Technology CEOs Should Consider Nine Disruptive Forces that are Impacting Businesses
The accelerated pace of business disruption is being triggered by the impact of new technologies combined with the challenges and opportunities of creating a connected experience, which are bigger than ever before, according to a new PwC report, The new digital ecosystem reality: Nine trends rewriting the rules of business. The nine trends outlined in the report are too inter-related to be tackled with an independent strategy. PwC recommends two complementary strategies, one targeting the short-term trends and the other targeting long-term challenges.
Trend number 1: Disruptive innovation
Radical shifts in technologies translate to radical shifts in business models. In order to prepare, technology CEOs should consider a variety of steps, including: developing an appropriate innovation strategy that ties in with the corporate vision and company capabilities; determining the best ways of fostering and sustaining organic innovation; identifying opportunities for growth; determining strategic investment bets and identifying appropriate partners for highly integrated digital ecosystems.
Trend number 2: Managing cost and complexity
According to PwC, in terms of IT complexity, more than half of all companies are turning to the cloud to reduce expenses. They must also adjust their operating model to increase agility through focus on innovation both in technology and processes, in order to lay the foundation for a more-efficient cost structure. Additionally, companies are using technology to get better information faster and cheaper through using social analytics within the connected experience they have with customers and creating a connected experience with suppliers and partners through digital ecosystems.
Trend number 3: Convergence
The convergence of consumer and corporate capabilities has forced most companies across industries to become technology companies. Many companies will need to increase the pace of their customer communications in order to meet these increased expectations.
Trend number 4: Consumerization of IT
Employees have become accustomed to the ease of accessing information online, whether through mobile devices, tablets or personal computers. Companies will need to develop enterprise applications that are easier to learn to improve productivity and those that are easier to use on smartphones and other mobile devices.
Trend number 5: Changing dynamics between developing and developed countries
Technology companies will likely be looking to emerging markets for new business opportunities. Therefore, technology CEOs should think about rationalizing their global operations and simplifying and standardizing business processes and products so that development can be applied across any region, and also tailored for a particular region.
Trend number 6: Social media
According to PwC surveys, 90 percent of technology companies are focusing on strengthening relationships with customers and clients by increasing engagement and 84 percent are enhancing their focus on social media in search of new customers. Companies can use social media to interact on a regular basis, to deliver information and advice, and thus potentially increase the value of the experience.
Trend number 7: Data explosion
Technology companies must be able to accommodate input from social media with input from sales results in order to harness the broad flow of information. This requires developing a variety of systems, for example: data warehouses, analytic tools, storage systems, and business intelligence.
Trend number 8: IP and data protection
Being able to compete in the global world of technology requires maintaining a balance for technology companies. Companies need to ensure that their systems are accessible to their friends (i.e. employees and business partners) and unavailable to their competitors.
Trend number 9: Changing political and regulatory landscape
Technology CEOs have already been subjected to extensive regulatory conditions, therefore they must be prepared to track manufacturing and product information, and to be audited on a regular basis.
To address these nine trends, PwC recommends that technology companies focus on extending their own digital transformation across their business units, including manufacturing, supply chain and finance. Digitization supports automation, which decreases response time and increases the accessibility of information which in turn enables companies to be more agile and able to respond to change faster.
Gartner Identifies the Top 10 Strategic Technology Trends for 2014
Gartner, Inc. highlighted the top ten technologies and trends that will be strategic for most organizations in 2014. Gartner defines a strategic technology as one with the potential for significant impact on the enterprise in the next three years. Factors that denote significant impact include a high potential for disruption to IT or the business, the need for a major dollar investment, or the risk of being late to adopt.
The top ten strategic technology trends for 2014 include:
Mobile Device Diversity and Management
Through 2018, the growing variety of devices, computing styles, user contexts and interaction paradigms will make "everything everywhere" strategies unachievable. The unexpected consequence of bring your own device (BYOD) programs is a doubling or even tripling of the size of the mobile workforce. This is placing tremendous strain on IT and Finance organizations. Enterprise policies on employee-owned hardware usage need to be thoroughly reviewed and, where necessary, updated and extended.
Mobile Apps and Applications
The Internet of Everything
The Internet is expanding beyond PCs and mobile devices into enterprise assets such as field equipment, and consumer items such as cars and televisions. The problem is that most enterprises and technology vendors have yet to explore the possibilities of an expanded internet and are not operationally or organizationally ready. The combination of data streams and services created by digitizing everything creates four basic usage models – Manage; Monetize; Operate; Extend.
Hybrid Cloud and IT as Service Broker
Bringing together personal clouds and external private cloud services is an imperative. Enterprises should design private cloud services with a hybrid future in mind and make sure future integration/interoperability is possible.
Cloud/client computing models are shifting. In the cloud/client architecture, the client is a rich application running on an Internet-connected device, and the server is a set of application services hosted in an increasingly elastically scalable cloud computing platform. The cloud is the control point and system or record and applications can span multiple client devices. The client environment may be a native application or browser-based; the increasing power of the browser is available to many client devices, mobile and desktop alike.
The Era of Personal Cloud
The personal cloud era will mark a power shift away from devices toward services. In this new world, the specifics of devices will become less important for the organization to worry about, although the devices will still be necessary. Users will use a collection of devices, with the PC remaining one of many options, but no one device will be the primary hub. Rather, the personal cloud will take on that role.
Software Defined Anything
Software-defined anything (SDx) is a collective term that encapsulates the growing market momentum for improved standards for infrastructure programmability and data center interoperability driven by automation inherent to cloud computing, DevOps and fast infrastructure provisioning. As a collective, SDx also incorporates various initiatives like OpenStack, OpenFlow, the Open Compute Project and Open Rack, which share similar visions.
Web-scale IT is a pattern of global-class computing that delivers the capabilities of large cloud service providers within an enterprise IT setting by rethinking positions across several dimensions. Large cloud services providers such as Amazon, Google, Facebook, etc., are re-inventing the way IT in which IT services can be delivered. Their capabilities go beyond scale in terms of sheer size to also include scale as it pertains to speed and agility. If enterprises want to keep pace, then they need to emulate the architectures, processes and practices of these exemplary cloud providers.
Through 2020, the smart machine era will blossom with a proliferation of contextually aware, intelligent personal assistants, smart advisors (such as IBM Watson), advanced global industrial systems and public availability of early examples of autonomous vehicles. The smart machine era will be the most disruptive in the history of IT. New systems that begin to fulfill some of the earliest visions for what information technologies might accomplish — doing what we thought only people could do and machines could not —are now finally emerging.
Worldwide shipments of 3D printers are expected to grow 75 percent in 2014 followed by a near doubling of unit shipments in 2015. While very expensive “additive manufacturing” devices have been around for 20 years, the market for devices ranging from $50,000 to $500, and with commensurate material and build capabilities, is nascent yet growing rapidly.
The Internet of Things is Poised to Change Everything, says IDC
The Internet of Things (IoT) represents a new construct in the information and communications technology (ICT) world that is occupying the minds of IT vendors, service providers, and systems integrators as it represents huge potential for new streams of revenue and new customers. International Data Corporation (IDC) has looked at the components, processes, and supporting IT and connectivity for the Internet of Things and expects IoT technology and services spending to generate global revenues of $4.8 trillion in 2012 and $8.9 trillion by 2020, growing at a compound annual rate (CAGR) of 7.9%.
Some enablers to the rise of IoT include:
Ongoing development of smart cities, cars, and houses
Enhanced connectivity infrastructure
An increasingly connected culture
Even though there is growing demand for the IoT, there are still several factors inhibiting growth of this market. This is not to say that they can't be overcome, but at present, they are hurdles that both vendors and enterprises will have to overcome to make IoT a reality. Some of these challenges are on the supply side, including lack of standards, global scalability, and a nascent ecosystem for application development. On the demand side, the challenges include lack of awareness and other IT/mobility priorities.
Despite these challenges, IDC expects the installed base of the Internet of Things will be approximately 212 billion "things" globally by the end of 2020. This will include 30.1 billion installed "connected (autonomous) things" in 2020. This is largely driven by intelligent systems that will be installed and collecting data – across both consumer and enterprise applications – by the end of the forecast period.
Digital Business Incompetence Will Cause 25 Percent of Businesses to Lose Competitive Ranking by 2017
Digital business incompetence will cause a quarter of businesses to lose competitive ranking by 2017, according to Gartner, Inc. During the second quarter of 2013, Gartner conducted a survey of 151 participants who were intimately involved in making digital business strategy decisions or in locating, developing and acquiring talent for those digital business strategy endeavors. Ninety percent of respondents thought that competition for talent will make or break digital business success.
According to Gartner, a digital business strategy creates value and revenue from digital assets. It goes beyond process automation to transform processes, business models and customer experience by exploiting the pervasive digital connections between systems, people, places and things.
Digital business has rapidly become a lingua franca of modern business, a common and unifying language across people whose native languages — in the modern age, the languages of organizations, companies, cultures and occupations — are different.
To jump-start digital business activity, Gartner recommends identifying key strategy players and possessors of technology and business expertise both inside and outside the enterprise and engaging them to launch a digital business community of practice to enrich cross-business understanding. CIOs who learn to orchestrate talent across multiple employment models and channels can take advantage of global ecosystems to build digital expertise quickly.
The world of digital business does more than pose challenges for CIOs and other executives. It also opens opportunities to use digital technology to reach beyond organizational boundaries, to assemble problem-solving expertise from around the world, to weave a fabric of knowledge and expertise across communities of practice, and to understand and exploit new models of work. Notably, the quest for digital business expertise provides an undeniable opportunity for CIOs and HR executives to create a robust alliance that helps them meet their respective outcomes. Leading-edge CIOs become leading edge because their HR and talent strategy counterparts support them.
Gartner advises CIOs to work with high-influence HR executives to investigate talent orchestration and to redesign the learning programs required to build digital business expertise. The focus should be on hiring, developing and deploying versatile and multidisciplined teams of people. Once teams are hired, the organization should promote employee engagement as doing so will make the organization more attractive to prospective employees and increase talent retention rates throughout the shift toward the digital strategy.
Survey Shows Majority of Tech Executives Planning for Cyber Security Attacks
Silicon Valley Bank, financial partner to the innovation sector, found the majority of technology and healthcare companies view cyber security as a serious threat to both their data and business continuity, and only one-third are completely confident in the security of their information in a survey of more than 200 technology company executives.
Nearly all (98 percent) of companies are maintaining or increasing their cyber security resources and of those, half are increasing resources devoted to online attacks this year. Resources are most likely to be invested in monitoring, preventative policies, training and staffing rather than in preventative infrastructure, indicating they are planning for when, not if, they are attacked.
While most respondents were moderately confident in the security of their information, they were less confident in their partners', vendors' and clients' security measures. Most respondents are storing their data privately, showing a lower appetite for storing their information in the public cloud. Software companies were the exception with 59% using the public cloud, versus more private behavior by hardware, healthcare and cleantech companies.
Forty-six percent of companies, whose main offering is not security, include cyber security functionality in their product and 8% more plan to add a cyber security component to their core offering.