Is Technology an Asset or a Liability?

NetStandard.com | 2000 Merriam Lane | Kansas City, KS 66106 | 913 262 3888 |

Is Technology an Asset

or a Liability? Presented by:

CBIZ MHM, LLC Presents: 2015 CFO Breakfast Series

John Leek


Introduction

• Welcome! • Thanks to CBIZ • John Leek, NetStandard • 30 year career working at companies in the insurance, financial,

and transportation industries • 10 years working with small to medium businesses • Email: [email protected] • www.linkedin.com/johnleek/ • Twitter: @john_leek

Presenter

Presentation Notes

And the best thing about our managed solutions is how rapidly they can be deployed and purchased on a monthly recurring charge as opposed to investing capital in purchasing and installing solutions.

http://www.linkedin.com/johnleek/


Rapid Change

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Presentation Notes

We are in a sea of rapid change. In the words of John Chambers, CEO of Cisco, at this year’s Consumer Electronics Show, “You either disrupt your industry, disrupt yourself, or become a victim of disruption”. We all have to keep an eye out for trends in our unique industries to ensure our companies stay relevant in the marketplace. The coming “internet of things” where everything is interconnected. You already see the rudiments of “the internet of things coming together”. There is home automation, automobiles that provide constant uploads to insurance companies and maintenance teams. And our cars provide insights into everything from restaurant reservations to stock prices, traffic conditions and weather forecasts. Homes can now have automation to remotely adjust the temperature, turn on appliances like crock pots… , turn on and off lights, record TV programs and more. We also note that wherever we go we can get connections to the internet for data. This provides new opportunities and demands on our businesses. For instance: The construction industry will need to make sure they can assist customers with installation of the latest “smart building/smart home” technology. Consumer and B2B industries might create new services to monitor end user experiences, “proactive service offerings”, etc. There is at least one company in here who currently offers a service to pick up product and monitor its location throughout the delivery process to the customer.


The Internet of Things

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And we are in an inevitable evolution towards an “internet of things”, an integrated, interconnected world where we can take advantage of interconnected life to do more and live a richer life. Whether its notifying drivers of a wreck ahead, monitoring your health using real-time metrics, optimizing the path that delivery trucks use using GPS and the delivery plan or managing power consumption in a facility, the amount of actionable information will continue to grow.


How Businesses See IT

Basic

Cost Center

More Efficient

Cost Center

Business Enabler

Strategic Asset

Standardized Rationalized Dynamic

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Presentation Notes

So we talk about disruption to business and the evolution of technology, but we need to consider how technology can “LEAD” our business into the future. Many business owners and leaders are tied into IT as a necessary evil that is a cost center. As businesses grow they realize they must become more efficient with IT and the next step we see in business is the recognition that IT can actually help their business move forward and serve as an enabler for efficient effective delivery of services. As an example, some of you in the room are in the distribution or 3rd party logistics business. When you are small, manual pick lists can allow you to fulfill orders and build shipments. Shipping decisions can be made by people


Business Enabler

Basic

Cost Center

More Efficient

Cost Center

Business Enabler

Strategic Asset


Presenter

Presentation Notes

As an example, some of you in the room are in the distribution or 3rd party logistics business. When you are small, manual pick lists can allow you to fulfill orders and build shipments. Shipping decisions can be made by people and everything can be mostly manual. Even applying the bill of lading and shipping labels to each shipment. As we go forward in time, the desire to reduce errors and drive volume focuses us on more automation to allow us to scale. Technology like rf id, bar coding, wireless scanning and automated pick lists, drive us to ever more efficient distribution centers.


Strategic?

Basic

Cost Center

More Efficient

Cost Center

Business Enabler

Strategic Asset


Presenter

Presentation Notes

And then we get to the point of IT as a Strategic Asset, an enabler to our business. Let’s think through some of those possibilities, especially as we look forward to the “internet of things”. While most of us sure cannot “chase technology” or live on the “bleeding edge”, if we just read the tea leaves a little we can see what technology is coming that might enable us to “ride the technology wave” to deliver growth and take advantage of technology when it goes mainstream. People are solving real world inconveniences and using technology to enrich lives, enable success, reduce cost and improve service. How are people using technology as a strategic asset?


1. Products and services enhanced with technology

2. Cost displacement

3. Enhanced decision support

4. Revision of the mission or objectives of the enterprise

5. Business interrelationships

6. Creation of new products and services

6 Ways IT becomes a Strategic Asset

Source: John Diebold “Information Technology as a Competitive Weapon”. International Journal of Technology Management

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Presentation Notes

There are six areas where people make investments in IT as a sustainable, strategic asset: Products and services enhanced with technology – mobile apps for scheduling/time reporting like that used by a health care provider that visits homebound individuals, collecting data (voter canvassing application) Cost displacement Those using hosted e-mail Enhanced decision support Revision of the mission or objectives of the enterprise Business interrelationships Creation of new products and services


#1 Products and Services Enhanced by Technology

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Presentation Notes

There are six areas where people make investments in IT as a sustainable, strategic asset: Products and services enhanced with technology – mobile apps for scheduling/time reporting like that used by a health care provider that visits homebound individuals, collecting data (voter canvassing application) Cost displacement Those using hosted e-mail Enhanced decision support Revision of the mission or objectives of the enterprise Business interrelationships Creation of new products and services


#2 Cost Displacement

Email Business Case 3 Year Look

Number of Users (cost/user) 50 In House Secure Exchange

Fixed Costs

Server, Disk, Switch Hardware $ 10,500 $ -

Software Licensing (Server, User) $ 1,500 $ -

Exchange Enterprise Software $ 1,443 $ -

E-mail migration fees $ 7,750 $ 7,750

Consultant to Install Software $ 5,700 $ 250

Total Fixed Costs $ 26,893 $ 8,000

Monthly Costs

Monthly Costs for Hosted Exchange $ - $ 373

Monthly Cost to Backup Exchange $ 25 Included

Bandwidth (any more needed) $ - $ -

Staff to Provide Maintenance/Upgrades and Service Desk Support $ 383 Included

Total 3 Year Monthly Costs $ 14,702 $ 13,410

Three (3) Year Total $41,594 $21,410 This comparison gives you an idea of the costs involved in managing your own solution. As you can see, there is a very low cost to implement our solution. With our advanced applications infrastructure and technical expertise, we can give you a high-end solution for a fraction of the cost of an "in-house" solution. The total cost past the first year may seem to decrease overall, but you must remember that maintenance and upgrades will end up costing you, as well as providing a backup solution. We are also completely scalable. Simply add users as your needs grow, without worrying about additional servers, software, and upgrade purchases.

Presenter

Presentation Notes

There are six areas where people make investments in IT as a sustainable, strategic asset: Cost displacement I give the example of a 50 user company moving to NetStandard’s Myappsanywhere hosted Exchange e-mail. This product works exactly as full enterprise level hosted Exchange works, but because you are using shared “cloud-based” services, each company can enjoy significant savings vs. in-house. This is one of the advantages of cloud-based services and why many “experts” believe that over the next 5 years, most enterprises will move to cloud-based solutions. From hosted e-mail, Office 365, hosted CRM, ERP platforms, automation and the like, they are all enabled now by broadband Internet costs that continue to drop month after month and year after year. In fact, this is why companies, like consolidated communications are partnering with companies like NetStandard to deliver services to customers as margins erode in communications circuits.


#3 Decision Support

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A few years ago, I heard the CIO at the CIA now say they had all the processing capacity and bandwidth needed to analyze every phone call, text message and video produced across the world. Now that’s pretty astounding, but it points out to business that we now have the bandwidth, processing capacity and data sources available that can help execute strategies based upon the huge quantity of data in the world. Many companies are using google analytics If you’re a typical small business, just crunching along from day to day without any real strategic direction, the ability to finally get your arms around your business by digging into the data you already have probably sounds enticing. But big-data service providers don’t make it easy. There are literally hundreds of companies out there, all of which promise to open your eyes to your company’s future by “harnessing big data.” These companies can be wildly dissimilar. For example, Tranzlogic provides a Web portal for merchants where they can track sales, how various locations are performing, and whether promotions are paying off. It uses “big data” analysis of your credit card transaction data to do this. Or consider MaxxCAT, which makes a network appliance and accompanying software to pluck data from your internal servers and hook those results into processing systems. It’s also a big-data service, but the two companies couldn’t be more different. Locally, a company called Kinetic Supply, which is part of Anthem Media, gathers data from sources similar to the above to provide input into what customers are buying, what they are searching, what purchases they are making. They also will manage your company’s online reputation by handle suppressing negative data, ActOn! So you can see if business decides to embrace big data, it doesn’t have to mean making a huge commitment to a service provider—contractually or financially. Identify one problem area—sales, finances, Web performance, etc.—and start mining your data for insights. In no time, you'll be turning big data into big opportunity.


#4 Revising the Mission

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Presentation Notes

There are six areas where people make investments in IT as a sustainable, strategic asset: Revision of the mission or objectives of the enterprise. For this feature let’s look at technology companies themselves. Last fall, John Chambers, CEO of Cisco, laid off 7000 employees and redefined roles, interviewed and hired 6000 in an effort to move from a company that produced equipment sold to customers TO a company focused on business outcomes. That is a clear change in the mission and vision. Amazon went from a company that had to buy hardware to support the Christmas sales to one that recognized that server, network and storage capacity could be “shared out” to other companies. Their CEO, Jeff Bezos said recently, “that AWS may be the largest business in Amazon over the fullness of time”. IBM recently sold off its Intel server business and some storage products in a message to SMB’s that the cloud is the only direction going forward. They have focused their energy on the cloud and how their software can bring value to their business. Closer to home, a local publishing firm has made a move away from providing published magazines and other publications to a focus on how big data can bring value to business.


#5 Business Interrelationships

Businesses can use technology to link companies that can provide more capability than either of them could alone.

Presenter

Presentation Notes

There are six areas where people make investments in IT as a sustainable, strategic asset: Enhanced decision support EDI B2B get product information, buy product, selling products to stores via a web site. Providing product information Anthem identifies, bring client to us and work together to provide a solution.


#6 Strategic: Creation of New

Products and Services

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5. Creation of new products and services We have only our imagination and understanding of the “art of the possible” to look at the endless possibilities for your business. Could we proactively monitor appliances in a home a schedule a person to come on-site and fix devices that are about to break. Inconveniences I can think of are a washing machine breakdown, an issue with my ice maker. We see consumer products companies adding in features to allow individuals to control these devices from their home. Over the weekend my sister-in-law remembered she hadn’t turned on her crock pot. Apparently Rival has added a feature where the crock pot is connected to her wireless and can be controlled remotely. What is your company thinking about revenue enhancing services or new markets using information you already have.


Strategy Execution

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Presentation Notes

Now that we have the approach for becoming more strategic with our IT investments, let’s look at some of the challenges with execution.


Challenge #1: How do I execute a

strategy?

Execution Requires:

1.Expert Assistance

2.Close Alignment of IT to the Business Vision

3.The People to Execute the Strategy


Challenge #2: I live in a bad

neighborhood*

* And I try not to think about it

Presenter

Presentation Notes

Cybercrime continues to be the #1 crime in America, from Sony to Home Depot, to Target to … a bunch of unpublicized events, its occurring every day. How many of you were hit with the Crypto Virus over the last year? This virus encrypts your data, they require a ransom to be paid to unencrypt your data. In reality, most companies, at an average cost of $5,000 pay someone to restore their data to its previously unencrypted form…which brings us to the next issue…


Challenge #3: IT Operational Reliability

Source: HSB Munich Re Ponemon Institute

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Are your back-ups complete and are they successful EVERY day? HARTFORD, Conn., June 5, 2013 — Almost one-third of U.S. small businesses surveyed by the Ponemon Institute had a cyber attack in the previous year, it was reported today in a study sponsored by The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re, and nearly three-quarters of those businesses were not able to fully restore their company’s computer data. 72% could not restore all their data!!!!


Challenge #4: Protecting Intellectual Property and Data

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Presentation Notes

And a Symantec report calls small and medium businesses the “Path of Least Resistance” for attackers. They report 31% of targeted attacks are aimed at businesses with fewer than 250 employees and that those attacks have increased 3 fold since 2011. But we also see companies where users are storing data ALL OVER THE CLOUD. Dropbox, OneDrive, GoogleDrive, Jungle Disk, you name it, their doing it… On the surface, this seems OK, but after awhile, most business owners come to realize their data is scattered and the only person with access is one person or a small group of people. I’ve had small business owners ask, “what do we have that they will want?” and the reply is customer data, intellectual property and bank account information. When a system is owned, User ID’s and passwords can be pilfered for the use of the perpetrator. Small businesses must realize they are “easy pickins”.


Challenge #4: Protecting Intellectual Property

and Data Assets

Presenter

Presentation Notes

HARTFORD, Conn., June 5, 2013 — The primary causes of cyber attacks on small businesses were computer viruses, worms and Trojans (61 percent) and unspecified malware (22 percent), the Ponemon Institute reported. Following the cyber attacks, 72 percent were not able to fully restore their company’s data. The survey found that 29 percent of the small businesses experienced a computer-based attack. The consequences of those attacks included managing potential damage to their reputations (59 percent); theft of business information (49 percent); the loss of angry or worried customers (48 percent) and network and data center downtime (48 percent).


Challenge #4: Protecting Intellectual Property

and Data Assets

Presenter

Presentation Notes

So we have thought through our B2B strategy, we recognize how we will use big data and all were doing is exposing more data to more places and Cybercrime is the #1 criminal activity in the world. We can ensure our critical data remains protected if we honestly understand what data is sensitive (i.e. employee records, health care information ,etc.) and build strategies around that and then recognize what data is publicly available or may be more valuable from a public source vs. what we have. For instance, a customer list previously would have been seen as one thing to protect with your life, but there might be better, more useful information on current and potential customers through big data services. Its your call, but you need to put a “modern lens” on your thinking.


How Much Security Is Enough?

Risk Types: • Strategy

• Demand

• Market

• Implementation

• Performance

Cost Drivers: • Price

• Service levels

• Specifications

• Policies

• Velocity

Presenter

Presentation Notes

The Keeper of the Stream One of my favorite stories by the late Dr. Peter Marshall, former Chaplain of the United States Senate, is about the “Keeper of the Stream.” This story is about an old man who lived in an Alpine forest high above a small Austrian village. This man had been hired by the town council to clear away the rubbish from the pools of water up in the mountains that fed the stream that flowed through their town. With faithful regularity, the keeper of the stream moved along the hill slopes and ravines removing leaves, branches and accumulated silt that could contaminate the fresh flow of water. Truly, because the town possessed such a beautiful clear stream, it became a popular attraction for tourists from all over the world. �Years passed and one evening the town council met for its annual meeting. As the council members looked over the budget, one council member began to question the salary being paid to this obscure keeper of the stream. He questioned why they kept the old man year after year. Because of this council member's persistence and a general mood for austerity, the council members voted to cut the old man’s services from the budget and tell him he was no longer needed. Now for several weeks nothing happened, and the members of the town council congratulated themselves on their savings for taxpayers. By early fall though, the trees began to shed their leaves. Small branches snapped off and fell into the pools, impeding the flow of water. Rollicking rapids with sprays of whitewater became stagnant pools. One afternoon someone noticed a slightly yellowish tint in the town water. Within a few weeks, a slimy film covered sections of the water along the banks and a foul odor was detected. Tourists to the little town soon left and many of the residents became sick. The town council was forced to call a special meeting. Realizing their error, they quickly amended the budget and rehired the keeper of the stream. Within a few weeks the stream cleared and the little town returned to normal. This story was brought to mind because of a recent company that removed some of their security controls in a cost savings mode and ultimately within 1 day their e-commerce site was rendered completely unusable. This company ultimately decided to move to the NetStandard cloud because of the controls that come with that decision. But this is not an advertisement for NetStandard Custom Cloud or Myappsanywhere, it is a focus on what are the right controls for your cloud. The customer in question has a pretty extensive set of controls in place, but how much is enough for your company? The answer lies in your risk profile for your business. We cannot give anyone a precise prescription for security, but we can highlight some of the most important security controls.


What Can You Do?

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Presentation Notes

As a small to medium business, most of you have limited resources, but there are steps that can be taken to reduce your risks: Employ common, low cost, best practices including anti-virus and commercial firewalls. Look at cloud options for Credit card processing Payroll HR/Benefits E-mail / anti-spam Use a 3rd party to process credit cards. Do not store these locally. Use the cloud to store personal information about employees. Most payroll and benefits companies offer services where information is stored on their systems. Use a 3rd party IT company with security and offerings that exceed your own. Many of these services are now offered using a cloud based approach that “shares the cost” across multiple customers.


Common Small Business Security Setup

3. Microsoft Active Directory

4. Data Back-up

Internet uplink with limited monitoring and limited awareness of capacity.

2. Network Perimeter Firewall

5. Anti-Virus on Servers6. Anti-Spam

1. SSL Connection to Application

Presenter

Presentation Notes

But wait, you might say, I already supply security controls! In fact most of you probably have firewall, active directory, anti-virus and data back-up these are important, but really cannot address the full breadth of concern for most customers in today’s high risk environment.


8. Microsoft Active Directory with password synch.

13. SQL Log Truncation every 2 hours 14. Data Back-up15. Off-site replication

Redundant Internet Uplinks Following Separate Paths with Multiple Internet

Service Providers

7. Network Perimeter Firewall

Anti-DDoS: Filters Rogue Web Traffic2. SSL Attack Mitigation3. Intrusion Prevention (IPS)4. Network Behaviorial Analysis (NBA)5. Source Reputation Analysis (RA)

6. Weekly Network Vulnerability Scans

NetStandard Surveyor Monitors:9. Application Integrity10. Service Availability11. Security Events Log Scans12. Back-up Event Log Scanning

16. High Availability Servers, Storage and Network17. Anti-Virus on Servers18. Anti-Spam

1. SSL Connection to Application

21. Video Monitoring of facilities with 90 day retention22. Fingerprint ID required to enter data centers23. Physically Locked Racks

Secure Network Configuration:19. Load Balancing for High Availability20. Web Security

Service Provider Security for Small Business

Presenter

Presentation Notes

Security providers offer more security controls at pricing that “shares” the cost across customers. As an example, this slide covers the security controls we offer. Many of these security controls we offer are beyond what most customers can afford on their own to purchase, implement and manage. When signing up for services, customers get to enjoy these added services for an incremental additional cost.


20 Critical Security Controls

http://www.sans.org/critical-security-controls/

Presenter

Presentation Notes

The SANS Institute maintains the list of the top 20 security controls. These controls can be addressed Of course these 20 tools apply to your information security environment today, whether on premise, with a managed services provider or outsourced to a software as a service provider. However, many IT professionals have struggled with where to draw the line in terms of ensuring that controls are really in place that acceptably address the information security risk for the company.


Imperative #1: Expert Assistance

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Presentation Notes

While technology is what we see the most on the surface, it is the people skills, processes they use and culture of customer service that can deliver the results you need to grow and thrive. How many folks have a real strategic plan? Of those with a strategic plan, how many include your IT needs? Who is helping you identify how your business will change OR if it needs to change to match your business plan and lead to market success? IT Managed Services Providers OFFER these insights/capabilities


Imperative #2: Position Organization for Success

Proactive Generalists

$$

Proactive Experts

$

Reactive Generalists

$$$

Reactive Experts

$$

Pro

cess

Foc

us

Bes

t Effo

rt

Pla

nned

Low High Capabilities

No Audit

SSAE16

$ Lowest TCO $$$$ Highest TCO

Presenter

Presentation Notes

The cloud or internet based services can provide avenues for your company to enjoy cloud-based services. The Cloud is now main stream and according to a Spiceworks' 2014 survey, cloud adoption is about 65% for companies in North America and is particularly prevalent in companies with less than 250 employees. The most popular cloud hosted solutions are Web hosting (80%), email hosting (58%) and productivity solutions (51%) are the most commonly used cloud services, with online backup and recovery, productivity solutions and infrastructure hosting figuring highest in IT plans for the next six months."


Imperative #3: Adopt Cloud Solutions

Presenter

Presentation Notes

The cloud or internet based services can provide avenues for your company to enjoy cloud-based services. The Cloud is now main stream and according to a Spiceworks' 2014 survey, cloud adoption is about 65% for companies in North America and is particularly prevalent in companies with less than 250 employees. The most popular cloud hosted solutions are Web hosting (80%), email hosting (58%) and productivity solutions (51%) are the most commonly used cloud services, with online backup and recovery, productivity solutions and infrastructure hosting figuring highest in IT plans for the next six months."


Thank You!

• Thanks to CBIZ • John Leek, NetStandard • 30 year career working at companies in the insurance, financial,

and transportation industries • 10 years working with small to medium businesses • Email: [email protected] • www.linkedin.com/johnleek/ • Twitter: @john_leek

Presenter

Presentation Notes

And the best thing about our managed solutions is how rapidly they can be deployed and purchased on a monthly recurring charge as opposed to investing capital in purchasing and installing solutions.

http://www.linkedin.com/johnleek/

Is Technology an Asset or a Liability?

Business

Transcript of Is Technology an Asset or a Liability?