Challenge of LeveragingIT Capabilities

www.aajtech.com

Mark DeMeo

SVP Consulting

• Over 25 years working in technology as a CIO, SVP IT Operations, Enterprise

Architect, Management Consultant and Managing Partner

• Knowledge of utilizing People, Process and Technology to expand IT service

delivery, improve service levels, increase speed to market and drive cost

efficiencies

• List of clients includes: Nestle, Caterpillar, GE Aircraft, Quaker, Nielsen, Northern

Trust, Bank of America, LendingTree, RCCL, Budget, Ocwen, UOP, Duke, Royal Sun

Alliance, Monsanto, ATT, SeaLand, FamilyDollar, St. Jude, US Air Force, ManTech

• Responsible for $120 M IT budget while at Tracfone Wireless

• Responsible for $150 M in services revenue while SVP at Pomeroy

• Won IBM outsourcing deal to provide 800 plus resources to IBM

• Started 3 consulting companies during his career

• Graduate of Society Information Managers Leadership Program

MARK DeMEO

• More Systems and Applications

• More Complexity (data, connectivity, internet of everything)

• New skills required

• Higher demand from business (Revenue, Profit, Costs)

• Resourcing

• Project Risks

• Customer Satisfaction

• Shadow IT

• Security and Compliance

• Disaster Recovery and Continuity Planning

• Support and Maintenance for Legacy applications

CHALLENGES FACING IT ORGANIZATIONS

IT Budgets Under Attack

CHALLENGES FACING IT ORGANIZATIONS

HW Costs14%

SW Costs12%

Employee Costs19%

Consulting Costs9%

Network Expenses2%

Telecom Expenses24%

Compliance Costs4%

Maintenance Costs 16%

Training

IT BUDGETS UNDER ATTACK

• What do we own and why

• Is this a fair price

• Length of time to get resources in place and trained

• Employee costs increasing but value not increasing

• Can you show the value for where the money was spent

• Business is not happy with IT

• Dealing with Incidents and Problems versus Strategy

• Acting as a Hero or as a Leader

• Keeping the business running

LEAKAGE POINTS

• Identifies most likely places that cost inefficiencies exist

• Measures where you are at versus where you want to be

• Input from IT Management, IT employees and Business

• Based on COBIT and Maturity Model

• Scores from 0 to 5 on 58 questions covering 4 Main Areas

• Areas Covered

• Leadership

• Strategy and Planning

• Service Design

• Service Delivery

• Provides roadmap for improving quality and maturity ofIT Organization

• Drives action plans to address most critical areas

OVERVIEW OF LASER ASSESSMENT

Leadership

• Organization

• Relationship Management

• Culture and Orientation

• Skills and Competencies

• IT Performance Management

Strategy and Planning

• Planning Process

• Governance

• Innovation

• Business Enablement

• Sourcing Strategy

• Products and Services

AAJ LASER ASSESSMENT AREAS DEFINED

AAJ LASER ASSESSMENT (CONTINUED)

Service Delivery

• Application Development

• Infrastructure and Operations

• Sourcing and Vendor Management

Service Design

• Portfolio Management

• Service Orchestration

• Security and Risk

• Enterprise Architecture Data

• Undefined - No process or inherent knowledge in organization

• AdHoc - unshared knowledge and quality is dependent upon

resource

• Repeatable - usually characterized by senior people performing

more junior level tasks to guarantee quality, of defined

processes

• Defined - existence of documentation and methodologies but

no measurements to indicate if used or improving delivery

• Measured - dashboards and statistics exist (uptime, project

schedules, KPI's) but no understanding how to improve them or

what influences them

• Optimized - ultimate goal of creating feedback loop for

continuous improvement

MOVING UP THE MATURITY MODEL

RELATIONSHIP OF SCORE TO LEAKAGE

Example:

Low Score in Sourcing and Vendor Management

means potential opportunity to lower costs of

sourcing and improve quality

Example:

Low score in Portfolio Management will impact

customer relationship and project delivery and

planning

Example:

Low score on Innovation will impact on value

business partners see in IT organization and

means potential to improve IT alignment to

business goals and service levels

Example:

Low score on Performance Management will drive

business units to blame IT for issues and result in

more senior IT resources fire fighting

• Identify critical areas that business and IT need to mature to deliver higher satisfaction

• Identify ways to reduces costs, timelines, resourcing constraints

• Identify ways to increase performance and project delivery

• Identify ways to leverage employee expertise and knowledge

• Identify ways to expand capacity

• Identify ways to increase velocity of delivery

• Identify opportunities for immediate cost savings in licensing and expense

HOW THE ASSESSMENT DELIVERS ROI

• Create Competition

• Consolidation of solutions

• Sunset or replace high maintenance items

• Identify compliance issues that can carry large capital hits

• Leverage employee knowledge for higher skills

• Historically we can usually drive 10-20% cost reduction

REDUCTION IN LINE ITEM COSTS

• What people are needed, for how long and who will support it?

• What is all the hardware and software required?

• Do I have plan for ongoing software support?

• Do I need additional hardware support?

• Is this solution still viable in two years or will it be replaced?

• How many development environments do I need?

• What is the service level agreement on this application and do I have the staff to support it?

• Do I have the skill sets to support what is being requested?

• How does this impact my compliance efforts?

GAIN INSIGHT INTO WHAT IT REALLY COSTS

• Understand deal registration by VAR's

• Understand how Vendor marketing funds work

• Create competition at Manufacturer and at the VAR level

• Understand their pressure points

• Utilize ability of Enterprise Level Agreements

• Understand cycle of maintenance support costs

• Understand Moore's Law

NEGOTIATE FROM A POSITION OF STRENGTH

• Lowered hand and feet costs

• Created competition between multiple providers

• Negotiated new lease deals

• Went to bulk power purchases instead of per line

• Reduced fees for One time recurring charges for network

• Allowed client to stay at same Data Center with lower costs and additional services

SUCCESS STORY

• Client had Data center costs that

ballooned from 5% of IT budget

to 20%

• We were challenged to reduce

Data Center operational costs by

$1.8 Million per year

Challenge Solution

• Reduced consulting expense by $5,000,000

• Reduced capital outlay by $3,000,000 on planned projects

• Realigned PMO to portfolio management

• Automated SQA processes

• Utilized capacity resource management leveraging onsite and nearshore: cut cycle times and reduced costs & turnover

• Moved IT employees to more critical roles (PM, Architect)

SUCCESS STORY

• Client had over $180 Million in unclosed projects that were more that three years old

• Resources billing to old projects and not current projects they were working on

• 60 day timeline to identify and board new resources

• Average of 6 resources interviewed for an opening

• We were challenged to reduce time from Release to Production from 4 weeks to 1 week

Challenge Solution

• Led to series of negotiated enterprise software agreements totaling $10,000,00 to cover all compliance issues and provide new technologies

• Incentivized vendors to compete for new business

• Included training credits, new products and lower maintenance schedules

• Built strategy around tech refresh and software refresh

• Resulted in freeing up $25,000,000 in the capital budget for new projects

SUCCESS STORY

• Company had continually bought hardware but not purchased operational SW licensing

• Increased HW processors from 120 to over 800

• Had over $80,000,000 in exposed costs (Tealeaf, BEA, Oracle, CA, IBM, Microsoft, Citrix)

Challenge Solution

• Implemented solutions in SaaS model to remove burden and lower costs

• Implemented offshore support operations utilizing recovered budget from eliminating other consulting support charges that employees could now handle

• Reduced combined Contractor / Employee costs by $650,000 annually

• Reinvested saving to build an additional 14 resources for supporting applications

SUCCESS STORY

• Organization struggling with

application support for business

applications due to headcount

• Identified non core applications

that internal skill sets did not exist

for 7x24x365 coverage or

application development

Challenge Solution

• Business Insights via Analytics

• Integration

• Mobility Solutions

• Project Management and Agile Expertise

• Vendor Management

• Software Quality and Testing

• Creative Solutions

HOW AAJ TECHNOLOGIES CAN HELP

• CIO Advisory

• IT Governance

• Resource Utilization and Expansion

• Enterprise Architecture

• Collaboration

• Utilizing Cloud / SAAS solutions

• SmartSourcing

We Offer

• Set up a initial walk through of the Laser Assessment Process

• Determine what are the benefit outcomes that are important to your business

• Conduct the Laser Assessment

• Review the results and recommendations

• Build Action Plans for most critical areas

• Build Action Plans for largest gaps between Current State and Desired State

• Execute and Implement

NEXT STEPS TO IMPROVING IT

Thank YouMark DeMeo

www.aajtech.com

Email: mark.demeo@aajtech.comPhone: 954-689-3984