Gartner - The Nexus of Forces

The Nexus of Forces
Gartner point of view

Bart Mellink 6 June 2013
GARTNER CONSULTING
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for
the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain
information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Introduction
Disruptive Technology is about technology changes that have a

Transformational Impact on products, services and processes
Cloud
Disruptive Technology
timeline
App
Big Data
Information
Social
Media
Mobile
Phones
E-Commerce
Mobile
Data
Digital
Enterprise
Consumerazation
Mobility
.COM buble
2013
2011
2010
The
Internet
PC
2000
1990s

1
Copying,distribution or public displaying prohibited without the express written permission of Gartner
Introduction
Context: CIO priorities for 2012 Enhancing the Customer Experience
The biggest value proposition is not in the individual priorities, but is realized at the Nexus of these
emerging and disruptive technologies such as Cloud, Mobility, Big Data (business intelligence and
data management) and Social Business.

2
Introduction
The Nexus of Forces: People

want to connect to
want to be mobile
share experiences
find answers
using devices of
their choosing
engage with
the community
staying connected
with people
being able to switch

easily between work
and non-work
want a seamless
experience to
Digital Enterprise
access anything
from anywhere
use multiple devices
(and apps), sometimes
simultaneously
blend work and non-work
activities
3
consume and
generate information
Ubiquitous access
to info and apps
Contextually relevant
info to augment their
activities
Dont care how it

works, only that it does.
Introduction
Key questions around disruptive technologies related to financial services

Disruptive
Technology
Impact and key questions
Cloud
Should we use cloud services for our computing infrastructure?

How can we leverage cloud services to reduce costs and increase
agility while ensuring compliance with security and regulations?
Which Cloud based financial services become available on the market
and how should we react?
Mobility
How do we support bring your own device in our environment?

How do we address the need for mobile applications?
Do we have to build our own internal App store?
Big Data/
Information
How do we improve our data quality?

Which data (internal and external) should we analyze to improve our
risk analysis, business performance, CRM and planning?
Social
How will our products and brand be perceived by our (potential)

customers that rely on information shared through social networks?
Digital
Enterprise
How to leverage innovative technologies such as Social, Big Data and

Analytics to increase customer engagement, sales and services?

4
Cloud

5
Cloud
Gartner defines cloud as "a style of computing where scalable and elastic IT-enabled
capabilities are provided 'as a service' to external customers using Internet Technologies."
Expectations and Concerns are Both Evolving
Agility
Security
Cost
Transparency
Less Complexity
Assurance
More Focus
Lock-in
Self Service
Integration
Innovation
Financial

6
Cloud
Slicing the Cloud Vertically:

Cloud Service Layers continue to evolve
Film Forecaster
SaaS
Business Proc. Serv.
PaaS
Information Services
Cloud
Service Broker
(CSB)*
Application Services
IaaS
App. Infrastructure Services
System Infrastructure Services

Cloud Enablement
7
Cloud Brokerage
BPaaS
Mgmt. and Security
Providers are developing

offerings across multiple
segments, making market
segments increasingly
interconnected
Cloud
Cloud deployment models: Private to Public
Enterprise
Private Cloud
Managed
Private Cloud
Virtual
Private Cloud
Hybrid
Public
Cloud
Community
Public Cloud
Owner
Enterprise
Enterprise
Provider
Provider
Provider
Operator
Enterprise
Provider
Provider
Provider
Provider
Service
Access
Closed
(enterprise)
Closed
(enterprise)
Closed
(enterprise)
Closed group
(community)
Open
Level of
Control
Full
High
High
Low
None
Points of
Leverage
Skills (none)
Assets (none)
Skills (strong)
Assets (none)
Skills (strong)
Assets (medium)
Skills (strong)
Assets (strong)
Skills (strong)
Assets (strong)

8
User Z
Company X
Enterprise B
Enterprise A
Enterprise A
Enterprise A
Enterprise B
Enterprise A
Open Public
Enterprise A
Closed Private
Cloud
Let's buy some Cloud Service Are you still in control?
The Old Way

Conduct an RFI process
followed by an RFP
process that, after six
months, results in a 1,000page service contract,
with 50 clauses and 20
attachments, that is then
reviewed and signed off
by the sourcing, IT,
finance, procurement
and legal departments.

9
The New Way

Press the
I Accept
button
Cloud
Service Layer Clustering - Potential Alternatives to mix Sourcing and Cloud

Who is responsible for the overall IT Architecture?
Traditional (out)sourcing portfolios
Business
Process Mgmt
Cloud models
Retained + Staff Augmentation
Solution
Design
Retained + Staff Augmentation or Projects
Application
Development
Retained + Project Based Application Development
Application
Enhancement
Application
Maintenance &
Support
AMS
ITO
AMS ITO
Extended
AMS ITO
Application
Operations
HW Platform
DC Facility
Retained
AMS ITO
Extended
AMS ITO
Extended
AMS ITO
BPO
BPaaS
SaaS
IT
Operations
ITO
Middleware &
DB admin
Infrastructure
management
Retained
Extended
Infra
Services
ITO
IT Ops
ITO
Infra
Services
ITO
Hosted
Data
Center &
Equipment
ITO
PaaS
Infra Utility
Service
(IUS)

10
IaaS
ITO = IT Outsourcing
AMS = Application Maintenance and Support
Cloud use cases

11
Cloud
Example SaaS: Google Apps Premier Edition (GAPE)

12
Cloud
Brazilian rama Internet based Investment Funds provider (for retail clients) fully
leverages a mix of IaaS Amazon Cloud services
Amazon services used:
Elastic Cloud (EC2) - Computing
Elastic Load Balancing Multiple

Availability Zones
Amazon S3 Storage
Amazon CloudFront Reduce latency
Amazon RDS Relational Database
Service
Amazon Route 53 Name service
Amazon CloudWatch - System

Management
https://www.orama.com.br

13
Cloud
Example SaaS: Ohpen uses the Amazon EC2 virtual private cloud as production
deployment platform for multiple front end web sites
Ohpen own
(native) offering
Ohpen services as
white label product
Robeco is launching customer
Amazon Elastic Cloud (EC2)

(Ireland)

14
Cloud
Business and IT Transformation: Usage-based Insurance

15
Pay-as-youdrive

15
Accident coverage for 24

hours for 99 Cent
Mobility and Digital Channels

16
Mobility
Key questions around Digital Channels and Mobility: From Inside/Out to Outside/In
INSIDE/OUT
FOCUS
Should we develop a Bring Your Own Device (BYOD) strategy and how does
such a strategy look like? What are the benefits, costs and risks involved?
How and where will our workforce be situated in the future and what are the
implications for technology, security and application design?
Should we enable our internal business applications for tablets and mobile
phones and what is the impact on Application Development, maintenance and
operational processes? Should we create an internal App store?
Which external business functions should be available for our customers and
business partners on mobile devices and how do we manage this?
Should we be part of an industry community or establish strategic relationships
to strengthen our market position in the mobile space?
OUTSIDE/IN
FOCUS
Which will be our role within the Digital Channel strategy of our key customers
and which services should we develop to support this?

17
Mobility
How to leverage what is possible today (or coming soon) in your business?
HD Audio/ Microphone
HD Camera
Voice Authentication
Speech Recognition
Kinnect type gesture sensing

Facial expressions reading and interpretation
2D to 3D to Holograms to 4D
Form-Factor Evolution
Micro-electro mechanical systems
Accelerometer
Compass
GPS (not a MEMS)
Gyroscopes
Sensors (i.e. Pressure & Temperature)
Other Features
Biometric Authentication
Fingerprint
Vein pattern (in the palm)
Retina scan
Voice authentication
Heartbeat pattern
Information Exchange
Machine sensors (IoT)

NFC
New Bluetooth
Wi-Fi Direct data transfer
Device Pairing with multiple devices
Information extraction from picture/video
Augmented Reality (visual contextual info)
Location-aware to activity-aware (i.e. smart VM)
Active to Passive Computing
Common operating systems

Form factor agnostic (mobile cloud)
Holographic projectors (i.e. keyboards)
Wearable/ implants
More computing power (replace desktops)
Olfactory sensing (artificial nose)

Kinetic movement (phone can move)
Germ-killing UV light
Solar powered batteries
Wireless battery charging (3 ft. Proximity)
Braille Input/ Display
Next-Gen Display Screens
Digital Assistants/ Delegated Control

Proactive recommendations
Appliance/ Machine Control (Chevys digital keys)
Digital Assistant to Digital Assistant communication

18
2-sided to multi-sided screens

Foldable/ Bendable screens
Expandable screens
Transparent screens
Mobility
What may be possible in the future

2012 2013: Smartphones and Tablets
2013 2016: Up-rights like Google Glass
Voice
Fingerprints
Information Capture and Exchange
Camera (MRDC and photo bill pay)
Wi-Fi Direct and NFC to exchange info
Augmented Reality
Get balances by looking at the bank's logo
Mood recognition can improve service
Auto-translation of documents /speech
Voice-control offers hands-free computing
1st gen iphone launched in 2007, ipad in 2010
Google Glass may launch in late 2013/ 2014
2017 2018: The internet of everything

Self-managing devices and systems
Possibly a self-managing ATM or branch
Groceries refilled proactively would require
access to payment methods
Information exchange
Capture data for loans directly from cars,
houses, etc.
Qualcomms Wifi coffee maker concept: Feb13
2020
2013
2013 2014: Watches and work-out bands

Heartbeat Pattern
Remote Control (Gesture based)
Control any iDevice, even possibly ATMs?
Payments (NFC)
Scan your iWatch at the POS terminal
Gamification
Financial related loyalty points similar to fitness
related Nike Fuel Points
Apple iWatch may launch in 2013
2016 2017: Truly smart clothing
2018 2019: Bio-Computing/ Cybernetics
Fabric Keypads for mobile devices

Another possible form-factor for service
interactions
Payments integrated into fabric which
redefines the POS for clothing purchases
Implants and Electronic Tattoos

Microchip lets blind patients see shapes
Microchips provide cashless transactions
E-tattoos may auth and provide access to
closed branches in the future
True Artificial Intelligence
Genetic Algorithms AI that can learn and
adapt to manage investment accounts
Googles talking shoes concept: March 2013

19
FDA approved microchip implants in 2004
Mobility
Business and IT Transformation: Real-time Insurance

20
Real-time
underwriting
Travel Insurance
ATM

20
Mobility
Gartner Consulting Case Study: Customer, Channel, & Disruptive Technology Trend
Assessment Tier-1 US Bank
Client and Business Context
Gartner Approach/Differentiation
Our client is a Tier-1 US Bank with a early adopter strategy on

IT technologies. In 2008, the bank acquired a major other bank
and was also effected by the financial crisis (the bank received
a substantial federal bail-out from the emergency economic
stabilization act)
Gartner used an "Outside-In" approach looking across

multiple dimensions:
Due to the combination of the aftermath of the financial

crises and the integration effort of a major acquisition, the
Bank felt they were no longer in a front runner position
related to their digital and channel strategy
Due to their dependency on the digital channels the bank

needed to identify both a tactical and strategic innovation
roadmap
Key business Drivers
Banking Industry Trends

Macroeconomic Factors
Challenge
Demographic Trends
Banking Industry Trends

21
Key business Drivers

Technology Enablers
Client Results
The detailed roadmap Gartner created (in March 2013),
contains a clear priority mapping. The bank decided to
implement all Gartner recommendations
Technology Enablers
Priority mapping
Social

22
Social
What Is Social CRM?
Social CRM is a strategy for harnessing

communities to support customers, as
well as sales, marketing and customer
service organizations, along a
purposeful and mutually beneficial
business process.
Understanding the power of communities, the multiple

personas of their members, their expectations, their
aspirations and how to engage with them will become
essential skills for companies in the 21st century.
23
Social
Five Levels of Social Maturity:

From Social Media to Social Business
Level 1:
Reactive
No way,
no how!
It's too
dangerous!
Level 2:
Exploratory
Level 3:
Emerging
There might be
a pony in there
somewhere.
Okay, it's worth

spending some
time organizing
this stuff . . .

24
Level 4:
Integrated
Level 5:
Optimizing
We've got
goals, we've got
metrics, we've
got game!
OMG!
How did we ever
do business any
other way?
Social
Emerging community based financial products in Europe: Paypool and Bankeez
Collecting money/ fundraising and donations:
Social Savings Account
Shared gifts for weddings and anniversaries
Shared savings account (with real money)
Cost sharing of parties and trips
Shared goal setting (i.e. trip, present,

charity)
Collecting registration fees, tickets, prizes,

funds for (charity) organizations
Social media to share progress
Leverages Tunz.com banking license in

Belgium

25
Social
Challenging Traditional Business Models: Peer-to-Peer Insurance

26
Social
New Product Development via Crowdsourcing
Co-design
Customer
innovation
Customer
engagement
27
Big Data / Information

28
Banking CEOs indicate the need for more information on regulatory compliance,
customers, the competition and operations
Source: Gartner Research, CEO Survey 2012:

Financial Services CEO Agenda

29
Big Data Initiatives: The three Vs

Technical
Challenges and
Opportunities
Business
Challenges and
Opportunities

30
Big Data New Questions From the Business
Past
Future
What
happened?
What is
happening?
What is likely
to happen?
Reporting,
Dashboards
Real-Time
Analytics
Predictive
Analytics
Why did
it happen?
Why is
it happening?
What should I do
about it?
Forensics &
Data Mining
Real-Time
Data Mining
Prescriptive
Analytics

31
Big Data requires Expanding Your Analytic Capabilities
Scenario Planning
Gamification/Contests
SELECT *
FROM
customers
WHERE
companyname
LIKE 'a%'
Predictive Analytics
Mobile Deployment
Complex Event Processing
Rule Engines
Data and Text Mining
32
Natural Language Processing
Visualization
Social Media plus Information Equals Customers Insight
Gamification
Social Media
Analysis

34
Own Social Media

Network
The Nexus of Forces driving the Digital Enterprise

35
Gartner Point of View
The Nexus of Forces
Digital Enterprise

36
Gartner Point of View
Best Practice: Use Pace Layering to drive decision points

Organizations need to create a "layered"
application strategy that recognizes that the
business requires several types of applications
with different governance, funding, and
deployment models
Systems of Innovation
Systems of Differentiation
Systems of Record
Highly
Flexible
Systems of Record Established packaged

applications that support core transaction
processing, i.e. core banking
Sales channel
Client
management
Marketing
Label / commercial offering

Commercial
Bundle
bundle
acceptance
Margin
Service
Advice
Channel
management
Sales Support
Core product factory
Tightly
Controlled
Underwriting /
Acceptance
Policy
administration
Claims
Product
management
Reinsurance
Risk
management
Output
management
Billing
Finance

37
Systems of Differentiation Applications that

enable unique company processes or industryspecific capabilities. They have a medium life
cycle (one to three years), but need to be
reconfigured frequently to accommodate
changing business practices or customer
requirements, i.e. channels
Systems of Innovation New applications that

are built on an ad hoc basis to address new
business requirements or opportunities. These
are typically short life cycle projects (zero to 12
months) using departmental or outside
resources and consumergrade technologies
Contact
Bart Mellink
Vice President
Disruptive Technologies EMEA Lead
Gartner Consulting
Telephone: +31 651272965
Bart.Mellink@gartner.com
GARTNER CONSULTING
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for
the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain
information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.

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The Nexus of Forces

Gartner point of view

Disruptive Technology is about technology changes that have a

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Context: CIO priorities for 2012 Enhancing the Customer Experience

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

The Nexus of Forces: People

being able to switch

Dont care how it

Key questions around disruptive technologies related to financial services

Impact and key questions

Should we use cloud services for our computing infrastructure?

How do we support bring your own device in our environment?

How do we improve our data quality?

How will our products and brand be perceived by our (potential)

How to leverage innovative technologies such as Social, Big Data and

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Slicing the Cloud Vertically:

Business Proc. Serv.

App. Infrastructure Services

System Infrastructure Services

Mgmt. and Security

Providers are developing

Cloud deployment models: Private to Public

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Let's buy some Cloud Service Are you still in control?

The Old Way

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

The New Way

Service Layer Clustering - Potential Alternatives to mix Sourcing and Cloud

Retained + Staff Augmentation

Retained + Staff Augmentation or Projects

Retained + Project Based Application Development

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Cloud use cases

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Example SaaS: Google Apps Premier Edition (GAPE)

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Elastic Load Balancing Multiple

Amazon CloudWatch - System

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Amazon Elastic Cloud (EC2)

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Business and IT Transformation: Usage-based Insurance

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Accident coverage for 24

Mobility and Digital Channels

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Kinnect type gesture sensing

Micro-electro mechanical systems

Machine sensors (IoT)

Common operating systems

Olfactory sensing (artificial nose)

Next-Gen Display Screens

Digital Assistants/ Delegated Control

2013 Gartner, Inc. and/or its affiliates. All rights reserved.

2-sided to multi-sided screens

What may be possible in the future

2013 2016: Up-rights like Google Glass

1st gen iphone launched in 2007, ipad in 2010

Google Glass may launch in late 2013/ 2014