access.
- Since it is relatively cheap for companies to try out different cloud computing offerings with little or no capital investment, the spaghetti model applies--"throw it on the wall, and see what sticks!"
- What application areas should you consider running in the cloud? Employee self-service portals-Yes, ERP-Mixed, On-time batch jobs-Mixed, Email-Yes, Access Control-No, Web 2.0-Mixed, Testing/QA-Mixed, Back Office Transactions-No, Disaster Recovery-Mixed.
- Different IT roles will see varying benefits and risks with cloud computing. However, by 2011, every new IT project must answer the question "Why not run in the cloud?"
There were a variety of track sessions that explored different aspects of cloud computing:
- Software-as-a-Server: When and Why
This session had three Forrester analysts in a Q&A panel format. SaaS can provide much-needed relief from application support, maintenance and upgrade chores. The choice and depth of offerings is improving from SaaS providers. However, when comparing TCO between SaaS and on-premises deployments, can yield different results for different use cases. For example, a typical SaaS rate of $100 US dollars per user per month, with discounts, could be $1000 per year, or $10,000 over a 10-year period. Compare that to the total 10-year costs of an on-premises deployment, and you have a good ball-park comparison. SaaS can provide faster time-to-value, and you can easily just try-before-you-buy several alternative offerings before making a decision.
The downside to SaaS is that you need to understand their data center, where it is located, and how it is protected for backup and disaster recovery. Some SaaS providers have only a single data center, so it mightbe disruptive if it experiences a regional disaster.
- Cloud IT Services: The Next Big Thing or Just Marketing Vapor?
Economic pressures are forcing companies to explore alternatives, and Cloud IT services are providingadditional options over traditional outsourcing. Only 70-80 percent of companies are satisfied with traditionaloutsourcing, so there is opportunity for Cloud IT services to address those not satisfied. Scalable, consumption-based billing with Web-based accessibility and flexibility is an attractive proposition. Tenyears ago, you could not buy an hour on a mainframe with your credit card, now you can.
Cloud technologies are mature, and there is interest in using these services. About 10 percent of companies are piloting SaaS offerings, 16 percent piloting PaaS offerings, and 13 percent investing in deploying "private clouds" within their data center. This week Aneesh Chopra, who is Barack Obama's pick as the first CTO for the US Federal Government, [stated to congressional leaders]: “The federal government should be exploring greater use of cloud computing where appropriate.”
IBM is betting heavily on their Cloud Computing strategy, has already gone through the reorganizations needed to be positioned well, and claims to have thousands of clients already. HP has some cloud offerings focused on their enterprise customers. Dell is investing and reorganizing for cloud as well.
- Network Strategic Planning for Challenging Times
While not limited to Cloud Computing, companies are seeing WAN traffic doubling every 18 months, but withoutthe corresponding increases in budget to cover it. The Forrester analyst covered WAN optimization management services, hybrid Ethernet-MPLS offerings to help people transition from MPLS VPNs to Carrier-grade Ethernet.
Who should you hire for WAN optimization? Do you trust your own Telco that provides your bandwidth to help you figure out ways to use less of it? Alternatives include System Integrators and Service providers like IBM and EDS.Or, you could try to do it yourself, but this requires capital investment in gear and performance monitoring software.
New workloads like Voice over IP (VoIP) and digital surveillance can help cost-justify upgrading your MPLS VPNs to Carrier-grade Ethernet. The possibility of converging this with iSCSI and/or Fibre Channel (FC) over Ethernet (FCoE) and this can help reduce costs as well. Both MPLS and Ethernet will co-exist for awhile, and hybrid offerings from Telcos will help ease the transition. In the meantime, switching some workloads to Cloud Computing can provide immediate relief to in-house networks now. Converging voice, video, LAN, WAN and SAN traffic may require the IT departments to reorganize how the IT role of "network administrator" is handled.
- Navigating the Myriad New Sourcing Models
The landscape of outsourcing has changed with the introducing of new Cloud Computing offerings. However, adapting these new offerings to internal preferences may prove challenging. The Forrester analyst suggesting being ready to try to influence their companies to adopt Cloud Computing as a new sourcing option.
Traditional outsourcing just manages your existing hardware and software, often referred to as "Your mess for less!" However, outsourcing contract law is mature and many outsource providers are large, well-established providers. In contrast, some SaaS providers are small, and the few that are largemay be fairly new to the outsourcing business. Here are some things to consider:
- Where will the data physically be located? There are government regulations, such as the US Patriot Act, that can influence this decision.Many Canadian and European customers are avoiding providers where datais stored in the United States for this reason.
- What is the service delivery chain? Some cloud providers in turn useother cloud providers. For example a SaaS provider might develop the software and then rent the platform it runs on from a PaaS, which in turn mightbe using offshore or co-location facilities to actually house their equipment.Knowing the service delivery chain may prove important on contractnegotiations. Clarify "cloud" terminology and avoid mixed metaphors.
- What is their contingency plan? What is your contingency plan if the system is slow or inaccessible. What is their plan to protect against data loss during disasters? What if they go out of business? Source Code Escrow has proven impractical in many cases. SLAs should provide for performance, availability and other key metrics. However, service level penalties are not a cure-all for major disruptions, loss of revenues or reputation.
- How will they handle security, compliance and audits? Heavy regulatory requirements may favor dedicated resources to be used.
- Who has "custodianship" of the data? Will you get the data back if you discontinue the contract? If so, what format will it be in, and will it make any sense if you are not running the same application as the cloud provider?
- Will they provide transition assistance? Moving from on-premises to cloud may involve some effort, including re-training of end users.
- Are the resources shared or dedicated? For shared resource environments, is the capacity "fenced off" in any way to prevent having other clients impact your performance or availability.
I am glad to see so much interest in Cloud Computing. To learn more, here is IBM's [Cloud Computing] landing page.
technorati tags: IBM, Las Vegas, FITF09, Forrester, Forrester Research, FORR, IT Forum, Cloud Computing, Manhattan Momentum, Interop, SaaS, PaaS, IaaS, co-location, Amazon EC2, Google, private cloud, SalesForce, Aneesh Chopra, HP, Dell, MPLS, Ethernet, VoIP, Digital Video Surveillance, LAN, WAN, SAN, FCoE, iSCSI
Continuing my blog coverage of the [Forrester IT Forum 2009 conference
], we start with some keynote sessions on Wednesday (Day 2).
A Forrester Analyst drew the analogy of a river to the upcoming onslaught of millennials. Some 100 years ago, smart companies positioned themselves near rivers, the water provided power as well as a means of transporting products. However, today, being positioned near a river doesn't ensure company success, and there are plenty of examples of companies that have existed a long time now filing for bankruptcy.
As we get out of this recession, the war for people will be intense. In the United States, as many as 76 million[Baby Boomers], born between 1946 and 1964, are retiring or approaching retirement, being replaced by 46 million [Gen X], born between 1965 and 1976. By 2010, there will be as many as 31 million [Millenials], born between 1977 and 1998, in the workforce.
To drive the point home, the Forrester analyst cited [Whirlpool] as an example, a company more than 100 years old, with 73,000 employees across 170 countries. Whirlpool manufactures kitchen, laundry and other home appliances. From 1997 to 2002, however, Whirlpool's per-ticket sales were dropping at a rate of 3.4 percent per year. To reverse this trend, they established the Whirlpool Young Professional program, assigned I-mentors, and invested in Web 2.0 collaboration tools. They realized that they needed to harness the Gen X and Millenial energy. The result?From 2002 to 2006, they had a compete turn-around, with per-ticket sales growing 5.9 percent per year.
Since I covered IBM's keynote session yesterday, I thought it would only be fair to cover HP's today.IBM and HP are the top two IT vendors in the world, and not surprisingly also the top two IT storage vendors, and are both platinum sponsors for this event.
- Phil McKinney, VP and CTO of Hewlett-Packard (HP) Personal Systems Group
Phil presented "Enabling Innovation: A Strength In Any Economy", which covered HP's approach to innovationnot just within HP itself, but also to help their customers. He presented an interesting progression forIT. In the first, IT is very technology-centric, focusing on standardizing platforms and automating tasks.In the second, IT is more process-oriented, standardizing and automating business processes measured for reliable IT outcomes. In the third, IT is business-aligned, standardizing and automating services, measured on business results. He argued that the challenge was for companies to transform their IT through this progression to improve business impact.
To help customers, HP focuses on four aspects of an Innovation Management Framework:
- Strategy, Measurement and Metrics
- Systems, Collaboration tools and knowledge management
- Culture, Education and Training
- Ecosystem, business partnerships and customer innovation
He wrapped up his talk reminding us that ideas without execution are just hobbies.
- Tom Peck, Senior VP and CIO, Levi Strauss & Co
Levi Strauss & Co. manufactures denim pants and other clothing apparel, and has been doing so for more than 150 years. Tom made a point to actually wear denim jeans and a sports coat on stage for his talk.His presentation "Dealing with Disruption" was not about disruptive technologies, but rather the disruption the economic downturn has impact the retail industry. To survive through this recession, IT leaders needto be bold about their hiring, reorganizing and rethinking of IT because disruption is everywhere.
IT is not a cost center at Levi Strauss, and represents only 3.5 percent of their total expenses. Instead, they have educated their stakeholders that IT is an investment for competitive advantage. They have focused on simplifying, which is important because their line of pants has grown incredibly complex. When you factor in the different fabrics, colors, styles, sizes, fit and finish, you end up with a large numberof different pants. This complexity came from an effort to provide exactly what every customer thought they needed. He cited a great quote:
“If I had asked people what they wanted, they would have said faster horses.”
--- Henry Ford
This same complexity occurs in IT. To address the changes needed, Tom combined "Lean IT" principles with "Six Sigma" methodologies. Lean IT helped identify problems with the overall flow of processes and provided the tools to remove steps that did not add value. Six Sigma was applied to the remaining steps that did add value, to improve capability and effectiveness.
Companies that have been around for awhile, like IBM, Whirlpool and Levi Strauss & Co., have learned to adapt to the changing business and IT landscape, and adopt new ideas for new ways of doing things.
technorati tags: IBM, FITF09, Forrester, Forrester Research, FORR, IT Forum, Gen X, Millenials, Whirlpool, HP, Hewlett-Packard, Phil McKinney, Levi Strauss, Tom Peck, Henry Ford, Lean IT, Six Sigma