Johan Hallberg
Research Manager, Nordic Services and Sourcing
Leading Digital Transformation to Scale– CIO Agenda 2016 Top 10 Predictions
CIO Trend 2016
Disrupted business models
2
These organization
are natively digital…
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Most are not!
Digital or dead!?
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“Digitalisering
är en hajp…”
”Svenska banker är inga
sömniga elefanter. Vi
har kommit ganska långt
i digitaliseringen...” Annika Falkengren, vd på SEB. Foto: All over press
Source: IDC
Technology innovation is at the heart of
digitalization
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http://uk.businessinsider.com/netflix-
intuit-juniper-go-all-in-on-amazon-
cloud-2016-1
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The cloud has changed
IT infrastructure forever! GE is to become the leading digital industrial company in the
world. General Electric CIO Jim Fowler predicts that by 2020 GE will generate $15B in revenue from software per year.
Key factors1. The people – investing $1B in developers and insourcing!
2. Technology – Build vs Buy, differing software and algorithms that allows us and our customers to run the business differently.
3. Leading partners – Migrating 9000 apps (including 300 ERPs) all into AWS into 4000 apps. Going from 34 to 4 data centres, keeping only mission critical data (the “Secret Sauce”).
For GE – “the Cloud has gone from probable to inevitable”
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How will a Tech CxO lead the Digital Transformation?
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We recognized the need for change . . .
But where do we start?© IDC Visit us at IDC.com and follow us on Twitter: @IDC 11
“Plans are useless
but planning is
Everything!”Dwight D. Eisenhower,
WWII General
US President 1948 – 1953
Next Generation Security & Governance
Changing focus for CIO’s
12
IT Service
Excellence Operation Heroes
Business
Alignment
Business
Partnership
Digital
“Discussions”Digital Innovation
CIOs Possess Critical Skills To Enable their
Organization to Build, Change and Innovate
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 13
Justification Experience
Process Knowledge
Technology Insight
Innovate Incorporate
IDC’s DX Leadership Model
Integrate
14
Partner with the business to create digital
innovations
Innovate IncorporateEvolve existing technology platforms by continuously
infusing new skills, techniques and culture
A DX Leadership Model
Integrate
Transition new technologies into stable
business services
: IDC’s Leading in 3D
15
IDC FutureScape: Worldwide CIO Agenda 2016 Predictions
“…a strategic blueprint
for what CIOs, line of
business executives and
IT industry leaders need
to do to in the next 36
months to position for
leadership in the digitally
transformed future of
every industry – the DX
Economy.” TIME (MONTHS) TO MAINSTREAM
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0-12 12-24 24+
Speed&Quality
Security
New digital revenue streams
Strategic Architecture
Data Governance
Leading in 3D
Rationalization
Business Services
DX Collaboration
DX WorkSourceModels
1 2
3
4
5
6
7
8
910
Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015
FY16 FutureScape Drivers
1717
DX: Accelerating Business
Disruption from Digital
Transformation
DX: Accelerating Business
Disruption from Digital
Transformation
Cloud Life: The Merging of Real
Life with Digital Identity
Cy-Q: An Interconnected,
Informed, Interactive, Intrusive,
Intelligent & Cognitive Ecosystem
Talent Quest: High Demand for
Next Generation Business/IT
Skills – Scarce Supply
21st Century Battleground: The
Race for Cyber Supremacy
Shifting Gears: The Slowing Pace
of IT Productivity
For additional details on the above drivers, please refer to report:
IDC FutureScape: Critical External Drivers Shaping Global IT and
Business Planning (IDC #258644, September 2015)
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 18
TIME (MONTHS) TO MAINSTREAM
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IDC’s CIO Agenda: FutureScape Figure1
2
3
4
5
6
7
8
9
10
Through 2018, two-thirds of CIOs will have embraced Leading in
3D, which requires them to simultaneously innovate, integrate, and
incorporate.
By 2018, 35% of IT resources will be spent on supporting the
creation of new digital revenue streams.
By 2017, 80% of global CIOs will initiate a data transformation and
governance framework to turn information into a competitive
business differentiator
By 2018, 70% of silo-ed digital transformation initiatives will
ultimately fail due to insufficient collaboration, integration, sourcing,
or project management.
By end of 2018, 90% of IT projects will be rooted in the principles
of experimentation, speed, and quality.
By 2016, 70% of IT organizations will shift their focus to advanced
‘contain and control’ security away from a perimeter mentality.
By 2016, 75% of CIOs will have to revive rationalization initiatives
to simplify the IT environment and enable innovation.
By 2017, 60% of digital transformation initiatives will not be able to
scale due to a lack of a strategic architecture.
By 2018, 80% of development organizations supporting DX will
incorporate collective genius and crowd sourcing into their projects
as a regular practice.
By 2017, 40% of services managed by IT will be business services
oriented to augmented experience and smart products
Speed&Quality
Security
New digital revenue streams
Strategic Architecture
Data Governance
Leading in 3D
Rationalization
Business Services
DX Collaboration
DX WorkSourceModels
12
3
4
5
6
7
8
910
Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015
Colors
Incorporate
Innovate
Integrate
CIO Agenda – PredictionsHighlights
1. Through 2018, two-thirds of CIOs will have embraced Leading
in 3D, which requires them to simultaneously innovate,
integrate, and incorporate.
2. By 2018, 35% of IT resources will be spent to support the
creation of new digital revenue streams.
3. By 2017, 80% of global CIOs will initiate a data transformation
and governance framework to turn information into a
competitive business differentiator.
7. By 2016, 75% of CIOs will have to revive rationalization
initiatives to simplify the IT environment and enable innovation.
8. By 2017, 60% of digital transformation initiatives will not be able
to scale due to a lack of a strategic architecture.
19
Innovate
Integrate
Leadership
Integrate
Incorporate
20Leading in 3D
Through 2018, two-thirds of CIOs will have embraced Leading in 3D, which requires them to simultaneously innovate, integrate, and incorporate.
1
IT Impact IT will serve as the transformation engine – from old to new, from unstable to stable, from experimental to operational.
IT Leadership will take place along three dimensions:1. Innovate: as a partner to the business in fostering
IT-enabled agility and innovation2. Integrate: as the owner of the processes that
transition new platforms to become stable business services
3. Incorporate: as a reliable and secure service provider for the established suite of IT-based products and services
Guidance Focus on critical business challenges to deliver speed, robust technology platforms, and cross-functional leadership to drive change
Build a roadmap for an organization that enables the business to thrive in the midst of digital transformation
Focus on the continuum of innovation, integration, and incorporation with strategic planning of capabilities for short, medium, and long term
Leadership
IDC’s CIO AgendaTop 10 Predictions
Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015
TIME (MONTHS) TO MAINSTREAM
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0-12 12-24 24+
Speed&Quality
Security
New digital revenue streams
Strategic Architecture
Data Governance
Rationalization
Business Services DX WorkSourceModels
1 2
3
4
5
6
7
8
910
DX Collaboration
Leading in 3D
Innovate: New digital revenue streams
IT Impact New digital products and services will represent the growth area for enterprises and IT
Organizations must shift their focus from operational concerns to innovation and integration
A robust foundation and information framework will be required to sustain product development, delivery, quality, and growth
Cost, complexity, and inconsistency will result in failed products and lost opportunities if IT does not step up to deliver early
21
By 2018, 35% of IT resources will be spent to support the creation of new digital revenue streams.
IDC’s CIO AgendaTop 10 Predictions
Guidance Start acquiring new talents and capabilities. The old excuse ‘we don’t have time for that now’ just doesn’t cut it anymore. Make time for it now, get started immediately, or it won’t matter in a few years
Cultivate and train internal talent as a way to shift skill sets to those that are needed to support digital transformation
Build a solid architectural foundation of plug and play services that enable new digital products and services. Be the "enterprise broker" of internal and external services
Innovate
Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015
TIME (MONTHS) TO MAINSTREAM
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Speed&Quality
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New digital revenue streams
Strategic Architecture
Data Governance
Rationalization
Business Services DX WorkSourceModels
1 2
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7
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DX Collaboration
2
Leading in 3D
22Integrate: Data Governance
By 2017, 80% of global CIOs will initiate a data transformation and governance framework to turn information into a competitive business differentiator.
IDC’s CIO AgendaTop 10 PredictionsIT Impact Information is key to digital transformation
Information must be integrated consistently across multiple sources and provided to analytic and cognitive systems
Information value must be developed and realized. Governance and stewardship determine information value
Information management is core to sharing knowledge and providing flexibility and agility
Guidance Create an information governance framework assigning accountability to the business executives
Design a harmonized approach to both the old world of business intelligence and the new word of big data and analytics
Assess future needs and build bench strength in skills like data science, that enable data transformation
Integrate
Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015
TIME (MONTHS) TO MAINSTREAM
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0-12 12-24 24+
Speed&Quality
Security
New digital revenue streams
Strategic Architecture
Data Governance
Rationalization
Business Services DX WorkSourceModels
1 2
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5
6
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910
DX Collaboration
3
Leading in 3D
23Incorporate: Rationalization
By 2016, 75% of CIOs will have to revive rationalization initiatives to simplify the IT environment and enable innovation.
IDC’s CIO AgendaTop 10 PredictionsIT Impact Data, applications, and infrastructure rationalization
are key to reducing complexity
Cutting cost via rationalization also allows increasing speed of change and accelerating innovation
3rd Platform and security requirements force many existing products into premature obsolescence and early retirement
Shift to IaaS infrastructure provides rationalization opportunities
M&A activities demand economies of scale
Guidance Create a strategy for data rationalization, a critical step to enable companies to focus on what matters or present the best opportunity of value
Launch or revive a rationalization initiative to address the new challenges
Establish a continuous maintenance process to establish the rationalizing effort as a needed component of agility
Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015
TIME (MONTHS) TO MAINSTREAM
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Security
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Strategic Architecture
Data Governance
Rationalization
Business Services DX WorkSourceModels
1 2
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7
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910
DX Collaboration
Incorporate
7
Leading in 3D
24Integrate: Strategic Architecture
By 2017, 60% of digital transformation initiatives will not be able to scale due to a lack of a strategic architecture.
IDC’s CIO AgendaTop 10 PredictionsIT Impact Strategic architecture is the means to coordinate and
integrate key components supporting the digital transformation of the enterprise
Uncoordinated projects and sourcing will lead to redundancy, inconsistency, and an inability to create interoperable, transformative solutions
Business will go to IT because it is the best option, not because they are told to
Guidance Do not expect business units to understand architecture or necessarily be motivated to make enterprise tradeoffs
See that architecture assists the business in sourcing services by educating on the true costs and acting as a broker for internal and external services
Ensure that IT is competitive in terms of cost, speed, and availability, and have a streamlined process for bringing new services in-house and into the catalog Note: The size of the bubble indicates complexity/cost to
address. Source: IDC, 2015
TIME (MONTHS) TO MAINSTREAM
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Speed&Quality
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New digital revenue streams
Strategic Architecture
Data Governance
Rationalization
Business Services DX WorkSourceModels
1 2
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5
6
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910
DX Collaboration
Integrate
8
Leading in 3D
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 25
Disruption Requires World Class Technology Leadership on 3 Fronts
Visionary leadership
Risk seeking
Agile development
Business analysts
Leading the ‘Innovate’
Agenda
Change leadership
Managing risk
Agile and waterfall
PMOs, architects and DevOps
Leading the ‘Integrate’
Agenda
Sustaining leadership
Risk and reward
Waterfall development
IT operations
Leading the ‘Incorporate’
Agenda
Want the details
and more?
Here is our gift to
you!
IDC FutureScape:
Worldwide CIO
Agenda 2016
Predictions
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 26
Want more on Leading in 3D?Related Research IDC PeerScape: Practices for Successfully Integrating Digital Innovation Groups with
Traditional IT Operations (Forthcoming)
Leading in 3D: Becoming a Digital Business (IDC #US41012216, February 2016)
IDC MaturityScape Benchmark: Leading in 3D in the United States (IDC #US40995716, February 2016)
IDC MaturityScape: Leading in 3D (IDC #US40933616, January 2016)
Leading in 3 Dimensions (L3D): Critical Issues for Digital Transformation (IDC #US40706315, December 2015)
IT Strategy and Innovation: Leadership in 3D — Beyond Two-Dimensional IT Thinking (IDC #256593, June 2015)
IDC MaturityScape: Leadership Digital Transformation (IDC #255709, May 2015)
IDC MaturityScape: Digital Transformation (IDC #254721, March 2015)
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 28
CIO Agenda – PredictionsPart I
1. Through 2018, two-thirds of CIOs will have embraced Leading in 3D,
which requires them to simultaneously innovate, integrate, and
incorporate.
2. By 2018, 35% of IT resources will be spent to support the creation of new
digital revenue streams.
3. By 2017, 80% of global CIOs will initiate a data transformation and
governance framework to turn information into a competitive business
differentiator.
4. By 2018, 70% of silo-ed digital transformation initiatives will ultimately fail
due to insufficient collaboration, integration, sourcing, or project
management.
5. By end of 2018, 90% of IT projects will be rooted in the principles of
experimentation, speed, and quality.
29
Innovate
Innovate
Integrate
Leadership
Integrate
CIO Agenda – PredictionsPart II
6. By 2016, 70% of IT organizations will shift their focus to advanced
‘contain and control’ security and away from a perimeter mentality.
7. By 2016, 75% of CIOs will have to revive rationalization initiatives to
simplify the IT environment and enable innovation.
8. By 2017, 60% of digital transformation initiatives will not be able to scale
due to a lack of a strategic architecture.
9. By 2018, 80% of development organizations supporting DX will
incorporate collective genius and crowd sourcing into their projects as a
regular practice.
10. By 2017, 40% of services managed by IT will be business services
oriented to augmented experience and smart products.
30
Incorporate
Innovate
Incorporate
Integrate
Incorporate
For additional details on the above predictions, please refer to report:
IDC FutureScape: Worldwide CIO Agenda 2016 Predictions (IDC November 2015)