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Digital Transformation: Top 10 Changes Through 2017

January 15, 2015 by Andreas Schmitz 3

To navigate through the emerging IT landscape, chief information officers will need to completely reinvent themselves and their roles. If they don’t, they risk being supplanted by chief digital officers. This article looks at IDC’s predictions for the coming years.

The era of digital transformation has dawned: IT managers are evolving into cloud services brokers, more and more products are being bought and sold online, and Big Data is opening up compelling new vistas of analytical insight. While clearly a source of opportunity, the digital transformation of companies will not be plain sailing for everyone.

These are the key changes that businesses can expect to witness between now and 2017:

1. New tasks for CIOs

By 2017, say the IDC analysts, CIOs who wish to thrive and develop in the future will already be spending 80% of their time on analytics and cyber security and on creating new revenue models in the digital services sphere. Merely focusing on traditional IT topics like standardization and consolidation will put CIOs in danger of losing out on their privileged position at the company’s “top table.”

2. IT as a Service (ITaaS)

CIOs are seeing their control over technology spending steadily diminish. In fact, a recent Gartner analysis estimates that the proportion of technology spending outside of IT will rise to 90% by 2020. It is therefore vital for IT departments to style themselves as services brokers and prepare to meet business units’ requirements quickly and reliably. By 2016, says IDC, 65% of strategies will require what it calls the “3rd Platform,” which is built on a combination of “mobile devices and apps, cloud services, mobile broadband networks, Big Data, and social technologies.” As such, the third platform provides what Unisys’ Nicholas D. Evans refers to as an “agile new IT fabric for applications, data centers, and, most importantly, the user experience.” IDC refers to the new, third platform-based solutions as “IT as a Service” (ITaaS).

3. Cybersecurity will raise IT’s profile

Thanks to cloud computing, business units are increasingly opting to circumvent the IT department and “do their own thing” when it comes to implementing new solutions. Often, though, those business units have either little or no IT security expertise. This state of affairs will present CIOs and IT departments with an opportunity to strengthen their profile and their value to the company. Provided, that is, that they succeed in positioning themselves as the definitive go-to security specialists.

4. Accelerated application delivery

Increasingly, business units are drawing up their own technical agendas and calling on IT to implement them quickly and flexibly. By 2015, say the IDC analysts, more than half of businesses (60%) will be blending software development and operations roles and adopting the so-called DevOps approach to provision new applications faster. This transformation will also rely on third platform technology.

5. New architecture

By 2016, four out of five CIOs will deliver a new architectural model. Their main motivation will be to deliver services and applications quickly and in full compliance with security standards and thus respond swiftly to business units’ requirements – while at the same time proactively creating services by offering additional insight gleaned from new analytics options and Big Data.

6. The CDO will replace the CIO

By virtue of their superior strategy-setting, innovative, and relationship-building skills, chief digital officers will supplant more than half (60%) of CIOs in the c-suite rankings by 2020. Creating digital products relies not on the traditional strengths of IT – such as automating business processes – but on the ability to constantly reinvent and reimagine. IDC calls it going “beyond the comfort zone”. Innovative IT services will be the responsibility of CDOs working in collaboration with marketing and the business units.

7. Most CIOs will opt for third platform
Hyper-scalable: the 3rd platform

Hyper-scalable: the 3rd platform

By 2016, four fifths of CIOs will adopt the third platform technology as the foundation for creating new applications and services. According to IDC, the third platform has cloud at its core and offers solutions that can be accessed from any device, in any location, and at any time. Its success will hinge on whether the corresponding apps will be able to match up to rapidly evolving mobile devices and transmission speeds. Otherwise, businesses will not benefit from the full potential offered by Big Data analysis and social technologies.

8. Pan-enterprise data and analytics strategy

IT departments will come under increasing pressure to transform the mass of data that businesses generate into actionable information and insight. “Only transformed data is valuable data,” might well be the corporate slogan for 2018. Consequently, companies will need to implement an effective data governance strategy and integrate their entire stock of archived, new, and Big Data in a practical model that allows for complete data accountability and traceability.

9. Risk assessment will become more professional

IDC predicts that, by 2017, “more than a third of all vendor relationships revolving around third platform technologies will fail”. It is therefore essential for enterprises to conduct risk assessments of third-party relationships based on rulings such as the Safe Harbor agreement (established between the European Union and the USA to regulate the way that the U.S. handles the personal data of European citizens) and other compliance-relevant regulations. Due diligence checks will also be vital to avoid problems resulting from poor-quality third-party services, financial bottlenecks, business strategy changes, and planned acquisitions. These comprise checks on technological, financial, and IT security risks.

10. Open standards frameworks

Come 2018, every second company will favor an open standards-based IT infrastructure. This is down to the proliferation of mobile devices in the enterprise and to the fact that IT-based collaboration with external partners is becoming increasingly commonplace. Thus, IDC predicts, companies will pare down to the minimum the number of areas that require additional standards, compliance specifications, and governance structures. Embracing an open standards-based framework will also create an environment in which business units can experiment and develop their own solutions.

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