An alternative model for IT in Exponential Organizations

1. Why IT does not matter in
Exponential Organizations*
Srini Koushik
Chief Technology Officer
© 2016 - Magellan Health* Based on Exponential Organizations by Salim Ismail1

2. The world is changing rapidly around us
© 2016 - Magellan Health2
Sharing Economy
Capital looking for investments
Rising costs of Healthcare
Volatility in Asian Economies
LAN – WAN - PAN
Bluetooth and BLE
LTE & 5G
Loons, Drones, Satellites
Longevity
Capital looking for investments
Digital Natives & immigrants
Eco-friendly and Green
Connected Home & Mobility
Quantified Self
3-D Printing
Natural Language Processing
Smart Everything
Miniaturization
Quantum Computing
Moore’s Law

3. The velocity and intensity of these shifts is
increasing
© 2016 - Magellan Health
1940 1950 1990 2001 2009 2016
3

4. Causing structural and seismic shifts in the
global economy
• Only 55 of Fortune 500 companies from
1955 are on the list in 2015
• The average lifespan of an Fortune 500
company is 15 years (down from 67
years)
• At this rate in the next 10 years 200 of
the companies in the current Fortune
500 will no longer be on that list
© 2016 - Magellan Health4

5. The Exponential Organization (ExO)
An Exponential Organization is one whose output (or
impact) is disproportionally (10x) larger than its peer
because of the use of innovative organizational
techniques that leverage exponential technologies
© 2016 - Magellan Health5

6. © 2016 - Magellan Health
ExOs are built around a
Massive Transformative Purpose (MTP)
The Massive Transformative Purpose (MTP) is the higher,
aspirational purpose of the organization, capturing the
hearts and minds of those both inside and (especially)
outside of the organization.
Think Different
We organize the world’s information
Leading humanity to healthy, vibrant lives
6

7. © 2016 - Magellan Health
ExO’s are enabled by key capabilities
DASHBOARDS
Manage ecosystem effectiveness
EXPERIMENTATION
Quick, effective and externally focused
AUTONOMY
Empower employees and partners
SOCIAL
Real-time, Bidirectional, Informal Networks
and Social Technologies
INTERFACES
Open and Loosely Coupled
STAFF ON DEMAND
Hire key skills, rent others based on demand
CROWDSOURCING
Engage the external ecosystem in core business processes
ALGORITHMS
Unique, differentiated, insight driven algorithms
LEVERAGED ASSETS
Leverage assets, use scale to drive costs based on
demand and usage
ENGAGEMENT
Build capabilities by engaging and Integrating across the ecosystem
7

8. Ability to create and
own new content
Engage community by
inviting them to Binge
Watch
Netflix Challenge on
Kaggle
Run multiple
experiments and A/B
tests to customize
experiments
Algorithms that
track viewing habits
and increases
viewership
Multi-sided platform
that makes
watching content
easy
Internal dashboards
that help Netflix
manage content &
infrastructure to deliver
optimum performance.
Netflix aims to be the World’s
entertainment distribution
platform
Cloud based
infrastructure and
content delivery
© 2016 - Magellan Health
Staff on
Demand
Community
&
Crowd
Algorithms
Leveraged
Assets
Engaging
Platform
Interfaces ExperimentDashboards Autonomy Social
Use of social
technologies to
engage employees in
ideas
8

9. 9
Focus of ExOs
Customer
Centric
Build
the
Ecosystem
Valuable
Experiences
Leveraged
Assets
and
Resources
ExO
Appleized Engaged Context sensitive Cloud & Crowd
© 2016 - Magellan Health

10. © 2016 - Magellan Health10
How do traditional IT organizations fit
into ExOs?

11. Relationship
Management
Specification
s
Solutions
Development
Service
Support
Staffing and Supplier Management
IT Financial Management
Security and Risk Management
Enterprise Architecture
CoreActivities
Support
Activities
ValueAdded
Activities
IT Portfolio Management
IT Support – Facilities etc.
1. Standardization
2. Centralized Control
3. Specialized Skills
4. Agile Methods
5. Automation
6. Efficiency
7. Outsourcing
© 2016 - Magellan Health
This model was designed for “Turn of Century” problems
Today’s IT Playbook
11

12. Exponential IT represents a significant
departure from today’s IT
© 2016 - Magellan Health
Consumer
Products
Closed Ecosystem
Standardization
Application Centric
Platforms
Co-creator
Open Ecosystem
Mass Customization
Data Centric
Full-stack skillsSpecialized Skills
Cloud & Smart SourcingOwn assets & Outsource
1
2
3
4
5
6
7
12

13. Exponential IT needs a new set of Plays
Adapted from Lean Startup created by Eric Ries
© 2016 - Magellan Health
BUILD
MEASURE
LEARN
1. 2P HIT & Smart Creatives
2. A portfolio of Experiences
3. Lightweight Integration
4. Agile Insights
5. Build @ Web Scale
6. Platform Thinking
7. Active Ecosystem Engagement
13
Ideas
Pla@orms
Data

14. Smart Creatives – People & System
Excerpts from http://www.slideshare.net/ericschmidt/how-google-works-final-1
APTITUDE:
Desire to perform
ATTITUDE:
The Ability to Learn
ADAPTIVE:
Willingness to Change
© 2016 - Magellan Health
DRIVE:
What makes them tick?
LEAD:
How they Lead
LEARN:
How they learn
TEAM SIZE:
2 Pizza Teams
TEAM
MAKEUP:
Horizontally Integrated
AUTONOMY:
How they Operate
Talent Leaders Team
14

15. BUSINESS
(VIABILITY)
PEOPLE
(DESIRABILITY)
TECHNOLOGY
(FEASIBILITY)
© 2016 - Magellan Health
Importance
Frequency
Low High
LowHigh
Experience Design
+ +
15
Secure – Simple – Context Aware

16. TraditiaonlNew
Data Lake
ODS & Sources ETL EDW
Derived (Transformed)
Discovery Sandbox
EDW
Streaming
Unstructured Data
Various Sources
Reporting, BI
Extracts
Data Science
Data Discovery
Reporting, BI,
Extracts
Agile Insights – New supply chain of data
© 2016 - Magellan Health16

17. Lightweight Integration
Stateless Micro Services Secure Cloud
based APIs
Scalable and Extensible
Cohesive Services
Loosely Coupled
Data at Rest
Data in Motion
Data @ Rest Orchestration &
Compensation
© 2016 - Magellan Health17

18. Secure Web Scale Computing
Business Architecture
Cloud Native Architecture
Continuous Delivery
DevOpsEngineered Security & Defense
Cloud Native ITSD&M
© 2016 - Magellan Health18

19. Platform Thinking
Producer
ecosystem
SaaS
Enterprise
Customers
Service
Providers
MULTI-
SIDED
PLATFORM
Deliver signature experiences
Value is derived from the
ecosystem - Network Effect
Business model delivers value to
all participants – Win-Win
Open and Interoperable – Easy to
connect to
Consumed as a Service
Value derived from content &
network
Consumer
ecosystem
Legacy
Systems
© 2016 - Magellan Health19

20. 20
Active Engagement
© 2016 - Magellan Health
Technology Platform
Collaboration tools
Social Media
User ratings
Multi-modal access
Easy to access and use
Digital
Channels
Partner
Ecosystem
Metrics &
Learning
Customer
Ecosystem
Social
Media
IT
Consumers as Co-creators
Customization of features
Decide what to consume
Information on usage
Transparency on charges
Engagement in platform design
Producers of Content
APIs and interfaces
Service Levels and Compensation
Branding
IP Sharing
Revenue and sharing model
Growth Plan & Metrics
Engagement metrics
Stage gate measures
A-B Testing
Scan competitive models
Alternative plans for Pivot
1
23
4

21. • Every industry will be transformed by ExOs
• Smart Creatives and Adaptive Leaders power ExOs
• ExOs focus on delivering a secure, seamless, context aware and
differentiated experiences
• ExOs view technology and data as a competitive differentiator
• Traditional IT will need to be revamped to support an ExO
Conclusion
© 2016 - Magellan Health21

22. Srini Koushik
Srini Koushik is Chief Technology Officer of Magellan Health. Previously he was President and
CEO of NTT Innovation Institute, a Silicon Valley-based startup focused on building platforms for
today’s Digital Businesses . He is also the founder and CEO of Right Brain Systems LLC.
Srini has 27 years of experience as Programmer, Architect, CTO, CIO and P&L owner at Fortune
100 Companies including IBM, HP and Nationwide.
Srini is an Open Group Distinguished Certified Architecture profession leader. He has published
several articles, holds three patents, and co-authored a best-selling book, Patterns for e-
business, in 2001. He was elected to the IBM Academy of Technology, and was named an IBM
Distinguished Engineer in 1996. He was also named an Elite 8 CIO by Insurance and
Technology, a Top 25 CIO by Infoworld, a Top 10 All-Star in the financial services industry by
TechDecisions, and a Computerworld Premier 100 Technology Leader in 2014.
Srini holds a bachelor’s degree in physics from the University of Madras, a master’s degree in
computer science from the University of Bombay, a master’s degree in business administration
from Ohio State University, and has completed executive education courses from both the MIT
Sloan School of Management and Stanford University.
Srini enjoys skydiving, hang gliding and other extreme sports. He is currently working on learning
to play the guitar. He enjoys traveling and has been to 55 countries and wants to visit the other
140 countries in his lifetime.
© 2016 - Magellan Health22