Section 3: Managing Innovations with IT

Section 3: Managing Innovations with IT

“Introduction … Moore’s Law … Innovating with IT … Evolving IT Innovations … Decisions to be made”
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Summaries

  • Managing Innovations with IT > Moore's Law > Moore's Law
  • Managing Innovations with IT > Innovating with IT > Strategies for Innovating with IT
  • Managing Innovations with IT > Evolving IT Innovations > Evolving IT Innovations
  • Managing Innovations with IT > Decisions to be made > The 9 Decisions

Managing Innovations with IT > Moore’s Law > Moore’s Law

  • Curiously, Moore’s Law is not really a law like Newton’s First Law.
  • The law is named after Gordon Moore who is one of the co-founders of the giant chip making firm called Intel.
  • Moore observed in 1965 that the number of transistors doubles on an electronic chip about every two years, and will continue to do so.
  • It turns out that Moore’s prediction was quite accurate.
  • It is now known that computing power doubles every 18 months.
  • This is possible owing to the improvements in technology for making computer chips that pack in more and more transistors in less space.
  • Moore’s la-law is now used to predict the growth of the semiconductor industry… …that makes chips for computers-such as central processing units and memory.
  • The implications of Moore’s law have been immense.
  • The relentless progress of technology has made computers cheaper, smaller, faster and cooler.
  • The power of mainframe computers of the 1970s is now surpassed by computer chips on smart phones.
  • This has led to immense innovation in the IT industry.
  • Software and networks have become cheaper and near ubiquitous.
  • A massive industry has come up that makes innovations on top of the advancing computing power… …thus driving the demand for faster, cheaper and smaller computers.
  • Almost all innovations in IT today can be traced to the workings of Moore’s law.
  • Is this relentless march likely to continue? Are chips going to become smaller and cheaper endlessly? Or is there an end in sight? Is it likely that Moore’s law will end? Some scientists argue that the endless doubling of the number of transistors will now end, owing to the limits of the material itself.
  • There is a physical limit as to how small a transistor can be made.
  • Others argue that in spite of the physical limits, computing power will continue to increase… …possibly with different technologies; and Moore’s law will continue to drive innovation.

Managing Innovations with IT > Innovating with IT > Strategies for Innovating with IT

  • When a technology has just shown up, when you have heard of it for the first time, the questions to ask are: What does this technology do? Why should my organisation care? Is it gaining any attention of others in the industry? Are people in the trade and media talking about it? Answering these questions helps you understand what the innovation is and whether you should learn more about it.
  • If a technology catches attention and does indeed provide some advantage to businesses, it will gain an adoption and use.
  • Organisations that consider adopting a new technology first check to see if others have adopted earlier… …and if they can benefit from these network effects, then why not? When a new technology has gained some market share and has evolved, it is worth looking around for all the stories that are emerging.
  • Are these stories positive, showing how firms have benefited… …or are these negative stories showing how difficult it is to implement a technology? These stories and case examples will show how difficult or easy it is to implement a technology.
  • When a technology has gained adoption and market share… …and is easily visible and mature, it is time to see if firms that took it up are getting any value or advantage.
  • Others have adopted a new technology and are benefiting.
  • Whether you will gain from the technology largely depends on your own situation and how you are able to manage your own adoption process.

Managing Innovations with IT > Evolving IT Innovations > Evolving IT Innovations

  • In terms of management decisions, there are three that stand out-Cloud computing… …Software Defined Networking and Big Data.
  • Let us look at the high level services of cloud computing and typical models of the cloud.
  • Simply put, “Cloud computing” is a computing model that enables easy and convenient on-demand access to resources from a pool.
  • The Cloud consists of configurable computing resources.
  • This makes the cloud very cost-effective and resource is utilised effectively.
  • Based on the type of service that they provide and the way they are deployed, there are different models of the cloud.
  • In IaaS, or IAAS, the cloud vendor that is the cloud service provider provides servers… …network, storage and other fundamental computing resources and the client organisations… …can deploy their own operating systems and applications.
  • The cloud service provider only manages the underlying physical infrastructure.
  • In PAAS or PaaS, the cloud service provider provides and manages the underlying physical infrastructure… …and the operating system and some system software, while the organisations using PaaS need to manage their applications.
  • In SAAS or SaaS, service provider provides the physical infrastructure… …operating system and the application, and organisation accesses the application typically through a browser.
  • Here the cloud service provider completely owns and manages everything.
  • So it does make sense to use the IAAS cloud or IaaS cloud, depending on your need.
  • The cloud is again classified into four different models based on deployment-Private, Public, Hybrid and Community.
  • In a private cloud, the cloud is used and owned by a single organisation.
  • In a public cloud, the cloud is available to a general public, and is owned and maintained by a cloud service provider.
  • In a community cloud, a cloud is shared by organisations with a common purpose or belonging to a community.
  • All the banks can have a community cloud, and host applications that need to be collaborative across banks.
  • A hybrid cloud is a combination of multiple models-public, community, private, tied together to serve a business need.
  • The decision on type of cloud deployment model is based on security of data, performance requirements and expected cost savings.
  • What do you think are the reasons that push organisations towards the cloud? The reasons can be many and varied.
  • The main ones are: To reduce the upfront investment on IT. Because the cloud gives them the flexibility of anytime-anywhere access and reliability Scalability and more importantly.
  • Whether to move to the cloud or not, and what should be migrated to the cloud are not easy decisions.
  • The decision would be based on the needs of the organisation and the services provided by the cloud.
  • This requires a knowledge of different services and models of cloud computing.
  • Let’s move on to the next emerging trend of Software Defined Networking, i.e. SDN. We have seen with the cloud that pooling resources leads to the best use of resources.
  • The advantage of this separation is that the entire network can be configured remotely without having to move boxes and rewire everything.
  • Earlier, the network used to be fixed and applications had to run on them efficiently.
  • With SDN, the network is not fixed and can be configured to adapt to the application.
  • When there is a programmable interface to the network equipment… …configuration can be automated, and this enables the network to dynamically respond to the needs of an application.
  • This capability of SDN becomes relevant in the context of cloud computing.
  • SDN applications could be a network application software like a load balancer.
  • The control plane being the brain of the network, has a view of the end-to-end network topology.

Managing Innovations with IT > Decisions to be made > The 9 Decisions

  • Managers have to make many decisions regarding IT. Let us discuss nine decisions here that are important and are considered key.
  • One of the first decisions that managers have to consider is how much should be spent on IT? So, the first decision here is, how much should we spend on IT? What this means is spending has to be either on a project or it can be something that is done on an annual or monthly basis.
  • The intent of this question is to find out how much should we spend on a particular innovative project.
  • Which business processes should receive IT money? Now, what this question means is in any organisation there would be many functions… …many departments, many processes that are going on.
  • Which of these are most important and which of these are key for the… …innovation that you are planning and which one of these should get the IT money that you are allocating? That’s decision number two.
  • What this question is asking is, which IT capabilities for the organisation, which of the innovations should be centralized? That was question three.
  • Now, question four is how good do our IT services really need to be? The answer to this question is simple.
  • What you’re seeing on this slide are something called service level of a particular IT service… …and you see the numbers in the first column, 99%, 99.9% and so on.
  • Now, if you continue in this same vein and go to 99.999% service level, this means… …and notice this, this means the service is down for less than one second per day which amounts to about five minutes in a year.
  • Now this is very high level of service and naturally for this very high level of service, the costs are also going to be very high.
  • How fast and flexible do you want your information really? This is decision number five.
  • What security and privacy risks will we accept? So I’ll just put here security and privacy risks.
  • The next decision is whom do we blame if an IT initiative fails? So, I’ll just say, whom to blame for failure? Now, why would you ask such a question? Here, the important point to note is that for all IT initiatives or any initiative within an organisation, it is important to assign responsibility.
  • If things fail, one has to seek out, who is finally responsible or what is finally responsible, okay? I’ll move on to the next question.
  • The ninth and last decision is when should you use open source? Now open source is a kind of technology in which the software that you use is provided to you in the source code of the software… …and invariably you have access to the software for free also.
  • The answer, the simple answer seems to be, well, you should use open source all the time.
  • What are the right answers? There are frankly no right answers to these questions or decisions.
  • Please read the case study and see if you can find the answers to all the questions that we have put up here for you.
  • Let me repeat, there are no right answers to these questions.

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