CIOs Reveal Many Are Unprepared for Digitalization: the Third Era of Enterprise IT
Digitalization, the third era of enterprise IT, is beginning, but most CIOs do not feel prepared for this next era, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs. The survey showed that many CIOs feel overwhelmed by the prospect of building digital leadership while renovating the core of IT infrastructure and capability for the digital future. The survey found that 51 percent of CIOs are concerned that the digital torrent is coming faster than they can cope and 42 percent don't feel that they have the talent needed to face this future.
The worldwide survey was conducted in the fourth quarter of 2013 and included 2,339 CIOs, representing more than $300 billion in CIO IT budgets in 77 countries.
During the first era of enterprise IT, the focus was on how IT could help do new and seemingly magical things — automating operations to create massive improvements in speed and scale, and providing business leaders with management information they never had before. The last decade has represented the second era of enterprise IT, an era of industrialization of enterprise IT, making it more reliable, predictable, open and transparent. However, while this second era has been necessary and powerful, tight budgets and little appetite for risk left scant room for innovation.
Entering the third era of enterprise IT technological and societal trends, such as the Nexus of Forces and the Internet of Things, are changing everything; not only improving what businesses do with technology to make themselves faster, cheaper and more scalable, but fundamentally changing businesses with information and technology, changing the basis of competition and in some cases, creating new industries.
Most businesses have established IT leadership, strategy and governance but have a vacuum in digital leadership. To exploit new digital opportunities and ensure that the core of IT services is ready, there must be clear digital leadership, strategy and governance, and all business executives must become digitally savvy. Indeed, the 2014 CIO Survey shows that the CEO's digital savvy is one of the best indicators of IT and business performance.
CIOs report that a quarter of IT spending will happen outside the IT budget in 2014 — and that is the spending they know about; the reality may be significantly higher. This is a direct result of the new digital opportunities that are more entwined with customer and colleague experiences, and that may, in some cases, reflect concerns that the IT organization is not fast enough or otherwise ready for more digital opportunities.
"There is an inherent tension between doing IT right and doing IT fast, doing IT safely and doing IT innovatively, working the plan and adapting," said Mr. Waller. "The second era of enterprise IT has been all about planning IT right, doing IT right, being predictable and creating value while maximizing control and minimizing risk. However, to capture digital opportunities created by the third era, CIOs need to deal with speed, innovation and uncertainty. This requires bimodal capability — operating two modes of enterprise IT — conventional, or "safe and steady" IT, and a faster, more agile nonlinear mode."
In order to deliver on this bimodal future, CIOs are planning for significant change in 2014 and beyond:
-- A quarter have already made significant investments in public cloud, and the majority expect more than half of their company's business to be running over public cloud by 2020.
-- Seventy percent of CIOs plan to change their technology and sourcing relationships over the next two to three years, and many are seeking to partner with small companies and startups.
-- Forty-five percent of companies have implemented agile methodologies for part of their development portfolio, although most need to go further to create separate, multidisciplinary teams, with lightweight governance and new, digital skillsets and alternative sourcing models.
Rate of IT Employment Growth Continues to Decelerate
The number of IT jobs grew 0.03 percent sequentially last month to 4,521,400, according to TechServe Alliance, the national trade association of the IT & Engineering staffing and solutions industry. On a year-over-year basis, IT employment has grown by 4.56% since December 2012 adding 197,100 IT workers.
Engineering jobs grew once again in December, up 0.13 percent sequentially last month to 2,479,300. On a year-over-year basis, engineering employment has grown by 1.39% since December 2012 adding 33,900 engineering workers.
"While IT employment grew almost three times the rate of the overall job market last year, the rate of growth decelerated throughout 2013. On the engineering side, the pattern of modest though irregular growth continued in December," stated Mark Roberts, CEO of TechServe Alliance. "When you look at the recently released jobs report which underwhelmed nearly everyone, it is hard to be too disappointed in the IT and engineering employment picture in 2013. While employers clearly exhibited more caution in the latter half of last year, there are signs that the rate of growth of IT and engineering employment should strengthen as 2014 unfolds," added Roberts.
Survey: Measurement and Analysis Across the Entire IT Infrastructure Is Key to IT Operational Excellence
Continuity Software, a provider of service availability risk management solutions, announced the results of the Continuity Software IT Operations Analytics Benchmark. Based on results collected across a variety of industry verticals - including financial services, healthcare, manufacturing, and retail - the benchmark underscores the importance of operational analytics in meeting IT performance goals.
The IT Operations Analytics Benchmark survey's key findings include:
Large organizations are the most common users of analytical tools to monitor and measure IT performance goals.
-- 57% of the large organizations surveyed use analytical tools to monitor, and measure IT performance goals (versus just 29% of small companies).
Cross-domain operational excellence is mostly measured by uptime.
-- 89% of the organizations surveyed measure uptime across most or all IT domains; 66% measure performance; 51% measure the number of open issues.
Frequently tracking configuration consistency helps organizations meet their goals.
-- 53% of the organizations that track configuration consistency on a daily basis across the IT infrastructure are meeting or exceeding their goals, compared to 31-33% of the organizations that track only portions of the infrastructure.
Better measurement and analysis tools are required for IT operations excellence.
-- 40% of organizations surveyed cited better measurement and analysis tools as the most effective means for achieving operations excellence, followed by tools to detect cross-domain IT configuration issues (22%) and tools to enforce IT best practices (19%).
Storage and network performance rank highest.
-- 71% of the organizations surveyed monitor storage and network key performance indicators (KPIs); other areas of IT operations that are commonly monitored and measured include applications (69%), databases (66%), and clusters (49%).
Cloud environments continue to lag behind.
-- Only 14% of the organizations surveyed monitor and measure cloud KPIs.
-- 43% of the organizations never analyze configuration consistency in their cloud environment.
ForeSee Releases the ForeSee Experience Index (FXI): 2013 U.S. Retail Edition
ForeSee, the global leader in technology-driven customer experience analytics, today released the ForeSee Experience Index (FXI): 2013 U.S. Retail Edition. Based on data gathered during 2013’s holiday shopping season, the report features company-level and channel-specific customer satisfaction analysis for the top 100 U.S. retailers.
The new FXI Retail report offers a comprehensive view of satisfaction at the Company-level and across every applicable sales channel including Store and Contact Center as well as Web and Mobile. The study is based on more than 67,600 surveys collected between Nov. 29 and Dec. 17, 2013, for the 100 biggest U.S. retailers as reported by the Fortune 500 and Internet Retailer's top 100 websites. Retailers listed in this report include Amazon, Dell, L.L.Bean, Apple, QVC, Keurig, Costco, Ralph Lauren, Victoria's Secret, Barnes & Noble, eBay, Groupon, Family Dollar, Best Buy, Toys"R"Us, zulily and others.
Company-level: retailers that satisfied the most (and least) during 2013’s holiday shopping season:
Amazon (90) and L.L.Bean (90) tied for the highest Company-level satisfaction. While this is the first time ForeSee has studied Company-level satisfaction during the holidays, the L.L.Bean website has scored an 80 or above in Web satisfaction eight out of the nine years measured, and Amazon has topped the Web satisfaction list every year. Amazon and L.L.Bean set the bar for customer experience excellence.
Priceline.com came in with the lowest Company-level satisfaction (76), as well as one of the lowest Web satisfaction (75) and Mobile satisfaction (73) scores.
Store channel: Apple, which prides itself on stellar Apple Store customer experiences, lost to the supermarket chain Publix Super Markets in Store satisfaction with a score of 86 – three points higher than Apple’s score of 83.
53 percent of retailers register merchandise as the main priority affecting in-store purchase, and 35 percent register service.
Web channel: While Amazon (88) led the pack for Web satisfaction, some retail sites such as vitacost.com (86), keurig.com (84) and llbean.com (84) are creeping closer. Basspro.com (83) and crateandbarrel.com (80) tied for the most improved sites with seven-point gains in customer satisfaction from last year.
57 percent of retailers identify merchandise as the top driver affecting customer web experience, compared to only 7 percent that register price.
Mobile channel: In a category that saw satisfaction stagnate this year, Walmart (80) was the only company to experience a significant increase of more than three points in Mobile satisfaction, seeing a five-point improvement from 2012’s score. Again, Amazon led the pack with a Mobile satisfaction score of 87.
38 percent of retailers register functionality as the top priority affecting the mobile customer experience, above both merchandise (34 percent) and content (31 percent).
Contact Center channel: QVC (88) beat Amazon (85) in Contact Center satisfaction by three points. Costco (85) and O’Reilly Auto Parts (85) tied Amazon in Contact Center satisfaction.
55 percent of retailers record knowledge of the customer service representative as the top priority affecting the customer contact center experience.
Worldwide IT Spending on Pace to Reach $3.8 Trillion in 2014
Worldwide IT spending is projected to total $3.8 trillion in 2014, a 3.1 percent increase from 2013 spending of $3.7 trillion, according to the latest forecast by Gartner, Inc. In 2013, the market experienced flat growth, growing 0.4 percent year over year.
Spending on devices (including PCs, ultramobiles, mobile phones and tablets) contracted 1.2 percent in 2013, but it will grow 4.3 percent in 2014. Gartner analysts said convergence of the PC, ultramobiles (including tablets) and mobile phone segments, as well as erosion of margins, will take place as differentiation will soon be based primarily on price instead of devices' orientation to specific tasks.
Enterprise software spending growth continues to be the strongest throughout the forecast period. The 2014 annual growth rate is expected to grow 6.8 percent. Customer relationship management and supply chain management (SCM) experienced a period of strong growth.
The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.
Last quarter, Gartner's forecast for 2014 IT spending growth in U.S. dollars was 3.6 percent, a 0.5 percentage points higher than the current forecast.
The data center systems spending growth outlook for 2014 has been cut from 2.9 percent in our previous forecast to 2.6 percent. This is mainly due to a reduction in the forecast for external controller-based storage and enterprise communications applications. These segments represent 32 percent of total data center system end-user spending.
Gartner has slightly revised downward the IT services compound annual growth rate between 2012 and 2017. The largest contributor to this revision comes from reductions in IT outsourcing — specifically, in colocation, hosting and data center outsourcing growth rates.