A New Approach to the CIO role by Redefining the IT Department’s Contribution to the Bottom Line

HUAWEI TECHNOLOGIES CO., LTD.

Reinvent Yourself

“Formulating a new

approach to the CIO role by

redefining the IT

Department’s contribution to

the bottom line”

Barry Lerner

CIO, Huawei Technologies

2 Copyright©2014 Huawei Technologies Co., Ltd.

What will the future hold for the CIO & IT Department?

Digitization and the value of IT to the Business

The future Role of CIOs and impact to the IT Organization

Core Focus Areas for CIOs and IT Departments


We are in an

Retailers From Fixed Storefronts to Online

Health Personalized Remote Monitoring

Education Open Online Learning (MOOCs)

Banking Mobile Online Banking, PayPal

Home Surveillance

Sensor Cities

Smart Meters

Friendships are Changing

Proliferation of Smart Devices

Everyone is IT Literate


We’re all talking about …..

Creating Social Networks with our Customers, Partners & Employees

The Social Enterprise

Retaining Customers & Increasing Wallet Share - Big Data, SQM / QoE

Customer Experience Mobility

Consumerization of IT / BYOD B2B and B2C Collaboration IoT / M2M

The Cloud Based Enterprise Agile Connected Efficient Cost Effective


….. and all Enterprise will be


Customer

Perception

Customer

Satisfaction

Customer

Loyalty

Customer

Profitability

Customer

Acquire

Customer

Fulfill

Service

Usage

Customer

Support

Customer

Optimize

Service

Design

Customer Touch Points

Delight and Serve your Customer Server our Customers


How does having a happy customer

effect the profitability of your business?

Longer the relationship lower the cost

Decline over the life of the relationship

Less inclined to switch, less price sensitive

More likely to buy high margin products

Happy Customers spread the word

Satisfied Customer less likely to switch

Regular customers familiar with services & processes

Cost of Acquisition

Account Maintenanc

e Costs

Stable Sales Volumes

Increase Sales

Revenue

New Customer

Acquisition

Churn Reduction

Less Expensive to

Service

$ $ $ $ $ $ $

Example: Cost to Service a Customer Revenue Increase $

$

Server our Customers


Supporting Tools

Portals, Web Sites , Content

Management - Access to Product

& Service Information

Online Self Care,

Contact Center,

Help Desk

Unified Communications, Social

Media, Office

Provisioning, Supply Chain

Automation

Purchasing Products

or Services online

Customer Data Analytics -

Understanding the Customer and

their needs

Server our Customers


Collaborate with Partners to grow together

Organization

Human Resources

Technology Purchasing

Sup

po

rt

Act

ivit

ies

Inbound Logistics Operations

Outbound Logistics

Marketing & Sales Service

Pri

mar

y A

ctiv

itie

s

Materials Handling

Manufacturing Order Processing

Product Pricing, Promo

Customer Service

Collaborate with

Partners


Supporting Tools

Online Self Care,

Contact Center,

Help Desk

Unified Communications, Social

Media, Office

Integration of Partner & Enterprise

Systems

Partner Contracts, Policies,

Procedures

Joint Co-Branding &

Marketing of Products

Channel Management

Partner Access to Enterprise

Information / Resources

Revenue Share,

Procurement

Collaborate with

Partners


“Digital” should be central to most companies businesses… The Company becomes part of a dynamic ecosystem that connects digital resources both inside and outside the company Harnesses Digital resources to enable e.g. • Improved Customer Experience • Drive Business Agility & Take Out Cost

to maintain competitive advantage

The future of Business is


Who should lead this Digital Transformation?

CEO

CMO

CSO

LOB CXOs

CIO

CIO is a business partner to the line of business (LoB), not a cost center.

An effective CMO/CSO+CIO relationship needs to be created and nurtured


The Role of the CIO of the Future

Source: Center of Information Systems Research (CISR) @ MIT Sloan CISR

Business Leaders Agile Companies

Business Leaders

IT Leaders

Expectation of Allocated Time


The Role of the CIO of the Future


% Current

CIOs

Key

Metrics


By 2018, 50% of business executives will view the CIO

as a Business Innovator

The CIO of the future will incorporate IT service provision and business process digitization into the “DNA” (i.e. Governance and Structure) of the company. Then the CIO will participate in sales, delivery and conducting digital conversations with customers or manage enterprise process operations, shared services, or product development.

CIO of the Future Find Time

• Finding the time to enable the Enterprise to be more agile, more global and increase revenues

Design Governance

• Governance matched to strategic goals to help free up time for strategic issues

Build New

Teams

• Build new teams and skills to undertake a transformation



The Role of IT is evolving to that of a Business Innovator

Source: Derived from IDC, 2013 (% = ICT spend share of wallet; left = spend today, right = desired %)

0

10

20

30

40

50

60

70

80

90

Transform the Business Change the Business Research & Explore Optimize Business

Today

Desired

0-10%

18-25% 5-25%

25-35%

0-5% 3-10%

60-80%

35-50%

CEO Focus CIO Focus Line of Business Executives

CXO IT is Business


… and how Enterprises Invest in IT will change

Source: IDC Predictions

Line of Business Executives will be

directly involved in 80% of new IT investments

90% of it Investments will be evaluated in

terms of strategic goals

CIOs and CFOs will move to “zero capital” and transform

the IT financial model


Additionally IT Service Consumption Models will need to

evolve; freeing up IT to become a Transformation Engine

IT needs to act as intermediaries between internal customers and all IT services (internal or external). IT becomes a service broker

Internal clouds are hampered by lack of experience and skills. Focus on Education and Automation Tools

Popular option for augmenting IT capacity and enabling DR over new data centres or a long-term outsourcing agreements

Key Challenges: •Secure & Backup Data •Support Broader range of Devices •Manage End to End Service Delivery

Traditional Computing

Hybrid IT

Hybrid Cloud

Internal Cloud

Source: IDC Predictions


IT will need to focus on 4 main pillars; supporting

Internal, Partner and Customer needs

Big Data reshapes companies

Cross-industry partnerships will also grow in this area as

Telco, Retailer & Bank come together to share customer

insights

By 2016 70% of CIOs will embrace a “cloud first”

strategy

Data Center ownership will not be a priority for

the CIO by 2017

The rise of many cloud providers – Retailers, Wholesalers, Brokers

30% of all new apps development will target

mobile

CMOs will deploy mobile to reach customers

BYOD will become the

norm

Social software will be embedded in UC&C &

enterprise apps

Social will give rise to B2B2C as consumers and brands interact


Pillar 1:

The emergence of the new Cloud-Based Enterprise

AGILE &

CONNECTED

EFFICIENT &

COST EFFECTIVE

New Business & Process Demands ‒ Work Smarter , Be Flexible & Agile

Need Business & Customer Insight ‒ Data Exploding, Need Real Time

Intelligence

Need to Connect to Partners ‒ Business to Business Connect &

Communicate

Infrastructure Inflexible & Costly ‒ Respond Quickly to Business, Need

Dynamic Infrastructure

Environmental Costs Escalating ‒ Optimized & Green to Reduce

Carbon Footprint

Inefficient & Costly Operations • Respond Quickly to Business

needs, Manage IT Efficiently


Pillar 2:

Mobility and rise of the Knowledge Worker

8/4/2014

Empowerment of the Consumer Shifting Business Models require Tech Savvy always

connected employees, partners and customers

The blurring of Home & Work The Trend to Telecommute

Driving changes in how Businesses Acquire and Consume IT

Employees expectation of IT are changing

Employees are solving business problems using technology that they utilize in their personal life.

Always Connected

Technology Savvy

Multitasked Socially Engaged


Pillar 3:

The rise of the Social Enterprise – Social Networks

Source: Brian Solis Author and Media Strategist

1. Planning: “Listen to Learn”

2. Presence: “Stake Our Claim”

3. Engagement: “Dialog Deepens Relationships”

4. Formalized: “Organize for Scale”

5. Strategic: “Becoming a Social Business”

6. Converged: “Business is Social”


Pillar 4:

Big Data - from Business Operations to Business Innovation

Data to Run Business

• Basic Reporting & Spreadsheet

• Hindsight based

• Manual, ad-hoc

• No version of truth

• Basic search, query, reporting and analytics

• Some automation

• Multiple versions of the truth

Information to Manage Business

Information as Strategic Asset

• Insight thru analytics, real-time

• Enhanced automation

• Single version of truth

Information to enable Innovation

Information Competitive Differentiation

• Foresight, predictive analytics

• Capabilities embedded in workflow

• Strategic insight

• Enablement of strategic business innovation


Summary

In the future Business is IT – IT is intrinsic to how

Enterprises will conduct business and operate

CIOs need to lead the Transformation and become the business partner to the

line of business (LoB)…. not a cost center

The IT Department needs to be wired for Innovation

CIO’s must move from Command and Control to

Business Innovator; developing relationships with

Partners and Customers

Focus on The 4 Pillars to enable this Transformation

Thank you

www.huawei.com

Copyright ©2014 Huawei Technologies Co.,Ltd. All Rights Reserved.

The information contained in this document is for reference purpose only, and is subject to

change or withdrawal according to specific customer requirements and conditions.

http://www.huawei.com/