Embed Size (px)
Citation preview
Technology-led Business
Transformation: Myth or Reality
A presentation by Adedoyin Odunfa. (CEO, Digital Jewels)
At the occasion of the Q3 2013 InformationValueChainBreakfast Forum, hosted by Digital Jewels Ltd
Outline
• The Role Technology Plays
• Business-IT Alignment
• Learning from others
• Critical Success Factors
• Pitfalls to avoid
The Role Technology Plays in Business?
• Creates competitive advantage by enabling/facilitating business:
– Accelerating transaction processing
– improving communications,
– managing data more efficiently
– changing expectations of customer service.
• In the Stock Market:
• Reduces information asymmetry thus making markets more efficient;
• Provides easier access to markets and products, both domestically and internationally;
• Enables more effective analysis and monitoring of risk;
• Allows more accurate pricing and redistribution of risk;
What is Competitive Advantage?
• A favourable position a firm occupies against its competitors.
• Broad strategies:
Cost leadership
• Supplier sourcing advantages
• Operational efficiency -Something is done faster/cheaper than others
Differentiation
• 1st mover advantage - something done for the 1st time
• Something done differently from/better than others (from the customers view)
• Customer Intimacy; Staff Productivity, Management effectiveness
Reduce costIncrease Revenue
Transformation is a process, not a project!
Automate
• Deployment of IT to improve task efficiency of ops
• Achieve function specific goal (localised) without necessarily influencing related areas of operation
Information & Integration
• Organisational integration of different roles & responsibilities that exploit the technical integration capabilities.
• Common IT platform serves to integrate business processes, potentially enhancing efficiency & effectiveness
Transformation
• Reconfiguration of scope & tasks of the business network involved in the creation & delivery of products & services.
• Redesign of “virtual business network” through IT capabilities.
• Electronic integration across key partners in the changed business network
• Possibilities of enlarging the business mission & scope (through related products & services) & shifting the business scope (through substitution of traditional capabilities with IT –enabled skills).
Theme Potential Impacts Major Objectives Operational Requirements/
Management Implications
1a.
Automation
(localised)
Potentially high savings in narrow areas of business.
Reduced costs and/or increased service e.g. Payroll app
Good understanding of technology & business need; change management
Identify firm-specific areas for exploitation
Articulate the logic for integration1b. Automation
(Integrated)
Efficiency & Effectiveness
Elevate IT as a strategic resource e.g. ERP/ HRIS
2. Information Powerful in creating differential capabilities in the market place
Re-engineer the business with Information as a central lever. E.g. CRM
Deeper understanding of business need, innovation, organisationalintegration and end game (outcome)
Strategy-IT alignment
3. Transform Op. efficiency
Market positioning
Altering bus. scope proactively & reactively
Create a virtual organisation & occupy a central position in the network
Identify new business as well as potential threats e.g. Internet only bank, full service multi-channel core application system
IT as business partner, benefits realisation process.
Board & Executive Management involvement. Full business/IT alignment. Articulate the logic of network redesign for the local firm
Identification of new scope of bus.
What can create a competitive advantage?
• Clear strategic intent implemented through:
– An understanding of the Value Chain – still evolving!
– Streamlined processes – simplify before automating
– Effective Business-IT Alignment – a moving target..
– Skilled, resourceful and empowered staff - in short supply
– A fully functional transactional processing system - enables efficiency – limited local traction in sector
– Dynamic functional e-delivery channels – enables efficiency/customer-centricity – yet to be explored
– Superior information to support decision making – just developing
Business-IT Alignment: a moving target?
Where is Your Organisation’s Centre of Gravity
Dynamic
Products
Stable
Dynamic Processes Stable © Gartner
Perception or Reality?
Dynamic
Products
Stable
Dynamic Processes Stable © Gartner
Where Is Your IT Dept’s Centre Of Gravity?
Dynamic
Products
Stable
Dynamic Processes Stable © Gartner
Dynamic
Products
Stable
Dynamic Processes Stable © Gartner
Each Strategy Has Distinctive Information Needs
What is
possible?
How well?
What is
needed?
How much?
What Role does IT play?
13
Role in Business Strategy
Role: Custodian Role: Agent
Role: Provider Role: Partner
Support
Factory Strategic
Turnaround
• Operational / back room• Low expectations
• Key to business change• Project delivery essential
• Integrated with business• Essential, high impact
• Zero defect IT• Essential to business day
to day operations
Op
era
tio
nal
Imp
act
Source: Gartner
LEARNING FROM OTHERS
Success Stories
LSE Case HighlightsBusiness-focused
justification
Problem/opportunity statement in business
terms
Specific & Measurable indices
www.nasdaq
• The Nasdaq web-site, www.nasdaq.com is heavily used as a source of information. Averaging 7 million page views per day, nasdaq.com is one of the most heavily trafficked investor sites in the world, offering high quality information to potential investors and existing shareholders. The site profiles Nasdaq’s listed companies by providing key information, e.g. historical charts showing relative share performance, reports on companies and consensus analysts’ recommendations of whether to buy or to sell.
FAILURES
The Taurus project of LSE: a mixed bag?
Background
ChallengeReduce the trade settlement process of three to six weeks to match the leading exchanges (US: 3-5 days; Japan : 2days) by eliminating its inefficient & inflexible paper-based system.
Promise• TAURUS (Transfer and Automated
Registration of Uncertificated Stock). Designed to ease its back office functioning through paperless trading & computerized shareholdings.
Purpose• To make the entire process cost
efficient and time saving along with removing the need for face to face meetings.
The Taurus project of LSE: a mixed bag?
• The promise included:– the elimination of masses of paper work & hundreds of jobs, saving millions of
pounds;
– reduced costs for the share registrars (who maintain a list of holders of a company’s shares), the institutions & brokers for future account controllers of share transactions.
– total dematerialization would mean that share ownership would be stored electronically and investors would not receive share certificates.
– TAURUS would be linked to some 280 financial institutions: stakeholders from registrars, brokers, market-makers, custodians to large investors.
– Reduced time taken to complete the legal and financial arrangements for the payment of shares being traded.
• 1st phase of TAURUS, known as INS (Institutional Net Settlement), was regarded as a success.
The Taurus project of LSE: a mixed bag?
Next Phase: A horde of challenges - people, process & technology!
• LSE tried to modify the application by rewriting almost 60% of it to accommodate other processes. This resulted in the software becoming ridden by hidden bugs and long delays. The costs of adapting the global custody system package, which should have cost only £1m, rocketed into the total unfinished bill of about £14m.
• The system was designed to do “all things to all men”. Originally intended as a settlement only system, it grew until it had become a full “share registration and transfer system”. Specifications were driven by a number of forces, including complex legislation and changing needs of investors.
• Poor stakeholder management: The smooth running of the market depends upon gaining a balance between the interests of the powerful and influential institutions that make up the market. It is impossible to propose a solution that ignored the interests of any significant part of that community, and LSE found it the hard way with the rejection of its original proposal of TAURUS.
…The Taurus project of LSE: a mixed bag?Next Phase: A horde of challenges - people, process & technology
• Outsourcing of this project to two rival management consultancies, with one running the Exchange’s day-to-day computer operations and the other’s staff trying to run TAURUS also contributed to it’s failure. Since total responsibility was shifted outside the LSE, no one from the Exchange’s technical staff was around to offer objective opinions or monitor the project otherwise.
• Milestones were rarely hit but most identified project risks played out.
• Various committees formed failed to realize the full scope of the project. Communication between parties was poor, and there was no control linked to a project-wide process of evaluation. In addition, accountability was often unclear.
• The project was scrapped in 1993 at a cost of £800m to the City of London.
• The lessons learnt helped in the successful implementation of CREST, which went “live” in 1996 to serve the need of a computerized system at LSE.
Other failures…
• Nasdaq Tech Problems Tied to Market Structure’s ‘Single Point of Failure’. August 22, 2013 – The technological problem brought the Nasdaq Stock Market to a
standstill in August 2013 is thought to be related to the structure of the U.S. market itself. Nasdaq trading was halted at 12:15 p.m. because of an apparent problem with Nasdaq’s Securities Industry Processor, or SIP, which aggregates pre-and- post trading information on Nasdaq-listed securities.
– The failure of the Nasdaq SIP may be unprecedented. The structure of the market might have been a vulnerability in itself. Market crashes have been more a problem in the U.S. than in Europe.
Where is all this headed? Too Fast to Fail?
• Complexity at the speed of light– Despite efforts at reform after the collapse of Lehman Brothers , today's markets are
wilder, less transparent, and, most importantly, faster than ever before.
– Stock exchanges can now execute trades in less than a half a millionth of a second—more than a million times faster than the human mind can make a decision.
– Financial firms deploy sophisticated algorithms to battle for fractions of a cent in high-frequency trading.
• Rollercoaster trading– This rapid churn has reduced the average holding period of a stock: Half a century ago it
was eight years; today it is around five days.
– Computer programs send and cancel orders tirelessly in a never-ending campaign to deceive and outrace each other, or sometimes just to slow each other down. They might also flood the market with bogus trade orders to throw off competitors, or stealthily liquidate a large stock position in a manner that doesn't provoke a price swing.
– It's a world where investing—often comes down to how fast you can purchase or offload it, not how much the company is actually worth.
Critical Success Factors:
IT led Business Transformation
• Articulate the challenge & Justify the value in business terms
• Simplify the business processes
• Ensure effective stakeholder engagement & management
• Plan effectively, execute painstainkingly, monitor constantly
• Fight for a strong sponsor
• Manage the change
• Keep focused:
– Don’t be all things to all people.
– Have a sense of urgency predicated on clear measureable milestones & a realistic timeline
• Identify &manage risks effectively,
• PPP’s have a place
• Get the skills you need
• Measure to manage: Develop & use clear measurement indices
• Have a realistic budget
The Balancing Act
• "Thanks to technology, our securities markets are more efficient and accessible than ever before," then-SEC chair Mary Schapiro said at an October market technology roundtable. "But we also know that technology has pitfalls. And when it doesn't work quite right, the consequences can be severe….“
• Balance the goals of promoting the benefits of electronic media, with the need to protect investors and the integrity of the markets from fraud and abuse.
Thank You
for your time & attention
1st 1SO27001 & PCIDSS QSA Professional Services Firm in Africa •PCIDSS: 3 engagements
•ISO27001 Certification: 5 Certification Engagements; 3 Surveillance Engagements•ISO20000: 1 engagement•COBIT: 9 engagements
Demonstrable capability to support you…
30
BS 25999Lead Implementer
BS 25999Internal Auditor
About Digital Jewels:Secure.Assure,Enable.Empower.Manage
Secure
• Information Security
Assure
• Information
Assurance
Enable
• E-business
Empower
• Capacity Building
Manage
• Project Management
Our InformationValueChainBreakfast Forums
Month (2012)
Topic Guest Speaker(s)
Dec. Project Management, Then What? Deji West. President, PMI Lagos
Sept. Special 50th IVC Session & ISMS Award
Ceremony
Mr. Charles Molapisi, CIO MTNMrs. Tokumboh MartinsDirector, CBN
Aug Cashless Lagos: A Critical Update Report Mrs. Christable OnyejekweED, NIBSS Plc
July Learning in the midst of Chaos Shehu GarbaHead, Learning. Shell.
Quarter(2013)
Topic Guest Speaker(s)
2 ISO20000: How we did it & what it
means to the Industry
Rasheed Adegoke. Former CIO, First Bank Plc
1 PCIDSS: How we did it & What it means
to the Industry
Ade Shonubi. MD/CEO. NIBSS Ltd.
Our InformationValueChainBreakfast Forums
Month (2012)
Topic Guest Speaker(s)
June Achieving Excellence in IT Service Management Probal Choudhuri, CEO, Coral eSecure Private Limited, India.
May Customer-centric Technology: GT Bank as a Case Study
Mr. Dare AdeyeriCIO GT Bank Plc
April Technology as a Value Driver in the FMCG Sector Mr. Saidu Abdullahi.Head IT, West AfricaCadbury Plc
March NOTAP: Enabling or Hindering National Technological Development
Dr. Umar BindrDG, NOTAP
Feb. Enabling Internet Ubiquity in Nigeria: Our vision, accomplishments and challenges
Ms Funke OpekeMD/CEO Main One Cable
Our InformationValueChainBreakfast Forums
Month (2011)
Topic Guest Speaker(s)
Dec. Transformation in the Aviation Sector: The NAMA Case Study
Mr. Ifeanyi Ogochukwu.CIO, Nigerian Airspace Management Authority (NAMA),
Oct. ISO27001 Certification: The Fidelity Bank Case Study
Mr. Ik. MbagwuED, Fidelity Bank Plc
Sept The IT Industry in Nigeria: The need to move to a self-reliant model
Mr. John AyohDirector IT, Central Bank of Nigeria
Aug. Making the “IT Business Operating Model”Decision
Mr. John MurrayCIO, Etisalat Nigeria
Our InformationValueChainBreakfast Forums
Month (2011)
Topic Guest Speaker(s)
July Implementing Global Best Practice-Standards for a Quantum Leap in the Performance of IT Organisations in Nigeria".
Dr. Evans WoheremEx-ED IT & Operations Unity Bank
June Redefining Healthcare Management through Technology
Mrs Fola LaoyeGMD/CEO Hygeia Group
May The Changing Face of the Oil & Gas Industry & Implications on Professionals, Institutions & Governments
Mr. Ademola Adeyemi-BeroMD/CEO, BG Exploration and Production, Nigeria
April NIMS: e-payment catalyst or encumbrance? Mr. Chris Onyemenam, DG/CEO. National Identity Management Commission.
March. The Central Switch: e-payment enabler or inhibitor?
Mr. Paul Lawal.MD/CEO NIBSS Plc
Feb. PCIDSS: A pragmatic implementation Roadmap
Mr. Stellios Tikas,Snr Consultant, FortConsult, Denmark
Our InformationValueChainBreakfast Forums
Month (2010)
Topic Guest Speaker(s)
Dec. Balancing Effective IT Service Delivery Controls & Governance
Mr. Pattison Boleigha. Head, Group Compliance and Internal Control, Access Bank Plc
Nov. IT Governance: A Business Growth Imperative
Mr. Peter Hill. Director, IT Governance Network. South Africa
Oct. Performance Management Strategies for Techies
Dr. Mrs. Lucy NewmanMD/CEO, FITC.
Sept. Redefining Insurance through Technology
Mr. Tunde Hassan-OdukaleED, Investment & Systems. Leadway Assurance
Aug E-learning: old wine in new skins? Dr. Mrs. Adesua AtandaHead, Learning. Nigeria LNG
Our InformationValueChainBreakfast Forums
Month (2010)
Topic Guest Speaker(s)
July ICT as a tool for transformation: Edo State as a Case Study.
Mrs Yemi KeriExec. Dir. ICT. Edo State Government
June Failsafe Strategies for Business Success
Mrs Ibukun AwosikaMD/CEO Sokoa Chair Centre.
May Risk Management as a Strategic Imperative
Mr. Tayo KoleoshoChief Risk Officer, InterSwitch
April Building, Growing & Transforming Businesses
Mr. Demola AladekomoMD, Chams Group
March Building a multi-billion dollar business Mr. Tonye Cole. Founding Director, Sahara Energy.
Feb. Unleashing brand power on your e-delivery channels
Mrs Lola Odedina, Group Head, Communication & External Affairs. Guaranty Trust Bank Plc
Our InformationValueChainBreakfast Forums
Month (2009)
Topic Guest Speaker(s)
Dec. Intriguing perspectives in Project Management
Mr. Anthony Youdeowei, GM Projects Sahara Group, Mr. Deji Ismael, President PMI Lagos Chapter Mrs Alfie Makinde , Project Manager, Transcorp
Nov. The evolution of e-business in Africa Mr. Valentine ObiMD/CEO etranzact
Oct Building Capacity to Combat Crises & Foster Growth
Mr. Jide Sanwo-OluLagos State Hon. Commission for Training,Establishment & Pensions.
Sept Changing Life in the Digital Domain Mr. Emmanuel OnyejeCountry Manager, Microsoft. Anglophone West & Central Africa.
Aug E-payments in Nigeria: The Road Ahead
Mr. Bukar KyariMD/CEO, ValueCard Nig Plc
July IT as an engine of engine of global expansion for African organisations
Tunde CokerGroup CIO, Access Bank Plc
Our InformationValueChainBreakfast Forums
Month (2009) Topic Guest Speaker(s)
June E-payments in Nigeria: Reality or Myth Mr. Gerald IlukweMD, Galaxy Backbone Plc
May Assuring Business Continuity in Uncertainty: Benefitting from the BS25999 standard
Lee AllisonBritish Standards Institute, UAE
April Legal Risks in the Technology Environment
Basil UdotaiManaging Partner, Technology Advisors
March Insight into Successful Strategies: The Rise & Rise of Computer Warehouse Group
Mr. Austin OkereMD/CEO, GWG
Feb IT Performance Mgt: High Impact Productivity & Retention Strategies
Mr. Yila YusufCIO O&O Plc
Our InformationValueChainBreakfast Forums
Month (2008) Topic Guest Speaker(s)
December Demystifying IT Governance Mr. David IsiavweChief Inspector, UBA Plc
November Strategic Issues in InformationTechnology
Mr. Chuks Onoha,GCIO, NNPC
October Achieving a Culture of Service Excellence
Titi Awogboro, Head, IT Gov. Etisalat
September Project Management Health Check Mr. Anders Pedersen,Director, Virak. Switzerland
Our InformationValueChainBreakfast Forums
Month (2008) Topic Guest Speaker(s)
August Leapfrog Productivity Enhancements • Mr. Lanre OnasanyaLead Consultant McGhee Productivity Solutions
July E-business in Nigeria: Where are we headed
• Mr. Mitchell ElegbeMD, InterSwitch Nigeria
June Technology Cost Savings Strategies • Mr. Mike SiscoMD, MDE Enterprises, US
May ISO27001: Understanding this Global Standard & why your company needs it
• Mr. Eric LaChapelle,CEO, Veridion, Canadaa
April Project Management Best PractiseJuxtaposing PRINCE2 & PMBoK
• Mr. Steven Sloan,Director, Virak. Switzerland• Mr. Bosun Isreal-BolarinwaPM Consultant
March Recruiting, Training & Retaining Technical Specialists
• Mr. Kunle OdebodeEx-CIO Zain (CELTEL)IT Director, Etisalat
Thank You
for your time & attention
