'Every budget is an IT budget'
- 12 November, 2012 22:00
“Every budget is an IT budget,” says Peter Sondergaard, head of global research at Gartner, as he highlights how the pervasiveness of technology is impacting enterprises today.
Sondergaard says the industry is entering a "nexus of forces" causing a conflation of cloud, social collaboration, mobile and information or data.
The digitisation of the enterprise is commencing as a result of this nexus, says Sondergaard in his keynote at the Gartner Symposium/ITxpo, taking place on the Gold Coast this week.
"This is an extraordinary time for human history, says Sondergaard. "IT professionals are changing the world, and are at the centre of every business and government agency."
Sondergaard says each individual force is changing technology but in combination, these four are driving substantial change in business models.
All IT projects, on the other hand, are business projects, in essence that there is work that needs to be done with the back office. Because technology pervades every business function, every budget gradually includes IT, which is why every budget is an IT budget, he explains.
“IT’s importance grows every year,” says Gartner CEO Gene Hall. He says a Gartner survey finds 85 percent of CEOs will be impacted by global downturn this year, yet growth remains a number one priority.
What keeps CEOs awake up at night is their organisation’s ability to innovate. As IT professionals and visionaries, you have an incredible opportunity within you, says Hall. “Your work will transform cities, governments, companies.”
It is a time of “exhilarating change” and “vastly disruptive technology,” says Hall.
The four forces of change
Sondergaard says the cloud is the carrier for the three other forces, the “permanent fixture” and “foundation” for this new environment. The mobile is the personal cloud, social media is possible through the cloud and information or big data is the “killer app” for the cloud, he adds.
The nexus accelerates the information economy, says Sondergaard. It creates a new layer in the economy, which is about information, turning data into revenue. This will accelerate growth in the global economy and will create jobs.
Gartner predicts that by 2015, 4.4 million IT jobs, will be created to support big data for instance. Around 960,000 of these will be in the Asia Pacific region. Each big data-related role in the Asia Pacific, meanwhile, will create employment for three people outside of IT, or a total of four million jobs.
While this sounds phenomenal, he says, enterprises will face the challenge of getting talent, and only around a third of these job will be filled.
“Data experts will be a scarce and valuable commodity,” he says. “You have to focus on how the organisations develop and attract the skills required. These jobs are the future of the new information economy.
As for a key initiative the CIO can embark in the next 12 months, Sondergaard says, “I would not start with a technology. Start with how I can as a CIO affect a positive change revenue wide. I would link a project that enables me to demonstrate what IT can do so I will work with the most favourable contact I have with a business unit to demonstrate that.”
“Cloud is not merely about cost-cutting, the end game is not just cheap on-demand services. In fact, 90 percent of these services are still subscription based, not pay-as-you-go,” says Sondergaard.
“We are just at the beginning of realising the cost benefits of cloud, but organisations moving to the cloud are also attracted by the new capabilities they do not get today. It is bringing new approaches to designing applications, specifically for the cloud, and providing more resilience by architecturing failure as a design concept. Cloud also teaches us about services and service levels, and the contrast between what the business wants for outcomes versus IT’s old methods of getting there.”
When we all come back here five years from now and talk about the cloud, we will talk about what functions the business does as a common practice without IT’s support.
He says organisations, on the other hand, must design their business around the second force – mobile. “Mobile is about computing at the right time, in the moment. It is the point of entry for all applications, delivering personalised, contextual experiences,” says Sondergaard.
In 2016, more than 1.6 billion smart mobile devices will be purchased globally. Two-thirds of the mobile workforce will own a smartphone, and 40 percent of the workforce will be mobile. The challenge for IT leaders is determining what to do with this new channel to their customers and employees.
He predicts that in less than two years, iPads will be more common in business than BlackBerries. Meanwhile, 20 percent of sales organisations will use tablets as the primary mobile platform for their field sales force. As a result, by 2018, 70 percent of mobile workers will use a tablet or a hybrid device that has tablet-like characteristics.
The third force, social computing, will move from just outside the organisation, to the core of business operations. He says by 2015, around 30 percent of posts to social media will be automated, or come from nonhumans.
The fourth force, information or big data, means enterprises that are serious about collecting, managing and deploying information will be rewarded. Infocentric companies have doubled their market-book value, he says. Data or information can become revenue.
“Big data is looking ahead beyond what everyone sees,” he says. You need to understand how to deal with hybrid data – both unstructured and structured, and also shine light on“dark data”. The latter, he explains is data collected but going unused despite its value.
“Leading organisations of the future will be distinguished by the quality of their predictive algorithms,” says Sondergaard. This is a challenge for the CIO and also an opportunity as technology pervades every aspect of the business, he says. “Long-term, big data is something we see as a complete shift for today’s ways of deploying information as mere resource, to valuing it as any corporate asset while being trustworthy with customer information.”
A new seat at the executive table
Sondergaard, meanwhile, says the nexus is leading to the new seat at the executive table – the chief digital officer who is responsible for the digital business strategy.
Sondergaard predicts in three years, a quarter of organisations will have a chief digital officer or a similar sounding role.
He describes the CDO role as this: “A function that sits as part of business unit management, it is an leadership position if you are responsible for the digital strategy of the organisation.
The title may not be chief digital officer, but it is a position with a set of responsibilities that can be entrusted in any executive position as opposed to having to create a new position.
He says executives who have the ‘e’ in their titles, such as people responsible for the digital channel, e-channel director, or e-commerce director are likely to be the ones who will evolve into chief digital officer.
Michele Caminos, Gartner managing VP, says CIOs recognise focusing on the customer is a major driver of innovation.
She suggests the following exercise: “Imagine you don’t have to deal with legacy technology or existing products, how would you do it?”
“We have to unleash the force that will differentiate the business instead of spending all our time at the back office,” she says.
For the CIO or the chief marketing officer – every budget is an IT budget, she says.
Your role is changing, she says. “Embrace the new realities”.
She says already half of CIOs have responsibilities beyond IT.
“The Silicon ceiling is cracking,” she says. “From your vantage point, sitting at the heart of the organisation, you may well be positioned to lead other areas.”
David Willis, Gartner analyst, meanwhile, highlights the role of security in this new environment.
“Security is always an arms race,” he says. “You can’t fight with old strategies and you may need new leaders in the company. If your security officer can only say ‘no’, get rid of him.
“Continue to invest in security all the time,” he says, and to expect to rework your entire risk management programme. “Make sure your policies are ready for nexus-driven threats, and expect attacks from new sources at an unprecedented rate.”
The world is shifting to openness, like with employee-owned devices, he notes.
“Counter cyber attacks – and anticipate new attacks from new sources at an unprecedented scale. Respond to ‘reputation’ warfare and defend against social media ‘mercenaries’.
Keep pace with security best practices and invest aggressively in security technologies.
“Use technology too,” he says. “Protect yourself with things like mobile device management, containerisation, and virtualisation.”
“Protect employee and customer data rigorously,” he says. “The paradox of security is if you overdo it, people will your work their way around you.”
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