P3 January 2005 Class 8: ISM Key Trends and Laws From Past to Future

P3 January 2005 Class 8: ISM Same Old Story: The IT Adoption Challenge

P3 January 2005 Class 8: ISM IT is Very Difficult 30% of IT projects are cancelled before completion 75% deficient in meeting user requirements 98% among large (>$10m) ones fail to meet meet requirements, time, and budget

P3 January 2005 Class 8: ISM Old Story, New Focus: IT and Organizational Impact

P3 January 2005 Class 8: ISM Beyond the Efficiency Battle Auto-mation Efficiency versus Info-mation Innovation Flexibility Culture change

P3 January 2005 Class 8: ISM Changes in Technology Skills

P3 January 2005 Class 8: ISM

P3 January 2005 Class 8: ISM IT Sophistication From 70% analogs, to 70% digitals Knowledgeable about desktop PCs, shopping on Internet, word processing, , mobiles, PDAs,…

P3 January 2005 Class 8: ISM …but rapid technical skills obsolescence

P3 January 2005 Class 8: ISM Technology Costs: Two Continuous Trends

P3 January 2005 Class 8: ISM The Cost of Computers YearCost 1964$ $ $1 2020$0,01

P3 January 2005 Class 8: ISM

P3 January 2005 Class 8: ISM

P3 January 2005 Class 8: ISM …But Total IT Costs Rising The McKean IT Paradox: Technology is 20% of total costs and effort: The box costs 20%, the wrap up (implementation, support, maintenance, etc) costs 80% From IT to Services

P3 January 2005 Class 8: ISM Always There: Aged Old IT

P3 January 2005 Class 8: ISM Legacy Systems More than 50% of corporate data are in old (i.e. 30 years old) systems (the “legacy systems”) IT consists of 1000s of legacy systems forming a spaghetti chart Integration is always a major technical capability challenge

P3 January 2005 Class 8: ISM Coming Up: The World of a Single, Global Computer Language

P3 January 2005 Class 8: ISM Standards and Global Interconnectivity Towards a common language: making machines talk to each other The extended enterprise: “Cisco is a node in an interconnected global network” –2002: $18 billion in b2b Internet sales, 65% Internet facilitated shipments, 82% of customer service on Internet IT becomes an outward-facing department Applications (web services) available over the internet

P3 January 2005 Class 8: ISM The new IT: From T to I

P3 January 2005 Class 8: ISM Information Over-Overload An average novel is about ( ) TB The U.S. Library of Congress is around 10 TB The worldwide production of information in 2002 was 5 million TB 30 billion s sent daily in 2002, equals to TB information production annually TB of internet information in 2002 A bank that took 10 years in the 80’s to accumulate 10 TB of data, now does this in less than 9 months

P3 January 2005 Class 8: ISM Continuous Improvements: Technology Evolution

P3 January 2005 Class 8: ISM

P3 January 2005 Class 8: ISM Moore’s Law

P3 January 2005 Class 8: ISM Gilder’s Bandwidth Law

P3 January 2005 Class 8: ISM Download of “The Matrix” DVD

P3 January 2005 Class 8: ISM Metcalf’s Law

P3 January 2005 Class 8: ISM The Singularity Point Moore’s Law Metcalf’s Law Gilder’s Law Computing Power Network Nodes Connection Speed

P3 January 2005 Class 8: ISM Coming Up Soon: The “Disappearing” Computer, Ubiquitous Computing

P3 January 2005 Class 8: ISM

P3 January 2005 Class 8: ISM Transforming Products with IT 2000 network 1960s hardware 1980s software hardware software

P3 January 2005 Class 8: ISM High Beyond Standalone Products Profitable growth potential Low Product platform Software + Network Services

P3 January 2005 Class 8: ISM Transforming Products: The Car Example

P3 January 2005 Class 8: ISM “A Car is a Java Machine on Wheels” Convenience Fun/Image Multi-media content Auto insurance Safety Airbag deployment Door unlock Door unlock Theft detection Theft detection Emergency services Remote Diagnostics Remote Diagnostics V-Mail Traffic reports Custom content Cellular calling Concierge services User Productivity

P3 January 2005 Class 8: ISM And Never Forget: The Three Fundamental Laws of Technology

P3 January 2005 Class 8: ISM The Three Fundamental IT Laws 1.Technology evolves, technology’s use evolves, people adapt 2.It is easy to change technology, it is difficult to change people, it is crucial to find the balance between the two (i.e. PETs versus KNETs, Organizations versus Society) 3.The impact (value/cost) of IT is 1.Measurable (hard) and non-measurable (soft) 2.First order and second order (transformative and unexpected )