Peter Hubbard: Don't Get Stuck in a Silo – Going Digital isn't Transformation

Editor's Notes

• #2: TRANSITION TO THE NEXT TOPIC
• #3: Approximate Time: 5 min Learning Objective(s): Define the term business value Explain the relationship between the business and customers in creating value Instructor Notes: This slide is designed for you to talk about business value and how it is created. If you do not like the post office example in the key concepts below, feel free to swap it for another that you find more relevant or useful. Key Concepts: This gap in expectations and understanding often has its roots in the business and IT having different expectations and definitions of what value is. Business value has the customer at its core. It is the level to which the business meets their expectations. However, the business creates value through services. In response to customer requirements, it sets the expectations. From the customer’s perspective, value consists of the business achieving its own stated objectives, keeping its own promises. Even then, the business must also respond to the fact that not all customers will see those objectives the same way, or agree on the same expectations. For example: Think about the service of mail delivery. What expectations does your local post office or carrier set for you about that service? Generally, they set their hours of operation and the accessibility of local post offices, and determine what kinds of additional services are offered there. They decide which days of the week mail is delivered on, the rates for postage, the customer service experience they want to hire for in their mail carriers, etc. Now think about the factors that they cannot control about your expectations and how valuable you will find the service. Does your perception of the value of mail delivery change depending upon the kind of mail you receive? What if you order a lot of packages, and pay a premium for fast delivery from the company you order from? What if you only ever receive junk mail? What if you have a family member with who you can only communicate with through mail? What if you have never received a letter in your life and never expect to because you do everything digitally? Business value is never static. It is always in flux, responding to the needs and expectations of customers as times change and as competition changes.
• #5: Approximate Time: 2.5 min Learning Objective(s): Summarize the key problem impacting the relationship between businesses and IT today driving the movement towards DevOps ASK: Have any of you heard the statements on the slide made before within your organization? Why do you think these kinds of complaints persist? Instructor Notes: Provide the learners with a moment to read the common statements made about IT by the business on the slide. Summarize why these types of statements occur from the business perspective using the key concepts below. Key Concepts: In general, most people who work with and for an IT organization will agree that there are many challenges involving the interactions, expectations and perceived quality and speed of value delivery. The problem is that IT simply does not demonstrate that they can operate at the level of value the business requires. The IT Service Provider often adds to this perception and problem by: Drawing a distinction between the IT function and the rest of the business units as if they in turn are not an internal supporting business unit Expressing that business demand and requirements are unreasonable Expressing the view that that IT professionals understand what the business needs in respect to technology solutions better than their business partners
• #6: Approximate Time: 1 min Learning Objective(s): Summarize the consequences process redundancy, complexity and inefficiency on IT's ability to deliver business value. Instructor Notes: This slide is designed to demonstrate for the learners the impact on business value of the process challenge – it means that IT is not currently enabled to innovate or grow or transform in the way that the business requires. Deliver the key concepts below. Key Concepts: The result of all that waste, of all that complexity and redundancy in processes, is that in recent years IT has been simply unable to grow and transform in the way that the business requires, because it is too busy keeping it heads above the water. This means that year over year the percentage of money spent to simply run the business also grows and the capacity for innovation decreases.
• #7: Approximate Time: 5 min Learning Objective(s): Define the term business value Explain the relationship between the business and customers in creating value Instructor Notes: This slide is designed for you to talk about business value and how it is created. If you do not like the post office example in the key concepts below, feel free to swap it for another that you find more relevant or useful. Key Concepts: This gap in expectations and understanding often has its roots in the business and IT having different expectations and definitions of what value is. Business value has the customer at its core. It is the level to which the business meets their expectations. However, the business creates value through services. In response to customer requirements, it sets the expectations. From the customer’s perspective, value consists of the business achieving its own stated objectives, keeping its own promises. Even then, the business must also respond to the fact that not all customers will see those objectives the same way, or agree on the same expectations. For example: Think about the service of mail delivery. What expectations does your local post office or carrier set for you about that service? Generally, they set their hours of operation and the accessibility of local post offices, and determine what kinds of additional services are offered there. They decide which days of the week mail is delivered on, the rates for postage, the customer service experience they want to hire for in their mail carriers, etc. Now think about the factors that they cannot control about your expectations and how valuable you will find the service. Does your perception of the value of mail delivery change depending upon the kind of mail you receive? What if you order a lot of packages, and pay a premium for fast delivery from the company you order from? What if you only ever receive junk mail? What if you have a family member with who you can only communicate with through mail? What if you have never received a letter in your life and never expect to because you do everything digitally? Business value is never static. It is always in flux, responding to the needs and expectations of customers as times change and as competition changes.
• #8: Approximate Time: 2 min Learning Objective(s): Summarize the key problem impacting the relationship between businesses and IT today driving the movement towards DevOps Instructor Notes: Provide the learners with a moment to review the quote on the slide. Key Concepts: While not on the slide, the next part of the quote is as follows: “As Deloitte’s Shift Index shows, the average life expectancy of a Fortune 500 company has declined from around 75 years half a century ago to less than 15 years today. Professor Richard Foster of Yale University estimates that “by 2020, more than three-quarters of the S&P 500 will be companies that we have not heard of yet.” As customer expectations and requirements evolve, the business must also evolve to keep pace. And IT must evolve with it. Further Reading: Lean Enterprise by Jez Humble, Joanne Molesky & Barry O’Reilly, p. xiii
• #9: Approximate Time: 1 min Learning Objective(s): List four key drivers of change within IT and the business Instructor Notes: This slide introduces the four business drivers of change to the learners. You do not need to spend very long on this slide, as you are about to go into more detail on each of the drivers on the following four slides. Key Concepts: Let’s talk about some of the rapid changes in technology and society, the things that are externally increasing competitive pressure on the business. We are going to look in more detail at four of them. They are: The impact of cloud technologies on the commoditization of traditional infrastructure services The increased pressure of global market competition on rates, skills and knowledge on local IT delivery options The industry trend to fully automate repetitive work The impact of first three drivers on the speed at which an existing or new competitor is able to come to market and put pressure on brick and mortar business models
• #10: Approximate Time: 2 min Learning Objective(s): Explain the relationship between the external drivers for change and the necessity for digital transformation Instructor Notes: This slide provides learners with a real world example of disruptive competition in action – that of the shifts that have happened in the retail shopping world in the last 150-200 since the advent of the department store. It illustrates the way in which each successive shift completely changes the game for all those in the retail shopping industry afterwards, completely altering consumer habits, business practices and processes, and the entire landscape of communities and industries. Key Concepts: Let’s look at a very familiar example. Everyone here should already know about disruptive competition, because you have all seen it in action your lifetime in a very real way. The landscape of retail shopping is a good example of an industry that you rely on in your daily lives that has been disrupted and transformed several times in the last 100-200 years. These disruptions have shaped your opinion of what a retail experience should be like today, shaped the products and services you have access to and your expectations of customer service. In 1858, Macy’s is founded in New York City, ushering in a boom in the 19th century of new department stores that offer customers a wide selection of products in one place. Pre-fabricated luxury goods become more widely and easily available, and the idea that shopping can be an experience takes hold. In 1925, Sears is founded as the first popular mail order catalog company, offering affordable, easy access to pre-fabricated and luxury goods to those living in rural areas of the United States for the first time. The local general store that sells everything becomes obsolete. Heading into the 1950’s, the post-war boom in suburban development encourages the spread of shopping malls anchored by department stores, which provide shoppers with even more convenience and encourage the franchising of the shopping experience. Then, in 1962, the first Walmart opens, ushering in the era of the big-box discount department store as competition to traditional mall anchor tenants. This impacts enormous varieties of specialized local businesses who cannot compete with Walmart’s prices or distribution capabilities. And then, in 1994 we see the first real digitally disruptive competition occur, Amazon.com.
• #11: Approximate Time: 2 min Learning Objective(s): Explain the relationship between the external drivers for change and the necessity for digital transformation Instructor Notes: This slide continues the real-world example of disruptive competition, focusing on the way that all of the drivers discussed have now accelerated the pace of it and specifically using Amazon’s relationship to Sears as an example. Key Concepts: Amazon begins as an online bookstore, but later diversifies to sell products of all kinds, both physical and digital, including producing consumer electronics such as the Kindle and Fire tablet, offering a video-on-demand streaming service with Amazon Prime and becoming the world’s largest provider of cloud infrastructure services. In 2015, Amazon supplants Walmart as the most valuable retailer in the United States by market capitalization. Amazon as an example encapsulates all of the external drivers and pressures that we just talked about being exerted on businesses today – it utilizes cloud technology and automation at a very high level to distribute its products and services globally in ways that no other company in its path has been able to match, and in doing so has forced all businesses it competes with (which are many given its scope) to keep up or fall behind. And it’s done this very quickly, decimating even the older, more established companies who as we saw have existed for decades like Sears. Further Reading: http://www.investopedia.com/news/downfall-of-sears/ https://en.wikipedia.org/wiki/Amazon.com
• #12: Approximate Time: 5 min Learning Objective(s): Explain the relationship between the external drivers for change and the necessity for digital transformation Define the term “digital transformation” Instructor Notes: Key Concepts: DevOps seeks to facilitate the Digital Transformation that was mentioned earlier. This is a profound transformation that encompasses all organizational activities, processes, skills and cultural attitudes and allows businesses to leverage the changes and opportunities that are presented by digital technologies and their accelerating impact in way that is strategized and prioritized so that they become an advantage and not a disadvantage. From the business perspective, this is a requirement, and an urgent necessity. However, as we’ve learned, facilitating that transformation means removing that disconnect between the business and IT so that it can be achieved. From the IT perspective, it often isn’t that the need for a digital transformation isn’t understood. It’s that it seems impossible in the current environment. So why is that? Now that we all understand why there is an increased demand from the business for better, faster and cheaper, what are the barriers to delivering it that IT are facing? What is the other side of the story?
• #13: Notes for the Participants Understand this model and the sub components of each stage. Notes for the Instructor Various elements, such as cloud policy definition, benefits and risks of cloud adoption and stakeholders, and cloud adoption strategy are discussed throughout this course. Present this cloud adoption strategy. This is important to know and is highly examinable. Go through each bullet point in each section.
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• #16: Approximate Time: 1 min Learning Objective(s): Summarize the consequences of silos, systems thinking and local optimization on IT's ability to deliver business value Define the term “silo mentality” Instructor Notes: Review the key concepts below, then ask the question and provide examples as necessary. A full definition of the term “silo mentality” is also available for the learners in their Study Guide. Key Concepts: A silo mentality occurs when a team or department shares a set of common tasks but operates distinctly from other groups, with their power derived from association with a function or shared technical knowledge. In a heavily siloed organization, cooperation and collaboration are reduced and roles and departments are not designed to be cross-functional. Each individual or functional team views their objectives only through the lens of their individual tasks and responsibilities, especially those which they are measured against. They lack the proper incentives or resources to respond to the needs of other teams or areas, or of the business as a whole. ASK: Has anyone here ever experienced problems associated with being siloed in a work environment? Ask the learners to share any examples from their own experience. Share any examples that you have experienced as a consultant or heard in previous classes. Further Reading: https://www.forbes.com/sites/brentgleeson/2013/10/02/the-silo-mentality-how-to-break-down-the-barriers/#7505326e8c7e
• #17: Approximate Time: 1 min Learning Objective(s): Explain the way in which organizational culture and hierarchies have evolved over time to create the cultural challenge of a silo mentality Define the term “systems thinking” Instructor Notes: This has caused the primary problem in IT that DevOps works to address, that of the disconnect between Dev and Ops teams. In almost every organization, the Dev and Ops teams are siloed, accountable for and measured against competing sets of priorities and concerns. They are expected to simultaneously pursue two very different goals: Respond to rapid changes happening in customer and business expectations to remain competitive Provide customers and the business with stable, reliable and secure service Development is more focused on agility, new technologies and speed to achieve the first goal, while Operations is more concerned with maturity, compliance and risk to achieve the second. This puts Dev and Ops into a position where they are both required to work together to produce the best possible outcomes, but they also cannot work together because their goals are directly in opposition with each other. Thought leaders such as Lee Thompson and Andrew Shafer like to refer to this difference in incentives as a “Wall of Confusion” – it is a scenario in which Dev and Ops both don’t fundamentally understand why the other side does things the way that it does or what their needs are. This impacts Dev and Ops ability to come together to deliver what is being asked of them, to deliver business value. Further Reading: https://www.arresteddevops.com/eating-sushi-with-andrew-clay-shafer/ http://dev2ops.org/2009/09/qa-lee-thompson-former-chief-technologist-of-etrade-financial/ The DevOps Handbook, Appendix pgs. xxiv-xxv
• #19: Key Concepts: LEAN does not replace ITIL. LEAN is an accelerator, not a replacement. You have to have something to accelerate first and that’s where ITIL comes in. It’s a starting point. Not the end of the journey. Same as any other framework Lean is effective in all areas of the value stream. Agile is best in the Plan Build stage DevOps in the Build Run stage This course will be about ITIL but also focus on Lean, Agile and DevOps as ways to accelerate service management. Lean, Agile and DevOps work to make organizations faster, but what are they actually accelerating? They are accelerating the process architecture just discussed, the concept of Engage, and then Plan, Build, Run. This is work that has always been a part of IT. To understand how these accelerators work to accelerate service management and make an organization better, faster, cheaper, first you need to understand the basics of the four concepts. Transition to ITIL Module
• #21: Digital transformation requires a change to organization culture. - new skills, processes, culture
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• #33: This is AIB (Allied Irish Banks) – they had a target payback of 1 year, but they achieved payback in 34 weeks. A great example of a “quick win” for IT
• #34: This is McKesson – they recovered over $10m in storage costs by raising their business customers’ visibility of storage usage, offering tiered network storage alternatives to meet business needs, and reducing over-provisioning