DIGITAL DYNAMICS - Opportunities, Alignments and The Way Forward

DIGITAL DYNAMICS

OPPORTUNITIES, ALIGNMENTS

AND THE WAY FORWARD

P R O G R E S S I V E C H A N G E

D I G I T A LD Y N A M I C S

The digital landscape is fast evolving. Enterprises are

experimenting and innovating, new players are entering the fray

and existing players are creating new products and services.

Amid such dynamism, it is essential to map the landscape

holistically, from both demand and supply sides. This shall

enable the enterprise users to prepare their future digital

strategies and the IT players to align their marketing focus.

WWW .DYNAM I C C I O . C OM

OPPORTUN I T I ES , AL IGNMENTS AND

THE WAY FORWARD

DIGITAL DYNAMICS A RESEARCH BASED STRATEGY GUIDE FOR BUILDING A DIGITAL ENTERPRISE

PUBLISHED: JUNE 2015

2 DIGITAL DYNAMICS

FOREWORD

Digital Enterprise is an idea, which is fast taking wings. It is

made relevant by the need for agility amid the contemporary

business challenges and enabled by the advent of a plethora

of digital technologies. The journey of enterprises to embrace

digital demands an all rounded focus on the competitive landscape,

strategic choices, leadership competencies, process capabilities,

enterprise culture and the technology platform. We believe that new

research insights and management thoughts are required to successfully

accomplish this all-rounded focus.

Core Quadrant, a partnership between Grey Head Media and Coeus

Age, has born out of the endeavour to create the new research insights

and management thoughts on digital. It started as a research study in

2013, which culminated over time into a digital enterprise framework.

The framework is now at the centre of many of our CXO interactions and

a foundation for our research initiatives. Core Quadrant is today engaged

in research on a wide variety of aspects related to digital landscape, both

from supply and demand sides.

I am personally very delighted to see this special publication

becoming a reality, which is a reflection on the depth and breadth of

our understanding of the digital space. We intend to explore further

with many interesting aspects of digital being researched in-depth and

presented to business and technology decision makers.

I thank you for the continued support and encouragement and look forward

to many insightful interactions in the future.

KAPIL DEV SINGHFOUNDER, COEUS AGE & PRINCIPAL

ANALYST, CORE QUADRANT

© 2015 Hewlett-Packard Development Company, L.P.

148 x 210 mm (WxH)

Accelerate IT with HP Network Virtualization. Now your data center network can move with on-demand agility. HP Network Virtualization solutions are designed to enable workloads and resources to scale up and down in an instant, allowing you to meet the demands of a dynamic marketplace by quickly delivering services and applications where and when they’re needed. To learn how you can accelerate service and application deployment with a more agile data center network, go to www.hp.com/go/datacentervirtualization and read the HP/SDxCentral white paper.

Give your networka boost of adrenaline.

© 2015 Hewlett-Packard Development Company, L.P.

148 x 210 mm (WxH)

Accelerate IT with HP Network Virtualization. Now your data center network can move with on-demand agility. HP Network Virtualization solutions are designed to enable workloads and resources to scale up and down in an instant, allowing you to meet the demands of a dynamic marketplace by quickly delivering services and applications where and when they’re needed. To learn how you can accelerate service and application deployment with a more agile data center network, go to www.hp.com/go/datacentervirtualization and read the HP/SDxCentral white paper.

Give your networka boost of adrenaline.

CORE QUADRANT QUARTERLY© Copyright 2015 Grey Head Media Private Limited.

All rights reserved. Reproduction in whole or in part in any form or medium without written permisison in prohibited

Editor

Principal Analyst

Executive Editor

Art & Design

Printed at

Rahul Neel Mani

Kapil Dev Singh

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Thomson Press India Ltd.B-315, Okhla Industrial Area, Phase 1, New Delhi - 110020

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New Delhi- 110 019 | www.greyhead.in

DIGITAL DYNAMICSA RESEARCH BASED STRATEGY GUIDE FOR

BUILDING A DIGITAL ENTERPRISE

02

12 26 34

48515660

06FOREWORD

KAPIL DEV SINGHFOUNDER, COEUS AGE AND PRINCIPAL ANALYST, CORE QUADRANT

10 RESEARCH FINDINGS

DIGITAL LANDSCAPE 2015TACKLING THE GROWTH CHALLENGE

INDIA INC: WHERE ARE THE BIG BUCKS GOING

FUTURE PERFECT: NEED FOR A NEW ENTERPRISE DIGITAL PLATFORM

EXPERT VIEWPOINT

THE DIGITAL ENTERPRISE: A CONTRARIAN VIEWARUN GUPTA

EXPERT VIEWPOINT

CREATING DIGITAL BUSINESS: CHANGE MINDSET BEFORE ANYTHINGHARVEY KOEPPEL

EXCLUSIVE INTERVIEW

DIGITAL DISRUPTION: CIOs CAN OUTSOURCE THE FUNDAMENTALS OF SUCCESSSUSAN CRAMM

EXPERT VIEWPOINT

CIO REVISITED: WELCOME THE NEW CIOERIC D. BROWN

PREFACE

RAHUL NEEL MANICO-FOUNDER & EDITOR,GREY HEAD MEDIA

PAGE

NUM

BER

GREY HEAD MEDIA PRIVATE LIMITED1509 & 1510, 15th Floor, Devika Tower, Nehru Place,

New Delhi- 110 019 | www.greyhead.in

6 PREFACE

DOING BUSINESS DIGITALLYW hile in the past 18 months or so, most of my conversations

(with CXOs) have been very “Digital” centric, and while

it is true that phrases like ‘Digital Business’, ‘Digital

Enterprise’, ‘Digital Transformation’, ‘SMAC’, etc. have caught the

attention of almost every corporate executive; it is also manifested

that not many have clarity on what it really takes to be digital? Some

confuse it with Social Media, some with Cloud, some with Mobility or

Analytics (SMAC), and the rest with a mix of everything. This proves

that most of the Indian organizations are still grappling with the

complexities of how to understand and make use of Digital.

By the year 2020, which is just 5 years from now, over 100 billion

computing devices will connect to the Web. Businesses will have to

manage 50 times the data they manage at present. Hence, SMAC (Social,

Mobile, Analytics and Cloud) will have a multiplying effect on businesses

and increase productivity across the organization. That’s true!

RAHUL NEEL MANICO-FOUNDER & EDITOR, GREY HEAD MEDIA

7PREFACE

But, is that what we call “Being Digital”? Will it be justifiable to call

an organization ‘digital-ready’ if it has one of these or a combination

of these technologies deployed?

The dichotomy of prevailing thoughts, theories and opinions

and counter-opinions gave birth to the idea of this book - “Digital

Dynamics.” Before you read on, I want to clarify that this is a benign

beginning of a very exciting journey that we’ve decided to travel –

the journey to uncover every possible facet of this paradigm shift in

computing that we know as ‘Digital’.

Our tryst with the “Digital Business” or “Digital Enterprise”

began when Kapil Dev Singh, the architect of this initiative, and I

were brainstorming the theme for CIO Productivity Conclave – our

flagship CIO summit - last year. After having explored almost all

possible themes, we chose to go with Digital. The idea was not to

just scratch the surface but to do deep exploration and demystify

all myths, try to answer all curious questions, research all possible

scenarios, understand the problems, make an attempt to create usable

frameworks, and finally help the CIOs with real, actionable stuff.

In essence, this book is to assist Indian enterprises in

understanding the digital conundrum and make informed choices

both in terms of their strategy, and aligning with the vendors who

can help them erect a robust digital enterprise.

This book is a combination of four things: • Research done with CIOs and the analysis of its massive data.

• Analysis of vendor landscape, their platform strategies and how

they are realigning themselves to tackle the growth challenges of

businesses through a digital push.

“By the year 2020 over 100 billion computing devices will connect to the Web. Businesses will have to manage 50 times the data they manage at present.”

8 PREFACE

• Recommendations from Core Quadrant on what CIOs should do to

create digital platforms.

• Expert opinions on Digital and how the New CIO should be taking shape.

I am extremely hopeful that this research-led approach of

dynamicCIO.com, facilitated by Core Quadrant, will help CIOs and

their teams in understanding various facets of the Digital Enterprise/

Business. Our endeavor is not to end this exercise here. As I stated in the

beginning, we are just warming up. In future, you should expect more

granular, in-depth, micro-level, and comprehensive research that will

take care of most of your concerns for Digital Business.

I am privileged to have Kapil Dev Singh - the guiding force and the

key resource to complete the mammoth research exercise – as the anchor

of this book. His ability to look beyond the obvious has supplemented

the usefulness of the contents here. My very special thanks goes out to

all the CIO friends who gave us their valuable time to accomplish this

mammoth task.

I am also extremely thankful to Arun Gupta, Harvey Koeppel, Susan

Cramm and Eric D. Brown – doyens in their respective domains – for

contributing generously for this edition.

In the end, I appeal to you to connect with us and help us make this

initiative more participatory, meaningful and focused.

“This book is to assist Indian enterprises in understanding the digital conundrum and make informed choices both in terms of their strategy,

and aligning with the vendors.”

KAPIL DEV SINGH

10 THE DIGITAL LANDSCAPE2015 & BEYOND

THE DIGITAL LANDSCAPE

2015 & BEYOND

THE DIGITAL LANDSCAPE

2015 & BEYOND

THE PRELUDE

At Core Quadrant, a research

initiative of Grey Head Media

& Coeus Age, we understand

the growing importance and relevance

of digital for the businesses. We

continually strive towards producing

the finest original research and

presenting a deep understanding on the

topic of digital. The Digital Landscape-

2015 & Beyond is our most recent

offering to help CXOs understand

this fast emerging phenomenon, both

from the supply and demand side

perspectives of the market place.

We believe that a new market is

emerging; a market that is driven by

consumer empowerment, emerging

needs of enterprises to grow amid

VUCA (volatility, uncertainty,

complexity and ambiguity) and

a tectonic shift in technology

represented by the digital wave.

Based on our conversations and

deliberations with industry leaders,

we also believe that the pressure is

equal on both the enterprise users and

the producers of technology.

This special research perspective is

based upon our continual research on

the enterprise and the IT vendor side

of the digital market. We’re delighted

to present to you the findings of this

research and our perspective in the

following three broad sections:

1. GROWTH CHALLENGE AND THE PLATFORM AS A STRATEGY (the supply side perspective)

2. AVENUES OF INVESTMENT BY THE INDIAN ENTERPRISES (the demand side perspective)

3. GUIDELINE FOR ENTERPRISES ON BUILDING THEIR DIGITAL PLATFORMS (a recommendatory perspective)

11

DOMESTIC IT MARKET (2011-2020)

The IT spend in India witnessed a

double dip in 2013 (the first being

in 2009 after the global economic

meltdown). The ebb in general economic

activities, due to a difficult economic and

political environment in the country, resulted

in 8% growth in IT spend in 2013, the lowest

since 2002. The spending by government

was put on hold due to the general elections in

2014, telecom industry was turbulent due to

the 2G spectrum muddle, manufacturing was

reeling under a tremendous slide in demand,

insurance sector was short on funds to grow,

banking sector was finding it difficult to grow,

and retail was facing the three-pronged threat

- lack of funds, low consumer spending and

the mushrooming growth of e-tailers. All of

it collectively led to the build up that resulted

into a grim scenario in 2013.

In May 2014, when the new government,

with clear majority, took charge under

the leadership of Mr. Narendra Modi, the

sentiment started getting more positive.

There was euphoria that after a long

period of uncertainty and instability,

there will be stabilization, finally. Policy

paralysis - more specifically with respect

to economic policy - a key by-product of

political uncertainty - had resulted into

low investor confidence and hesitation by

India Inc. in charting out any significant

growth plans.

This inadvertently affected the enterprise

spend, especially that on Information

Technology. As the improved sentiment

has been demonstrated in the bolder and

development-oriented policy moves, the

mood within India Inc. has also started

TACKLING THE GROWTH CHALLENGE


showing visible improvement. From

being ‘overtly cautious’ and ‘closed to

opportunities’, the industry is now slowly

gearing up for growth plans. In other

words, while companies began opening up

their coffers to spend on IT, the decisions

were still marked by a degree of caution. It

turned out to be a blessing in disguise with

greater thrust on strategic pieces with clear

business objectives and long-term growth

in perspective, instead of just spending on

silos and being too tactical.

This has led to greater expectations from

2015, which is reflected in the results of our

survey, with over a hundred CIOs, on their

business priorities and IT plans. Though

businesses continue to focus on enhancing

efficiency and productivity, which assumed

even greater importance during the

aforesaid period, there is an even bolder

move towards ‘IT for growth’ in 2015, as

opposed to ‘IT to sustain’.

‘IT for growth’ means increase in

enterprise IT budgets and fresh impetus in

digital growth for most Indian enterprises.

By this logic, we predict 2015 to be a critical

year for India Inc. It is, perhaps, a turning

point in their journey towards embracing

‘digital for growth’. While the journey began

in 2014 when organizations started building

the foundation for their SMAC+ stack, it

is now that the true preparedness of the

enterprises for digital will be tested.

Core Quadrant pegs the growth in

overall domestic IT spends at 12.3% in

2015, up from 9.7% in 2014. We expect

the growth to continue in 2016 and 2017.

The Compounded Annual Growth Rate

for 2015-2020 is expected to be 11.7%

(see figure 1).

Source: Core Quadrant, 2015

FIG

UR

E 1

India IT Spend, 2011-2020

CAGR 10.4% CAGR 11.7%

(INR Crores)

296529270277243548217570192802170540151786138376127996115000

15.4%

11.3%

YoY Growth

8.1%9.7% 12.4%

13.1%

12.8%11.9%

11.0%

9.7%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

13THE DIGITAL LANDSCAPE2015 & BEYOND

But when we compare it with the

technology spending figures during the

previous decade, especially between

2003 and 2009, the story doesn’t appear

very encouraging. The CAGR for the

period mentioned was 22-25% with

sectors like BFSI and Telecom accounting

for the majority of it. This growth was

also accompanied by moderate-to-low

inflation in the economy, in general, and

continually falling prices of travel and

communications. Overall, it was a great

time for the businesses to post healthy

profits, which reflected in their high

spending on IT.

However, the situation in the current

decade is very different. The revenue

growth is moderating but inflation is high,

and the pressure on margins is felt across

industries, let alone IT. The business focus

is on containing costs and enhancing

revenue growth. The situation in the global

economy, especially the developed block, is

grimmer. The key issue for the IT vendors

today is to find ways to grow business.

The subsequent paragraphs shall

provide an analysis of a new market

landscape, shaping up in response to the

growth challenge.

The Growth Challenge & Converged Platform as the Stratergy

In response to the changing business

dynamics, the vendor landscape is evolving

faster. On one hand, the large vendors are

figuring out ways to sustain growth, on the

other, the emergence of niche players with

super innovative point solutions, is quite

a strongly visible trend. At the same time,

they are both competing and collaborating

for providing a holistic digital (technology)

platform for the enterprises.

These platforms correspond with

both infrastructure and applications (or

the process) layers. E.g. Cisco, Oracle,

Microsoft, IBM, HP, Dell, Citrix, VMware,

CA, EMC, etc. cater to the infrastructure

layer with a unified compute, network

and storage platform, whereas MS,

Oracle, IBM, Adobe, SAP, Salesforce.com,

etc. cater to the applications (or process)

layer. The “Platform Strategy” is oriented

towards tapping the surge in spend by the

enterprises for building digital capabilities.

A platform (or architecture or suite or

cloud) finds place for not only the vendors’

key products and unifying framework

but also for the point products from niche

players (as collaborators). The niche

players offer an innovative approach to

address an existing problem for which

some solution exists, or they innovate for

a completely unaddressed problem area.

Eventually, many of the niche players

may get acquired by the large vendors and

become a part of their unified frameworks.

The commoditization of hardware,

their falling prices, acceptance of the open

source, emergence of cloud computing,

pressure on time-to-market, increasing

competition from the technology startups

and shrinking IT budgets put large

vendors in a quandary as far as growth

is concerned. In order to deal with it, the


response of the large vendors is to build

platform strategies, which allows them to

capitalize on their strengths of being end-

to-end and one-stop-shops.

The platform strategy envisages that

smaller players align with the larger

players (who have the might to manage

and retain the customers, and hence

control on revenue), complementary

technology vendors form a consortium

and new go-to-market partnerships are

identified and nurtured. The success in

this new paradigm of platforms shall

depend on partnerships, ecosystem

The (technology) platform definition has evolved over

time. What was once referred to denote the core

operating system (Linux versus Windows platform), evolved

over time to include other aspects of the core systems

(hardware and applications) and catalyst technologies

(middleware, virtualization, SOA, web services, etc). The

latest extension has been in terms of the SMAC+ stack

of technologies and the emerging infrastructure related

choices of data centre design, public versus private cloud,

IT automation, software driven everything, analytics driven

IT processes, etc. In short, the technology platform has

continually evolved in terms of its scope and functions.

Core Quadrant classifies technology into three

stacks - core, catalyst and SMAC+ 1. These stacks

mesh up together to create a digital platform.

A common misconception is that SMAC+

technologies sit on top of the core and catalyst layers.

Some refer to them as the ‘third platform’.

We feel that in some cases it may be true. But,the

larger play for SMAC+ is to mesh up with the core

and the catalyst technologies and help build smart

infrastructure, smart applications and smart processes.

The SMAC+ layer plays a big role in creating the

digital platform.

A vendor (digital) platform is defined as a

converged play of these three stacks to provide a

specific infrastructure, applications or catalyst

functionality in an automated, managed and optimized

manner. The stacks and the related technologies can

come from one or multiple vendors.

The enterprise (digital) platform, on the other

hand, offers a broader play of the three technology

stacks built by using multiple vendor platforms and

individual technology pieces, which may belong to

multiple vendors and generations. An enterprise

platform is an evolutionary phenomenon, and ideally,

never in a perfect state of existence.

Throughout this report, we shall be using the

terms ‘vendor platform’ and ‘enterprise platform’,

which are different in their definition and scope.

The seven key defining aspects of a digital platform

are applicable to both vendor and enterprise versions 2.

DEFINING ‘PLATFORM’

1 Core- Servers, Storage, Network, Unified Communications, Enterprise Applications, Database, Security, BCDR etc.; Catalyst- Virtualization, Software-Defined Layers, Infrastructure Management Software, Network Optimizer, BPM, Data Management Platform, Service-Oriented Architecture, Middleware, Web Services, APIs etc.; SMAC+- Social, Mobile Apps, Cloud Orchestration/ Broker Solution, Mobile Devices Management, Analytics/ BI/ Big Data, Mobile Middleware Platform etc.2 A holistic definition of an enterprise digital platform is discussed in a subsequent section


1. Automation of the underlying IT service processes

2. Enhanced communication between machines, people, process and data through integration

3. Embedded play of analytics and big data capabilities for smart infrastructure and applications

management

4. Availability of IT management dashboards on multiple devices

5. Elasticity and geographical spread to computing, networking, storage, middleware, applications and the

development environment

6. Openness to integrate other platforms or services

7. Security & governance at multiple levels of infrastructure, applications and data

(The above seven aspects of a platform provide efficiency in IT management, optimized provisioning of resources and agility to respond to business needs.)

management, value chain effectiveness,

delivery channels innovation, marketing

and customer acquisitions (management

and retention). Mere technological

superiority is not enough to succeed in the

changed order.

The platform strategy also puts

innovation at the centre of the partnership

rather than restricting it within the

organizational boundaries. The potential

winning technologies, products and

services shall be increasingly created in

the larger ecosystem, often by smaller

players (or start ups), supported and made

mainstream by the bigger vendors.

The term platform can also be seen from

a user point of view. It is not necessarily

the same as a vendor’s view. The enterprise

platform is an ongoing phenomenon,

defined by the contemporary technologies

and how they are integrated amid a

large legacy footprint. It is a continual

interaction of new technologies at the

periphery and the legacy at the core,

and the speed and manner in which

the new technologies impact and shape

the core. The contemporary enterprise

platform must support the growing

demand of anywhere, anytime and any

device access by anyone (employees,

customers, suppliers and partners). How

do the vendor platforms get adopted by

the enterprises to build (or evolve) their

individual platforms shall determine the

success of the latter’s strategy.

A New Growth Ecosystem*

Slowly but surely, there’s a surge in the

tech-driven business and more so in the

adoption of digital technology. As a result


(*For the first time, Core Quadrant aims at conveying information on technology providers/vendors. We have tried to be as vendor agnostic as possible, apart from being fair and unbiased. But we don’t want to be vendor oblivious when it comes to conveying information on digital technology services and products. In fact, the ecosystem of technology vendors is actually something that merits a story all its own.)

of this, a new growth ecosystem is taking

shape. It consists of a variety of vendors.

This ecosystem is emerging against a

backdrop of ‘the commoditization’ of the

traditional IT. The new growth is expected

to come from the enterprise spending on

creating an enterprise (digital) platform to

support their digital business initiatives.

A fair share of the new growth is

currently being cornered by the new and

niche players. The larger vendors are

trying to place themselves more suitably

in the new growth ecosystem. Let’s

briefly discuss the five types of players

relevant in the new growth ecosystem

(see figure 2).

FIG

UR

E 2

The New Growth Ecosystem


The Commodity Market

New Vendors

The Platform Challengers/

Supporters

Niche Vendors

The Platform Integrators

Large Vendors

The Platform Providers

The Enterprise Platform

Partners

The Platform Builders

Consultants

The Platform Strategists


(i) Converged Platforms from Large

Infra and App Players: Large technology

players like Microsoft, Google, Cisco, IBM,

HP, Oracle, SAP, Dell, etc. are creating

a unified and converged infrastructure

and applications platform. The platform

is being built upon the existing products

(hardware and/or software) and services,

new products and services acquired over

time and partner products and services.

These large vendors are the ones facing

the growth conundrum. New, niche

and startup vendors have been smartly

cornering a fair share of the growth in a

low-to-moderate growth market.

There has been an increasing pressure

on the larger vendors to act beyond their

commodity playto satisfy their investors.

These vendors are finding ways to evolve

to place themselves more suitably in the

new growth ecosystem.

(ii) Niche Vendors and Their Converged

Portfolio: The challenges before the

niche or mid-sized vendors such as

VMware, EMC, NetApps, CA, Citrix,

Adobe, Salesforce.com, etc. are not

very different from the larger vendors.

The niche vendors play in specified

domains of infrastructure (computing,

storage, network and management),

middleware or applications layer, and

have been busy creating a converged

version of their technology stacks to

offer an integrated platform. These niche

players are collaborating with other

large vendors (e.g. the VCE converged

product from VMWare, Cisco and EMC)

or complimentary niche vendors to create

converged platforms for comprehensive

service/solution offering, rather than

competing separately.

(iii) New Products Vendors or Startups:

New products and services, often seen

as addressing the gaps in the existing

platform ecosystem, are being developed

by new vendors or startups. They address

very specific aspects of the infrastructure,

middleware or the applications. E.g. domain

specific process application providers,

messaging applications for automated

infrastructure management, mobile devices

management middleware, etc.

(iv) Platform Strategists: The

management and technology consultants

(including many of the large vendors

listed under category 1) help an enterprise

design their platform blueprint, which

can be built in-house or with the help of

a third party. As enterprises’ focus on

building their digital platform is gaining

momentum, the platform strategists also

have an opportunity to grow.

(v) Platform Builders: These are the

erstwhile systems and network integrators,

who have now forayed into third party

smart infrastructure and application

providers. They generally collaborate with

the first three (category of vendors) to build

a mesh of technologies for enterprise users

to access their products and services. They,

in a way, are the new Systems/Network

integrators or distribution (channel)


partners, who can place themselves

between the first three (category of

vendors) and the enterprise users.

Old Versus New Growth Ecosystem: The Big Transition

In order to understand the ‘platform’ story

of the incumbents (big, niche, strategists

and builders) as a strategy to deal with

the growth challenge, we need to first

declutter the deeper and bigger transition

underway. We all are witness to the

decisive shift from the traditional IT to a

stronger, digital play. But, how easy will

it be for the incumbents to transit? What

stage of transition are they in today, and

how far can they really go?

Core Quadrant believes this transition

to take place in two phases and many

incumbents may find it difficult to cross

both the levels of transition. These

transitions are not about some start

and end points, but about continuous

evolution. The two phases are merely

conceptual in nature.

In figure 3, Core Quadrant’s position

on the two phases of transition is

depicted. The first phase of transition is

from traditional IT to digital embrace

and second phase is from digital embrace

to full digital play. (see figure 3)

In the traditional phase, IT was deployed

and consumed onsite as distinct products

and services. Though technologies like

virtualization, integration, middleware,

SOA and services paradigms like managed

services and outsourcing emerged to

create a feel of a converged platform, the

vendors approached markets largely from

distinct products and services perspective.

Their customer engagements and channel

strategies were driven by individual

products and services.

Digital embrace involves an

incremental play- newer product/

service conceptualizations, newer ways

of customer engagements, newer ways

to deliver them and online channels

to distribute them. Most of the large

technology providers (IBM, HP, Dell,

Microsoft, Cisco, SAP, Oracle, etc.), niche

technology providers (VMware, CA,

Traditional IT

Onsite:

Distinct Products and related Services

Technology Specific Competition

Digital Embrace

Hybrid:

Mix of Onsite and from the Cloud

Blurring Competitive Boundaries

Full Digital Play

Infrastructure, Development & Application

Platforms

Platform Specific Competition

FIG

UR

E 3

The Big Transition



EMC, Citrix, etc.) and technology builders

(Wipro, TCS, Accenture, etc.) are in the

first stage of transition.

If digital embrace can be termed as

‘service first’, then full digital play is a

‘services only’ paradigm. Even products

are available as services, delivered and

distributed virtually. In short, digital

embrace is an incremental approach where

traditional and new exist together, but full

digital play is a distinctly new approach.

Internet players (like Google, AWS,

Salesforce.com, etc.) and new startups are

at this stage because of no legacy. However,

Adobe is an exception, which has evolved

beyond the first level of transition and is

well ahead of other traditional players in its

second level of transition.

The first transition is relatively simple as

it represents moving to a middle level, where

the new platform play works along with the

traditional. It requires some adjustments

in products/services design and delivery

(onsite versus over the cloud), involves

new channels of distribution (physical to

online) and new ways to engage with the

partners and customers (social). But this

adjustment doesn’t go the whole hog. It is

just incremental, retaining the traditional,

which accounts for the volume baseline

revenue (if not growth).

The second transition is extremely

difficult, if not completely impossible. The

success in carrying out the transitions shall

determine the readiness to grow. Over time,

both the transitions will be required, though

majority of incumbents are today managing

to stay in the middle ground.

The transition to full digital play is

extremely risky, uncertain and requires

clarity of vision. To let go the huge revenue

base, which has been managed in traditional

ways, is not easy.

The Five Platform Strategies of The New Growth Ecosystem

The new age players and incumbent vendors

(transitioning from traditional to digital

embrace and full digital play stages) shall

make their digital foray, or alignment with

the market opportunities, in three ways:

(see figure 4)

(i) Creating products for digital: Building

a digital platform requires next generation

products, e.g. next-gen networking

products, endpoint devices, infrastructure

management tools, broker platforms,

middleware, APIs, traffic management

tools, virtualization products, optimization

products, development tools, etc.

(ii) Providing products and services as

digital services: The second digital foray is

about moving towards providing products

and services online (as a service). This may

vary from simple functionality (e.g. server

power, storage space or email service)

to a very complex solution (e.g. unified

communications, marketing applications,

development environment).

(iii) Services for building digital platforms

for the enterprises: If the first two forays


provide the products and services to

envision an enterprise digital platform, the

third foray is about building it. This is the

domain of platform builders and integrators,

who use products and services of diverse

type and vendors to create a custom platform

for their clients.

These three types of forays are sort of

pure plays, and larger vendors play across

these forays with complex and multiple

go-to-market approaches. The Figure 4 gives

a mapping of how the prominent vendors

(or vendor groups) span across these three

forays or market alignment approaches.

After defining the new growth ecosystem

and the three types of forays, it is now time

to understand what are the various platform

strategies adopted. These platform strategies

are more concrete steps in which the vendors

go to market and position themselves. Let’s

see the classification using an analogy

of car manufacturing 3. Building a car

requires individual components (the nuts

and bolts, chassis, engine, etc.), component

assemblies (transmission drive assembly,

engine assembly, electronics platform, etc.),

assembly platform (the line or the raising

platform or the paint platform), and special

products and fittings. (see figure 5)

There are five platform strategies vendors

are adopting today:

(i) Converged infrastructure platform:

A converged infrastructure is an

integrated mesh of hardware (computing,

networking, storage), software-defined

layer, infrastructure management software,

virtualization, security and the SMAC+

components. These converged platforms

propose to provide most of (if not all) the

3 Though the digital & converged platforms’ world is certainly more complex than the analogy we have discussed here, the purpose of the analogy is to make the concept clear and lucid.

IBM, Dell, HP

Adobe, Salesforce.com, Google, AWS

New Players, Start-ups

Microsoft, Oracle, CISCO, SAP, CA, Citrix, VMware

Wipro, TCS, Dimension Data, Data Centre Players

Products for Digital Providing Digital Building DigitalNext-gen networks, end point devices, broker solutions, middleware, APIs etc. are all products, which enable digital play.

Providing products (as service) and services from the could. E.g. Azure of Microsoft, HANA by SAP, Marketing Platform of Oracle and Watson Analytics by IBM.

The platform builders, who take the products, third party platforms and their own platforms to build digital platform for the enterprises.

FIG

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The Three Digital Forays



infrastructure capabilities in a single

package. The emergence of such concepts is

a direct result of ambitious plans of the large

vendors. Not content with their respective

domains, each one of them has been moving

towards the centre by bringing in other

pieces of infrastructure. It is their strategic

response to dealing with the growth

challenge. They build these platforms in-

house, through acquisition or by partnering

with other vendors. These converged

infrastructure platforms can be used both

‘on-premise’ or ‘in-the-cloud’ model (or even

a hybrid model).

Cisco, IBM, HP, Dell, EMC, VMware,

Oracle are the prominent players who have

created such converged infrastructure

offerings. We see the emergence of a new

sub-category called hyper-converged

platforms. HCPs have emerged from

companies like Simplivity, Nutanix and

Maxta. Unlike a converged platform, where

the components are from multiple vendors

but architected together, a hyper-converged

platform is typically an appliance that

combines higher-density compute cores,

all-flash storage arrays and all software-

based networking from a single vendor, or

from an array of partnering vendors. Some

of these appliances come with features such

as data de-duplication and other efficiency

gaining technologies.

From the analogy of car manufacturing,

the converged platform is like the pre-fitted

engine, chassis and transmission drive

loaded with functionalities to manage their

interactions and optimize the same. A car

manufacturer can procure these pre-fitted

assembly of individual products and build

on top of it to produce a car.

(ii) Unified management platform:

Unified management platforms are built

upon similar fundamentals as converged

platforms, but there is one key differentiator.

They are beyond the core infrastructure play

and address a specific functional, service

management, application or process aspect.

They are built using a unifying framework,

putting together a variety of hardware and

software products, and delivered both on-

premise and in-cloud.

Examples of this include unified

communications, security, mobility,

cloud management, data management, IT

infrastructure management, IT service

management, applications development,

applications lifecycle management or

business process management platforms.

The vendors active in this area include

Converged Infrastructure Platform

Unified Management Platform

Integrated Applications Cloud Platform

Data Centre and Cloud Platform

Niche Service Cloud Platform

1 2 3 4 5

FIG

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The Five Platform Strategies



Cisco, Microsoft, Oracle, HP, Dell, CA,

IBM, SAP, etc.

In our analogy of car manufacturing,

this includes special assemblies like the

integrated electronic system covering

the engine management, audio, video,

communication, navigation systems and

the dashboards.

(iii) Integrated applications in the cloud

platform: Integrated applications are not

novel. Integrated suite of applications

from the application vendors have been

there for some time now. But these

models are mostly on-premise. What’s

new is a set of ‘functional’ applications

available in the cloud. These are

function-oriented (like marketing, supply

chain and HR) or industry-oriented

(like core healthcare or core insurance)

and can be accessed through a SaaS

(Software-as-a-Service) model.

Most such platforms have the ability

to integrate offline services (like product

purchase in case of marketing or material

supply in the case of supply chain) with

online services (like content consumption

or level of engagement). Loaded with

analytics and big data capabilities, these

platforms integrate a wide variety of

digital (and physical) services and help

create functional capabilities for the Line of

Business(LOB) managers.

The software which controls the

electronics system functioning, when

accessed directly from the cloud is the

equivalent of integrated application in the

cloud in our analogy.

(iv) Data centre and cloud platform: The

data centres and cloud platforms help

enterprises, developers and builders leverage

the power of the first three as a service. Large

technology providers, erstwhile system

and network integrators, and new breed of

services players are building such platforms

for others (large application vendors, niche

players, new startups) to host their services

or for use directly by the enterprises. The

data centre and cloud platform also leverage

the strength of the first three platforms

discussed here - converged infrastructure,

unified management and integrated

applications in the cloud.

Azure is one such platform from

Microsoft, which has extended its play

beyond software into the broader realm

of IT services. IBM, Google, Amazon Web

Services, HP, Dell, EMC, VMware and

other large and niche players have offerings

around cloud development and management,

offered both as discrete functionalities and as

integrated platforms.

From the analogy of car manufacturing,

it includes the platforms and specific

frameworks and tools to manufacture

a car. The assembly line is one such

example(unfortunately that cannot be

accessed online).

(v) Niche cloud platform: Niche cloud

platforms offer specialised services,

which can be accessed by enterprises,

developers and builders in the cloud. For

example, Google Analytics, IBM Watson,

SAP HANA or Hadoop (an open source

platform). These are analytics and big


data platforms, which can be accessed as a

service. Similarly, Cloud Managed DevOps

by IBM is an example of a development

platform using DevOps methodology.

Special platforms to develop

customization of the car exteriors (like

the famous Dilip Chabria or DC brand)

are the niche products and services in our

analogy of car manufacturing.

The discussion regarding a new

ecosystem of growth, the big transition,

emerging pure play forays and the five

platform strategies is summarized in

figure 3. It summarizes the market

realignment activities of large and niche

vendors in response to the big transition

in the market and the deepening growth

challenge. (see figure 6)

Converged Infrastructure Platform

Unified Management Platform

Integrated Applications Cloud Platform

Data Centre and Cloud Platform

Niche Service Cloud Platform

1 2 3 4 5

5 PLAT

FORM

STRA

TEGI

ES

Traditional IT

Onsite:

Distinct Products and related Services

Technology Specific Competition

Digital Embrace

Hybrid:

Mix of Onsite and from the Cloud

Blurring Competitive Boundaries

Full Digital Play

Infrastructure, Development & Application

Platforms

Platform Specific Competition

Products for Digital Providing Digital Building DigitalNext-gen networks, end point devices, broker solutions, middleware, APIs etc. are all products, which enable digital play.

Providing products (as service) and services from the could. E.g. Azure of Microsoft, HANA by SAP, Marketing Platform of Oracle and Watson Analytics by IBM.

IBM, Dell, HP

Microsoft, Oracle, CISCO, SAP, CA, Citrix, VMware

Adobe, Salesforce.com, Google, AWS

New Players, Start-ups

Wipro, TCS, Dimension Data, Data Centre Players

The platform builders, who take the products, third party platforms and their own platforms to build digital platform for the enterprises.

3DIGI

TAL

FORA

YS

FIG

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E 6

The Digital Landscape




INDIA INC: WHERE ARE THE BIG BUCKS GOINGWhen it comes to investments,

Indian corporations are very

unique and sensitive to many

things like price, product life-cycle, etc.

Unlike their western counterparts, Indian

corporations are cautious spenders. IT is no

exception. The boost in the pace of economic

growth in India has brought the role of IT

into sharp focus among enterprises looking

for horizontal and vertical growths. This

reflects in the data we collected from the CIOs

across the country. The India Inc. is ready to

bet on new technologies to give push to the

growth (see figure 7).

The spending on new technologies,

represented by SMAC+ layer, shall reach

INR 59000 Crores (approx. US$10

billion) in 2020, up from INR 19629

Crores in 2015 (approx. US$3.3 billion).

During the period 2015-20 it represents

a combined spending of US$37 billion by

the enterprise and government segments.

(Source: SMAC+: Indian Enterprises’ Plans

Report, Core Quadrant 2015)

According to Core Quadrant estimates,

the SMAC+ spending will grow at a CAGR

of 24.6% between 2015 and 2020, as

against the overall IT expenditure growth

of 11.7%. This includes spending on all IT

components, i.e. hardware, software and

services, and spending on third party

products and services as well.

Year 2015 is going to be crucial in

enterprise digital journey. This is the


time when the SMAC+ moves from

‘casual flirting’ to ‘deeper building’ of

individual pillars as more enterprises

recognise digital as the tool for

innovation and growth in the future.

The estimates and expenditure

do not include staff expenses or real

estate costs. It also does not include the

spending on digital marketing, which

will be part of CMO’s budget and not the

CIO’s IT budget.

The spending of US$ 10 billion in

2020 suggests that out of every US$ 4

spent on IT by the Indian enterprise

and government segment, US$ 1 will

go towards SMAC+. The software and

services component of SMAC+ will

grow the fastest.

In fact businesses, for the past

couple of years, waited for these new

technologies to mature and demonstrate

quantifiable results. The organizations

natively undertook small pilots, POCs and

experiments (few and far between) to test

waters and begin.

Reality of 2015: Emphasis on the Core Overhaul, Piecemeal SMAC+ (on the periphery)

When we went a little further in

our quest to find whether Indian

enterprises are really spending on

SMAC+, the response wasn’t extremely

encouraging. The data from Core

India SMAC+ Spending, 2015-2020


FIG

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E 7

19629

2015

30.5%

2016

26.6%

2017

23.7%

YoY Growth in SMAC+Spending

2018

20.4%

2019

18.6%

2020

17.2%

25471

32305

40021

CAGR 24.6%

49216

58919

INR Crores


Quadrant’s latest survey, conducted

in Apr-May 2015 with over 300 CIOs,

reveals an interesting story.

The Core Quadrant research revealed

that 3 out of 5 CIOs have focused on

infrastructure and applications overhaul

in the last 2 years, whereas 2 out of 3 were

busy investing on enterprise mobility.

Nearly 50% CIOs have adopted cloud,

analytics and social media in some form,

whereas BYOD and middleware ranked

low on adoption (and perhaps priority

too). Actually, cloud and middleware

won’t be as low as it appears because

some of them become part of the infra

overhaul exercises, and hence do not get

reported as standalone projects.

There are two broad areas in which

the enterprises are focussing today. It

is to be seen, how the investments into

these two areas sync up. These two areas,

though approached separately, are related.

Without a proper alignment between

the two, the benefits of digital initiatives

cannot be fully reaped.

New SMAC+ initiatives: Though

mobility seems to be CIO’s favourite

play, enterprises are also building ‘on

the top’ SMAC+ applications, aimed at

enabling new customer touch points,

marketing, supply chain and enterprise

processes. However, many of these

initiatives will still be categorised as

‘flirting’ with the possibilities of SMAC+

in a limited manner. Flirting means

basic Facebook and Twitter presence,

social listening, digital advertising, and

other isolated initiatives using SMAC+.

These are placed mostly on the periphery

of an organization or the IT function

(e.g. adopting cloud infrastructure for

development stuff or selectively putting

non-mission critical apps on the cloud).

Overhaul of the underlying infrastructure

and applications: Overhauling the

infrastructure and applications includes

migrating to the new enterprise

architecture, consolidating data centres,

large-scale technology refresh, application

upgrade, application modernization,

applications portfolio rationalization, and

also large-scale integration. Some of these

are part of the usual IT lifecycle, but some

are also driven (and will increasingly be)

by the need for smarter infrastructure and

agile applications by meshing the SMAC+

with the core and the catalyst technologies.

The pressure for such smartness and agility

will mainly come from Line of Business

(LOB) demands for newer processes and

digital capabilities. (see figure 8)

According to an earlier Core Quadrant

research conducted in 2014 with 116

enterprises, 45% confessed they were merely

flirting with SMAC +. Another 37% said

they are building one of the few pillars,

but in an isolated manner. 14% CIOs said

they are converging the SMAC+ pillars

together with the aim to create a truly

end-to-end digital infrastructure. Among

the respondents a miniscule 3% claimed

that SMAC+ is fully meshed up with

their digital technology platform, and is

performing. (see figure 9)


If we superimpose these findings

upon the data in Figure 8, it is quite

evident that the SMAC+ play is still

very peripheral, and its benefits just

partially reaped.

The Platform Paradox: Converged Vs. Best of Breed

To get the bigger picture, it is vital

to understand how enterprises are

responding to and adopting the

platforms proposed in the marketplace

by the technology providers.

Are they really buying it?

Do they prefer to work with limited vendors or

a multitude of vendors?

Is there a difference between high digital and

low digital score companies?

Let’s, first do a reality check from the

infrastructure point of view.

Despite knowing that consolidation

can be critical to support future growth

plans, including digitization, CIOs aren’t

readily adopting it. According to a Core

Quadrant research in late 20141, while

79.3% enterprises considered vendors’

offerings for consolidated, converged

and optimized IT Infrastructure/data

centre solutions, just 15.5% actually

implemented them.

Significant Projects Undertaken in the Last 2 Years -CIO


FIG

UR

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1Based upon a study of 116 Enterprises, Core Quadrant categorized them as High Digital, Medium Digital and Low Digital Score Enterprises. The Digital Score reflects the digital readiness of the enterprise and is measured using seven aspects of a digital enterprise - response to the external environment, strategy, leadership, structures, process capabilities, culture and technology platform.

IOT 24%

25%

27%

36%

40%

49%

55%

61%

62%

67%

BYOD

Middleware

eCommerce

Social Media

Analytics

Cloud

Applications Overhaul

Infrastructure Overhaul

Mobility

Base –295 CIOs


The SMAC+ Progression

First experience

with SMAC+ by adopting on

a piece-meal basis. Mostly at the periphery, these are low

hanging fruits and isolated

initiatives. The exuberance, however, is

high.

The flirting with

individual pillars of

SMAC+ and the resulting

experience and learning often

evolves into focused build up around one or more pillars.

However, the build

up remains largely

separate and isolated.

The maturity in more than one pillar of SMAC+ and the resulting

learning prompts

enterprises to look at

converging them together and with the underlying

infrastructure and

applications. E.g. how

mobility and social CRM, or cloud and

analytics converge.

A highly converged enterprise

(digital) technology

platform also means that the underlying IT

also has evolved to support it. A new enterprise

architecture, a matured IT

base, leadership vision, strategy,

culture and skills sets are natural allies for it to give

performance benefits.Flirting 45% Converging

14%

Building 37%

Enterprise (Digital) Technology Platform

Transforming 03%

116 Enterprises


FIG

UR

E 9

The study also suggests that

organizations with a high digital score

tend to adopt converged infrastructure

more than those with lower scores. For

instance, 22.2% of the 36 organizations

with high digital score have already

adopted converged infrastructure and

another 30.6% are on course to adopt it.

Similarly, 15.3% of the 59 organizations

with a medium digital score have adopted

converged infrastrcuture with another

23.7% actively considering it. On the other

hand, a mere 4.8% of the 21 organizations

with a low digital score have gone for

converged infrastructure. It validates

our claim that the adoption of converged

infrastructure is related to the digital score

of an enterprise

(Refer to Figure 10).

As enterprises begin their tryst with

digital, the pressure to rethink and

reorganize their IT infrastructure is visible


because the traditional infrastructure isn’t

sufficient to keep up with the escalating

business demands for acceleration.

A digital transformation exercise,

including enabling and delivering SMAC+

technologies, requires an agile, scalable,

manageable and secure backend. For

IT, this means a change in the approach

towards IT infrastructure away from the

separate components/solutions for compute,

storage and the networks. The data centre

needs to move away from a siloed approach

and embrace new models that not only give

cost and agility advantages but also ensure

enabling the underlying platform on which

the digital technologies can work optimally.

The practical alternative to it is “Converged

Infrastructure Platforms”.

So that’s about the underlying compute,

network and storage infrastructure.

(see figure 10)

However, when it comes to the pieces

beyond the infrastructure - solutions,

applications, middleware and other

components as part of the plumbing - one

of the most classic challenges CIOs face

in their digital plans is the difficulty in

finding the right technology and the right

service provider to help them in achieving

their business goals. Moreover, the new

choices have added to the clutter, noise

and subsequently to the confusion.

According to the Core Quadrant survey

of 116 Indian enterprises, conducted

during Dec 2014-Jan 2015, 45.7%

respondents agreed they look at multitude

Considered the Offerings of Vendors for Consolidated, Converged and Optimized IT Infrastructure/ Data Centre Solution

FIG

UR

E 10


0

5

10

15

20

25

30

35

40

45

28.6

20.3

16.7

33.3

40.7

30.633.3

23.7

30.6

4.8

15.3

22.2

We have never considered

We have considered but did

not adopt

Low Medium HighDigital Score

We have considered and

planning to adopt

We have considered and already adopted


of vendors (based on their speciality) to

meet specific business needs. Only 12.1%

respondents said they look for one or fewer

vendors for their IT needs. The survey

also revealed that 34.5% enterprises are

looking at niche players to meet their

digital needs.

The survey suggests that out of 36 (of the

116 respondents with a high digital score),

52.8% are looking at multiple (specialist)

vendors. The CIOs of these companies are

aware of the digital trends on the horizon

and are ready to participate in digital

experiments and innovations. These CIOs

are examining the diverse landscape of

new digital technologies and exploring

opportunities that can bring in disruption

and innovation, to help increase the

stakeholder value.

It’s a scenario that is being played out in

myriad corners of enterprise computing.

What’s better? An integrated, ‘all-in-one’

product suite from a single vendor (or a

consortium of many vendors) or a ‘best-

of-breed’ environment that incorporates

multiple point solutions.

The confusion has escalated because the

vendor landscape has undergone a drastic

shift with the digital sprawl. Companies

that were, in the past, leading their

respective segments, are today struggling

to maintain the equilibrium. Their channel

strategy, sales force and partner ecosystem

is challenged by competitors (like cloud

and mobile startups fulfilling new business

technology needs), new buying centres

and changed customer business models.

Digitization has led to an accelerated

technology-driven startup environment

being created across the globe.

(see figure 11)

While the confusion is but natural

because of the way the market and vendor

dynamics are at play and fast evolving,

enterprises cannot afford to let this

confusion translate into a limbo. For the

CIO time is of the essence here, considering

the pace of change, and so is taking an

appropriate decision on the right platform

approach as that ultimately will have a far-

reaching impact on their digital journey.

At the infrastructure layer, Core Quadrant

views the Converged Platform approach as a

better option and as the way forward for the

enterprises in the long run. And, the reason

we are more positive about it in the long

term as opposed to short and medium term

is because the value proposition currently

offered by the Converged Platform vendors

hasn’t matured to the desired levels and it

may take some time before it becomes clearer

to the enterprises.

From an enterprise perspective, the

possible dampeners in the way of adoption

of the converged infrastructure play

would be the legacy and protecting the

investments already sunk into the existing

IT infrastructure.

However, the story takes a

different turn when going beyond the

infrastructure layer. Here, paradoxically,

the enterprises are more likely to see a

preference for niche players and stand

alone point products, specializing in

certain areas and domains and with


Single, Few or Multiple Vendors for Building the Enterprise Digital Platform

FIG

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flexibility for greater innovation and

customization. In the journey towards

digitization, the pieces that are part of

the ‘beyond infrastructure’ layer are

constantly evolving in tandem with the

enterprise’s evolving digital play. Thus,

requiring a more strategic, specialized

and open innovation approach, an

expertise that niche and ‘best-of-breed’

players are better placed to offer with

their point offerings.

Here, Core Quadrant recommends

converged platform vendors to base

their strategy around identifying and

conveying a distinct business value

proposition that’s built on the innovation

piece. Opening up vistas for new

innovation will hold the key to building

discrete functionalities into the platform

and upstage a converged play that clearly

conveys that the ‘whole’ has more value

than ‘sum’ of the parts. Furthermore, the

fear of being locked in to a platform and

having no choice going forward, would

be another aspect concerning the CIOs.

Enterprises will clearly seek

addressal of these issues before

making a significant move in the

converged direction even for the beyond

infrastructure pieces.


0.0

Low Medium HighDigital Score

10.0

20.0

30.0

40.0

50.0

60.0

We generally look for single or few

vendors

We have one or few main vendors

but we look at niche vendors too

We look at multiple vendors,

each one according to their

specialization

We do it all ourselves, we use multiple vendors for specific tasks

A cross every industry and almost

every organization, we see

technology driving massive

amount of change. The workforce entering

in today’s business landscape has very

different expectations from technology.

Businesses,too, are grappling with a peculiar

situation wherein they need to keep pace

with the new form of globalization. With

the emergence of new-age companies on the

horizon, majority of organizations today are

looking at reorganizing themselves to stay

competitive, and therefore, a new enterprise

digital platform is emerging dominantly.

This emergence also traces its origin in the

latest technological developments in the

client devices, mobility, analytics, social

media, connectivity, security, wearables

and the paradigm of cloud computing. The

possibility of new and innovative services

for the entire spectrum of stakeholders

(consumers, partners, suppliers, institutions,

employees) across multiple devices and

geographies is behind the need for a new

enterprise digital platform. (see figure 12).

The emergence of the new enterprise

digital platform is a sort of transition

from one paradigm to another. It is

a journey, and hence, continuously

evolving. It may retain elements of the old

paradigms, though the proportion will

change with time. Later on, we shall be

discussing the three paths, which can be

adopted for this journey.

FUTURE PERFECT: NEED FOR A NEW ENTERPRISE DIGITAL PLATFORM


Firstly, we discuss the bigger shifts,

which characterize the journey towards

the emergence of a new enterprise

digital platform.

A Comprehensive DefinitionEnabled by digital technologies at the core

and aimed at supporting digital initiatives

at the periphery, the emerging enterprise

IT platform can be aptly termed as the

Enterprise Digital Platform. A functional

enterprise digital platform is critical. An

enterprise digital platform is a collection

of myriad technologies from multiple

vendors, assembled over a period, (ideally)

using the framework of an enterprise

architecture

(see figure 13).


FIG

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Need for a New Enterprise Digital Platform

Cloud Services

Cloud Services

Cloud Services

Cloud Services

Cloud Services

Cloud Services

Enterprise IT(in premise)

Partners/ Suppliers

Developers

Institutions

Employees

Customers


FIG

UR

E 13


Enterprise Digital Platform

User experience with aesthetics, personalization,

information relevance,

security, multi device access, and

speed

1

Automation of the IT

processes by software

defined everything

1

Digitized, secured and dynamically retrievable documents

2

Communica-tion between

machines, peo-ple, processes

and data

2

Automated, agile, managed,

connected, secured and

contextualized business

processes

3

Embedded play of analytics and big data capabilities

3

Integrated, open, managed,

optimized, orchestrated and secured

business applications

4

IT management

through dashboards on multiple

devices

4

Secured, quality & rationalized

data, and smooth data

flow in and out of the enterprise

5

Elasticity and geographical

spread through virtualization &

cloud play

5

Agile, governed

& secure IT infrastruture

6

Openness to integrate with other

platforms or services

6

Security & governance at multiple levels

of infrastructure, applications and

data

7

6 Functional Imperatives of an Enterprise Digital Platform

7 Technology Imperatives of an Enterprise Digital Platform

Digital

Catalyst

Core


The architecture is designed keeping

in mind the operational and strategic

reality of an enterprise. The platform

serves the enterprise processes, which are

automated and managed through IT, e.g.

communications, finance, sales, marketing,

operations etc. Any change in the way

processes are required to behave (a function

of the external competitive situation and

the internal strategic choices) warrants a

change in the way they are served by an

underlying platform. In the broader realm

of digital adoption, the demand is for agile

and dynamic processes, which in turn,

requires a more agile and dynamic platform.

Enterprise Digital Platform takes form

using digital technologies (referred to as

SMAC+) in such a way that they mesh with

the other two technology domains the core

(computing, networking, storage hardware,

business applications, security, BCDR and

databases) and the catalyst (middleware,

virtualization, infrastructure management

software, web services, APIs, WAN

optimizer) technologies.

This mesh of three domains, namely core,

catalyst and the digital technologies shall

address 7 aspects or technology imperatives

and create 6 functional imperatives.

The former can be seen as an input or

constituting imperatives and the latter as

output or effect imperatives.

The seven key defining technology

(input or constituting) imperatives of a

platform are:

1. Automation of the underlying IT

service processes

2. Enhanced Communication between

machines, people, processes and data

through integration

3. Embedded play of Analytics and

Big Data capabilities for smart

infrastructure and applications

management

4. Availability of IT Management

Dashboards on multiple devices

5. Elasticity and Geographical Spread

to computing, networking, storage,

middleware, applications and the

development environment

6. Openness to integrate other platforms or

services and

7. Security & governance at multiple levels

of infrastructure, applications and data

These seven aspects of a platform provide

efficiency in IT management, optimized

provisioning of resources and agility to

respond to business needs. These 7 aspects

also apply to the platforms by the IT

vendors, which are converged a platform of

technologies from various vendors, to create

specific functionalities for the enterprise

digital platform.

However, an enterprise digital platform

is a much broader entity, and one or

many vendor platforms may become

part of it along with the best of breed and

individual pieces of technologies.

The technology input aspects enable the

core, catalyst and the digital mesh-up to create

6 functional (output or effect) imperatives:

1. Matching expectations of user

experience (UX): Consumerization


of IT has raised the user expectations.

The customers, employees, partners

and other users are not willing to accept

anything which is shabby, slow and does

not meet their needs. Mere availability

of IT services is not enough. Access to

relevant information, aesthetics, seamless

availability across multiple devices, security

and speed are also important.

2. Digitized, secured and dynamically

retrievable documents: Documents are an

integral part of a business and its processes.

Though a completely paperless office is a

difficult aim, the more they are digitized and

secured and can be dynamically retrieved as

needed, the more they enable digitization of

processes and organizational boundaries.

3. Automated, agile, managed, connected,

secured and contextualized business

processes: The traditional view of IT gives a

rigid picture of systems, which is almost cast

in stone. The digital view promises agility

and dynamism, personalized or context-

specific rendering play and a seamless flow.

4. Integrated, open, managed,

optimized, orchestrated and secured

business applications: Many enterprises

develop applications as islands of

automation, which later require to be

bridged. They need these applications

to remain open for further integration,

especially with external services, optimized

and well orchestrated for a seamless play.

The ease of access and information are

important elements of user experience.

5. Secured, quality and rationalized

data, and smooth data flow: Multiple

versions of data, poor quality of data,

congestion free paths for the data to travel

in and out of the enterprise boundaries, and

lack of security while it travels are the key

roadblocks in creating an enterprise digital

platform. Unless these issues are resolved,

the digital platform functionalities may

remain incomplete.

6. Agile, governed & secure IT

infrastructure: A fully automated IT

infrastructure, which can be contextually

managed and provided in the right

measure, is important. A major part

of IT spend goes into the baseline IT

infrastructure and the applications

over it. Hence, their consolidation and

optimization are important for both

efficiency and effectiveness.

The 7 technology (input or constituting)

imperatives define where the CIOs should

focus upon and invest while designing

and building their enterprise digital

platform, whereas the 6 functional

(output or effect) imperatives define

the functionalities expected out of an

enterprise digital platform. These 6

outcome imperatives can also be used to

gauge the effectiveness of the enterprise

digital platform.

CIOs and other technology leaders must ask

themselves:

• Whatisthecurrentstateonthe6

outcome or effect imperatives?

• Wherearethecurrentbottlenecksand

problems?


• Whatistherequiredlevel,andwhere

should the focus be?

• Whereshouldtheinvestmentsgoin

terms of the 7 technology imperatives to

enhance the performance around the 6

outcome imperatives?

The process of creating the 6 functional

(output or effect) imperatives is a journey

from old paradigm towards the new

paradigm. Table 1 provides a comparison of

the old and the new paradigm of enterprise

IT on the relevant aspects.

The Enterprise Digital Platform: A Tale of Two Competing Worlds

The challenge before today’s CIOs is to

balance competing priorities. On one hand,

they are expected to create an efficient and

effectively run IT platform, manage the

complexity of technologies from a large pool

of vendors that has been put over time, and

build adequate IT security; On the other


TABL

E 1 OLD & NEW PARADIGMS OF ENTERPRISE IT PLATFORM

OLD PARADIGM NEW PARADIGM

On-premise IT infrastructure and

applications, most of the users within the

enterprise.

A hybrid infra (on-premise and public or

private cloud based IT infrastructure and

application), growing number of users based

outside the enterprise.

Development and change needs arise

internally.

Development and change needs arise at the

edge of the digital platform.

Monolithic infrastructure based on

dedicated computer network and storage

hardware, convoluted with point-to-point

networking.

Flexible infrastructure based on virtualized

and software-driven computer, network and

storage hardware, secured public network

for optimized connectivity.

Applications developed using traditional

methods like Waterfall model with long

cycles.

Application development using modern

methods like DevOps with short cycles.

Stability-oriented and slow in responding to

the business needs.

Change-oriented and agile in responding to

the business needs.

Focuses on stability, availability, perimeter

security and closeness.

Focuses on change and agility, user experience,

data security, governance and openness.


hand, they are expected to respond to the

growing demands of the LOB managers for

speedy implementation of digital initiatives

and educate the users to leverage the

information for decision making.

These two competing demands arise

from two different worlds of digital and

traditional IT - each one requiring a

different management outlook, leadership

approach and operating structure. Many

paths and options can be adopted to bridge

this dichotomy. However, an organization

must be aware of and deliberate upon their

fitment before it chooses any one of them.

Let’s first understand the five competing

priorities for the CIOs:

(i) Responsive and Agile IT Platform:

The scope of IT is no more limited to the

physical premises of an enterprise. It has

changed dramatically for two reasons.

One, the definition of an enterprise has

undergone dramatic shift with mobile field

workforce needing to remain connected

and employees wanting to work anywhere

and anytime. Two, customers demand

access to the enterprise services anywhere,

anytime and anyplace. With the sprawl of

smart phones and better internet services,

employees, partners and customers are

more empowered than in the past.

The scope of enterprise IT has changed.

It is no more confined within the physical

premises of an enterprise. A part of it has

moved outside into the cloud and that part

is expected to grow further.

The change in the scope of IT puts a

lot of pressure on the availability and

provisioning of the IT infrastructure (and

applications). What was earlier limited to

the demands of a few in a LAN (or, at the

most, enterprise WAN) environment has

now transformed into a bigger, complex and

erratic load coming from the edges of an

ever-expanding network of users.

Developing a responsive and agile IT

platform seems to be a major priority for the

CIOs in 2015. According to a Core Quadrant

research on CIO’s IT Priorities, 2015, 25%

respondents mentioned infrastructure

overhaul as their top priority, followed by

17% citing applications overhaul, and 14%

mentioning consolidation of IT assets as the

top priority. Combined, a whopping 56% of

the CIOs see evolution of a future enterprise

platform as their top goal. For many

enterprises, the old platforms are failing to

meet the demands of digital applications

using SMAC+.

The traditional architectures,

development methodologies and old

technologies of the legacy platform

generally do not fit well with the new

world of speedy application development

and operations. The legacy platform is

complex as it evolved through a piecemeal

approach to development, and attempts

to integrate the otherwise disconnected

islands of automation. Beyond a point,

it becomes untenable and limitations

of legacy platforms stand in the way of

an enterprise’s digital initiatives. The

situation is manageable till the digital

initiatives are flirting in nature and

remain at the periphery. But as they

evolve for a better penetration into the


enterprise IT platform, legacy starts

becoming a bottleneck.

(ii) Operational Efficiency: The business

environment of moderating growth and

rising costs has its own effects on the IT

spend. The budget for IT is not increasing

as seen in the past. Core Quadrant

estimates IT spending in India to grow

at a CAGR of 11.6% over the 2015-2020

period. A constant struggle for the CIOs

is to balance the competing needs of new

applications development (which may have

a direct impact on business) and ensuring

maintenance of the legacy platform. Any

money saved in doing the latter will create

more leeway for the former.

A better utilization of the existing

resources, enhanced productivity of the IT

workforce and reduction in complexity is

a clear mandate today. According to a Core

Quadrant research on CIO’s IT priorities,

2015, IT Efficiency emerged as the top

priority for 48% of the CIOs.

(iii) Information Leverage: A quarter of the

CIOs see educating IT users, and creating

structures and practices for leveraging

information residing in the enterprise

systems as a priority for 2015. An increasing

number of leaders are realising the need

to focus on information as opposed to

technology alone.

(iv) Speedy Digital Applications: Yet

another interesting finding of the same

survey is that 40% of the CIOs said that

exploring digital technologies is their

priority for this year, a massive increase

from just 19% last year. It’s an indication

that the SMAC+ play is evolving beyond

the initial flirting phase to the building

phase and beyond. By the end of 2015, it is

expected that more CIOs shall have explored

the possibilities around SMAC+ and, hence,

will face the challenge of evolving the

mechanism to develop and deploy digital

applications speedily.

It results into the need for a responsive

and agile platform, from both operations

and application development points of view.

How do CIOs harmonize the traditional

legacy approach at the core and the new agile

approach at the periphery as they evolve

into a digital enterprise platform, is a key

challenge for the CIOs.

(v) Adequate Security: Lately, security

has been quite a concern for not only the

CIOs but also the top management and

the company boards. As the enterprise

grows and its boundaries expand,

more access points get created, travel of

critical data intensifies and new threats

emerge. Any security preparation seems

inadequate in the age of cyber warfare

where the bad guys seem to be miles

ahead and companies are merely into

catch-up game. In the Core Quadrant

research, nearly 25% of CIOs stated that

security is their key priority for 2015.

This need shall further intensify with

the enterprises’ evolution on SMAC+

(beyond the flirting phase). As the market-

facing applications get integrated with

the critical enterprise data and access is


given to a multitude of users (consumers,

mobile workforce, partners, suppliers and

distributors), security challenges will erupt

more often. This will mandate the CIOs

and CISOs of organizations to stay ahead

of the curve, and create a policy-based

security architecture to safeguard the

digital enterprise. The need is for a multi-

faceted and dynamic approach to security

including access control, perimeter security

and data security. (see figure 14).

The Dynamic Interplay of the Two Competing Worlds

Enterprise (digital) platform is an outcome

of a recursive process of interaction between

FIG

UR

E 14


Competing CIO Priorities

RESPONSIVE AND AGILE IT

PLATFORM

OPERATIONAL EFFICIENCY

INFORMATION LEVERAGE

SPEEDY NEW APPLICATIONS

ENHANCED SECURITY

IT PRIORITY FOR 2015 BASE-142 CIOs %

Enhance IT OPERATIONAL EFFICIENCY

(through adoption of IT management processes,

frameworks and technologies)

47.6

Explore NEW TECHNOLOGY paradigms

(like social, mobility, cloud, unified communication, green

IT, BYOD, etc.)

39.5

Enhance INTERNAL USAGE

(of IT for business advantage)25.8

OVERHAUL architecture

(to prepare for the infrastructural needs

of the future)

25.0

Enhance IT SECURITY/BCDR

(& risk management)23.4

ADOPT / EXTEND / OVERHAUL enterprise

applications16.9

CONSOLIDATE IT assets

(for economies of scale and optimization)13.7

OTHERS ( Outsourcing) 5.6


the two competing worlds- digital initiatives

(at the periphery) and the core infrastructure

and applications (at the centre). The

technologies in middle (or catalyst) layer

establish a dialogue between the two.

There are two aspects to this dialogue:

One, the peripheral digital initiatives and

the changes (or adjustments) they require

in the core architecture. They may range

from simple adjustments enabled by

small patches of technology to complex

adjustments enabled by a significant middle

layer and upgradations. But, these changes

are piecemeal for specific initiatives.

Two, a big overhaul and upgradation of

the core infrastructure and applications

create new possibilities for market facing

digital initiatives at the periphery. The

digital elements really seep deep into the

core infrastructure and applications, thus

creating brand new digital capabilities.

The Figure 15 shows the dynamics of the

dialogue between the two competing worlds.

But, why are they competing?

Because, their key characteristics and

demands are different. The peripheral,

market-facing digital initiatives require

speed of development and roll-out across

multiple channels. The core infrastructure

and applications, on the other hand, are

required to address issues of traditional

development models, integration, technology

compatibility, regulatory compliance and

security. They represent the legacy (multiple

platform and technologies) built over time

and they trade off robustness with speed.

However, eventually the two need to

reconcile and sync with each other. Though

each enterprise shall evolve in a unique way

and have unique milestones, we present

three possible pure-play paths.

Evolution, Co-evolution or Revolution: The Three Paths to Build the Enterprise Digital PlatformAs said earlier, enterprise (digital) technology

platform is an outcome of a recursive process

of dialogue between digital initiatives (at the

periphery) and the core infrastructure and

applications (at the centre).

With time, they must intimately mesh

together to create an enterprise (digital)

platform. This platform continuously

takes shape during its journey. There

are many ways in which this sync may

happen, depending on the environmental,

strategic, structural, relational, cultural

and technological realities of an enterprise.

There are three representative

trajectories, which can define the way

the sync between the peripheral digital

initiatives and core infrastructure

and applications gets established-

(disconnected) evolution, co-evolution

and revolution.

We define each one of them briefly here:

(Disconnected) Evolution: The two

forces may evolve in a disconnected

manner, independent of each other (or

with minimum interdependence). They


may be driven by multiple stakeholders

with minimum interaction between

them. It may be a natural choice due to

inadequacy of the core IT platform or a

lack of concerted organizational focus on

digital, where each one is left to decide

on its own. In the latter scenario, the

structural or relational readiness to drive

an organization-level digital drive is low.

But these issues may not even be in the

awareness of the leadership.

Many enterprises, in the flirting stage of

digital evolution, may take this path.

Co-evolution: The two forces co-evolve,

i.e. evolve in tandem with each other, but

one step at a time. The peripheral digital

initiatives drive suitable adjustments

in the core, which is slowly developed

towards providing new digital capabilities.

It is still evolutionary, but with a

mechanism in the middle to enable them to

FIG

UR

E 15

The catalyst

technologies play an

important role both

in rolling out the

digital initiatives and

building the core IT

infrastructure and

applications.

How deep does the

peripheral need to go? In

other words, what kind of

changes or adjustments

or upgrades are required

in the core IT or the

catalyst platform in

response to the peripheral

digital initiatives?

How does this recursive interaction shape up? Is it a designed process or is it left to evolve on its own? Is there

a roadmap of the likely evolution (or revolution)? Who initiates the change and manages the road map? How is

the change management planned?

The upgrade or overhaul of the core enterprise

platform is undertaken to make it more digitally

enabled. Why are these changes undertaken? Is it

a routine thing or a special need? What have been

the past patterns? What kind of new possibilities for

SMAC+ does it offer? What new functionalities does it

bring on table, which can be digitally exploited?

Market facing digital initiatives driving innovative processes, multiple channels and new products. These initiatives face

‘time to market’ pressures and require agile development and implementation frameworks. They mostly address the

needs specific to LOB functions and mostly driven by the respective functional heads.

Core infrastructure and

applications represent the

baseline (one may also refer

to them as backend) IT. It is

a legacy, which is built upon

traditional development

approaches and are slow to

respond.

Digital

Catalyst

Core


Three IT Layers and Dynamics of the Enterprise Digital Platform


move together. The various stakeholders

have adequate interactions for the two

aspects to evolve together.

An enterprise may evolve through the

four stages of the digital evolution (flirting,

building, converging and performing)

taking the co-evolutionary path. It is a

natural choice when the legacy core is

still amenable to adjustments, and cannot

be done away with because of financial

considerations. As stated earlier, a middle

structural, relational and technological

mechanism to drive the sync is essential

for co-evolution.

Revolution: The sync between the two

forces can be created through a big bang

approach, a complete overhaul of the core

infrastructure and applications. When the

peripheral digital initiatives become an

important part of the competitive strategy

and the legacy core becomes untenable

to drive these initiatives, a big bang

approach may be necessary. This approach

generally surfaces at the converging phase

when it becomes quite urgent to address

the legacy issues.

The revolutionary approach may be a

part of a bigger business transformation

drive (though it may be at the centre of that

drive) and generally requires sophisticated

structural mechanisms and involvement

of the C-suite.

A comparison of the three evolutionary

paths is given in Table 2.

A particular enterprise, based upon the

need, may take each of the three approaches

at different stages of its evolution.

Each CIO and CXO, in an enterprise,

must answer the following questions:

• Whatistheenterpriserealityinterms

of digital vision, leadership support,

collaboration between IT and business,

and the structural mechanisms?

• Whattypesofmarketfacingdigital

initiatives are being undertaken in your

organization?

• IsthecoreenterpriseITplatform’sability

to support these initiatives an issue? If

yes, what kind of issues are there?

• Areyouconsciouslyapproachingthe

sync between peripheral and core?

• Whichofthethreepathsareyoutaking,

and why? Is it working?

If you have a vision of how your enterprise

digital platform should look, you need to

create an appropriate path to reach there.

Vendor Platforms: Superiority versus Suitability

Vendor platforms are essential components

of an enterprise digital platform.

Though the CIO may want to develop

the enterprise digital platform using

various technologies, vendors’ converged

platforms are also important. They provide

specific functionalities and capabilities in

a packaged form - a wheel which does not

need to be reinvented by the CIOs. But the

real question to seek an answer to is: which

platform(s) a CIO must adopt and which

vendor(s) the CIO must select?

Once decided on platform(s), we

recommend that instead of a technology


comparison between vendors, enterprises

must assess their suitability. Each vendor

approaches the platform strategy from

their original domain perspective. Hence,

a network equipment vendor shall have

strengths in networking, whereas systems’

software player will have strengths in

its own domain. Though their portfolio

may appear complete as they may have

integrated the acquired pieces and the

partner products into their platform, it can

still never be ‘apples to apples’ comparison.

Moreover, an enterprise platform

can never be built using a single vendor


THE THREE EVOLUTIONARY PATHS

(DISCONNECTED) EVOLUTION CO-EVOLUTION REVOLUTION

KEY CHARAC-TERISTICS

The two forces evolve in their own domains at their own pace.

They evolve in sync with each other, but rather slowly, step by step.

A big bang approach. The core is overhauled in a big way for creating immediate digital capabilities.

LEADERSHIP

Fragmented approach, almost no interaction or synergy between the stakeholders.

Concerted efforts are taken by the functional CXOs and the CIO together.

The transformation is driven by the C-suite with an active participation of the CEO.

STRUCTURAL ORIENTATION

The structural mechanisms to create sync between the two forces is missing.

A minimum structural mechanism to drive sync is in place, even if the approach is one step at a time.

An adequate structural mechanism to drive a big bang change is created during the transformation.

SITUATION FITMENT

When digital initiatives are few and far between, mostly of flirting nature, and there is a low sense of urgency.

When the core can supprt the adjustments required to drive moderately urgent digital initiatives. It may not be feasible to overhaul the core in a big way as there have been big investments sunk in it in the past.

When the legacy core becomes untenable to support piecemeal adjustments required for (very urgent and strategic) digital initiatives.

PROSIt requires no or low investment.

It requires low investment, and still over time, it can drive the required level of digital drive at the periphery.

It can create new and strategic digital capabilities.

CONS

It is not suitable for advancing beyond the flirting or the building phase.

It is not suitable in the situation of urgent need or a low collaboration environment.

It requires high level of investments and very high level of collaboration at the top.

TABL

E 2

46 THE DIGITAL LANDSCAPE

2015 & BEYOND

platform. It has to be a mix of platforms

from multiple vendors, with one being the

key. What’s more important is to assess

the suitability and relevance of a vendor’s

platform, keeping the reality in mind.

Core Quadrant has identified 11 such

questions to be answered while evaluating

the ‘suitability’ of a vendor platform for a

particular need in an enterprise.

Assessing the Need1. What is the current need? Is it tactical

or strategic?

2. Is the need at the periphery or at the core

of the enterprise digital platform?

3. Where is the need for a vendor

platform in the enterprise’s digital

platform (process, application,

middleware or infrastructure)?

4. What are the alternatives to buying

a converged platform from a

vendor? Does the enterprise have

internal skills to buy best-of-breed

technologies separately and create

the required functionalities in a cost

effective manner?

5. What kind of budget exists? Who all are

involved in decision making?

Assessing the Vendor-converged Platforms6. What is the openness of the vendor

platform to integrate with other vendor

platforms, products or services existing

currently in the enterprise?

7. What is the stability of the vendor

partnerships (if the platform is an

outcome of a consortium’s efforts)?

8. What are the future plans? What

investments may be required in

the future, and what is the possible

evolutionary roadmap of the vendor

platform? Will it support

long term needs, and what is the

investment required?

Assessing the Internal Fitment9. What is the fitment with the current

enterprise architecture, and what

complimentary investments will

be required to integrate the vendor

platform with the existing architecture?

10. What is the enterprise’s past

experience of working with that

vendor? Are there any products or

services of the vendor already deployed

in the enterprise?

11. What is the level of availability of

skills around the vendor’s technologies

relevant for the platform?

Based on the assessment of the need, the

enterprise can decide whether they should

really go for a converged platform from an

external vendor or not. The assessment of

the vendor platform and the internal fitment

shall help select the right vendor.


“ Age is a number,” is what someone remarked

when I turned 50 not too long ago from now;

but thinking about the technology evolution

I feel a few shades younger than a dinosaur!

Imagination is the limit to what can be

achieved with technology-enabled solutions

offering opportunities for new business cases

rather than solving problems of the past.

Conventional business models are seeing massive

challenges from the startups while money chases

differentiated thinking, threatening the old age. It

is an exciting world to live in and to contribute to

the disruptive thinking.

Digital India has captured the imagination of

the country; starting late is not a disadvantage,

rather it is an opportunity to learn from

mistakes that smatter the digital ecosystem of

failed projects and passive failures of solutions

adding no value to a handful that made it big.

Think tanks and technology experts collectively

brainstorming on future-proof architecture

have attracted promise of large investments. The

citizenry awaits with abated breath the fruits of

this labor.

THE DIGITAL ENTERPRISE: A CONTRARIAN VIEW

ARUN GUPTAMANAGING PARTNER & DIRECTOR, INGENIUM ADVISORY

EXPERT VIEWPOINT

49EXPERT VIEWPOINT

• What does this imply for enterprises and CIOs who are being

challenged with the Digital wave?

• Are you going to be the Chief Digital Officer or another CXO will

claim this position?

• Will the CIO be marginalized in this race towards Digital success

or survival?

Winners will not be the ones who create the buzz in the short-term,

but those who create a sustainable and institutionalized model.

Filtering the noise and loudmouths will be a challenge for

companies to address before they embark on the journey. For the

enterprise and the individual the answer lies within, in the culture,

the leadership and personal goals.

Let’s divide the initiatives into three parts:

The first that addresses internal stakeholders, with the second

focusing on customers; so where is the third?

I call it nebulous, as the impact is in both camps, though not clearly

definable. The third category also generates the most interest with

fairytale-like success stories of huge investments and valuations

created by 20 something entrepreneurs.

Boardroom discussions attempt to analyze applicability and ruboff,

if any, within without the accompanying mindset, skills, or risk

ability, deciding to explore some more before taking action.

Dis-intermediated retail stores, taxi operators, telecom companies,

leisure/holiday companies - created using a digital foundation -

create new opportunities for mass participation, thereby, raising the

bar higher. 3D printing is frightening manufacturing even in the lab

scale, IoT wants to change lifestyles and we are just getting started

with driverless cars connecting to traffic systems or the washing

“In this confusion, everyone is doing their bit to move a step, hoping that it does take them forward in a direction that matters. CIOs rejoice, you don’t have to clear the fog, as there is no clarity on the other side too.”

50 EXPERT VIEWPOINT

machine deciding which clothes to wash based on your calendar so that

you have that favorite party dress ready for Friday night. Is technology

controlling your life? Not yet!

• Does social media integration to your customer database, predicting a

slew of probable behaviors, make you digital?

• Is addressing customer grievances heard on micro-blogging sites a tick

in the right box for digital?

• What about information on fingertips and mobile approvals for busy

overworked executives?

• How about enterprise mobility with BYOD and apps for every task?

If no, then what will make my enterprise digital? Where and how do I get

started? Unfortunately there is no consensus as yet on what qualifies as a

milestone on this journey.

In this confusion, everyone is doing their bit to move a step, hoping that

it does take them forward in a direction that is right and that matters.

CIOs rejoice, you don’t have to clear the fog, as there is no clarity on

the other side as well. The only advice I can give is don’t sit idle, rather

participate, challenge, ideate, contribute to the confusion, take action,

which is a lot more than what others are doing inside your enterprise. You

will be proclaimed a ‘Digital Leader’ if you ended up hitting a goldmine,

else at least, you have failed faster.

About The Author

Mr. Arun Gupta is Managing Partner & Director, Ingenium Advisory. Arun has over 30 years

experience in Business Technology, with focus on driving technology and enabling business

with improved customer satisfaction while reducing operational IT budgets, and driving

change agenda to make organizations globally competitive.

His previous positions include Global CIO of Cipla, Group Chief Technology Officer (CTO)

at Shoppers Stop Limited, Director – IT of Philips Electronics India Limited, Senior Director –

Business Technology at Pfizer Limited, Vice President – IT for Hughes Telecom, Vice President

– IT at DSP Merrill Lynch, as well as leadership roles with DHL and Tata Group Company.

HARVEY KOEPPEL PRESIDENT OF PICTOGRAPHICS INC.

I f I am asked to truly speak my mind in order to

demystify the concept of digital enterprise, I would

say that it indeed appears to be somewhat mystical,

mainly because the typical way in which the enterprise

is described is both: (a) too much about technology and

not enough about business value; and (b) often lacks a

clear vision or definition of the “digital business” that

the “digital enterprise” needs to embrace and nurture.

My definition of the digital business is one that sits

at the intersection of Social Media, Mobility (including

Geo-spatial), Analytics (including Big Data), Cloud,

and importantly (and often left out), is happening in

‘real-time’. Digital business is further characterized

by one that places the customer in the center of

everything, commonly including but not limited to

the definition of products and services offered by the

enterprise, often developed collaboratively across the

ecosystem of customers, partners and stakeholders

within which the enterprise lives.

CREATING DIGITAL BUSINESS: CHANGE MINDSET BEFORE ANYTHING

EXPERT VIEWPOINT

52 EXPERT VIEWPOINT

Simply stated, we are evolving from a world where we studied product

performance history to predict future customer segment buying behavior

and made decisions about what to sell to which segments during the next 3 - 6

months, to a world where we look at individual customers (not segments) in

real-time and determine what to offer them based upon their individual needs

now, not in 3 or 6 months from now.

And we depend upon their relatively instant feedback (both positive

and negative) to improve the value of the products and services that we

deliver. All of that said, the digital enterprise that supports digital business is

much flatter and much more driven by facilitated collaboration as compared

to historical enterprise models that have almost entirely been based upon

hierarchical command and control structures.

Move Along the C-SuiteIt is vital that the CIO in a digital enterprise needs to have an equal

understanding and appreciation of the marketplace as any of his/her

partners across the C-suite. The digital CIO, who is today short on some

key skills, must possess strong leadership traits, including the ability

to articulate the enterprise vision, and build and motivate the IT team

based on creatively leveraging innovative technologies, to enable the

enterprise vision.

Certainly, the historical IT drivers of expense management, system

performance, reliability, availability, etc. haven’t yet lost their importance.

In fact, they may be more important than ever in today’s time because

those objectives form the foundation of superlative customer experience -

the digital CIO’s mantra.

The big difference is that while earlier the CIOs were focused on those

objectives for 90% of their time, they must now hire people who can deliver

on the SLAs, KPIs, etc. and free themselves to concentrate on social media

strategies, designing better analytics or enhancing the customer experience as

a key differentiator for the enterprise.

“The digital enterprise that supports digital business is much flatter and much more driven by

facilitated collaboration.”

53EXPERT VIEWPOINT

In order to break this jinx, the CIOs also need to think like CMOs, which

in many enterprises, represents a significant cultural change across the

C-suite and throughout the organization. Majority of CIOs until now try

to get things done using the influence of either their title, or their authority

and/or control on systems. With the changing times, they must now learn

to lead and manage horizontally and get things done through influence.

I advise CIOs to take decisions collaboratively than by asserting their

authority. Its about time CIOs create an image that is of a trusted leader’s in

addition to competent IT managers.

Seven Steps to GloryA typical CIO, ridden with legacy frameworks, working in a not-so-

progressive environment, can also strategize a digital enterprise, where

one doesn’t already exist, by following the following seven steps:

• Hire and train people qualified to run the IT shop to free your time for

strategic stuff.

• Spend the time building trusted relationships with C-suite colleagues.

• Educate C-suite on the value of evolving towards digital business and,

importantly, the risks of not evolving.

• Offer examples of companies in your industry/marketplace that have

succeeded in making the transformation.

• Find resources (external, if required) to ideate and execute a short-

term, inexpensive pilot that demonstrates the value of digital business

innovation. Don’t forget, “Start small”.

• Leverage small wins to gain support for more ambitious efforts. Gain

the confidence and support to embrace more significant efforts.

• If none of the above works, write your resume.

Your Ladder to SuccessIt’s true that technology is available and will only get more matured and

standardized as we move forward. The problem of deploying technology won’t

be technology alone. It will be more related to people. It is absolutely critical

for a CIO to look at skills - both their own and those of their IT organization. In

addition to the skills mentioned above, the IT organization needs to be able to

work with their business partners to ensure that a well-balanced governance

model is in place that allows for more short-term quick win type projects.

Short-term, low-cost failure should not be punished, long-term

expensive failure should be. If you are not taking risks, you are not

54 EXPERT VIEWPOINT

going to make progress. Risks need to be managed, not avoided and that

mentality needs to be an integral part of the enterprise work culture. If

risk management is just an IT mindset, it will never work.

Another important aspect is selling ideas to the company’s management

or board. There is no ‘one-size-fits-all’ logic while selling digital business

(or anything else) to a company’s board. With respect to digital business,

some boards are actually frustrated over management’s inability to

envision or implement a digital business strategy, and would embrace new

thoughts and ideas that bring the company into new and exciting spaces.

Some boards avoid risk rather than manage it and are much tougher to

convince. The best approach that I have seen is to first get to know your

board members, both as individuals and how they act as a team, and then

integrate your digital business strategies and ideas into your board-level

presentations. Generate content based upon activities related to suggestion

made above (seven steps) and ensure that your points are clear, crisp and

concise - a couple of slides maximum.

Most importantly, focus upon business objectives and value, and avoid

jargons of any kind – business or technology. Leadership and excellent

communication skills are the two most important skills to tap for a CIO. As is

standard protocol for dealing with any board, ensure that you have socialized

and received approval of the presentation content with your CEO, CFO and

any other executives that will be participating with the board.

Industry is witnessing unprecedented opportunities coming its way, like

powerful mobile devices, social networks, data analytics, and sensors. But,

at the same time, there is a need to adjust the organization to deal with the

changing demands.

How can a CIO take the lead in not only helping create these digital

propositions but also in creating a better connect with customers, is today’s

most pertinent question.

“Digital CIOs need to think a lot more like CMOs, which in many enterprises, represents

a significant cultural change across the C-suite and throughout the organization.”

55EXPERT VIEWPOINT

Without being prescriptive, I’d say, CIOs need to partner with their CMOs

to design and deliver impactful social media strategies through which they

can articulate the vision and direction of the enterprise and receive feedback

from customers on everything - from longer-term vision to the quality of a

customer service experience that happened just a few minutes ago.

Once you engage your customers in this fashion you must be prepared to

listen and act upon comments and suggestions when they are appropriate.

Even negative experiences can be turned into positive (Wow moments) when

companies respond directly to customer needs, especially when the response

is in close proximity with the experience.

CIOs should help in creating policies and procedures that bring the

strategies to life and affect positive change to the customer experience.

I worked with one package delivery service that monitors Tweets and

Facebook posts. When they detect a bad customer experience with their

service, their commitment is to have an agent appear in person at the customer’s

location within 45 minutes of the time of the post with a plan to resolve whatever

the difficulty was about. Not only does that policy and procedure satisfy the

immediate concern, the now-satisfied customer is also much more likely to tell

the friends and colleagues about the great experience that s/he had with the

package delivery company. The company also has the opportunity to identify

and fix what could be a systemic issue that is negatively impacting other

customers, in a much more timely and likely less expensive manner.

Everybody wins and you have a great story to tell your board!

About The Author

Harvey Koeppel is the president of Pictographics Inc., a management and technology

advisory and consulting services firm. The firm has provided executive-level support to the

financial services industry since inception in 1979. Harvey recently served as executive director

of the Center for CIO Leadership. He set the center’s strategy and directed internal and

external operations in support of a global community serving more than 3,400 CIOs and other

C-level executives interested in developing the skills required to further leverage enterprise

investments in information technology.

From May 2004 through June 2007, Harvey served as the CIO and SVP of Citigroup’s Global

Consumer Group (GCG). In that role, Harvey set the strategic direction for the GCG’s operations

and technology and actively supported the development and growth of the operations and

technology community in support of all GCG products and services, on behalf of 180 million

customers located in 54 countries throughout the world.

“ Digital disruption is an opportunity for CIOs,”

said John Chambers at the beginning of this

year in a Wall Street Journal CIO conference.

What he meant by saying this was that the

whole digital revolution is so intense that 1/3rd of

the corporate leadership won’t make a transition

over the next three years. Therefore, it provides

an opportunity for CIOs to elevate their roles in

companies as technology becomes increasingly

central to the business. “It’s a chance for IT to be

back in vogue,” he said.

What’s more important for a CIO to understand

is that the future will respect only “outcomes” and

not so much the efforts. And to get those positive

outcomes, Digital Disruption is a must.

How should a CIO help himself first by

demystifying the whole digital conundrum to

then helping his organization in achieving the

business excellence?

In an exclusive interview with Core Quadrant,

Susan Cramm, former CFO and Executive VP at

DIGITAL DISRUPTION: CIOs CAN OUTSOURCE THE FUNDAMENTALS OF SUCCESS

SUSAN CRAMMFORMER CFO & EXECUTIVE VP AT CHEVY’S MEXICAN RESTAURANTS AND FORMER CIO & SENIOR DIRECTOR OF FINANCIAL & STRATEGIC PLANNING AT TACO BELL CORP.

EXCLUSIVE INTERVIEW

57EXCLUSIVE INTERVIEW

Chevy’s Mexican Restaurants and former CIO and Senior Director of Financial

& Strategic Planning at Taco Bell Corp. gives her cracking thoughts on

what she thinks about the digital revolution and how can CIOs align

themselves with it. Core Quadrant excerpted the key points from the

interview, that are given below:

What are your key thoughts on this whole big shift towards

Digital? How do you rate the movement of IT from a plain,

computing mechanism to a whole new way of servicing customers

Digitally?

It may appear like a dramatic shift, and serve the consultants and

vendors, to term it so, but I don’t view the focus as a major shift , rather a

continual (albeit rapid) evolution in the increasing impact of technology

enablement and the importance of technology smarts – in and out of IT.

Technology has always enabled new business models and new

operating models across the spectrum. The pace of enablement

opportunities is accelerating due to the convergence of technologies

that enable data analytics, social linkage, the Internet of Things (IoT),

robotics, and ubiquitous and inexpensive computing and mobile/

smart devices, etc.

There is a significant disconnect between the incredible

opportunities to exploit technology and the inherent capability

residing in the companies to do so.

This increases the risk for established companies of being

disrupted by the startups, which are able to gain a great foothold

through mass personalization for customers, and do so at a

much lower cost, simpler, more advanced technology footprint.

Organizations, who, over the past 10 years have invested in

increasing technology smarts with a focus on experimentation and

rapid adoption, are better positioned and equipped to prevail and

thrive in this increasingly digital world.

“CIOs, who are willing to learn, take risks, and reshape their organizations and IT, will be able to create a future that feels very different than the past.”

58 EXCLUSIVE INTERVIEW

If that’s the case, the CIOs from older, legacy-ridden organizations

should be even more worried for multiple reasons. How do those CIOs

change their mindsets? How do their thought processes become Digital

rather than just using technology to digitize the production?

Digital is both important and unavoidable, and leaders - across all the

professional disciplines - should be playing offense, not defense.

Boardrooms who are speaking a different language than the IT leaders

within are going to demand for new leaders to stand up to the challenges

of competing in the digital economy.

CIOs have little options left but to change their mindsets. They can

begin doing so by shifting their focus from internal to external – learning

from others who are further along and have demonstrated success in the

application of digital capabilities.

This new knowledge and perspective shift will bear knowledge in

one of two ways. If the CIOs are working within companies where other

leaders are looking through digital lenses, their conversations, plans,

and initiatives will be conceived with the digital at their core. If the CIOs

are working within companies where leaders continue to contemplate

layering on digital concepts on analog business and operating models, the

new mindset will bear little fruit and they are best served by taking their

digital bats and balls and seeking to work for companies where they can

collaborate effectively.

To be successful in the new world, CIOs have to themselves

dismantle their own monoliths and mindsets. Can you throw some

light on how the management and board thinks of IT’s alignment

with business and where the CIOs are today? Where’s the gap? How

will the gap begin to reduce?

Unfortunately but true, I see a world of “haves” and “have-nots”

when it comes to technology enablement. The “haves” started changing

“CIOs have little options left but to change their mindsets. They can begin doing so by shifting

their focus from internal to external – learning from others who are further along.”

59EXCLUSIVE INTERVIEW

their perspective about the importance and potential of IT in the late

1990’s and changed their expectations as to the level of technology

smarts required in and out of IT. They have IT reporting to the highest

levels of management positions in the company because they understand

that IT expands the range of opportunities and doesn’t simply react or

execute against them. They hold all leaders accountable for conceiving

and driving IT-enabled change initiatives. They understand that the

10% of employees in IT cannot “serve up” technology on demand to the

remaining 90%, but instead view that technology is a permanent part of

everybody’s job description. So, the CIOs have to essentially come in the

category of “haves” and think like they think.

Should the new CIO, in quest for creating a Digital Organization,

begin relooking at the skill-sets of own people or replace technology?

How can s/he be successful in his/her pursuit to create a holistic

digital organization?

The new CIOs should understand that they are an enablement

organization – enable the productive conversations about digital

opportunities, enable the process to convert ideas into experiential

learning, enable infrastructure to promote rather than inhibit

experimentation and scaling of capabilities, enable the process of joint

creation across the enterprise of digital capabilities, enable the enterprise

to learn and grow while reducing the inherent risk of doing so.

The control-oriented mindset of, “we do IT on behalf of the rest of the

organization”, has to change and this will require changes in leadership,

starting at the top. With changes in leadership will come changes in

technology as well.

As a global visionary, where do you see the whole digital momentum

heading? What ends will it help businesses achieve and how can

CIOs be the key agent of this change?

It has been exciting to be a part of this industry for almost 40

years and to realize that the future is even brighter than that past. I

agree with Ray Wang that digital transformation is fundamental to

success and cannot be outsourced (even though many of the factors of

the transformation may be). CIOs, who are willing to learn, take risks,

dream with colleagues, and reshape their organizations and technology,

will be able to create a future that feels very different than the past.

Ian Cox, an acclaimed CIO advisor and former IT

professional, in one of his recent articles on his

blog “CIO Leader” asked a very key question:

“Are CIOs running out of time?” In the article, Ian

provides an excellent analysis of the current state

of the CIO and argues that CIOs are definitely not

running out of time, especially if the CIO realizes

that the role today is different than it was in years

past.

Ian says CIOs need to better understand the new

role of the CIO and follow a new model.

He writes:

In this new model, rather than being the gatekeeper of

the technology budget and the provider of all technology

used by the business, the new type of CIO and IT function

act as brokers, providing advice, guidance and access to

the technology required by the rest of the business. It is

a far more important and valuable role but it requires a

different type of CIO and a different type of IT function.

Emphasis mine.

There are some CIOs out there that have

embraced the changing landscape of IT. These

CIOs have figured out that their future lies

within a collaborative environment with other

CIO REVISITED:WELCOME THE NEW CIO

ERIC D. BROWNTECHNOLOGY CONSULTANT AND ENTREPRENEUR

EXPERT VIEWPOINT

61EXPERT VIEWPOINT

groups within the organization. They’ve realized that groups like

Marketing and the Chief Marketing Officer have been increasing

their technological knowledge exponentially over the last few years.

They’ve realized that the future of the IT group and their future as

CIO lies within their ability to help lead technology solutions within

a company without having to ‘own’ that technology or the budget for

that technology.

I’ve given these CIOs a new moniker. They are New CIOs.

While these CIOs have figured out the future of their role and

the IT group is changing, there are many other CIOs who’ve yet to

figure it out – or at least have yet to accept that changes are coming

(or have already arrived). These second type of CIOs are looking for

ways to get their ‘old’ lives back. They’re looking for ways to own

all technology budgets, projects and systems and are constantly

fighting the CMO and others to regain the control they once had.

Just like the New CIOs, I’ve given this second type of CIO a moniker

as well. They are Old CIOs.

I know, not very interesting names for either, but stick with me

in this journey and you’ll see they are perfect monikers for the two

types of thinking. Not only do they perfectly describe the difference

between the two types of CIOs I see today but the monikers describe

the difference in the types of thinking that is required of CIOs to build

the digital organization of the future.

Throughout my career, I’ve generally found myself at the

intersection of business strategy and technology. I’ve spent many

years working as a consultant to CIOs, CMOs and others within

“The New CIO can bring more value to an organization than any other part of the business. As CIO, you can continue doing things the way you used to or you can reimagine your role and the role your team plays within the organization and deliver more value to the business than ever before.”

62 EXPERT VIEWPOINT

many different types of organizations. I’ve worked with large and small

companies and IT groups from one to one thousand people.

Over the course of my career, I’ve watched many companies struggle

with technology and technology management. I’ve watched companies

languish in the Old way of thinking and I’ve watched companies grow

revenues exponentially with new thinking. I’ve watched companies

shrink and layoff staff because they just couldn’t move away from Old

thinking. I’ve watched other companies grow their technological systems

and capabilities while keeping staffing levels fairly constant with New

thinking approaches.

I think the New CIO and the New IT group can bring more value to

an organization than any other part of the business. As CIO, you can

continue doing things the way you used to or you can reimagine your role

and the role your team plays within the organization and deliver more

value to the business than ever before.

I’ve heard some people say that the IT group (and the CIO) are

irrelevant in today’s world. I disagree. The New CIO can make IT and the

CIO role more relevant than ever before.

About The Author

Eric D. Brown is a Technology Consultant and Entrepreneur with a focus on using

technology and data to solve business problems. Eric’s experience includes working with IT

and Marketing groups to integrate technology with marketing initiatives. His main interest

areas fall into merger of IT and Marketing with the marketing technology, information

technology and big data.

Eric is a Doctor of Science (D.Sc.) in Information systems with a specialization in knowledge

management, decision support, social network analysis and natural language processing.*Source: HP internal competitive analysis (April 2014). © 2015 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

Outperform Cisco Catalyst with improved security and full interoperability. With up to 7X faster *performance, simplified management, and up to 27% lower TCO , HP FlexCampus switches offer you

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HP vs. Cisco: Switching has never been simpler.

Simpler, faster, smarter

148 x 210 mm (WxH)

*Source: HP internal competitive analysis (April 2014). © 2015 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

Outperform Cisco Catalyst with improved security and full interoperability. With up to 7X faster *performance, simplified management, and up to 27% lower TCO , HP FlexCampus switches offer you

advantages that Cisco Catalyst can’t match. And the HP Network Protector reduces the time you’ll spend on security from weeks to hours. Learn how you can drive agility and lower costs with SDN-enabled switches designed to simplify your network and empower your business.

To get quotes for HP Networking products please log on to hpshopping.in/networking

To learn more, go to and see the Ballarat Grammar School case hp.com/networking/switchnow-campusstudy.

HP vs. Cisco: Switching has never been simpler.

Simpler, faster, smarter

148 x 210 mm (WxH)

64 DIGITAL DYNAMICS

NOTES DATE & TIME


DIGITAL DYNAMICS

OPPORTUNITIES, ALIGNMENTS

AND THE WAY FORWARD


D I G I T A LD Y N A M I C S

The digital landscape is fast evolving. Enterprises are

experimenting and innovating, new players are entering the fray

and existing players are creating new products and services.

Amid such dynamism, it is essential to map the landscape

holistically, from both demand and supply sides. This shall

enable the enterprise users to prepare their future digital

strategies and the IT players to align their marketing focus.

WWW .DYNAM I C C I O . C OM

OPPORTUN I T I ES , AL IGNMENTS AND

THE WAY FORWARD

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