A CIO's Guide For Embracing The Rapid Adoption of Digital Transformation

C014585 CIO’s Guide for Embracing Digital Transformation
Roger Bales
Manager – WW Business Development
Executive Consultant
rlbales@us.ibm.com
@RogerBales
© Copyright IBM Corporation 2017. Technical University/Symposia materials may not be reproduced in whole or in 0
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part without the prior IBMofCorporation
written permission IBM. 2017. Technical University/Symposia materials
may
not be reproduced in whole or in part without the prior written permission of IBM.
Key Forces Shaping The Future for Business & Technology
Market Drivers:
Business Capabilities:
§ Compressed time to react to
§ Deliver differentiated omnichannel
customer demands
experiences
§ Erosion of industry boundaries - new
§ Customer insight and quickly
competitors
anticipates emerging needs
§ Maintain core business while driving
§ Enable lean experimentation and
innovations at unprecedented speed
rapid time to market
and scale
Changes in Technology:
§ Enable ecosystem integration
§ Enhance transaction and analytics services
§ Flexible capacity based on rapidly changing business conditions
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Digital technologies are driving major industry shifts
…empowered yet entangled by digitalization
Individuals are more connected and empowered

§ Increased consumer expectations
Implications § More diverse channels of engagement
§ Expanded information transparency
Traditional competitive boundaries are shifting

§ New competitors from different industries
Implications § Changes in value migration; new winners and losers
§ New types of collaboration and convergence
Business models and operations transforming

§ Redefined value proposition and customer value
Implications § Integration across digital and physical assets
§ Concerns around risk, security, compliance and privacy
Source: IBM IBV Digital Reinvention Study
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The next major shift is well underway – digital business
World’s largest taxi company owns no taxis
Largest accommodation provider owns no real estate
Largest phone companies own no telco infrastructure
Most popular media owner creates no content (Facebook)
World’s most valuable retailer has no inventory (Alibaba)
World’s largest movie house owns no cinemas (NetFlix)

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The opposing forces of speed and stability driving two IT worlds
Speed Stability
Driving innovation: Maintaining business:
IoT will connect 30 billion devices by 2020 6.75 TBs of data will be created per person per day by
2018
48% of shoppers want on-demand Average cost of a data breach in 2020 will exceed $150
personalized promotions million
65% of transactions with healthcare Average hourly cost of downtime is over $1.6 million
organizations will be mobile by 2018
Proven expertise has never been more essential to successfully meeting these challenges
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The Third Era of Computing
2010 (Jeopardy) - Future
1940s - Today
Cognitive
Computing Era
1820s – 1940s
Programmable
Computing Era
Tabulating Era The Cognitive Computing
Era. Machines learn and
adapt by interacting with
The Programmable
data and people.
Computing Era. Electronic
devices programmed by
Single-purpose machines humans calculate,
calculate and tabulate communicate, store data,
using mechanical or etc. 1940s to today.
electro-mechanical
processes.
may
Cognitive Computing and Digital Business – A Powerful Combination
Digital Business Cognitive Computing
Develops better insights for

More Aglie, Nible and Efficient
smarter decision making
The two play hand-in-hand
A digital business can apply advanced and cognitive analytics, gaining

insights to achieve operational excellence and new market
opportunities previously unimaginable.
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There are four key forces impacting Digital Business
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part without the prior written permission IBM.
Smart Machines
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Six smart-machine capabilities are rapidly transforming digital business
Capability Learning Breakthroughs
Sensing • Low-cost, wirelessly connected sensors allow low-value objects to • Embedded sensors combine with
detect information about their state and that of their environment. advances in nanotechnology to
• Technologies sense at a distance (such as cameras) provide the capability provide fabrics, building structures
to link objects and places with no embedded sensors or communications. and materials with new capabilities.
Learning • Machine learning from data and unstructured information (text and images) • Knowledge-as-a-service
• Automated smart advisors can handle challenging applications in CRM, • Smart machines enhance their abilities
medical diagnosis, investment advice and IT service reliability. by modifying their learning algorithms.
Acting • Improvements in machine movement, navigation and precision are enabling • Robots and/or autonomous vehicles
a growing range of robots, autonomous vehicles and drones. will work together
• Robots can repeat tasks shown to them - less need for on-site programmers • Soft robotics enable new applications.
Creating • 3D printing – design, logistics and manufacturing innovation • 3D Bio printing

• Writing, music, art and recipes - computational creativity. • 4D Flat printing – self creating objects
Interacting • Speech recognition, natural-language conversations and virtual • Direct computer-human brain
personal assistants interface
• “Anticipatory computing” adds the ability to make suggestions or act on a • Enhanced output beyond screens and
user’s behalf based on environment and context. printing – tactical output
Sharing • Through APIs and cloud services, data sharing is increasingly pervasive • Cognitive cloud services and semantic
and automated. Sensing/learning/sharing with other systems standards - sophisticated sharing
The CIO Survival Guide: Your Role in a World of Increasingly Smart Machines - By Jackie Fenn – Gartner Group
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Interacting with Smart Machines & the Cognitive world
Cognitive Systems will:
• augment rather than substitute for human intelligence
• Unlock value of rea-time analysis & insight
• penetrate complexity and make better decisions.
• making the world work better.
Our relationships and interactions with Smart Machines will evolve:

• Changes in way we work – challenging and rewarding
• Some roles between humans and cognitive systems become interchangeable
• The Cognitive world will demand unprecedented levels of learning, skill development and
innovation – IT has a great opportunity to lead in this area.
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Cognitive Computing
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Cognitive Computing – A new way of computing
UNDERSTAND REASON LEARN INTERACT
Cognitive systems They can reason, grasp With each data point, With abilities to see,
understand imagery, underlying concepts, interaction and outcome, talk and hear, cognitive
language and other form hypotheses, and they develop and systems interact with
unstructured data like infer and extract ideas. sharpen expertise, so humans in a natural way.
humans do. they never stop learning.
A cognitive business has systems that can enhance digital

intelligence exponentially.
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R
Cognitive Computing – At-A-Glance
Combining AI technologies, relevant information and deep subject matter expertise

Capability Required Advanced Ultimate
Understand domains • Has task-specific • Also has contextual • Also has common sense &
deeply knowledge knowledge relevant to asks general knowledge
Reason towards specific • Uses specific approach • Also explains • Also combines approaches
goals • “Deductive or Inductive” • “Abductive” • “Adaptive”
• Also uses feedback from the

Learn continuously from • Uses explicit training • Also uses implicit training.
environment.
experience • “Supervised learning” • “Unsupervised learning”
• “Reinforcement learning”
Interact naturally with • Transactional request • Session-oriented contextual, • Life-long conversational

cognitive agents response affective interactions interactions
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15Feb2017 AI / Cognitive Computing Trend Report, 2017 (External Version)
13 not be reproduced in whole or in part without the prior written permission of IBM.
The promise and possibilities of Cognitive Computing
• Cognitive Systems that use artificial

intelligence (AI) can understand, reason, Dramatic Growth - $47B by 2020
learn and interact using natural human
“Widespread adoption of cognitive systems
language. and artificial intelligence (AI) across a broad
range of industries will drive worldwide
• They augment rather than substitute for revenues from nearly $8.0 billion in 2016 to
human intelligence and effort providing more than $47 billion in 2020” IDC
both real-time insight and deep analysis.
Cognitive computers ultimately help your New and Different Jobs
business make better decisions.
“The cognitive era will create new jobs,
such as robot monitoring professionals,
• They enable businesses to take much data scientists, automation specialists, and
greater advantage of the data they have. content curators: Forrester forecasts 8.9
million new jobs in the US by 2025.” Forrester
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Infrastructure is essential to unlock power of Cognitive Computing
Public Cloud Enterprise Private Cloud
• Dynamic Apps • High-Value – Business Critical Apps
• Rapid innovation • Need greater agility
• Cost optimized • Enable quicker App changes without
• Born on web apps risking reliability or security
Expansive
Reach of Data
Off-Premise Enabling On-Premise
Cognitive
Systems
Outsourced Hybrid Cloud Infrastructure

Traditional IT
• Run Off-Premise • High-Value – Business Critical Apps
• Leverage Cloud • Requires industrial strength security
Technology & reliability
• Managed services • Systems of Record
for apps • Critical business IT assets
Where will infrastructure be in 2019? Source: IDC
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Digital Business & Digital Transformation
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The journey toward becoming a Digital Business
Digital Reinvention is about

• Digital Transformation
reimagining all key elements
of your business strategy, • Client Centered Design / Design Thinking
operations and technology, • Strategy & Innovation
with a central focus on • Organization, Skills and Process
creating improved customer
experiences • Technology
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How to approach IT transformation to embrace Digital?
Digital Reinvention is driving the need for an end-to-end approach to IT transformation

How to proceed?
• Identify and understand key business risks and
Change process must be broken down
opportunities presented by digital technologies, industry
into three steps: trends and competitive disintermediation risks
1. Defining the target state for IT • Understand key business priorities and initiatives and
measureable success factors for digital transformation
architectures
• Identify and confirm key strategic digital transformation
2. Deciding which elements of the IT initiatives
landscape (systems, people, and • Assess strategic intent and commitment from business to
processes) need to change address/exploit digital transformation opportunities
• Identify, confirm and assess current and future state
3. Determining the sequence and scope requirements for IT, people and process to achieve
of change strategic digital transformation initiatives
• Perform current-future state gap analysis identifying and
prioritizing key actions and initiatives needed to close
exposures
© Copyright IBM Corporation 2017. Technical University/Symposia materials may not be reproduced in whole or in
18
written permission 2017. Technical University/Symposia materials may
IBM.
• Develop and manage to a structured roadmap of

execution to manage digital transformation

Our approach working with CIOs on digital transformation
Focus Areas
• Identify and understand key business risks and opportunities presented Cloud Enabled
by digital technologies, industry trends and competitive
disintermediation risks
Analytics department
• Understand key business priorities and initiatives and measureable
success factors for digital transformation
Mobile
• Identify and confirm key strategic digital transformation initiatives
• Assess strategic intent and commitment from business to Social
address/exploit digital transformation opportunities
• Identify, confirm and assess current and future state requirements for IT, Optimized Systems
people and process to achieve strategic digital transformation initiatives

• Perform current-future state gap analysis identifying and prioritizing key DevOps
actions and initiatives needed to close exposures

Service Predictability
• Develop and manage to a structured roadmap of execution to manage
digital transformation
Enterprise IT
Fundamentals
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What might a Digital Transformation Strategy look like?
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The details – how to rapidly develop and end-to-end roadmap
Elevate Prepare Assess Analyze Recommend
§ Engagement Kickoff § Finalize workshop § Conduct workshop § Analyze workshop § Present report to
§ Review workshop logistics and § Provide IBM outcome client IT leadership
objectives, approach timeline thought leadership § Produce project team
and timeline § Complete IT on digital recommendations § Choose immediate
§ Conduct Discovery: environment transformation based on next steps
questionnaire § Review business’ observations and
− IT environment
§ Complete Business objectives and analyzed data
questionnaire
Objectives imperatives § Create an IT
− Business questionnaire roadmap
§ Explore IT
objectives survey implications § Produce an
§ Complete IT
− IT provider provider relationship § Conduct IT executive-level
relationship survey survey Capability report
§ Workshop Planning, § Collect and analyze Assessment
Date/Logistics discovery § Gap Analysis
documents § Key Project ID &
Priortization
1 day 1 week 1 day 1 week 2 hrs +

Week 1 Week 1 Week 2 Week 3 Week 3 or 4
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Managing Change
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CIO/Technology leadership in the Cognitive Era
The CIO Survival Guide: Your Role in a World of Increasingly Smart Machines - By Jackie Fenn – Gartner Group
may
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C014585 CIO’s Guide for Embracing Digital Transformation

Individuals are more connected and empowered

Traditional competitive boundaries are shifting

Business models and operations transforming

World’s largest taxi company owns no taxis

Largest accommodation provider owns no real estate

Largest phone companies own no telco infrastructure

Most popular media owner creates no content (Facebook)

World’s most valuable retailer has no inventory (Alibaba)

World’s largest movie house owns no cinemas (NetFlix)

Driving innovation: Maintaining business:

Digital Business Cognitive Computing

Develops better insights for

The two play hand-in-hand

A digital business can apply advanced and cognitive analytics, gaining

Capability Learning Breakthroughs

Creating • 3D printing – design, logistics and manufacturing innovation • 3D Bio printing

• Unlock value of rea-time analysis & insight

• penetrate complexity and make better decisions.

• making the world work better.

Our relationships and interactions with Smart Machines will evolve:

• Some roles between humans and cognitive systems become interchangeable

UNDERSTAND REASON LEARN INTERACT

A cognitive business has systems that can enhance digital

Combining AI technologies, relevant information and deep subject matter expertise

• Also uses feedback from the

Interact naturally with • Transactional request • Session-oriented contextual, • Life-long conversational

• Cognitive Systems that use artificial

Outsourced Hybrid Cloud Infrastructure

Where will infrastructure be in 2019? Source: IDC

Digital Reinvention is about

Digital Reinvention is driving the need for an end-to-end approach to IT transformation

• Develop and manage to a structured roadmap of

execution to manage digital transformation

people and process to achieve strategic digital transformation initiatives

actions and initiatives needed to close exposures

Elevate Prepare Assess Analyze Recommend

1 day 1 week 1 day 1 week 2 hrs +

Submit a survey at:

Join today connect with

If you can’t find the training that is right for you

Contact IBM Training at dpmc@us.ibm.com

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