SIM Fairfield-Westchester Bart Stanco SVP, Gartner, Inc. March 18, 2004 “Strategically Leading The CIO Today!”

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 2 Key issues for CIO 1.Technology 2.Value (Financial) 3.Business Alignment 4.Leadership & Communications 5.Multi dimensional (keep lights on, strategic and tactical)

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 3 Technology Need to be: Up to date Profit Integrator Technical Vocabulary

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 4 Long-Term Outlook for IT Is Brilliant, but Also Will Result in Pain for Many Cut Costs Keep the Lights On Fix What You Have Power Shifts to the User Vendors Hemorrhage Massive Consolidation Power Shifts to Vendors Fundamental Technology Changes Installed Base Refresh Internet This, Now Price Is No Object Get Really Rich, Quickly Pure Greed and Fear Y2K Global IT Spending True Power of IT Finally Unleashed Massive Wave of Innovation Huge Productivity Gains Enormous Societal Impact Consumer Is King

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 5 Massive Vendor Consolidation Will Enable or Cause ‘Burn and Churn’ Through ,300+ Software Companies

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 6 Massive Vendor Consolidation Will Enable or Cause ‘Burn and Churn’ Through 2005

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 7 End-User Standard Practices … rigorously managing your portfolio Consider... … standardizing everything you can at base level … outsourcing anything non-value-added

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 8 Advances in Technology: Computing Infrastructure Goes Virtual 2003– – –2014 Computing Storage Virtualization Networking and Storage Meld Utility Computing Dynamic Partitioning Network Load Balancing Horizontal Scaling Frame Consolidation Blade Management Parallel Database Mixed Workload Efficiency Distributed Performance Mgmt. Server Provisioning Technical Computing Grids Dynamic Virtual Partitioning Virtual Blade Mgmt. Self-Healing Service-Level Management Policy-Based Management Distributed Workload Mgmt. Grid for Commercial Use

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 9 Wi-Fi g/b Intel Cisco IBM Residential Broadband Cable Advances in Technology: Networks Go Wireless Broadband

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 10 Power delivery technology isn’t exciting Power consumption technology is awesome “Always on, always connected” Source: E Ink Advances in Technology: Power Management and Display Electronics

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 11 Advances in Technology: Massive Shift in Software Architecture SOA Deployment Contracts Messages Repository Servers

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 12 Interoperability Is Cheaper Than Integration Advances in Technology: Massive Shift in Software Architecture Composite Applications “Real Time” Integration

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 13 Next Massive Wave of Innovation and Demand for IT Will Start in 2006 Secure Broadband Wireless Low-Power- Consumption Mobile/Display Devices Real-Time Infra- structure Transition to SOA 2006

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 14 By It will be difficult to buy a nonwireless “device.” Secure, robust, national wireless broadband networks will reach critical mass. It will be nearly impossible to buy a cell phone without a camera. Electronic paper will be a viable alternative to paper for industrial and consumer applications. Applications will be built by assembling services. Core infrastructures of computing and storage will be much more autonomic and reliable. The last new application for Unix will have been written. RFID will be ubiquitous up to the retail shop. The wireless digital media center will be the de facto home form factor. Real-time analytics and massive data management will emerge as the most important business applications.

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 15 Value (Financial) Saving Money Sourcing Strategy Strategic Skills SLA Cost Governance Financial Vocabulary Investment Choices

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 16 Business Alignment Why

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 17 Making the business case for Enterprise IT Enterprise IT when aligned will add 22% to Business objectives  Better information for better decisions  Speed of operations  Lower cost  High value outcome first  Simplified process Enterprise IT when NOT aligned will add 0% to Business objectives  Increase Cost  Friction  Barrier

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 18 Capability can do the job - technical, management, financial Communications meaningful and timely Responsiveness understand, anticipate, decide, mobilize, deliver Predictability set and meet expectations, no surprises Dependability certain about behavior in uncertain times Mutuality common goals, individuals win because the team wins Congruency perception and reality are matched Consistency standards are deployed, protocols are applicable to all Reputation personal experience, word of mouth, press, references cultural fit, business understanding Compatibility Primary Ingredients of trust

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 19 Capability Communications Responsiveness Predictability Dependability Mutuality Congruency Consistency Reputation Compatibility Reconsider Relationship Terminate Relationship Not Significant 0% 24% 0% 28% 3% 0% 69% 45% 68% 55% 60% 58% 25% 28% 31% 55% 4% 45% 21% 40% 35% 39% 75% 72% Capability and congruency are the top two factors

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 20 The power of 5 for alignment 1.Management 2.WIFM (carrot) 3.Financial (stick) 4.Communications 5.Trust

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 21 WIFM What is in IT for me? What value do we bring to our clients?  Is it our view of value or is it their view?  How do we help them? What are each business units objectives?  What are you providing that they cannot do today?  Is it better?  Does it really cost less? Were they involved in the decision?  Given a choice would they choose your service?

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 22 Public sector IS must manage a credibility cycle within and across its organization Results Resources Outcomes Credibility Initial credibility Lost credibility

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 23 Leadership & Communications Leader of the IT team Leader on Business Information Process Innovate Coach Challenge Communicate Multimode All levels

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 24 Vertical and horizontal collaboration turns outcomes into results OutcomeResult HQ/Central office Field office

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 25 Connect outcomes and results to deliver the executive agenda Business Strategy Results Service improvemen t Cost savings Need met Compliance Item 1Item 2Item 3Priority A Priority B Outcome Projects Project AProject BProject CProject D Service 1 Infrastructure 1 Service 3 Service 2 Infrastructure 2 Infrastructure 3 IS plans Executive agenda What How Value

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 26 Multi Dimensional Keep lights on, Strategic Tactical Metrics and KPI Sourcing as the Aggregators Vocabulary Tech Finical Business Coach Integrators

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 27 Summary We need to have multiple Vocabulary (Know our audience) Tech Financial Business Coach Integrate – Aggregators We Need to be aligned to Key Business Objectives and outcomes Keep in Mind WIFIM

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 28 Contact information Bart D Stanco m

Entire contents © 2004 Gartner, Inc. All rights reserved. | Appendix

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 30 | Effective IT Governance. By Design | | Top levelIT governance arrangements have three major components THE THREE COMPONENTS 1.What decisions need to be made?... decisions about major IT domains © 2002 MIT Sloan Center for Information Systems Research (CISR). This material is adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as Working Paper No. 326, "Don't Just Lead, Govern: Implementing Effective IT Governance," April 2002, and is used by Gartner with permission. 2.Who has decision and input rights?... Rights are exercised in different governance styles 3.How are the decisions formed and enacted?... Multiple mechanisms make governance work

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 31 IT Infrastructure Strategies IT Principles IT Architecture Business Application Needs IT Investment and Prioritization Strategies for the base foundation of budgeted-for IT capability (both technical and human), shared throughout the firm as reliable services, and centrally coordinated (e.g., network, help desk, shared data) High level statements about how IT is used in the business An integrated set of technical choices to guide the organization in satisfying business needs. The architecture is a set of policies and rules that govern the use of IT and plot a migration path to the way business will be done (includes data, technology, and applications) Business applications to be acquired or built Decisions about how much and where to invest in IT including project approvals and justification techniques © 2002 MIT Sloan Center for Information Systems Research (CISR). This material is adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as Working Paper No. 326, "Don't Just Lead, Govern: Implementing Effective IT Governance," April 2002, and is used by Gartner with permission. 1: What decisions need to be made? Clarify five major IT decision domains

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 32 Note: Some Governance styles were inspired by Davenport, C-level executives, as a group or individuals, including the CIO (but not acting independently) C-level executives and at least one other business group IT executives and at least one other business group Business unit leaders or their delegates Individuals or groups of IT executives Each individual business process owner or end user Business Monarchy Federal Duopoly Feudal IT Monarchy Anarchy © 2002 MIT Sloan Center for Information Systems Research (CISR). This material is adapted from Weill & Woodham's work originally published and copyrighted by the MIT Sloan CISR as Working Paper No. 326, "Don't Just Lead, Govern: Implementing Effective IT Governance," April 2002, and is used by Gartner with permission. StyleWho makes the decisions? 2. Who has decision rights and inputs?.. Rights exercised in six governance styles

Entire contents © 2004 Gartner, Inc. All rights reserved. | DLA Public SectorPage 33 Business Monarchy IT Monarchy Feudal Federal Duopoly Anarchy The ‘IT governance arrangements matrix’ shows how decisions, styles, mechanisms fit together © 2003 Gartner, Inc. and MIT Sloan Center for Information Systems Research (Weill), drawing on the framework of Weill and Woodham, IT Principles IT Infrastructure Strategies IT Architecture Business Application Needs IT Investment and Prioritization Decision domain Style Exec comm Biz leaders Exec comm IT leadership InputDecision CIO IT leadership Exec comm Biz leaders InputDecision Biz leaders Biz pro own Biz/IT rel mgs Biz leaders IT Leadership InputDecision Exec comm Biz leaders Cap appr comm InputDecisionInputDecision CIO IT leadership Some exec + some biz leaders Biz pro own Input rightsDecision rights Business/IT relationship managersBiz/IT rel mgsCIO, CIO’s office and biz unit CIOsIT leadership Business process ownersBiz pro ownBusiness unit heads/presidentsBiz leaders Exec comm subgroup, includes CIOCap appr commExecutive committee (‘C’ levels)Exec comm Governance Mechanisms