What Is Disruption? A reflection by the team behind the New York Times

 

Disruption is a predictable pattern across many industries in which fledgling companies use new technology to offer cheaper and inferior alternatives to products sold by established players (think Toyota taking on Detroit decades ago). Today, a pack of news startups are hoping to “disrupt” our industry by attacking the strongest incumbent — The New York Times. How does disruption work? Should we be defending our position, or disrupting ourselves? And can’t we just dismiss the BuzzFeeds of the world, with their listicles and cat videos?

Here’s a quick primer on the disruption cycle:

1. Incumbents treat innovation as a series of incre- mental improvements. They focus on improving the quality of their premium products to sustain their current business model.

For The Times, a sustaining innovation might be “Snowfall.” 

2. Disruptors introduce new products that, at first, do not seem like a threat. Their products are cheap- er, with poor quality — to begin with.

For BuzzFeed, a disruptive innovation might be social media distribution. 

3. Over time, disruptors improve their product, usually by adapting a new technology. The flash- point comes when their products become “good enough” for most customers.

They are now poised to grow by taking market share from incumbents. 

 

A CASE STUDY IN DISRUPTION: KODAK

Kodak and its filmbased cameras were the classic incumbents: a traditional, respected company offer- ing a high-quality product to a mass market.

Then came digital cameras. Film companies laughed at the poor shutter speed and fuzzy images of early digital cameras.

The photos weren’t great, but digital cameras better addressed the user’s primary need: to capture and share moments. It was easier and cheaper to take a digital picture, download it onto your computer and email it to many people than it was to buy film, print dozens of high quality photos at a shop and mail copies to friends.

When the inferior and cheaper digital product became “good enough” for customers, it disrupted the incumbent.

Digital cameras seemed poised to own the market. Then came flip phone cameras. They offered even lower quality photos. And digital camera companies mocked their grainy images. But again, users opted for a lesser product that was more convenient. They’d rather have a “good enough” camera in their phone then lug a better but bulky digital camera. When the flip phone camera became “good enough,” it disrupted the incumbent. “

 

A willingness by notably salesforce to disrupt how the IT services are delivered requires a repositioning of the IT department. I have a boarded this perspective in “deliver business value with IT” that you can find @  http://www.amazon.com/dp/B00FOQ6T46

 

Please find the full report from the New york Times @: https://app.box.com/s/618qztt4g1fupw7p9s9n

 

 

An updated version of “Deliver Business Value with IT” is now available on Amazon

@  www.amazon.com/dp/B00FOQ6T46

What the reviewers said: “The focus that Martin takes in the “Deliver Business Value with IT” series will help in tackling the seven main non-technical challenges any CIO or other senior IT business leaders will face:

1. How and what should I communicate to whom in what way?

2. What to think of when it comes to competences needed to provide my IT services?

3. How to provide the best value at the best cost?

4. What to think of when ensuring efficient and effective delivery of projects?

5. How to establish a sourcing strategy and determining how to manage your vendors?

6. What are the best practices for managing my operations, and what to think of?

7. How can I best scan for and analyse emerging technologies?

The approach taken utilizing basic business management principles and applying them to how to run an IT department are explained clearly, and takes this publication above and beyond the standard publication proclaiming to ‘run IT as a business’. The 2 key trends identified in the publication for the CIO to focus on of “Differentiation” and “Cost” are a perfect example of this.

Further to this the focus and examples of non-technical KPIs used, provides a good framework for the CIO to communicate the state of how services are provided and how the company is maximizing its value of their IT assets.”

(Alex van der Kruit, is a senior IT executive with extensive experience in building and leading service organisations, and directing change management initiatives for leading global corporations. He has held positions such as Service Delivery Director at CSC, General Manager IT at Swedish Match, and is currently Business Systems Manager at Toyota Material Handling Europe)

@  www.amazon.com/dp/B00FOQ6T46

Do you want to stay on top of your IT and Digital and Mobile strategy and deliver to the needs of the business?

I thought that you would find this of interest and in particular how security, IT, Infrastructure, Mobile and “Digital” multi channel web services (FB, you name it…) demand management is addressed orchestrated and provisioned effectively (we most likely could have prevented the security default mess @ Target). Bottom line we ensure that applications and the network are up an running and secure.

 

Do let me know could you accord me 30 min to rapidly take you through the logics @ martin.palmgren@deliverbusinessvaluewithit.com

 

Cheers Martin

 

I have over the last 15 years worked with a COO / CIO audience on how to “deliver business value with IT” and I thought that you would find it of interest to see how you can pull the IT delivery model together and keep mission critical applications and the network up and running to “keep the business in business” and deliver end-to-end.

We do this as we Discover, Model, Manage the Availability, Performance and Security of Business Critical applications and the network and ensure that Business Services are delivered end-to-end (Monitor, Orchestrate and Provision).

 

Network (IT, Web and Business) services are spelled out with SLA’s, OLA’s, chargeback / show back. If you have a large number of networks and multiple network providers you need to understand the application layer, if services invoiced from outsourced providers are delivered and at cost, impact of outages, how to fix them, penalize outsourced providers and pinpoint where the problem is.
We provide 100% instant discovery rate of the network and 80% of applications outsourced providers, cloud included the import of visio (Aris, Mega) diagrams is used to map and discover homebuilt applications (the 20 % that might not have been auto discovered), this would include applications that sit on a mainframe as access is given.
Once the information collected we build and host a world class CMDB.As the technical service catalogue is consolidated ( this includes thatIT infrastructure demand management is addressed effectively, this recent article from McKinsey and Company https://app.box.com/s/vfrwb2njz342h88vog5x spells out the logics that can be delivered “out of the box”) we can orchestrate business and IT services (business & IT service catalogue) with IAM and self service store fronts.

 

Web services such as Facebook, Priceline, Expedia, Travelocity (you name it) can be provisioned and orchestrated as access is given as the the platform is designed with a SOA compliant massively scalable Enterprise Service Bus (web services) at its core. We can move data to/from any system to any system. FB can be used as point of contact, first level help desk with end – to – end integration of the work flow behind.

A Big (picture) data application approach would ensure network and application security but is not limited to IT:

“Data analysis and aggregation increase efficiency and improve safety. Oil and gas companies are faced with collecting, storing and analyzing massive amounts of information associated with well site and pipeline transport data, carbon accounting data and safety management demands needed to reduce or eliminate the potential for catastrophic failures. Oil and gas companies must aggregate and analyze vast amounts of data both real time and offline to acquire the information they need to operate safely and efficiently. We provides a Big Data aggregation capability with massive scalability for pulling together disparate data from real-time and offline sources. It enables real-time processing of data for normalization and an analysis engine for doing real-time inline data analysis for detection of anomalies and patterns of interest to safety and performance. Capable of processing 500,000 events per second, the data analysis engine is unmatched in scalability and performance.”

Clients: US Army, US Marines, and US Federal Aviation Administration, Verizon, AT & T, Direct TV, Starz, Bloombergs, Global Payments.

Bottom line: we deploy “business technology” with end-to-end process delivery and captured in a business service catalogue (and follow up on delivery (SLA’s, OLA’s) as well as Total Cost of Ownership (TCO) with Cost, Consumption, Show back / Chargeback as needed) supported by IT services provisioned in an IT service and technical catalogue (SLA,s, OLA’s + TCO) as well as the possibility to follow up on the delivery of outsourced providers (SLA,s, OLA’s + TCO) to ensure that services are delivered and at set cost and that the IT Business Model supports the Business (IT) Value Proposition.

From a business perspective this permit service provisioning and orchestration where we set up self service store fronts (internal / external (ecommerce)) that can be accesses in a browser / app format, with full range Identity Access Management that fully leverages internal and external cloud initiatives, that is regardless of where the data / applications sit.

 

Where is the beef? As a part of my thought leadership effort where I help an international COO / CIO audience to “Deliver Business Value with IT” (the “value proposition” often implies to think outside the Gartner quadrant and look @ industrial highly scalable “swiss army knife” IT tools that does not fit in to a neat little box), I would like to invite you to discover a slide set on how to stay on top of your IT and Digital and Mobile strategy and deliver to the needs of the business.

Step 1: “We keep the business in business” and demonstrate that we do so as we keep applications and the network up an running, that is we ensure service delivery (Network Management, Service Management, Provisioning to support business needs and big data analysis), we “pull the IT stack together” as we Consolidate the Technical Service Catalogue and build an effective CMDB.In business terms this translates in to the ability to in 10 minutes time-to-set-up and visualize an “As Is” of services (applications, how they interrelate and that they run correctly), network and security performance in real time with actionable reporting (Orchestration and provisioning: Discover, Model, Manage: Availability, Performance, Security). It also means that we address bottlenecks as they appear rather that when users complain and the ability to follow up on outsourced contracts (SLA’s, OLA’s, pinpoint breaches).Performance dashboards are available in real time with the possibility to drill down and we are able to in a couple of minutes pull together the critical services, network and security report.

Step 2: We ensure that business services are delivered end-to-end (We pull the ERP landscape together and stay on top of the IT and Digital and Mobile strategy and deliver to the needs of the business as platforms, dashboards, internal and external self service storefronts, AIMs are available in a browser or an app format as needed), that is we Consolidate the Business Service Catalogue.

Step 3: We build an effective IT Delivery Model to meet Business Needs (build an effective relationship with your stakeholders as you understand their expectations and build a clear IT Business Model and Value Proposition).

What is in it for me? Bottom line: we consolidate the “IT Business Model” (security, architecture, delivery capability, IT Strategy delivery articulated in services) bottom up with a tool set that gives you the opportunity to deliver IT services end-to-end where mission critical network services are kept up an running and IT and network, service provisioning and service orchestration performance “Big Data” (an overview) is available in a dash board at the tip of your fingers and permit you to pilot and follow up on, delivery and consumption of services in real time.

We do this with end-to-end delivery through scalable and secure network management (Discovery, Planning, Configuration, Reporting), service management, self service provisioning, service orchestration, internal and client facing self service store fronts (IAM) that support handheld and BYOD that helps you get the job done regardless of where data and applications “sit” to fully leverage internal / external cloud efforts that you should find of interest (product oriented).

Investors want more information on corporate governance

A recent article from PwC @ http://www.pwc.com/gx/en/audit-services/corporate-reporting/publications/world-watch/articles/investors-want-more-information-on-governance.jhtml  spells out that “Investors want more information on corporate governance” further “Many said that overall, the information they got was adequate, but some were concerned that typical measures of good corporate governance resulted in a “tick the box” mentality”. From my experience this is also true on the IT side where both the board and investors need to understand how the IT Business Model and Value proposition support the needs of the business and that IT risk is managed.

How to survive – Outsourcing Australian IT and Finance Jobs

Answer to Ron C. question @ How to survive – Outsourcing Australian IT and Finance Jobs

 Business System Improvement Manager at The Mayo Group, Sydney (part time)

Over the past few years I have seen many traditional support service leadership roles become out sourced to foreign companies or hybrid (Local / Foreign) companies.

If cost is perceived to be one of the key elements of a business being competative in a an environment of slow economic growth how do Finance and IT professionals provide value back to the business and therefore be seen as an essential part of business growth rather than a cost centre?

Answer: Hi Ron, I assume that this is a question. In some (extreme) cases the executive management have the impression to throw money out of the window or in to the chimney and most of the time with little or no perceived result. The reaction is then to (and this is often encouraged by some of the large consulting groups that run outsourced service centers) to get rid of the problem to have a minimum level of at least established SLA’s, OLA’s and a “burn rate” ceiling.

If we look at some of the large outsourcing deals such as Siemens IT cost was spiraling out of hand. That is the “burn rate” had become unacceptable.From a business perspective it all boils down to a make or buy decision that is this a strategic capability in which case we can accept a somewhat higher cost, do we do this well, is the cost acceptable or at least defendable, do we get value to cost, if no let someone else do it that is buy.

This is also a logic that the CIO office will need to adapt.

Step 1) If cost is a major argument you need to understand the current cost of the IT services that you deliver as IT department. You also need to set SLA’s, and OLA’s for current services and demonstrate that you meet set objectives.

Step 2) Get your IT business model and value proposition right. Understand what the business expect (In some case the best thing to do would be to bring in a business executive. SAAB Defence have done this with excellent result). Understand how to build a delivery model that would meet these expectations. “Deliver Business Value with IT” ( that you can find @ Smashwords  https://www.smashwords.com/books/view/290604 @ Amazon http://www.amazon.com/dp/B00FOQ6T46) will give you the opportunity to ask the right question and to start to build a dialogue with the business and start to deliver to their expectations.).

Step 3) Most IT and business projects that fail do so due to the lack of formalised processes. Process Industrialisation tools (I currently work with a client where we investigate the opportunity to use sales force platform) to rapidly spell out the process, industrialise the work flow, have the client validate the result by the end of the day and have it up and running the day after where the process is tied together end to end the tool drives the process pulls and push data in to the underlying systems and validation are done via email in the platform and operated on any device (and that would of course include mobile).

That is as your innovation, marketing,  HR, Finance, IT department or the business line needs to set up a project you can provide them with the necessary access to information within the different systems within hours or days rather than months or years at a reasonable cost with a cost as you consume business model.

This should give you a head start in the right direction cheers martin

COMMENTS:

How to survive – Outsourcing Australian IT and Finance Jobs
I do agree with Martin. Very often, senior executives focus on the x% of revenue that they see in their budget spend line for “IT” or “Data Processing” as they perceive the cost being out of balance with the value they get in return. First, it is essential to make the big spending number more transparent, to show what the budget is spent for (Run, Build, Infrastructure, Busines Systems, etc). Slice it in a way that makes sense to the senior leadership team. No senior team member, including yourself will be happy if they find that 80%+ of the cost is just spent to maintain what is already there… A look at the global mix of resources and associated cost might be in order. To “run” IT, the CEO expectation will always be “cheaper, faster, and more scalable”. It has become increasingly difficult to compete against outsourced models for certain areas of “run” IT. The mere scalability of third parties which lowers their cost is a tough match for “internal” IT. Regardless how, if you can scale on that “run” side of the IT spend, you will stand a much better chance to improve the justification and business case for the “build” side of IT. Still it is crucial to understand the key areas where IT can really make a difference, and help the senior leadership team (and ultimately the entire company) to be more successful with their key value driving strategies.
By Armin Osterholzer
How to survive – Outsourcing Australian IT and Finance Jobs
Thanks for your feedback,I agree with Martin’s moment.
“Most IT and business projects that fail do so due to the lack of formalised processes.”
Additionally, they need business buy in and commitment which all part of the change process. Without the buy in and commitment they will also fail.

All of my successful projects come from formalised processes and business buy in.
(primarily based on PMBOK and ITIL)

To some extent, Business applications and IT are becoming a commodity you can pick up from a shopping trolley. For example, Sales force and Xero.

So where is the Value to the business? The Role of CIO and Architects appears to be shifting from servers and infrastructure to Innovation, business improvement and partnership. The business can still own the applications and improvements however we can facilitate the change through providing experience, formalised processes and overall business knowledge.
If the business believe they own the outcomes, they will be accountable and will work hard to ensure the success of the project. In some cases my role in the process is to act as the Traffic Cop. This ensures everyone gets can where they need to go without crashing into one another.

By Ron C. Le Mesurier MBA, Prince2 & ITIL
How to survive – Outsourcing Australian IT and Finance Jobs
Outsourcing is the hidden cost

Another observation I have seen with Outsourcing is the hidden cost. When the technology functions are outsourced the business units have more say on plug and play options. They tend to go off and get off the shelf applications to meet specific business needs. And yes, it does meet their needs but how does the solution interact with other business functions. In some cases a stand alone system can add additional costs and risks by creating silos of applications and information. In other cases it can create more work down the chain. The business units may not have the experience and training to correctly assess the overall impact on the business as well understanding the technical aspects such as DR, Scalability, security, integration and sustainability. Once the application is implemented a business resource takes over the support of the application where in the past this was managed by application support specialists who were an IT/Finance cost and shared their time over multiple applications. When the business units start supporting the silos of applications there is a hidden opportunity cost as those resources are spending less time with their core function. So how can you measure the real costs and benefits when they are capital and operational costs are hidden in the business functions. For example, are these costs a cost of sales or an overhead expense.

As an IT and business improvement professional I believe it is essential to capture and measure all benefits and costs as well as the impact on the overall business. Also it is important to prioritise all initiatives as they can be a disruptive influence on all departments and distract the business units from their key objectives.

By Ron C. Le Mesurier MBA, Prince2 & ITIL


Are salesforce putting innovation back in to IT?

The upper part of the clients that I speak to feel that there is a lack of actionable articles and publications that help to bridge the gap between the execution of the business strategy, business objectives and how IT can be used to support the latter to deliver business value. This is also the reason why I decided to put forward an execution centric material that has for objective to if not entirely bridge the gap between IT and the business provide Business and IT Decision makers the necessary common language to move forward in the same direction (pointing fingers is rarely productive).

Please find: (IT) Innovation Unleashed: Deliver Business Value with IT! – Design, Build and Run Effective IT Strategy execution to business needs

http://www.amazon.com/IT-Innovation-Unleashed-Effective-execution-ebook/dp/B00GJVDMZO/

(multi reader format @ Smashwords https://www.smashwords.com/books/view/375887 ) (PDF format @ Flevy  )

(IT) Innovation Unleashed will demonstrate how to cover both the “IT Business Model” that is how well do we provide IT services as well as the “Business (IT) Value Proposition” that is how well do we support the needs of the business. I will also make an exception and point towards technological solutions that will enable the CIO, IT Department to get on top of things and to meet the needs of the business, now! Recent business and IT undustrialisation solutions have demonstrate the capability to provide the lever to “pull” the Business and IT landscape together and in particular salesforce platform that industiralise business and IT processes and for the sales and marketing team included.

The execution of the defined business strategy is often a mystery (missing link) both on the Business and the IT side. The truth is that regardless of how well the executive team draws out the strategy in the boardroom the bottom line is that the business initiatives that were supported by clients succeeds, those not supported by clients (that do not get it) fail and disappear.

The CIO and IT department hence needs to support the run of the current business activities as well as new emerging initiatives that will eventually form the business strategy. The cloud (internal or external) would be particularly well placed to develop new services that can then be institutionalised as the success of the initiative is confirmed.

The CIO and IT Department that sit around and wait for the Business Strategy to be formalised to build an IT strategy and vision might not make the 18 months magic mark. The IT Bottom line is that the IT Strategy should support business objectives, with new technology as needed as the IT department delivers effective IT Services and innovative technology solutions to improve competitiveness, demonstrated and articulated.

In order for the CIO and the IT Department to position as premium provider of IT services and focus on value to cost we need to understand the Business (IT) Strategy and how the IT department can deliver effectively to business objectives, that is to deliver business value with IT:

-       What is the Business’s strategy and plans?

-       What is the current business model that IT has to support?

-       Where could IT make a significant impact on the business?

-       Are there any further opportunities to use IT?

-       How can we leverage IT in a “Time to Market”, “Cost Effectiveness”, “Cycle Time” perspective?

 

Please find more articles @  http://deliverbusinessvaluewithit.com/