Technology change, once gradual, now occurs so suddenly that what used to be a vision for the next era is now a project for next year. We’re in a permanent state of upgrade and IT may feel a sense of chaos, without stability, to keep up. Yet after building earlier IT infrastructures, CIOs and IT leaders can be “builders again” of the digital platforms for the new civilization infrastructure, said Peter Sondergaard, senior vice president and global head of research at Gartner, in the opening keynote at Gartner Symposium/ITxpo 2016 in Orlando.
“You are builders of a new type of infrastructure that won’t just reshape business but the way people live – society itself,” Mr. Sondergaard told the audience of more than 8,000 CIO and IT leaders.
Top performing IT organizations receive 5x higher increases in budgets than trailing organizations.
Top performing digital organizations have embarked on this mission: They spend twice the percentage of their IT budget on digitalization versus the mainstream For starters, top performers don’t see technology investments as a burden to be controlled or managed down. They view IT as an asset not a cost. Gartner’s latest CIO research shows that top performing IT organizations receive 5x higher increases in budgets than trailing organizations. Yet, they are also the best at taking cost out.
“In other words, because they save more they are trusted with more funds to support digital,” Mr. Sondergaard said.
These leaders are trusted to build the digital platform which entails five domains: IT Systems, Customer Experiences, things, Intelligence, and the Ecosystem Foundation. The domains are interconnected and independent and organizations will focus on the one or few with the most impact for them.
IT Systems, how you run and scale operations, requires work because in recent years applications have become mobile and social. Infrastructure applications and business processes have moved to the cloud and data is more pervasive, accessible and open. While there is a general trend towards the cloud, systems move at different rates and organizations should audit their mix of internal and cloud-delivered capabilities to use the cloud when appropriate.
“In parallel we have to clean up our in-house systems and infrastructure,” Mr. Sondergaard said. “High performing IT systems are crucial to your success.”
Customer Experience, how you connect and engage in new ways, requires a different approach to design. “The digital experience may be the only one that your customers have with your products or services,” Mr. Sondergaard said. “This is the experience economy, where you earn customer loyalty by moments.”
This is the experience economy, where you earn customer loyalty by moments.
To play in this arena, organizations should cast aside their assumptions and understand the customer’s intent through advanced algorithms and artificial intelligence (AI). In a connected world, customer relationships will equal “the relationship your systems have with your customer in the moment.”
Mr. Sondergaard challenged the crowd of CIOs and IT leaders to take a seat at the customer experience table and help create new experiences that solve problems customers didn’t realize they had. It’s also time to realize that in a world of virtual reality (VR), chatbots and Virtual Personal Assistants (VPAs), an organization’s mobile apps and web presence may become less relevant.
Things, how your organization senses and acts in the physical world, involves the consumer-driven world and enterprise IoT. By 2020 over 26 billion devices will be interconnected with 215 trillion stable connections and 63 million new connections every second. Integration will be the highest priority for the IoT department. Yet adding devices is the easy part. IT leaders should remember that processes, workflow and data integration will be the hard part.
By 2020 over 26 billion devices will be interconnected with 215 trillion stable connections and 63 million new connections every second.
The massive amount of data generated may see a new cross-disciplinary area for IT departments that require a merging of industrial and enterprise architects. “Picture data scientists with hard hats,” he said. Furthermore, a shift to real-time analytics will surpass traditional analytics to become 30% of the market by 2020.
Intelligence is not only about analysis but how systems learn and decide independently. Algorithms are at the heart of this intelligence along with AI. By building machines that learn from experience, we can produce unanticipated outcomes. New commercial AI systems will proliferate and IT will employ people to not only code the systems, but to train them. Note that machine learning and AI moves at the speed of data, not at the speed of code releases.
The Ecosystem foundation builds the capability to interact with customers, partners, adjacent industries and even the competition. How an organization interacts as an institution in the digital world, entails the transformation from traditional businesses with linear value supply chains to networked digital ecosystem businesses. Gartner research shows that CIOs plan to double their number of ecosystem partners in two years. This requires technical touch points in the form of Application Programming Interfaces (APIs) that allow developers to build capabilities an organization might not have foreseen.
AI moves at the speed of data, not at the speed of code releases.
“An active community of developers can create more products in a week than you can in a year,” Mr. Sondergaard said. “APIs implement business policies in the digital world. They shape not only who you are but what your partners can do.”
Many industry models will transform with digital ecosystems. They will move from simple relationships, run by intermediaries, toward distributed partnerships managed by a shared distributed ledger system such as blockchain. “Building a strong ecosystem will help you manage the transition,” Mr. Sondergaard said. “Ecosystems are the future of digital.”